“Peruvians want an evolution, not a revolution,” said José Luis Renique, an expert in Peruvian politics and professor of history at City University New York. He was talking about the June 5 runoff elections in Peru. Renique was joined by three other experts on Peru for a May 25 discussion at the Inter-American Dialogue about the potential economic, political and social repercussions of an Ollanta Humala versus Keiko Fujimori presidency.
Patrick Esterhuelas, vice president of the Sovereign Risk Group at Moody’s Investors Service and former director of the Eurasia Group’s Latin America practice, and Saavedra-Chanduvi, acting director of the Poverty Reduction and Equity Group at the World Bank, opened the event by outlining Peru’s economic trajectory and potential for continued social advance.
According to Esterhuelas, Peru is unlikely to see a significant upset in economic growth regardless of who wins the election because of the country’s established market fundamentals—its strong central bank, solid domestic investment, low debt and good fiscal rules. Esterhuelas noted, however, that the political moderation displayed by Humala has generated doubts about his sincerity because of his previous, more interventionist views on economic policy. Consequently, uncertainty about the economic trajectory of a Humala administration could result in some initial dampening of Peru’s growth, although any great economic upheaval is unlikely.
Saavedra-Chanduvi offered an overview of Peru’s progress in reducing poverty and inequality, but argued that much more remains to be done. The difference in poverty between rural and urban areas is especially troubling—as of 2010, nearly half of Peru’s rural population lived in poverty. Furthermore, social advances have been more a result of strong economic growth than government efforts. Peru’s relative performance in international indices suggests that government has done more to promote a business-friendly environment, for example, than to equalize children’s access to basic services.
Renique and Jose Gonzales, director of EMC Managers, followed with a discussion on how Peru’s political history provides insights regarding the June 5 presidential runoff.
After crunching the numbers, Gonzales concluded that neither candidate is a favorite to win. Fujimori reached the second round with the same percentage of votes that her party has captured in previous regional elections. Humala’s surge in votes, however, showed that “politics, not economics, is the issue” that people are voting on in this election. Gonzales posited that Peruvians want development—access to basic services and quality jobs— which is more than just economic growth.
Renique noted that Peru is experiencing “a miracle without a saint,” in that no politician has been able to capitalize politically on its economic performance. There is a widespread dissatisfaction with government, and Renique argued that people want improvements in access to information, education quality and services. Given Fujimori’s agenda, however, he doubts that she will improve the state’s institutional capacity to meet these demands.
