The Persistence of Neopopulism in Peru? from Fujimori to Toledo

Home , Alejandro Toledo, Corruption in Peru, Juan Velasco Alvarado, Pedro Pablo Kuczynski, Vladimiro Montesinos

Third World Quarterly, Vol 24, No 6, pp 1161Ð1178, 2003

The persistence of Neopopulism in Peru? From Fujimori to Toledo

ROBERT R BARR

ABSTRACT This paper argues that Peru’s Alejandro Toledo can be considered a neopopulist leader. Neopopulists seek to develop personalistic ties with the dispossessed, unorganised masses, while also appealing to international economic interests. By analysing Toledo’s administration according to four categories—anti-political rhetoric and symbols, promises and policies, personalism, and mass support—I conclude that his strategy is largely, but not perfectly, consistent with neopopulism. Importantly, however, his strategy has failed to generate the all-important element of broad mass support. I further argue that Toledo faces three important contextual constraints: the absence of crisis, public weariness with neoliberalism and the reaction to Fujimori. These factors limit the prospects for successful neopopulist leadership in contemporary Peru. They also suggest that today’s neopopulists in Latin America may require ever more nuance and creativity to mobilise support.

Neopopulism is commonly understood as the political phenomenon in which a leader attempts to build personalistic ties to the impoverished masses while pursuing neoliberal economic policies.1 What better symbol of neopopulism than Peru’s President Alejandro Toledo, child of poverty as well as World Bank official, and his inauguration, a traditional Incan ritual atop Machu Picchu coming soon after naming free market disciple Pedro Pablo Kuczynski as Finance Minister. The combination of Toledo, called Pachacutec by his supporters in reference to a 15th century Incan monarch, with Kuczynski, a US- based investment banker, speaks volumes of the intended direction of the new Peruvian administration. Toledo, as he explained during the campaign, promised to pursue market economics with a human face. Despite his intentions, Toledo has not yet been able to generate that all- important neopopulist element of mass public support. Indeed, rather than solidifying the bonds between leader and followers that defines populism, he has severed them. To this point in his administration, I argue, his administration presents an example of unsuccessful neopopulism. That is, his strategy has not propelled him into the kind of dominant political position that has characterised the notable populists of the past. What follows is an assessment of Toledo’s administration in terms of its affinities with and distinctions from neopopulism. This paper is part of a broader effort to assess the contemporary status of neo-

Robert R Barr is in the Department of Political Science, University of Miami, PO Box 248047, Coral Gables, FL 33124-6534, USA. Email: [email protected].

ISSN 0143-6597 print/ISSN 1360-2241 online/03/061161-18 2003 Third World Quarterly DOI: 10.1080/01436590310001630116 1161 ROBERT R BARR populism in Latin America and to better understand the conditions that affect its use and success. The picture that appears in Peru highlights the role of context. While certain contemporary contextual elements in Peru should facilitate neopopulist rule, others hinder it. In particular, the current absence of crisis, the public’s weariness with neoliberal economics, and the reaction against the legacy of former president Alberto Fujimori have created obstacles to building broad public support and a personalistic manner of governance. After briefly considering the background to the current administration, the paper turns to the analysis of the Toledo administration and then to the role of context as it has affected neopopulism in Peru.

