Peru’s upcoming presidential election could be an important litmus test in a region leaning leftward.
March 10, 2006 4:50 pm (EST)
- Current political and economic issues succinctly explained.
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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.
What issues are at stake in the upcoming Peruvian elections?
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.
Who are the main candidates?
- Lourdes Flores Nano. A lawyer and former congresswoman from Peru’s National Unity (UN) party, Flores Nano was once considered the dominant frontrunner and has been called the election’s "traditional" and "pro-business" candidate. She has clashed with Venezuela’s president, Hugo Chavez, whom many consider to be Latin America’s standard-bearer of the Left. "I view with concern the political process in Venezuela," she said in a recent interview with the Telam news agency, though she also vowed to preserve a "cordial" relationship with Chavez if she is elected.
- Ollanta Humala. In a very short period of time, Humala, a retired soldier, has emerged from obscurity and overtaken Flores Nano in the polls. Support for Humala surged at the end of 2005, and then again in March 2006, prompting predictions that Peru will be the next Latin American domino to fall leftward. Humala has fashioned himself as a nationalist, not a leftist, but he has called for a rewriting of Peru’s constitution, greater state control of the economy, and a clampdown on foreign capital investments. Humala’s surging popularity has provoked jitters in the Peruvian economy (Reuters).
- Alan García. Peru’s president from 1985 to 1990, García was trounced by Alberto Fujimori in his bid for reelection. Many experts say he left the country in shambles, riddled by hyperinflation—over 7,500 percent his final year in office—and destabilized by rampant guerilla violence. Still, García’s center-left populist American Popular Revolutionary Alliance (APRA) Party has many loyalists, and García himself is a popular figure. As CNN put it, he has "an almost-hypnotic ability to seduce Peruvians with his charisma, charm, and oratory skills." Recent polls show García running a close third behind Humala, though some experts say he has yet to take a clear stance on the allocation of public funds, the most pressing issue currently facing the country.
- Alberto Fujimori. One of the race’s more dramatic moments came when Fujimori, Peru’s president from 1990 to 2000, announced his candidacy last October. Fujimori was forced to resign amid charges he organized death-squads to crack down on guerilla forces and that he had used public funds in a corrupt manner. Until late last year, he had been living in exile in Japan. In November 2005, Fujimori relocated from Japan to Chile, where he planned to coordinate a campaign for Peru’s presidency, despite the fact that he faces twelve criminal charges in Peru and has been officially banned from office until 2010. But at Peru’s request, Chilean officials detained the ex-president. Chilean courts are currently debating whether he should be extradited to Peru.
- Valentín Paniagua. Peru’s interim president after Fujimori’s resignation, Paniagua is considered a long-shot candidate. Polls show him with less than 10 percent of the popular vote.
Is there a clear frontrunner?
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.
How does Peru’s electoral system work?
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.
What are the main U.S. interests in Peru’s elections?
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."
What role is Hugo Chavez likely to play in Peru’s elections?
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.