PPK prepares to preside over a divided Peru

But the near-certain winner of the election will not have to enact major economic reforms like Brazil or Argentina

Kuczynski supporters outside election commission headquarters.
Kuczynski supporters outside election commission headquarters.ERNESTO BENAVIDES (AFP)
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Kuczynski se prepara ya para tejer un Perú dividido pero sin crisis económica

The people who decided the Peruvian elections would easily fit inside Lima’s National Stadium, which can seat 50,000 fans.

With 98% of the vote counted, Pedro Pablo Kuczynski (PPK) has secured a nearly certain victory over Keiko Fujimori by a margin of 43,000 ballots.

“It is irreversible; Fujimori would have to secure 70% in all the remaining voting tables, and that’s highly unlikely,” says Alfredo Torres, president of marketing agency IPSOS Perú and the man in charge of a poll that correctly forecast the results.

PPK has the great advantage, which Humala lacked, of knowing the state from the inside

David Rivera, editor of Poder magazine

On Saturday, this poll predicted that PPK would win by 0.6 of a percentage point. In the end, the victory will be even narrower at 0.3 points.

Kuczynski is getting ready to take the reins of a divided country, but one with a much better economic situation than Argentina or Brazil, two nations where liberals like himself have just taken power and introduced adjustment measures.

The vote count has become an agonizing process. Although all analysts have been agreeing since Tuesday that the outcome is irreversible, the Fujimori camp is reticent to accept defeat, and some of its spokespeople keep fueling the hopes of their followers.

The expat vote has consolidated PPK’s victory, even though Keiko Fujimori won in Japan, where her father, former president Alberto Fujimori, took refuge while he was being prosecuted in Peru.

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Yet despite the delay, the tension is much lower than one might expect in such a divided nation with a recent past of violence and authoritarianism. Most Peruvians are taking this decisive moment calmly, although a few hundred protesters marched on Tuesday night outside the headquarters of ONPE, the election commission. The demonstration pitted Fujimori supporters with orange flags against PPK followers who sang the national anthem. Standing in the middle were around 50 police officers, but the mood was not particularly tense there, either.

Kuczynski has decided to keep quiet until his rival admits defeat. But in the meantime, he is putting together a new government and preparing a plan to address the economic and political situation in a country where the president will only have 18 congressmembers on his side, compared with 73 for Fujimori.

This means that Kuczynski will be forced to seek agreements in order to govern. But he is not facing a major economic crisis.

“His problems are more political than economic,” says Gonzalo Zegarra, editor of Semana Económica, an influential business magazine. “Expectations are not bad, especially because of the price of metals, which Peru is strong in, such as silver and gold. There is a cash flow problem, and PPK has promised a lot of things that mean spending, such as a major infrastructure plan. But debt levels are very low and there is economic growth.”

The expat vote has consolidated PPK’s victory, even though Keiko Fujimori won in Japan

“PPK already has the trust of the markets, which Humala had to earn,” adds Zegarra. “Now he needs governability He is a very open-minded man; now he needs to become a politician.”

Peru’s economy has grown significanly in recent years, sometimes at a rate of 9%. The current growth rate stands at 3% but people are unhappy, because this growth has not trickled down to everyone. Streets are still unsafe and inequality remains rampant.

“We call it our unhappy growth. Our polls detect that people are very unhappy about public health, education, transportation and citizen safety,” says Torres, of IPSOS. “That’s where the great challenge lies. That, and reaching deals. PPK and Fujimori’s platforms were not that different. Both have common friends in the business world who will build bridges. The reality in parliament will force them to get along.”

David Rivera, editor of Poder magazine, notes that PPK will not need to make any major adjustments like Argentina or Brazil.

“Peru has had a lot of continuity in economic policy, and it’s worked out well,” he says. “PPK has the great advantage, which Humala lacked, of knowing the state from the inside, as he served as economy minister and prime minister. He can be a good manager. His main problem is political. During the campaign he evidenced near-zero political abilities, reacting only in the last week. He evidently has trouble understanding the logics that drive Peruvian politics. His entourage is very right-wing, and he will need to build bridges with all sectors, even in the center-left. But given his personal style, that shouldn’t be a problem.”

Despite his narrow victory, several analysts agreed that PPK is poised to run a good government, among other things because he will be taking over from a president, Ollanta Humala, whose popularity ratings had sunk to rock bottom. Now it is up to this 77-year-old economist to deliver on what Peruvians are expecting of him.

English version by Susana Urra.

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