Background Populism has been a recurrent feature in Peruvian politics, beginning in the 1930s and lasting in some form until the present. The classic populists—the charismatic leaders who formed multi-class coalitions and pursued expansive economic policies—include the likes of Víctor Raúl Haya de la Torre, Manuel Odría, Fernando Belaúnde Terry, Juan Velasco Alvarado, and Alan García.2 Following García’s administration (1985Ð90) was that of Alberto Fujimori (1990Ð2000), which marked the introduction of a new phase of populism in Peru.3 Neopopulism, as I define it, differs from the classical variant principally in the acceptance or pursuit of neoliberal economic policies. Rather than pursuing expansive social policies, neopopulists work within the confines of fiscal constraint, and thus specifically target their spending on particular groups. Their targets tend to be the dispossessed, or those least included in national economic and political life. Along with the impoverished masses, neopopulists appeal to international financial interests as the potential stimuli of economic growth in the neoliberal development model. In addition, these leaders tend to rely on electoral movements with low levels of institutionalisation, rather than the foundation of solid party organisations, and they even attempt to ‘de-institutionalise’ politics by bypassing other representative or intermediary institutions.4 Fundamentally, nevertheless, both variants of populism are political in nature, where an individual leader seeks to build broad popular support through a strategy of confronting the political establishment. Fujimori’s time in office serves as the prototypical case of neopopulism. He ruled in a top-down, personalistic manner that, at best, blurred the boundaries between democracy and authoritarianism; he made direct appeals to Peru’s poor, particularly the unorganised masses; he made heavy use of an ‘anti-system’ or ‘anti-political’ rhetoric that lambasted the political class for causing the nation’s many problems; he manipulated the institutions of government to concentrate power in the executive office, thereby facilitating his use of state resources for personal political gain; he ‘saved’ the country from the acute crises of hyperinflation and terrorism; and he transformed the structure of the economy, implementing a neoliberal model of development and appealing to international financial interests. His tactics proved highly successful for a number of years: his average approval rating for his entire time in office—including the period of quadruple-digit inflation and when his government was collapsing in absolute 1162 THE PERSISTENCE OF NEOPOPULISM IN PERU? disgrace—was 54.3%.5 Public opinion is an excellent measure of a neopopulist’s success in that such leaders derive their strength directly from the public. Rather than relying on organisations like a disciplined party or the military, ‘the ultima ratio of populism [is] broad mass support’.6 Fujimori was highly successful in combating hyperinflation and the terrorist organisation Sendero Luminoso. From 1991 to 1997 the economy grew at an average rate of 5.3% per year7 and in 1992 the Sendero Luminoso effectively came to an end. Largely thanks to international factors, however, Peru’s economic performance changed course beginning in 1997. The country’s GDP declined in 1998 (-0.5%) and saw little improvement the following year (0.9%).8 The president’s approval ratings began to decline during this period as well, dropping from a 1996 average of 60% to 41% the following year, although his approval picked up somewhat in 1999.9 In 2000 Fujimori ran for a legally questionable third term in office. His leading competitor was Alejandro Toledo, who withdrew from the second round of voting to protest the government’s manipulation of the electoral process. In September a videotape leaked to the press showed Vladimiro Montesinos, Fujimori’s right-hand man, in the act of bribing an opposition congressman. This was the first of the ‘Vladi-videos’: the hundreds of videos in Montesinos’ collection that exposed the extent of corruption in Peru. Responding to the crisis, Fujimori announced that he would call for new general elections the following year and that he would not participate. With the corruption scandal escalating, Fujimori relinquished the presidency in December 2000, faxing his resignation from Japan. Congress selected Valentín Paniagua to serve as the interim president until the following summer, when a newly elected administration would take office. The first round of elections took place in April 2001. Alejandro Toledo received a plurality of the votes, but not far behind was former president and populist Alan García. By reaching the second round of voting García had made a remarkable political comeback: his administration had ended in disgrace and he had only recently returned to Peru from self-imposed exile. Although Toledo emerged victorious and took office in July, García’s APRA party proved the big winner. Many observers had concluded that Peru’s party system had effectively collapsed during the course of Fujimori’s tenure, with the established parties almost entirely eclipsed by new, independent electoral movements like Toledo’s Perú Posible.10 García’s return, however, helped boost the popularity of APRA—the country’s only well organised party—and it captured 23% of the seats in congress, the second largest bloc after Perú Posible’s 37%. García and APRA have proven to be somewhat of a challenge for the Toledo administration, which is analysed below.

The Toledo administration As described earlier, neopopulists seek to develop personalistic ties with the dispossessed, unorganised masses while also appealing to international economic interests. Their political strategy can be dissected and analysed according to four sub-categories: anti-political rhetoric and symbols, promises and policies, 1163 ROBERT R BARR personalism, and mass support. In this section, I assess Toledo’s administration according to each of these categories. Despite his apparent efforts to implement the strategy associated with neopopulism, he has been unable to do so completely at this point in his administration. As the paper later explains, domestic political conditions have created obstacles to neopopulism in general, helping account for Toledo’s only partially consistent use of standard neopopulist tactics and, more importantly, his failure to generate political strength in the form of public support, a necessary element for any populist.

