The “good payer” reputation of Uruguay is maintained and reinforced not only by Investment Grade but through media narratives and political discourse that construct and perpetuate myths about democracy and governance. These myths often emphasize economic stability and institutional strength, which align closely with the interests of international financial markets, bondholders, and investors.

First, in constructing a narrative of stability, media outlets play a crucial role in broadcasting Uruguay’s favorable rankings on indices like The Economist’s Democracy Index and celebrating its reputation as a fiscally responsible and politically stable nation. Therefore, by framing Uruguay as a “model democracy”, the narrative glosses over the trade-offs involved in maintaining this image, such as constrained public spending or limited participatory decision-making. The underlying message to investors is clear: Uruguay is a safe, predictable, and reliable debtor. This reassures bondholders and encourages further investment.

Second, the political discourse is reinforcing the myth, as politicians frequently highlight Uruguay’s adherence to international standards of democracy and fiscal responsibility, reinforcing the idea that these attributes are integral to national pride and identity. By celebrating these narratives, political elites deflect attention from domestic challenges, such as housing shortages, rising living costs, or social inequalities, which might conflict with the priorities of bondholders and financial markets.

This constructed myth has a role in controlling citizen expectations, in the way that citizens, who internalize the myth, are encouraged to view economic stability and democratic rankings as evidence of national success, even if these metrics do not translate into tangible improvements in their quality of life. This creates a collective subjectivity where people prioritize macroeconomic stability and international prestige (“la imagen pais”) over immediate social or material needs. The national myth delegitimizes calls for alternative policies, discouraging dissents such as greater public spending or redistributive measures, by framing them as threats to stability.

Finally, the good “imagen pais” reputation is working as a functional tool. Investor confidence on sovereign bonds is undisturbed. Uruguay’s image as a reliable debtor ensures low borrowing costs and continued access to international credit markets. To maintain this reputation, Uruguay adheres to fiscal policies that prioritize debt repayment and investor confidence over expansive social welfare programs. This dynamic reflects a structural dependence on financial markets, where again the “good payer” status becomes a non-negotiable policy priority.

While Uruguay is celebrated for its democracy, the myth obscures potential democratic deficits, such as limited citizen participation in decision-making about social priorities. The focus on stability and fiscal responsibility may limit the state’s ability to address pressing issues like housing, cost of living, or security, as these could disrupt the financial stability that investors prioritize. Moreover, the myth perpetuates existing power imbalances, prioritizing the interests of international creditors and elites over marginalized or underserved populations.

Uruguay’s investment grade status is not just an economic reality but a politically constructed and media-reinforced narrative. This myth about democracy and stability serves to align the country’s policies with the interests of bondholders and investors while limiting the scope for alternative socio-economic priorities. Breaking this cycle would require challenging the dominant narrative and fostering a broader public debate about the costs and benefits of maintaining such a reputation. The new administration under President-elected Orsi could provide further information to confirm the above-stated stance.