A hopeful future for Peru

Patricio Navia

Buenos Aires Herald, June 14, 2016

 

The 2016 presidential election in Peru will go down in history, being the narrowest victory by any presidential candidate in recent years in Latin America.

 

The victory by Pedro Pablo Kuczynski (PPK) represents a ray of hope in a difficult economic moment for the region. By electing PPK to the presidency, Peruvians have signalled their preference for gradual and pragmatic change over the harsher polarizing rhetoric of Keiko Fujimori. But since he does not have majority support in Congress, PPK will need to immediately begin displaying his commitment to building coalitions and forging consensus. If PPK succeeds, Peru will be on the verge of making the transition to a consolidated emerging democracy. That would be good news for the entire region.

 

There were many good reasons to fear that the presidential election runoff in Peru would not end up well. The close race turned even closer in the days leading up to the June 5 vote. The razor-thin margin of victory by PPK, a market-friendly economist and former Finance minister, could have triggered an understandable challenge on the part of the losing candidate, Keiko Fujimori. Because she is the daughter of a president, who was elected democratically in 1990 but later became a dictator in 1992, many people doubted her democratic credentials. Though her political trajectory has been impeccably democratic — she served as a democratically elected Congresswoman between 2006 and 2011 and unsuccessfully ran for the presidency in 2011, accepting her defeat — the fact that she surrounded herself with some notorious supporters of her father’s 10-year rule, allowed others to cast her as insufficiently democratic enough.

 

As a candidate, Keiko promised to be tough on crime, an understandable promise given Peruvians’ concern over insecurity. Yet, many read those statements as signalling weak democratic credentials on her part and among members of her party, Popular Force. Yet, by accepting defeat and committing to leading a democratic opposition, Fujimori did a great service to Peru (and possibly to her own electoral chances in 2021, when she will be 45 years old and might well run for the presidency again).

 

The 0.2 percent margin of victory for Kuczynski (50.1 percent to 49.9 percent) was, as PPK himself admitted, an extremely slim margin. As a president, he will need to help heal a divided country. It will not be easy. PPK only commands the support of 20 legislators in the 130-member unicameral chamber. To advance his reforms, PPK will need to build coalitions. Fujimori’s Popular Force will have a commanding majority with 71 seats and the left-wing anti-neoliberal Broad Front coalition will also have 20 seats. That will leave Kuczynski with little room to manoeuvre. His government will need to reach out to the market-friendly Popular Force or anti-neoliberal Broad Front legislators, depending on the initiative. The success of the president-elect’s administration will depend on his ability to build bridges and bring people together for specific initiatives.

 

 

Showing his style

Kuczynski has wasted no time in showing his style of governance. Immediately after having been declared the winner of the election, PPK began meeting with some of his former rivals. A meeting with Keiko Fujimori is in the works and will probably happen in the next few days.

 

Though his age — he is 77 years old — is certainly a concern, PPK is healthy and active. He has also surrounded himself with capable technocrats who will be able to take on the design and implementation of second-generation reforms to increase productivity and competitiveness and to expand the quality in the provision of social services like health and education. Kuczynski has asked the current president of the Central Bank, Julio Velarde, and the popular minister of education, Jaime Saavedra, to stay in their posts. He has announced his plans to stay on course with the most consensus driven market-reforms adopted in Peru since democracy was fully restored in 2001.

 

Because the Fujimori surname generates so much negativity in Peru, some analysts caution that Kuczynski won primarily because he was not Keiko. Thus, his approval should soon fall after taking office. In a country where presidential approval has been historically low, PPK has few expectations of becoming a popular president. Yet, if he seeks to be effective rather than popular, Peruvians might end up defying expectations and holding on to their tendency to quickly disapprove of their presidents.

 

As the country with the best record of economic growth in the last 15 years, Peru seems headed toward challenging Chile as the most successful economy in recent Latin America history. Coming out of a fiercely fought presidential election runoff, Peruvian democracy looks healthy and strong. The president-elect is sending all the right signals to foreign investors, domestic actors and political leaders. Though Peru is affected by the same negative forces that have thrown many a Latin American country into recession or sluggish growth, the Andean country is now buoyant with optimism. The road will be tough ahead, but Peru has just shown the world that its political leaders are up to the occasion.

 

In a region where bad news has dominated in recent months, recent events in Peru are a good reason to remain hopeful.