Anti-politics The rhetoric and symbols of anti-politics help establish a particular type of relationship between the leader and his or her constituents. Populist or neopopulist leaders accuse the elite political class of the nation’s ills and present themselves as defenders of the oppressed, as symbols of redemption.11 As such, they attempt to secure a status as a kind of saviour of the masses. A populist’s strategy, in other words, defines politics as a battle of ‘us versus them’. To do this, they must not only identify their adversary, but also convince the people that they are on the same side of the contest. During the 2001 campaign Toledo decidedly pursued the neopopulist tactic of identifying himself with common citizens: he defined himself as a ‘cholo’ highlighting the indigenous heritage he shares with the majority of Peruvians. He and his European wife, Elaine Karp, emphasised the ethnic theme. As noted, he enjoyed the sobriquet of Pachacutec and chose the ancient Incan capital for his inauguration. Karp, despite her own roots, argued that to elect Toledo would be to return political power to the Indians after a 500-year interlude. As the result of similar comments and reactions, charges of racism among the candidates were common. In addition to this indigenous image was the similarly potent symbol of Toledo’s personal success. Toledo rose from childhood poverty, when he worked on the street as a shoeshine boy, to earn a PhD at Stanford, and went on to affilia- tions with the World Bank and Harvard. That one of Peru’s underclass could overcome enormous obstacles and become president arguably helped establish a sense of connection with the huge masses of Peru’s poor as well as providing a symbol of hope. Despite the high potential for connecting with the masses, a number of accusa- tions circulated during the campaign and tarnished Toledo’s image. There were alleged pictures showing Toledo in compromising positions, a claim he rebuked with allegations that Fujimori’s allies had drugged him and staged the pictures. There were also charges of drug use and of having an illegitimate child. As a result many Peruvians viewed the choice between Toledo and García as picking the lesser of two evils. Opinion polls before the run-off vote showed little difference of support among the three choices: voting for Toledo, voting for García, or spoiling the ballot.12 After taking office, moreover, Toledo found it increasingly difficult to credibly claim affinity with the Peruvian masses. He was reproached for leading an extravagant lifestyle, criticised for beginning his workdays late, accused of nepotism, and chastised for refusing to take DNA tests relating to a paternity suit. Despite repeatedly denying the allegation that he 1164 THE PERSISTENCE OF NEOPOPULISM IN PERU? fathered Zarai Toledo, after a year in office he relented and recognised the 14-year-old as his daughter (and agreed to pay her for her troubles). Moreover, his salary of US$18 000 per month along with his wife’s of $10 000 per month from a private bank increased the distance between the new president and the plight of most Peruvians. In short, despite his efforts to tie himself with the masses, a number of obstacles have impeded him. Regarding the identification of the common adversary, Toledo clearly and dramatically defined it by withdrawing from the elections of 2000. The foe was Fujimori—who had effectively used an anti-political strategy during his own administration—and the effects of the FujimoriÐMontesinos regime. Despite Toledo’s (or his wife’s) occasional rhetoric against the country’s white elite, the Fujimori legacy dominated the campaign. The former president and his cronies had become symbols of corruption, abuse of power and the problems associated with excessively centralised and non-transparent government. The numerous videos displaying political corruption, the trials of Montesinos and others, and reports from various human rights groups documenting government abuses of ordinary citizens have helped keep this adversary alive. The presidential candidates harped on repairing the damage done by Fujimori and his mafia, pledging to clean up corruption and decentralise power. Toledo, for instance, has at various times promised to clean up government corruption (including the police and military), streamline the judicial process, remove the authoritarian elements in the 1993 constitution, gain the extradition of Fujimori from Japan for trial and compel the courts to speed up the trials of the FujimoriÐMontesinos mafia. As such, the anti-politics that characterises most neopopulist rhetoric was somewhat different in Peru,13 that is, the ‘us versus them’ contest was not one of the people versus the oligarchy, but the people versus the former neopopulist regime. This element is an important contextual factor, which I will explore in more detail below.

