What a Keiko Fujimori presidency means for Peru

Keiko Fujimori is favored to be elected President of Peru this Sunday June 5. Peruvian presidential elections are notoriously fickle and an 11th hour momentum swing is not impossible, but it doesn’t look likely.

In my opinion her opponent in the runoff election, Pedro Pablo Kuczynski or “PPK”, hasn’t run a very strong campaign but I don’t think it would have mattered. When Keiko Fujimori wins the election it will be largely for 3 reasons:

She represents change in the minds of the voters.

Since Keiko Fujimori’s father, Alberto Fujimori, got run out of the country 15+ years ago, Peru has had typically center-right, business friendly government and conservative fiscal policy. While macro indicators are generally good, a significant portion of the electorate feels sidelined, they feel that the government cares only for the business/political establishment. Peru isn’t the only place in the world with this sentiment, look at Scotland, the Brexit, the US elections, Dilma’s impeachment in Brazil, it’s a global trend. People want change and here in Peru, Keiko Fujimori represents change from the status quo.

People believe she will get things done.

Peruvians remember the era of Keiko’s father more nuanced than what is reported in English language media. For some background, read Colin’s article on Fujimorismo in Peru. Bottom line: Peruvians feel that under Alberto Fujimori the State did function but in the years since then essential government services have been entirely inefficient, paralyzed by political infighting, corruption and incompetence. Peruvians appear to be willing to accept a degree of autocracy (considering Keiko Fujimori has an absolute majority in parliament) in return for basic government services.

Keiko Fujimori and her inner circle relate well to all Peruvians, including the urban poor and the rural populations.

Although the latter may be in appearance only, appearances matter. PPK seems to relate well to all Peruvians but his team clearly is most comfortable in the business/political establishment of Lima. PPK’s people are not the type of people who would appear comfortable eating cuy in Pampa Wasi. Peruvians feel that Alberto Fujimori’s regime – for better or worse – was a government for all of Peru but the governments since then have been largely a government of wealthy districts in Lima and other big cities.

Barring a last minute PPK comeback, what does a Keiko Fujimori presidency mean for Peru?

In the short term you’re likely to see stronger government and more efficient public institutions. Crime will go down and critical infrastructure projects will advance. Some levels of bureaucracy will get cut and political infighting will end. Tourists won’t notice any significant differences.

However there’s a flip side: Keiko Fujimori has been working methodically since the end of her father’s regime to restore her father’s movement, rebuild her congressional delegation and gain strength in local/regional government. All of this support comes at a cost, especially in a country like Peru where political support is historically based on a direct “quid pro quo”. For example: when you support a local mayoral candidate, it means you’ll get a job in his or her administration when they are elected. There is a “civil service” system in Peru but it’s relatively minor, a very large degree of public employment is politically motivated, as are government contracts.

In a Keiko Fujimori government, anything from justice to building permits will be issued based on who you are (or not) in the regime. Business owners, local and regional government officials will be richly rewarded for their support with contracts, kickbacks, personal favors, etc. Infrastructure projects will advance but they’ll be executed by regime loyalists with generous “extra” compensations and tailored to the needs of government supporters.

Government will be tough on small criminals but big drug traffic rings and other criminal mafias will be allowed to operate within certain confines. Crime is likely to go down nationally but those who support Fujimorismo will have free reign in things like illegal mining, illegal logging, land invasion, etc.

For big foreign investors little will change. However, you’ll have to make that decision as to what legal and ethical confines you’re willing to work in. No matter how many layers you put between yourself and your operation on the ground, you have to be able to sleep at night.

It will be interesting to see how Keiko Fujimori will handle big mining investments, her rhetoric to foreign investors and to her local supporters is somewhat conflicted. While I don’t think she will substantially restrict foreign mining investment, it will be difficult to reconcile the formal mining industry with giving carte blanche to informal miners. Also, expect any big mining project to pay dearly for the approval of the local authorities. Whenever a big mining project comes to town, you can rest assured the local powers that be will come to Keiko looking for their reward for past support.

You could argue none of this is limited to Fujimorismo and I would agree to an extent. All of these issues are part of the culture and only the complete disregard of past governments for the needs and sentiment of ordinary Peruvians have made a return to Fujimorismo possible.

I’d like to believe that government is a noble enterprise, public institutions serve the greater good but sadly I think that’s naive here in Peru, and it’s only going to get worse. Just like I used to think of middle class in a noble kind of way, nurses, teachers, police officers, etc. Upper middle class maybe a doctor or an honest judge. You want to know who’s upper middle class in Peru nowadays? Corrupt mayors, illegal miners, illegal loggers, land invadors, illegal construction etc. Just look for any Toyota Hilux with a Keiko bumper sticker.

Advertisements

One thought on “What a Keiko Fujimori presidency means for Peru

  1. Kind of funny, something I read about politics either in Peru or greater Latin America. In the U.S. and Europe, the youngsters who want to get rich go into business / finance. Down here, they go into politics. Kinda wrong if you ask me 🙂

    I am also looking forward to see how a Fujimori or any government deals with social conflicts surrounding mining projects. Keiko has proposed giving the communities a 5% stake. While that would do the trick, it is fraught with criticism in itself. Just have to wait and see…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s