Political Risk Latin America Blog @PolRiskLatam

The populist crowd

Posted in News and Articles, Political Risk by politicalrisklatam on April 12, 2011

by The Economist – Americas View, April 11th, 2011.

In 2006 Ollanta Humala, a populist former army colonel backed by Venezuela’s Hugo Chávez, won the first round of Peru’s presidential election with 31% of the vote. In the subsequent run-off, however, he lost by five percentage points to Alan García. History repeated itself on April 10th, when Mr Humala, now presenting himself as a moderate centre-left candidate, again topped the first-round field. With 90% of the ballots counted, he has received the same 31% of the vote.

This time, however, he is likely to face another populist—albeit a conservative one—in the second round. The runner-up to Mr Humala will almost certainly be Keiko Fujimori (above), a 35-year-old congresswoman. Her father, Alberto Fujimori, was an autocratic right-wing president in the 1990s and is now in jail for corruption and human-rights abuses. Collectively, the three candidates who embodied Peru’s restored democracy as well as its orthodox fiscal and monetary policies received nearly half the vote. But Pedro Pablo Kuczynski, a former finance minister who leads that group with 19% of the vote, currently trails Ms Fujimori by four percentage points. As a result, the politics of a country that has been impressively stable since Mr Fujimori left office in 2000 have suddenly become highly volatile. The local stock market fell by 1.32% on the news.

Peruvians voted for politicians who might change their country’s highly successful approach to government for two reasons. First, the fruits of its GDP growth have not been shared broadly enough. Although the percentage of Peruvians living in poverty has fallen sharply in recent years, access to basic public services remains spotty and crime is on the rise. Polls taken before the vote found that more than 77% of voters expressing an opinion wanted to modify the country’s development model, although just 37% said they wanted to do so radically. (continue reading… )



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