Promises and policies Although the slogan on Toledo’s campaign posters read, simply, más trabajo (more work), he has made a number of bold promises, not least of which was to create one million new jobs. During the campaign he also pledged not to privatise any state-owned companies, implicitly acknowledging the growing regional discontent with neoliberalism. At the same time, however, he considers foreign investment necessary for domestic job growth and has thus tried to maintain investor confidence. As such, he has walked the neopopulist tightrope of promising tangible benefits for the poor as well as an investment climate friendly to international capital. Since taking office Toledo has actively pursued this two-tiered economic agenda. Among his policies or pledges aimed at the popular sectors are: creation of the agrobanco to issue small loans to peasant farmers, health insurance for poor women and children, a national housing plan to build tens of thousands of homes, construction projects in several regions designed to limit the impact of the El Niño weather phenomenon, a $300 million project to expand drinking water and sewerage in the Lima shantytowns, a 9% pay raise for public sector 1165 ROBERT R BARR employees, a temporary jobs programme in poor areas, a rural education programme, irrigation projects, rural infrastructure development, and a 10-year rural electrification project. He has actively sought funds from international donors for several of these projects, including an Inter-American Development Bank (IDB) project for land titling and World Bank programmes to improve water supplies and access to social services in rural areas.14 Indeed, budgetary social expenditures as a percentage of GDP were 7.5% higher in Toledo’s first full year in office (2002) than in Fujimori’s last (2000).15 At the same time he has appealed to the international financial community by promising a climate favourable to investors. Perhaps the strongest message to investors came with his appointments of Kuczynski as Finance Minister and Roberto Dañino, another pro-privatisation hawk, as Prime Minister.16 In addition, Toledo has actively sought free trade agreements with the other Andean countries as well as with South Korea, has made Peru’s first sovereign bond issue in 74 years,17 pledged to reduce the fiscal deficit through cuts in military and defence spending, and proposed what the IMF referred to as ‘an ambitious privatisation and concessions program’.18 Toledo ran into fundamental problems with this approach in May 2002. Large- scale protests broke out in Arequipa and other cities in response to the sale of energy companies to foreign interests. The protesters claimed he was breaking his campaign pledges to not privatise. Although Toledo initially said he would not give in to the opposition to privatisation, he was forced to capitulate. Soon thereafter he reshuffled his cabinet, pushing out the pro-privatisation elements and signalling a move to the left. His strategy had already generated some divisions within the government before the protests. As an example, Kuczynski told Paul Keller of the Financial Times ‘there are too many photo ops where the President is put in a position to have to offer something. There is maybe a need for a change in strategy.’19 The technocratic elements of Kuczynski, Dañino and others were replaced with politicians deemed acceptable not only to Toledo’s Perú Posible Party but also to challenger Alan García’s APRA party. In this Toledo has implicitly acknowledged not only the strength of his opposition, but his own relative weakness. Again, then, despite these explicitly neopopulist tactics, they have not helped propel his administration.

Personalism Another aspect of neopopulism involves the highly personalistic manner of governance. This factor has both stylistic and, more importantly, institutional elements. Stylistically, the idea is to highlight the president’s personal role in distributing tangible benefits to the people—to generate the notion that this person is indispensable when it comes to improving peoples’ lives. Toledo has followed a path established by his neopopulist predecessor in making personal appearances, such as handing out new computers at schools, inaugurating public works projects and so forth. Indeed, he proposed buying a new presidential helicopter to facilitate this purpose, although withdrew the idea when it was poorly received. Institutionally, personalism involves bypassing intermediary institutions—the 1166 THE PERSISTENCE OF NEOPOPULISM IN PERU? de-institutionalisation of politics—and the concurrent concentration of power in the office of the executive.20 Those neopopulists that arose through established party ranks, like Mexico’s Salinas in the PRI and Argentina’s Menem in the PJ, intentionally undermined the party apparatus to secure their personal control.21 In other cases neopopulists arose as outsiders with no party organisation worthy of the term. Fujimori followed the latter course, forming new movements with each electoral cycle. He intentionally steered away from forming lasting organisations that might detract from his personal control. To date Toledo seems to be maintaining this course of action as well. His party, Perú Posible, along with most in Peru, is better classified as a followership than a coherent, national organisation. Results from recent regional elections indicate the party’s limited breadth: in the 25 races for governor in November 2002, Perú Posible won only one. Like Fujimori, then, Toledo is not associated with a strong party organisation. Not all his actions are consistent with the personalisation of politics, however. One means of bypassing congress that Fujimori often used was the executive decree. Although at times congress granted him specific authorisation to legislate via decree, he also took full advantage of the constitutional provision that permits legislation by executive initiative (constitutional decree authority or CDA), thereby circumventing the typical legislative process.22 The use and abuse of this mechanism by various leaders generated the label ‘delegative democracy’, referring to regimes in which ‘whoever wins election to the presidency is thereby entitled to govern as he or she sees fit, constrained only by the hard facts of existing power relations and by a constitutionally limited term of office’.23 Peruvian CDAs include Decretos Supremos Extraordinarios, Decretos de Urgencia and Decretos Supremos. Gregory Schmidt reports that from 1990 to 1992 Fujimori issued an average of 29 CDAs per month.24 By contrast, Toledo has averaged only 8.5 during his first 12 months in office.25 A similar rule-making feature, the Resolución Supremo, is issued first by a minister, but must be approved with the president’s initials. The same sources show that, for the same periods as above, Fujimori issued an average of 67 Resoluciónes Supremos per month compared with Toledo’s average of 17. Compared with his neopopulist predecessor, then, Toledo is not as aggressive in governing in a personalistic, delegative manner. In addition, Toledo has overseen a decentralisation programme that stands in contrast to the centralisation of the previous administration. Decentralisation gained some currency during the 2001 campaign, as candidates positioned themselves in opposition to Fujimori. Toledo has followed through on the rhetoric, and in November 2002 elections were held for new regional governorships. These positions replaced the presidentially appointed representatives (the Consejos Transitorios de Administración Regional) that Fujimori created in the early 1990s.26 Although issues of responsibilities and funding remain to be determined, the president put into motion a process that could lead to a relative diminution of central government power. At a minimum Toledo’s reform will provide new arenas for political entrepreneurs to seek public support. An increase in public backing for other politicians constitutes a loss for a neopopulist: it represents a segment of society that feels a greater allegiance to someone else. For this reason Fujimori actively sought to reduce, if not eliminate, opportunities for other 1167 ROBERT R BARR individuals to gain a popular following, even at the local government level.27 Indeed, the results of the first regional elections in 2002 proved disastrous for Toledo: while his party took only one of the 25 regions, APRA took 12 and regional parties took seven.28 Reducing the relative power of the president certainly stands in contrast to a typical neopopulist strategy, and seems all the more surprising given the limited national reach of the president’s party.

