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Presidential elections in Peru: What awaits PPK?

Presidential elections in Peru: What awaits PPK?

Lima, Peru: Government Palace , Residence of the President ,known as House of Pizarro in the Historic Centre of Lima, Unesco World Heritage Site,

By Carolina Santos - Consultant, Peru

Until a week ago, the most respected local pollsters showed Keiko Fujimori – the leader of the Fuerza Popular Party and daughter of former president Alberto Fujimori, now in prison for corruption and crimes against humanity – as being the winner in the second round of the presidential elections that took place on the 5th of June. Polls had indicated that she enjoyed a 5-point difference and would become Peru’s first female president.1

However, to the surprise of political analysts, pollsters and ordinary citizens, her opponent in Pedro Pablo Kuczynski - the center-right candidate for the Peruvians for Change Party and commonly know as PPK, succeeded in reversing predictions to win the presidency by less than 50,000 votes.

While this result was unexpected, investigations from journalists into Fujimori’s close aides (such as the General Secretary of her party and current congressman who is being investigated by the DEA for money laundering) and the publicity generated from this has greatly swayed public opinion and votes, and as the saying goes in Peru, “que se le volteara la tortilla”. (flipped the tortilla)

Mr. Kuczynski managed to capture the aggressive anti-Fujimori vote that has been generated from both the crimes committed by her father and concerns that his eldest daughter had failed to respond to questions around her campaign (e.g. probes into Fujimori's campaign contributions, alliances with illegal miners and criminal allegations levied at congressmen from her party). This sentiment has caused deep divisions in society and fanned protests against the Fuerza Popular candidate that brought 70 thousand people to the streets only a few days ago.

Furthermore, endorsements of PPK from other political parties and especially Verónica Mendoza - the candidate for the Frente Amplio party who was narrowly edged out by the PPK for the second round of voting – have been crucial. Undoubtedly this support was decisive in the result as it gave votes to PPK from southern regions where Veronica Mendoza is most popular. The question remains as to whether these votes will continue to be supportive during his presidency.

Who is PPK?

Pedro Pablo Kuczynski was the son of a Polish-German doctor and a French-Swiss professor of literature who spent his childhood in the diverse regions of Iquitos (Amazon), Puno and Cusco in Peru. After completing his schooling in both Lima and England, PPK then undertook a degree in Philosophy, Politics and Economics at Oxford University (UK) before later complementing this with a Masters in Economics from Princeton University (USA).

He returned to Peru in the 1960s and was Director of the Central Reserve Bank before fleeing to the US during the dictatorship of General Juan Velasco. During his exile in the US, he worked in the financial sector in a variety of countries as well as the World Bank as an economist. On returning to Peru in 2000 following the resignation of Alberto Fujimori, PPK entered politics as the finance minister (on two occasions) as well as cabinet chief for former President Alejandro Toledo. In 2011, he unsuccessfully ran for president under the Alliance for Great Change, coming in third.

Policies

Despite being labeled a ‘gringo’ and criticized for fleeing the country in the 80’s, PPK will continue the current government's market-friendly fiscal and monetary policies and has pledged to restore the country’s economic dynamism with annual GDP growth of 5% of the course of his administration.

To achieve this, among his principal policies, PPK has proposed;

  • Providing tax incentives for SME’s and temporarily reducing income tax from 28% to 10% for small businesses that have a turnover of 2,300 ITU or less.
  • Tackling Peru’s crippling red tape by eliminating all procedures but those deemed essential for a projects completion.
  • Amending the Law of Fiscal Transparency and Responsibility to “increase funds for infrastructure works.”
  • Reorganising the National Police Force through the purge of corrupt officials and improving salary and conditions. Security in Peru has become a major political issue due to a rise in crime and that 88% of Peruvians feel insecure according to the National Institute of Statistics and Information – INEI.
  • Creating a ministry dedicated to supporting regional growth
  • Increasing funds for the public education system. Peru ranked last out of 65 countries and regional education systems by PISA in 2015. (PISA is the Programme for International Student Assessment - conducted every three years by the Organisation for Economic Cooperation and Development - OECD).

PPK also proposes creating unemployment insurance to address the fact that between 65% and 70% of Peruvians work informally and are without basic labour rights, and proposes a new law for equal pay for equal work between men and women.

Congress – will PPK be able to govern?

Peru’s Congress was elected on the day of the first round Presidential vote so even before Sunday’s votes had been cast, the makeup of congress was already known.

Of the 130 congressmen, 73 are from Keiko Fujimori’s Fuerza Popular Party, 20 belong to the Frente Amplio and 18 represent PPK. Therefore, whilst Keiko has not been elected president, her party will enjoy and absolute majority in Congress and be the most powerful political force for the next five years.

Faced with the potentially volatile scenario where Fujimori is able to both approve and reject laws without asking for the support of other political groups, the PPK will have to tread lightly and form both alliances with opposing political parties as well as establishing dialogue with the Fuerza Popular2 to pass laws through the house.

Otherwise it will once again be the contentious Fujimori surname that governs the country, regardless of who holds the presidency.

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  • 1. If she had been elected, Keiko Fujimori would have achieved the rare political feat of holding the highest post in office after having being been first lady years previously.

    2. Although Fujimori and PPK have very similar views on economic policy

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