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| Author: | Lee Hudson Teslik, Associate Editor |
|---|
March 10, 2006
The first round of Peru's presidential election (ElectionGuide.org), which is held every five years, is scheduled for April 9. Until recently, the conservative candidate, Lourdes Flores Nano, was expected to win handily. But in a matter of months, Ollanta Humala, a former soldier and staunch populist supported by Venezuela's iconic president Hugo Chavez, has seen a meteoric rise in popularity, and polls now show him leading Flores Nano. Three former Peruvian presidents have also entered the fray, though each is considered a long shot. Analysts are eyeing Peru's election carefully—it could be a tipping point in Latin American politics, which have already seen a shift to the left.
In early 2006, specific policy questions in Peru's election were largely overshadowed by its charismatic candidates. "Personalities are playing such a big role," said Peter Hakim, president of the Inter-American dialogue. But as support for the nationalist candidate, Ollanta Humala, has surged in the immediate run-up to the election, policy has come to the foreground.
Most pressing is the question of foreign investment. Humala has threatened to limit investment (Heritage) in Peru's mining, oil, and natural gas businesses, while Flores Nano has defined herself as a "free market" candidate, and has pledged to respect contracts. Treatment of Peru's cocaleros, or coca growers, is another major policy question. Humala has signified that he may be inclined to follow the lead of Bolivia's Evo Morales and legalize the production of coca crops. Bolivia and Peru are major exporters of cocaine, which is produced from the coca plant, and the legalization of coca growth in those countries is a concern to U.S. counter-narcotic agencies.
A third question is how Peru's federal government will allocate its rapidly growing revenues. A surge in demand for Peru's commodities, which include gold, minerals, and foodstuffs, has been spurred by China's steadily expanding influence in Latin America. China's imports from the Andean region have increased more than six-fold since 2000. But experts say the Peruvian federal government has yet to implement effective means of distributing new funds. Despite increased national wealth, living conditions for most Peruvians remain unimproved.
The inability of Peru's current president, Alejandro Toledo, to address these problems has earned him an approval rating of under ten percent—the lowest of any president in Latin America. Toledo addressed the task of reducing poverty in a 2003 speech at CFR, but experts say he hasn't been able to make significant progress on this issue during his final years in office.
At the beginning of 2006, Flores Nano was considered the overwhelming favorite in the race, but Humala surged in popularity in March and polls now show him leading the popular vote. Early April polls from the Apoyo Group showed Humala with about 32 percent of the vote, leading Flores Nano by four points. Experts point out that Apoyo mishandled polls in the recent Bolivian elections, but it seems all but certain that no candidate will garner the 50 percent needed to win outright in April and the vote will go to a runoff.
At one point, polls predicted that Lourdes Flores Nano would win overwhelmingly in a runoff situation against either Humala or García. But now the race has tightened. Some polls show her winning a runoff against Humala by a small margin (Bloomberg), while others have the candidates in a dead heat.
Peru has what is called a "ballotage" system. There is an open first-round election, currently scheduled for April 9. In the event no candidate wins more than 50 percent of the vote, the top two candidates will compete in a second-round runoff May 7. It is unlikely that any of the candidates will win the majority of votes, and there will most likely be a runoff.
The United States and Peru struck a free trade agreement last December, a move intended to solidify U.S.-Peruvian relations and, eventually, to facilitate a broader U.S.-Andean trade pact. Rob Portman, the U.S. trade representative, said in a statement that the "agreement with Peru is a key building block in our strategy to advance free trade within our hemisphere." The United States opened trade negotiations with Peru, Columbia, and Ecuador in 2004. On February 27, 2006, it followed up on its deal with Peru by finalizing an agreement with Columbia. Talks with Ecuador are still in progress.
Experts say the United States hopes a Flores Nano victory would abate what some have called a "lurch to the left" in Latin American politics. Many experts have focused on Chavez's role as a regional leader and point to the elections of self-described "nightmare" for Washington Evo Morales in Bolivia and Chile's socialist president-elect Michelle Bachelet as evidence of this trend. U.S. officials have expressed concern that a swing to the left could prompt Latin America to withdraw from specific free trade agreements and from the global economy more generally, which experts say could be detrimental to all parties involved. But CFR Fellow Julia Sweig said in a recent interview with cfr.org's Mary Crane that some of these fears may be unfounded. "These votes for the Left are not a rejection of the market," said Sweig. Rather, she says, they represent a lack of confidence in "existing institutions and the traditional elites."
Venezuela's authoritarian, anti-American president has publicly endorsed Humala's candidacy and Humala has reciprocated, praising Chavez as a role model and political icon in the region. After meeting with Chavez and Morales in February, Humala proclaimed himself part of "a Latin America with new leaders, in which the perception is that the neo-liberal economic model is exhausted." Still, some experts say Chavez's endorsement could be a mixed blessing for Humala's political prospects. Chavez has limited political clout in Peru. The two countries have long been at odds, and Peru briefly withdrew its ambassador from Caracas after Chavez announced his support for Humala, accusing the Venezuelan president of interference with Peru's national politics.
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