Mass support Mass support is of critical importance to neopopulists; their power depends upon it. Because they favour the de-institutionalisation of politics, their strength as executive officers comes principally from the public. Fujimori, for example, enjoyed tremendous levels of public support for much of his time in office—his average approval rating during his first five-year term was a remarkable 61%29— and he used it to legitimate his rule.30 Even while bypassing intermediary institutions and ruling autocratically, public support helped maintain a democratic veneer.31 He relied on the public, for instance, to approve the constitution that institutionalised his personalistic rule. For a few years, Hugo Chávez in Venezuela similarly used public support to legitimate his rule and to enact favourable institutional reforms. In general terms, with the security that high levels of public support provide, neopopulists can confidently turn to plebiscites and referenda to approve reforms in a democratic, if majoritarian, manner.32 Toledo has not yet been able to use such methods because he has failed to generate sufficient levels of public support. Although he had positive approval ratings upon taking office, they quickly fell because of the negative press coverage of his lifestyle. His approval rating reached a low point of 15.7% after the Arequipa protests against privatisation.33 Since that time his figures have improved slightly, reaching 28.5% in January 2003, but they have fallen once again below 20% as he faces additional protests related to mining privatisation and coca policies (see Figure 1). Toledo’s average approval for his first full calendar year in office was 23.8%;34 Fujimori averaged 43.3% in his first full year, one of his lowest periods.35 To be sure, just as Fujimori was able to turn relatively low approval ratings into exceptionally high ones, in theory Toledo could do the same. However, at the time of writing Toledo’s approval stands at only 16.1%, suggesting that a turn- around will be difficult at best. Even the disgraced Fujimori, for whom Interpol has issued an arrest warrant, has higher approval ratings (at 21.6%) than the current president.36 In addition, society has organised to protest against Toledo’s policies (as it did during the final days of Fujimori). Although neopopulists favour de-institutionalisation and appeal to the unorganised, in Toledo’s case society has turned to organisations or has organised in opposition to his policies. Unions, for instance, led the popular mobilisation against privatisation in Arequipa, and new groups have formed in protest at other policies, such as the rise of a cocaleros movement.37 If this reflects an increased willingness to mobilise to express demands (as seems to be the case across the region), then Toledo could face continued difficulties in establishing personalistic governance and in building mass support. 1168 THE PERSISTENCE OF NEOPOPULISM IN PERU?

100 90 80 70 60 50 40 30 20 10 0 Jan. Mar. May June July Sept. Oct. Dec. Jan. Mar. 2002 2003

FIGURE 1. Toledo’s public approval ratings. Source: Datum Internacional

Assessment At the most general level Toledo can be considered another of Latin America’s neopopulists. He has attempted to cobble together a coalition that includes the Peruvian poor—perhaps particularly the rural poor—and international economic interests. Several of his specific tactics are likewise consistent with the neopopulist approach. These include the cultivated symbol of Toledo as cholo, the personal inauguration of public works, the two-tiered policy approach of distributing benefits to the poor while maintaining a neoliberal economic course, and so forth. In contrast to the typical neopopulist tactics and policies are his less frequent use of executive decrees and, especially, his strengthening of intermediary institutions (namely the sub-national governments). To date Toledo’s neopopulist strategy, as it is, has not proved a success. He lacks the public support that should be his primary source of political power. Instead of relying on public support as the basis for his policies, he has had to change policy directions thanks to public opposition. Similarly, he has been forced to be sensitive to the interests of Alan García and the APRA party. In addition, because he abandoned the Arequipa privatisations and removed his cabinet’s free market champions, Toledo slightly hurt Peru’s standing in the international financial community. Common indices including Moody’s and Standard and Poor’s downgraded the rating of Peru’s currency and bonds. Although certainly not permanent, the change indicates the sensitivity that the international financial community has with respect to his policies. The contemporary social and political context in Peru helps account for the results of Toledo’s strategy, in particular his inability to generate strong ties with the public. This context and its implications are explored in detail below. 1169 ROBERT R BARR

