Leftist Candidate Humala Expected to Win First Round of Peru's Elections

Published by Minyanville

A leftist friend of Venezuela’s Hugo Chávez looks set to win Sunday’s first round of presidential elections in Peru, five years after narrowly losing out to Alan García. Back then, Ollanta Humala’s fiery rhetoric and friendship with the Venezuelan is thought to have stilted his success.

Now, he has toned down rhetoric — refusing do discuss any relationship with Chávez or any of Latin America’s left — and looks to beat Keiko Fujimori, daughter of the former president, Alejandro Toledo as well as former prime minister Pedro Pablo Kuczynski in Sunday’s election.

To win, Humala must achieve 50% of the vote. This looks unlikely, with the latest Iposos Apoyo poll giving him 28%, Fujimori 21% and Toledo and Kuczynski both 18%. In this case, a run-off election will be held on 5th June between the top two candidates.

Rather than aligning with Chávez this time round, Humala is closer — at least publicly — with Brazil’s popular former president Luiz Inácio Lula da Silva, whose advisors he has been in talks with in order to mold this campaign. The markets are jittery with Humala’s success, preferring perhaps Alejandro Toledo who is credited with building the basis for Peru’s successful economy or Keiko Fujimori, who stands with a hard-line business-led manifesto.

While rhetoric has been toned down, Humala is still keen to tax foreign mining companies up to 45% of profits, up from 30%. Mining accounts for 60% of Peru’s exports. He does, however, promise to respect the independence of the central bank as well as respect free trade agreements, many of which were initiated by Alejandro Toledo.

Toledo was president of Peru between 2001 and 2006. He has promised 6% growth each year though is dogged by allegations of heavy drinking and cocaine abuse. The 65-year-old is hoping to reshape domestic and external public debt offered in 2003 as well as converting Peru into a maritime hub by improving logistics and infrastructure. He also has more liberal social policies on gay marriage and drug use.

Fujimori’s father Alberto reined between 1990 and 2000. He is currently serving a 25-year jail sentence for corruption and human rights abuses during that period. Still, his 35-year-old daughter is happy to bask in his legacy, with policies reflecting his. She promises growth of at least 7% every year by promoting free trade. She is also hoping to bring back the death penalty, abolished in Peru in 1979. It is expected that her first act in power will be to pardon her father.

At 72 years old, Kuczynski is the elder statesman of the pack. Once a Wall Street Executive, he studied at both Oxford and Princeton before becoming Toledo’s prime minister. His pale skin has earned him the nickname "El Gringo" and he has been slammed for his dual US citizenship, though has promised to give up his passport if elected.

His main economic policy is to decentralize the financial ministry, giving regional governments more autonomy. He also intends to lower national sales tax from 18% to 15% as well as, more generally, eliminate extreme poverty within a decade.

The question really is whom Humala will face in June and whether he has, in fact, reinvented himself or whether Peru will turn the way of Venezuela, Ecuador and Bolivia. Many fear that a win for Humala would stop economic growth in its tracks. Rivals and the markets are skeptical. With 8.8% growth last year and 7% expected in 2011, Peru is the envy of many Latin American nations.

Growth has accelerated since 2006, when García came into power, averaging 7% despite the global recession. The boom in the international price of mineral exports — Peru is the world’s largest silver producer, second in copper and zinc and sixth in gold — was the good luck that, according to the World Bank, combined with policy allowed such growth. “Peru’s election runs some risk of turning into a lesson in what happens when economic growth is not backed up by more effective government,” opines the Economist.

Polls are not guaranteed indicators of results on Sunday, especially when the figures are so tight. Peruvian elections are known for their volatility and Sunday looks to be no different.