Peru’s president doesn’t haveroom for failure

Pedro Pablo Kuczynski, giving a campaign speech, eked out a victory to become president of Peru.
Pedro Pablo Kuczynski, giving a campaign speech, eked out a victory to become president of Peru. AP

On June 5, Peruvian voters went to the polls to elect as their new president: a soft-spoken, Oxford-educated economist whose Spanish is marked by an American accent. In the second-round election, Pedro Pablo Kuczynski squeaked past his opponent, congresswoman Keiko Fujimori, daughter of jailed former President Alberto Fujimori. Kuczynski won with 50.12 percent of the vote.

After being behind for most of the campaign, Keiko Fujimori’s lead in the polls withered away with allegations that some in her inner circle had connections to criminal organizations.

Latin Americans’ intolerance of corruption and impunity is changing regional politics at lightning speed. With Fujimori, the specter of corruption has ended yet another Latin American political career.

Academic and wonkish, Kuczynski had trouble creating a relatable image for himself during the campaign. Fujimori seized upon this — and his half-century of work outside Peru, including at the World Bank — to paint Kuczynski as someone who would place foreign interests ahead of the interests of Peru.

But Kuczynski, a former prime minister, successfully campaigned on the issues that resonate most with Peruvians today. A recent surge in violent crime rates has left people weary of lawlessness and impunity. The country’s impressive economic growth has been slowing down with the end of the commodities boom.

Illegal mining is causing extensive environmental destruction in the country’s hinterlands and brings forth the greater issue of informal employment in Peru.

Though less outspoken than his rival on nearly all these issues and facing a Congress packed with Fujimorista opposition, Kuczynski has the experience and policy knowledge to implement reforms. Behind his quiet demeanor lie sound economic credentials, leaving little doubt over his capacity to address Peru’s systemic market inefficiencies.

It may be tempting for some observers to link Kuczynski’s victory — and the right-wing-dominated runoff — to the ebbing of the “pink tide” in Latin America, following recent shifts in Argentina, Brazil and Venezuela.

But this is not true.

Economically speaking, continuity is the theme. Peru is going from one pragmatic, free market, export-oriented government to another. The country will continue to be a candidate for the Trans-Pacific Partnership (TPP), will continue its crucial role as a founding member of the Pacific Alliance and will continue its efforts to secure OECD membership. Under the past two administrations, Peru has signed 17 free-trade agreements involving more than 50 countries, a trend that is expected to continue.

Instead, the campaign was dominated by concerns about rising crime rates and perceptions of impunity. As Kuczynski tackles these issues, he will need to reconcile an increasingly widespread desire for mano dura — iron fist — law enforcement with the careful gaze of human-rights groups wary of past experiences with crime-fighting in Peru.

First, we can expect that the new government will seek to show action on corruption. He has running room on this issue since Peruvians handed him a victory because of allegations against Fujimori’s inner circle. Policies may include the appointment of a transparency czar or new laws requiring income disclosures for public officials.

But, reforming the administration of justice is a slow, multi-generational process that takes years to bear fruit. Immediate symbolic gains will be made doubly difficult by an opposition Congress and public suspicion over his vice president, Martín Vizcarra, whom Fujimori repeatedly accused of appropriating public lands.

Second, Kuczynski quickly must show improvements in fighting crime, the greatest area of concern for Peruvians today and Fujimori’s top selling point. To the relief of the human-rights community, Kuczynski has shown a greater inclination toward crime deterrence than merely punitive policy. But immediate results will require more direct action, including his proposal to completely overhaul of the national police force to root out corruption and inefficiencies.

Third, the new government’s biggest challenge will be incorporating the informal economy, which accounts for about 64 percent of employment. In particular, the Kuczynski administration is expected to focus on informal mining activity. Kuczynski has proposed the establishment of a “miner’s bank” to purchase gold from miners who comply with tax and environmental regulations. His plan also entails temporary tax amnesty to incentivize entry into the formal sector, though time will tell how effectively this plays out.

If Pedro Pablo Kuczynski is successful in navigating these three areas early in his first year, it is possible he could win over his native Peru. But there will be little room for error. Kuczynski has a few months to prove who he is and who he is not. Peruvians are famously impatient with their presidents.

Peter Schechter is the director of the Adrienne Arsht Latin America Center of the Atlantic Council, based in Washington, D.C.