Context Arguably some of the reasons Toledo has failed to succeed as a neopopulist reflect his personal flaws, such as his resistance to accept paternity of Zarai, his fondness for a luxurious lifestyle, allegations of illicit behaviour, etc, and/or bad press. Certainly, these have had an impact on his public image. However, I contend that Toledo faced, and continues to face, larger obstacles that are not the result of poor personal decisions. These factors reflect the contemporary political context and would affect the governance of any neopopulist leader in Peru. Specifically, there are three contextual obstacles to neopopulism: 1) the absence of crisis; 2) public weariness of neoliberalism; and 3) the reaction to the Fujimori regime. Together, these related elements have made it difficult for Toledo to credibly present himself as a national saviour, to hold together the coalition of poor and international economic interests, and to govern in a personalistic manner.

Absence of crisis Crisis is a vague term, to be sure, and what is deemed a crisis in one national setting could be considered a mere unpleasantness in another. Despite these conceptual concerns, issues that the public comes to view as problems requiring immediate resolution do appear from time to time. Crises present opportunities for leaders to prove the value of their rule. Leaders can reap enormous gains in support as the result of effectively managing crises. Arguably, such success can help build a leader’s charisma, the ‘special personal qualities and talents that, in the eyes of their followers, empowered them to defend the interests of the masses and uphold national dignity’.38 It may be true that such support is fleeting: once success is achieved, the leader’s relative importance declines.39 It is also true that, in case of failure to resolve the crisis, blame will fall squarely on those in power. Along the same lines, should a leader cause a crisis he or she will naturally take the blame, and the opportunity for resolving it will pass to someone else. García’s time in office serves as an excellent example: his failures to stop the economic tailspin and handle the Sendero Luminoso terrorist group overwhelmed his charismatic appeal. As such, tackling crises as a means of generating public support is a high-risk endeavour, but the pay-off can be great. For instance, where García had failed, Fujimori succeeded, and it propelled his administration. Crises, in other words, present an opportunity to make substantial gains in public support. Lacking some acute problem that the president can (potentially) solve in a demonstrable way, the opportunities for creating intense public support decrease.40 Presidents may find that maintaining stability and the status quo does little to help define their leadership skills and thus mobilise supporters. Even where a president can claim credit for substantial but gradual improvements, the results are unlikely to generate the visceral, emotional response that the successful populists have enjoyed. The personalism and de-institutionalisation that characterise neopopulism require a social basis of power, and thus a means of building it. Particularly where other forms of charisma are lacking, bold policy 1170 THE PERSISTENCE OF NEOPOPULISM IN PERU? reforms and dramatic successes can be effective means toward these ends. Building popular support certainly does not require periods of crisis—populism can exist in times of stability or ‘normalcy’41—but crises do facilitate populist mobilisation.42 Rather, the point offered here is simply that periods of great social turmoil generate an enormous need for a national saviour; the public may generously reward the individual who fulfils this role. In 2001, when Toledo took office, the economy was barely growing (at 0.2%), but by no means did it represent an acute economic crisis. Indeed, in the previous year it grew 3.1%, and preliminary figures report 3.7% for 2002.43 Inflation, meanwhile, has virtually disappeared. While one should not minimise the economic challenges Peru continues to face, they do not constitute a crisis. This point becomes most apparent by recalling the context in 1990 when the annual inflation rate had surpassed 7000%. Fujimori successfully resolved the crisis and by 1992 inflation had dropped to double digits. Moreover, Peru’s recent economic slowdown came only towards the end of Fujimori’s time in office; it was not a long, drawn out depression, as was the case in Venezuela. As such, economic success for Toledo will probably be defined by sustained positive economic growth rather than by a radical change in economic fortune. Peru, of course, did have a genuine crisis regarding the collapse of the Fujimori regime. Toledo himself played an important role in the drama with his refusal to take part in fraudulent elections in 2000. Later that year, with the revelation of the first ‘Vladi-video’, the crisis reached an acute phase and led to Fujimori’s resignation. Montesinos, his partner in crime, avoided the authorities for some eight months but was eventually detained in June 2001, a month before Toledo took office. Hence, by the summer of 2001, both Fujimori and Montesinos had been removed—one through self-imposed exile and the other through incarcera- tion. In the meantime, congress selected Valentín Paniagua as the interim president until new elections could be held. Although Toledo had made the first stand against Fujimori, Paniagua was the first post-Fujimori president, thus presenting the most direct contrast to the despised former executive. Paniagua, moreover, could take credit for the capture of Montesinos in what was perhaps the symbolic equivalent of Fujimori’s 1992 capture of Sendero Luminoso leader Abimael Guzmán. After eight months of the Paniagua administration, the Fujimori regime no longer presented an acute crisis to resolve, but a residue to remove. Toledo has complained that the political honeymoon he should have enjoyed was exhausted by the interim administration.44 A March 2003 survey lends support to his complaint: Paniagua’s approval rating was an exceptionally high 65.2%; quadruple that for Toledo.45 While the nefarious role and even persistence of the FujimoriÐMontesinos mafia remain salient, as Toledo prefers, the new administration cannot take credit for solving the crisis.46 Instead, Toledo inherited the unglamorous, albeit tremendously important, work of cleaning up the political system.

