The upcoming Peruvian runoff elections for president may provide another sign that the wave of Hugo Chavez-style populism in Latin America has crested. The contest is between Alan Garcia--a former populist president who ruined the country during his term (1985-1990) with heterodox economic policies (Peru was set back 30 years in terms of per capita income; had 7,000 percent inflation in 1990; and much of the country was controlled by the Shining Path guerrillas)--and Ollanta Humala--an extreme nationalist and populist who, following the example of Chavez, led a brief but failed rebellion against the outgoing regime of President Alberto Fujimori in 2000. Humala´s popularity among the most disenfranchised of Peru´s poor, especially in the country´s interior, went virtually unnoticed among Peru´s elite and the press until last year. (Peruvian adjunct scholar Enrique Ghersi was alone in foreseeing this development in an op-ed in the Christian Science Monitor in 2003).
Garcia promises to run a responsible government that respects the constitution and the separation of powers, including the independence of the central bank. Humala promises nationalizations, a rejection of the free trade agreement with the United States pending in the congress, a constituent assembly to draft a new constitution, and the arrest of corrupt ex-presidents including Garcia himself.
Polls give Garcia a lead in the June 4 elections, especially among voters in urban areas and along the coast. Peruvians don´t love Garcia; many who plan on voting for him even hate him but consider him a lesser of two evils who will stick to democracy and be constrained by a Peruvian economy that is much more open than it was during the 1980s. Humala´s authoritarianism promises to change the rules of the game in a way that scares most Peruvians.
I'm writing from Moyobamba, Peru. In the rural areas surrounding this jungle town where the Andes turn into the Amazon rain forest, most villages have no sewerage or running water and electricity for some areas is recent. Rural Peruvians here will vote for Humala. But those votes are not necessarily ideological. Many will vote for Humala because they feel they have nothing to lose from rejecting the traditional political system that has served them poorly. Indeed, were the supposedly neo-liberal former president Fujimori (1990-2000) allowed to run again, the poor here would overwhelmingly give him their votes. The two most popular presidents in this part of the country are Fujimori--for pacifying the country by getting rid of leftist guerrillas who terrorized rural areas--and Fernando Belaunde, who in the 1960s built major roads connecting the region to the rest of the country.
Garcia´s likely election will be a blow to Hugo Chavez. Chavez has explicitly endorsed Humala, leading to heated and continuing exchanges between Chavez and Garcia, who accuses the Venezuelan president of interfering in Peru´s internal affairs and of planning on using Humala as his puppet. Chavez may have an ally and a client in Bolivian President Evo Morales, but his Bolivarian dream of uniting Latin America under his leadership is being undermined by a Latin American reality: Latin America´s usually irresponsible governments more often than not, thankfully, do not get along.
Thus Brazil and Bolivia are in a dispute over Bolivia´s nationalization of gas companies that belong to Brazil and provide that country with much energy; Mexican President Vicente Fox has clashed publicly with Chavez about Mexico´s relations with the United States; and the leftist governments of Argentina and Uruguay are in a heated dispute about a border issue.
The election of Garcia will not be a victory for market liberals or a definitive defeat of populism. As a Peruvian economist recently described to me, Peru, with its long coast and Andean and jungle interior, is part Chile (modern and open) and part Bolivia (more backward and isolated). A Garcia presidency will be mostly mediocre with a possibility of market reforms in some areas (agriculture and perhaps property titling, for example) and with Humala as a remaining, significant irritant.
Such is the uneven pace of progress in Latin America these days. But it would be progress nonetheless. The next bit of major good news in the region may come from Mexico, where presidential elections in July may result in the rise to power of Felipe Calderon, a market liberal now leading in the polls, and the defeat of populist Andres Manuel Lopez Obrador, Chavez´s favored candidate.