June 7, 2011 10:13PM

Peru’s Election

The last 10 years have probably been the best decade in Peruvian history in terms of economic growth and social progress. As I’ve described before, Peru has become an increasingly successful market democracy. Growth averaged a yearly 5.5 percent since 2001 and the poverty rate fell from 54 to 30 percent in the same period. And yet, Peruvians elected leftist Ollanta Humala as president on Sunday in a contentious, polarizing and very tight race.

Humala narrowly beat Keiko Fujimori, daughter of former President Alberto Fujimori, now serving a 25-year prison term for corruption and human rights abuses conducted during 10 years in power (1990-2000) that also saw the defeat of the Shining Path guerrillas and the liberalization of the Peruvian economy. Fujimori had trouble condemning violations committed under her father’s rule. Humala is a nationalist, former army officer and coup leader who for years advocated populist, anti-market policies of the kind practiced by Venezuela’s Hugo Chavez or Bolivia’s Evo Morales.

Though the election pitted two aspirants with questionable democratic credentials against each other, it would be a mistake to interpret it as a rejection of Peru’s market-liberal path. The two candidates got to the second round of elections because the various other presidential contenders broadly supportive of democratic capitalism carved up almost half the popular vote among themselves in the first round of elections. Humala’s initial vote was still high (32 percent), but it is doubtful he could have been elected president had only one market democrat run.

Compared to other Latin American countries, Peruvians’ support for a liberal society should not be surprising. The country set itself apart by introducing perhaps the most far-reaching market reforms of the early 1990s, sticking to those reforms, deepening some of them after the return of democracy last decade, and avoiding major public policy mistakes that led to economic crises in other countries. The result has been a transformation of large parts of the economy and society. Non-traditional exports and industries have flourished; wages have increased; economic growth has spread throughout the coast and much of the interior traditionally little affected by economic progress; successful Peruvian multinational corporations have emerged from humble roots; and poverty reduction has meant both the rise of a middle class and a narrowing gap between the rich and the poor.

According to Peruvian journalist and anthropologist Jaime de Althaus, “What we are seeing, in essence, is the birth of the free and autonomous citizen and his incorporation to the national dialogue of the market.” Bourgeois values are spreading. 

That is why so many Peruvians found the second round of voting unfortunate and agonizing. In the face of that dilemma, Peruvian Nobel laureate in literature and renowned classical liberal Mario Vargas Llosa exhorted his compatriots to vote for Humala in Sunday’s election on the idea that it was the lesser of two evils. My friend and colleague Alvaro Vargas Llosa (Mario’s well-known son) then vigorously campaigned for Humala, arguing constantly, articulately and forcefully that Humala no longer believed in his previous, extremist views. Thus he convinced at least a small portion of the electorate that Humala represented the modern Latin American left committed to civil liberties, economic stability and democracy along the lines of former President Lula of Brazil. It is probably fair to say that Alvaro made all the difference in the final weeks of this election, delivering the vote to Humala.

For many of us, though, the argument that Humala was now Lula and not Chavez was too hard to swallow. Why should we believe in the new democratic credentials of a politician who led a failed coup attempt in 2000, praised another failed coup attempt by his brother in 2005, and allied himself with Hugo Chavez in the previous elections (with credible indications that he received funds from the Venezuelan regime at that time)? After all, Humala’s campaign platform released in December 2010 called for nationalizing strategic industries, renegotiating free trade agreements, re-writitng the constitution, reviewing the legitimacy of radio and TV broadcast licenses, guaranteeing that the media “are at the service of democracy,” and it blamed “neoliberalism” for Peruvian poverty and advocated a general expansion of the state in society. Humala then changed his campaign platform considerably several times and professed to be ever more moderate. (I rarely believe U.S. politicians when they make much more credible claims of policy moderation.)

If instead you believed that the chances that Humala was just following a pattern of deception that we’ve seen elsewhere in Latin America where elected populists went on to destroy democracy and violate rights, then it was fully rational to oppose Humala. I hope Alvaro is right about his assessment. For the time being, uncertainty about Peru’s future will prevail. Those of us skeptical of Humala should now do everything we can to hold the new government to account and to steer it away from Chavismo, as I think is the intention of Humala’s liberal supporters.