Weariness of neoliberalism A second contextual factor affecting a neopopulist’s ability to generate substantial public support is the growing public weariness with neoliberalism. 1171 ROBERT R BARR

This factor hinders the capacity of neopopulists simultaneously to please the disenfranchised popular sectors and international economic interests. The economic context has changed since the time of the first neopopulist leaders like Fujimori, Menem and Salinas: the economic transformation has already taken place and it has not met popular expectations. Facilitated by acute economic crises, the earlier neopopulists oversaw the change from state-led development to neoliberalism. The process sometimes entailed what has been called the ‘bait- and-switch’, where candidates promised continued state involvement only to change course once in office.47 For many, the surprising element was the public’s tolerance not only of the initial policy switch, but also of the budget austerity, labour flexibilisation and economic uncertainty that often followed. The dramatic policy reforms may have been welcomed, and the costs tolerated, on the basis of changing levels of risk acceptance.48 That is, citizens and leaders may have been willing to accept the risk associated with radical change, but then became more conservative as the issue moved from one of reducing the losses associated with crisis to sustaining the gains in the post-crisis period. This notion helps account for the public’s support for, or toleration of, neoliberalism after the crisis stage. Now, however, these economies are on the other side of the bend, and into second-stage neoliberalism. Generally speaking the region’s economies may not fully satisfy financial institutions like the IMF in terms of fiscal responsibility, efficient tax revenue collection and so forth, but they are far beyond the days of state-led development. The bold phase of implementing neoliberalism is past; the current phase calls for less dramatic policies of finishing the privatisation process, trimming the fiscal deficit, reforming the revenue collection bureaucracy and the like. Arguably the consolidation of neoliberalism implies greater economic policy stability. Yet, as discussed earlier, maintaining stability may not earn leaders high levels of public support. The public has lost much of its tolerance for bearing the continued costs of austerity, from which only the elite appear to be benefiting. Paradoxically, significant gains have been made according to some indicators. For instance, Peru’s economy grew at a healthy 5.3% per year from 1991 to 1997. Never- theless, neoliberalism, privatisation and free trade are becoming dirty words in Peru as well as around the region. Recent electoral results clearly illustrate this phenomenon: in Bolivia the anti-neoliberal candidates received the largest bloc of votes in the 2002 presidential contest,49 and Brazilian voters rejected the party responsible for neoliberal reform and instead rewarded leftist Lula da Silva with the highest vote count in history. The protests against privatisation in Arequipa and other cities are equally powerfully symbols of the Peruvian public’s weariness with neoliberalism. The combination of neoliberalism with populism has always required astute political manoeuvring to provide tangible material benefits while coping with diminished state resources. Implicitly, these benefits were accompanied by the promise of future economic growth, better paying jobs and the like. In a sense, the benefits were short-term compensation for those most affected by the transition, but accompanying them was the promise of future economic gains. The added complexity of second-stage neopopulism is that the public’s expectations are no longer something to be met, but something that has not been met. 1172 THE PERSISTENCE OF NEOPOPULISM IN PERU?

Whether real or perceived, unmet expectations negatively affect the public’s attitude towards continued economic reform and even to the market-led model. The implication is that Toledo (and perhaps any other neopopulist in the region) will find it more difficult to pursue a two-tiered economic policy and thus to please both elements of his constituency. In other words, how can a neopopulist build high levels of public support when the public no longer approves of neoliberalism? Pursuing unpopular policies may please one element of the neopopulist constituency, but not a broad swath of the electoral base. As Guillermo Zoccali and Oscar Hendrick of the IMF observe: Despite steady implementation of stabilization and structural reform policies under Fund-supported programs over the last ten years, the most vulnerable segments of society still do not see a substantial improvement in their living standards. Consequently, the current administration faces daunting pressures to create employ- ment, reduce poverty and increase social spending. The economic model is also under scrutiny, pointing to the importance of being able to maintain a pragmatic and flexible approach to preserve public support for a market-oriented economy.50

