The Price of Illusionism: When Dismantling the State Becomes an Intergenerational Debt

According to the author, the fiscal burden of political and business decisions made during the 2010–2015 period continues to weigh on Uruguay’s public finances and future generations.

THE PRICE OF ILLUSIONISM
When Dismantling the State Becomes an Intergenerational Debt
By Dr. Nelson Jorge Mosco Castellano

There is a dangerous temptation in contemporary politics to separate the epic narrative from the harsh accounting reality of public administration.
For years, a narrative was built around the administration of former President José Mujica (2010–2015), centered on the personal austerity of its leader—a symbolic garment that served to anesthetize public attention during the greatest cycle of fiscal resource drainage in Uruguay’s recent economic history.
Under the dogma of the industrialist voluntarism of the ignorant planner and a matrix inspired by subversive thinking aimed at institutional dismantling, colossal public funds were committed that today not only constitute an irreparable net loss but also project themselves relentlessly onto all citizens—especially the economically marginalized—in the form of public debt and heavy financial burdens with their corresponding interest.
The subversive background: The systematic demolition of institutional structures
The economic damage inflicted upon Uruguayans was not merely an accident of management or the product of a series of misguided technical mistakes; according to the author, it responded to a profound ideological matrix. Behind the failed megaprojects, the abusive waste of public resources, and the hollowing out of state-owned enterprises operated an intention rooted in anarchic thinking: the deliberate pursuit of undermining the foundations of the liberal rule of law, eroding the authority of economic norms, and provoking social disruption of devastating proportions.
When fiscal balance is disregarded, legal contracts are trampled upon, and the levers of political power are used to conduct collectivist experiments outside the bounds of economic calculation, the objective is not state efficiency but its gradual collapse.
State monopoly corporations were hollowed out from within to serve factional interests, transforming public administration into the spoils of ideological improvisation intended to shake the foundations of “bourgeois” institutions, regardless of the financial ruins left in its wake.
The map of depletion: One and a half billion dollars lost
The cost of failed initiatives and administrative negligence is not an accounting abstraction; it represents destroyed jobs, hospitals that were never equipped, deteriorating schools left behind, incentives for informality, the loss of rights for the most vulnerable, and crushing tax pressure on the taxpayers who generate the nation’s resources—resources ultimately used to fill monumental black holes.
These are not merely numbers; they are devastated people, shattered lives, and the reckless madness of hybris—believing oneself master of the destiny of the governed.
The collapse of ANCAP: The state oil company required a parliamentary-approved recapitalization and assumption of liabilities totaling nearly US$900 million. Unjustified cost overruns, loss-making cement plants, and unchecked management translated into a direct mortgage on the nation’s wealth.
The Gas Sayago and regasification debacle: An energy chimera that never injected a single cubic meter of gas and left net losses exceeding US$215 million through liquidation costs, sterile maintenance expenses, and lost international arbitration cases against suppliers.
The PLUNA nightmare: The improvised liquidation of the national airline initially left US$137 million in debts and executed guarantees, followed over the years by more than US$80 million in final judgments and legal costs awarded by international arbitration tribunals (ICSID).
The agreements with Venezuela and PDVSA: The commercial arrangement designed under political and ideological affinities with the Venezuelan state oil company ultimately forced the Uruguayan government to rescue and settle liabilities totaling US$262 million, committing genuine public funds through an opaque trust. In addition, more than US$30 million of debt was shifted onto a dairy cooperative.
The FONDES drain and other misadventures: More than US$50 million squandered on uncollectible loans to unviable “cooperative” and “self-managed” projects financed through BROU, together with millions lost in abandoned consulting contracts and failed expropriations for the Deep-Water Port project and the unfinished tracks of the ill-fated Tren de los Pueblos Libres.
Opportunity cost: The moral tragedy of rising child poverty
To understand the true magnitude of this dissipation, it is enough to compare it with the social priorities that dominate today’s public agenda.
When members of the current left-wing governing coalition—within which Mujica’s political faction remains the strongest and most influential force—refer to relatively modest figures such as the US$30 million needed to address the serious problem of 25% child poverty, the contrast becomes morally unbearable.
Had the resources that, according to the author, were squandered under Mujica on corporate ventures and ideological experiments—a conservative estimate exceeding US$1.6 billion—been available, Uruguay would not only have been able to eradicate this social tragedy entirely and secure the future of several generations of children, but would also have had capital left over to transform the country’s educational infrastructure.
The opportunity cost of that administration translates into a cruel paradox: the very political sectors that now demand resources to alleviate child vulnerability are, according to the author, those that while in power burned through the equivalent of more than fifty budgets capable of rescuing those same children from poverty in the fires of inefficiency and fiscal disorder.
And today, the author argues, a revived Mujica inspired the decision to spend another US$32.5 million on what is described as another misguided project: dividing a productive estate into six small holdings in his honor. Meanwhile, they now complain about the allegedly insufficient US$30 million once again charged against the country’s opportunity cost for poor children.
The perverse projection: Principal, interest, and the burden on taxpayers
When discussing a consolidated floor of between US$1.6 billion and US$1.65 billion in direct losses, society often makes the mistake of viewing the figure as a static snapshot of the past. The institutional and financial reality is far more dramatic.
Governments do not finance these corporate losses with thin air or current public-sector savings; they finance them through public debt issuance.
Every dollar injected to rescue ANCAP, every international judgment paid because of the misguided decisions surrounding PLUNA, every energy liability settled with Venezuela at the time, and even the María Dolores estate, translated into sovereign bond issuance and domestic borrowing with predetermined maturities.
This means that the lost principal must be added to debt servicing and the accumulated interest year after year—a financial burden faithfully paid by Uruguayans through taxes on consumption, labor, and production. It is a heavy weight that drags down the projected and illusory economic growth upon which, according to the author, the irresponsible left budgeted and spent with destructive intent.
It is the final bill of a strategy that combined economic incompetence with the subversive design of undermining the rules of the republican order.
According to the author, the State abusively confiscated wealth from the productive private sector to finance its own dismantling while neglecting society’s most pressing problems, condemning future generations to pay in cash for the consequences of a failed revolution.
We shall also see the interest that all Uruguayans continue to pay—an additional cost that, according to the author, is attributable to a “supreme infamy” by those who now seek to present “my friend Pepe” as the champion of poor children.

Opportunity cost
Public debt
Republican institutions

Continue reading in Global Order and Geopolitics