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.

Peru presidential elections are almost here

Peru’s 2011 Presidential elections are almost upon us. April 10 is the big day, and I believe tonight is the final televised debate between the leading candidates.

Let me say 2 things first:

1) I am a guest in Peru so it doesn’t matter to me who wins or loses. I’m privileged to be here and however the Peruvian people choose to govern their country is up to them.
2) I’m Belgian, so you should never take my advice on any matters of politics or government. When it comes to politics, the only thing we Belgians can say is “Thank God for Italy!”

Having said all that, here’s a few notes about the leading candidates in Peru’s upcoming 2011 Presidential elections, for no purpose other than to show how the candidates come across to a gringo. Official bios, photos, web pages and the like can be found here.

1) Alejandro Toledo: He was Peru’s president from 2001 to 2006 and was first Peruvian president of native Indian (Quechua) heritage, but his politics were free-market oriented. He left office to rather low approval ratings, due to the fact that many felt the macro-economic gains that were made did not extend to all Peruvians. On the other hand, nothing bad or particularly controversial happened during his tenure, which was a welcome change from the late 20th century. He’s considered a strong candidate in the upcoming elections, but I know someone who knows some people who know Toledo and say less than favorable things about him.

2) Lucho Castañeda: He was mayor of Lima (home to about 30% of Peru’s population) from 2003 to 2010 and enjoyed generally good approval ratings, easily winning re-election. He implemented the Metropolitano bus system in Lima, which has to be regarded as a great success – although it’s only a small first step in Lima’s transportation solution. Otherwise I don’t know much about Castañeda’s ideology. He’s divorced and conventional wisdom says he has little chance of becoming president without a first lady.

3) Ollanta Humala: He’s the villain of them all, widely painted by his opponents as a “leftist” of the same mold of Evo Morales and Hugo Chavez. Humala narrowly lost the 2006 Presidential elections. He seems to have moderated his stance on some issues like foreign investment, but he remains a controversial figure. His opponents and the establishment in general paint a sad picture of Peru heading for the same abyss as Bolivia under Evo Morales should Ollanta Humala be elected, ignoring the fact that Bolivia has one of the fastest growing economies in Latin America and Evo enjoys high approval ratings. But since when does reality trump ideology in this world? Of all the leading candidates Humala is the only one who’s married to a Peruvian, so at least outside of politics he has good judgement 😉

4) Keiko Fujimori: She’s the daughter of former Peruvian president Alberto Fujimori. Her father was president from 1990 to 2000, when he was driven out of the country by a popular revolution. During Alberto Fujimori’s regime, Peru saw an end to terrorism and the economic chaos of the 1980s, but his regime was also marked by human rights abuse and corruption, especially in later years. Keep in mind that Peru has a very young population (partly due to the stability that was brought under Fujimori) and something like 20% of the voting public has no adult memory of Fujimori’s presidency. However, there has remained a strong “Fujimori” following and political party in Peru, led now by his daughter Keiko. I don’t know much about Keiko’s ideological convictions, but her VP candidate is ultra-conservative. I guess Keiko has a chance only if someone can be elected president just for being the child of a well-known ex-president. Eerrrgh, wait, where did I see that one before?

5) PPK or Pedro Pablo Kuczynski: He’s Patricia’s favorite, and the favorite of many of her friends as well. I have a PPK poster on the window, but my dog barks at it. It has to be said my dog is one of the dumber dogs you’ll ever meet. In seriousness, PPK is perhaps the most Western of all the leading candidates. He held US citizenship (I think he renounced it before the elections) and has worked on Wall Street. He has a free-market ideology and as minister of economy under Toledo should take some credit for the macro-economic gains that Peru has made. Although I’m not a fan of this ideology (ie. what’s good for business is good for everyone), I have to say that PPK appears to be a thoughtful and reasonable person, and considering his age and previously successful career I would be more inclined to believe that he’s running to serve the country as opposed to running in order to make financial gain for himself and his inner circle.

Finally, it always strikes me how so many politicians no matter where you are would like you to believe the world as you know it would end without their magnificent leadership. Consider this quote from the Ottawa Citizen about Belgian politics, titled No Government, No Problem:

Take Belgium, for instance. It’s a European country riven by ethnic tensions. Its public debt is almost as big as its total annual output and it’s in the middle of a political crisis so deep that this week it passed Iraq as the modern-day state whose politicians have taken the longest to form a government.
Yet the buses run more or less on time, the garbage is collected twice a week, exports of pharmaceuticals, chocolate and beer have gone on without interruption and it can still take about a month to get a new telephone line. Life goes on.

And that quote is more than a month old by now, still no Belgian government, beer exports are still going on fine 😉