While Batlle had promised a cautious approach to economic reforms, his inauguration speech gave hints that he was prepared to press for major reforms to change antiquated ways of doing business. He planned to do this by bringing spending under control and making Uruguayan exports more competitive in the world market. Faced with a shrinking economy, he proposed cutting government expenses to reduce a fiscal deficit. He has said that he is committed to economic liberalization and has succeeded in deregulating and demon-opolizing some economic activities, but some long-term measures appear to be stalled. Batlle wants state-owned companies to improve services, quality, and prices, and to compete at a regional level. He also called for more transparency, proposing a new government agency that would inform citizens about government expenditures. Shortly after his election, Batlle disclosed his salary and the salary of his closest associates on the presidential website. The Internet, and computer technology in general, was expected to be a main component of Batlle's development policies. He wants all Uruguayan students to become computer literate.
Shortly after his inauguration, Batlle met with families of Uruguayans who disappeared during the dictatorship years of the 1970s and early 1980s. The previous government had refused to meet with the families, simply saying that an amnesty law protected former and current military leaders and closed the issue. Batlle, however, said his government had a moral responsibility to bring closure to the approximately 159 unsolved disappearances. As of August 2002, however, the Batlle government had still failed to satisfy the inquiries of the bereaved families, and Batlle had not addressed a punishment for the Lieutenant General Carlos Daners, the man deemed responsible for the disappearances. The issue remains an open wound in Uruguay. Batlle's government quickly dismissed a high-ranking member of the army in early 2000 for suggesting that the armed forces would someday have to stage another war against leftists.
In 2002, Uruguay's economy was its fourth year of recession with little sign of recovery. Batlle's advisors have told him to trim social services, but this goes against the grain of this highly socialistic country. Uruguay's citizens are not willing to give up the comforts of these services. Another of Batlle's strategies may be to privatize some governmentowned companies. None of these solutions had been implemented as of early 2003, however.
Batlle has become one of the most outspoken leaders to address the prevalent drug problem in Latin America and the enormous criminal activity that results from the drug trade. He is a fervent believer in the decriminalization of drugs. He has called on Uruguay's neighbor, the United States, to follow his lead saying, "The day that it (drugs) is legalized in the United States, it will lose its value. And if it loses value, there will be no profit.' On 22 December 2002, Batlle was proclaimed "Hero of the Year" by the Narco News Bulletin for his antidrug stance.