Reaction to Fujimori Although the post-Fujimori political context is of course specific to Peru, it raises a generalisable question regarding consecutive neopopulist leaders. Specifically, does the impact of the first neopopulist pave the way or create obstacles for the second neopopulist? As discussed, populists and neopopulists alike rely on rhetoric and symbols that can be characterised as anti-political, or as an ‘us versus them’ battle. Their support stems in part from the reaction to the perceived problems created by the political class, as part of the Manichean struggle against the oligarchy.51 The corrective offered to the public is the individual leader as direct representative of the people. For Toledo, as the second consecutive neopopulist, the anti-political element is defined as opposition to the FujimoriÐ Montesinos legacy, not to the nation’s oligarchy. A struggle defined as one neopopulist against the legacy of another presents an obstacle to neopopulist governance, especially regarding the institutional concentration of power. Fujimori, like Chávez, used high levels of public support to legitimise institutional changes enhancing the power of the president. Such changes are important elements in facilitating personalistic rule, and thus in maintaining public support. Concentrating power increases the executive’s discre- tion over state resources, which can then be used for the political purpose of tying followers to their leader.52 As the second consecutive neopopulist, Toledo finds himself in the position of reaction against those changes. The fight against the common enemy entails rooting out corruption, increasing government trans- parency, and reducing the power of the president. A successful struggle in this context means, in other words, undermining the institutional arrangements that facilitated neopopulism. By proceeding with decentralisation, for example, Toledo increases the access points to political power, thereby reducing his own relative influence. The context, in other words, effectively precludes Toledo from presenting himself—the rule of a single individual—as the solution to the nation’s problems. 1173 ROBERT R BARR

The pull of the pendulum is away from personal control and instead towards the distribution of power. As a neopopulist, then, Toledo finds himself in somewhat of a Catch-22 situation: maintain the institutional arrangements to facilitate his neopopulist strategy but alienate the public as a result; or correct the perceived institutional flaws and undermine his ability to govern in a personalistic manner. Based on his pursuit of a decentralisation programme as well as downsizing the armed forces, it seems Toledo has chosen the second path.

Additional factors Although the above three contextual factors present obstacles to neopopulism, one should not conclude that it, or even classic populism, has no future in Peru. Indeed, as long as there remain inequality and high levels of poverty, populist discourse is likely to have a certain appeal. It requires little explanation that those who feel excluded from national political and/or economic life should continue to be appealing targets for opportunistic politicians. Currently some 40% of the population is under-employed and roughly the same percentage lives below the poverty line.53 Another important factor in the Peruvian case (and others) is the fragmentation of the party system. Peru’s party system seemed dead by the middle of the 1990s. The vote for the country’s political establishment—namely the AP, APRA, IU and PPC—had declined from a collective average of 92% during the 1980s to just 4% by 1995.54 Public opinion data support the notion that the public had lost all faith in parties, as well as the other means of interest representation. Between 1991 and 2000 confidence in political parties averaged only 15.5%.55 In a fascinating turn of events and what may mark a comeback for APRA, the once-disgraced Alan García returned from self-imposed exile during the most recent presidential campaign and made it to the second round of voting. Upon his return opinion polls overwhelmingly indicated that Peruvians would never even consider voting for him, but he gained 25.7% of valid votes cast to Toledo’s 36.5% in the first round, and 47% in the second. Although this turnabout concerns Peru’s only well institutionalised party, it reflects the force of García’s personal charisma more than the efforts of the party organisation. Even including APRA’s comeback, then, the predominant feature of Peru’s party system continues to be personalism. As such, personalities rather than party identity or platforms may continue to play an enormous role in political contests. Combined with socioeconomic problems, the fragmentation of the party system should provide an opportune setting for populist appeals. Whether they will generate broad public support for those in office, of course, remains to be seen.

Conclusion This paper has analysed the administration of Alejandro Toledo in an effort to determine the status of neopopulism in contemporary Peru. Although Toledo may be considered a neopopulist leader, he has not been very successful. That is, he has not been able to secure the personalistic connection between leader and followers that constitutes the core of neopopulist rule. As a result, he must now 1174 THE PERSISTENCE OF NEOPOPULISM IN PERU? be sensitive to the demands of his opposition, as evident in the cabinet changes of 2002. The general direction of his strategy most clearly marks him as a neopopulist. He has struggled simultaneously to build ties to the impoverished masses and to the international financial community. Many of his tactics, similarly, are familiar from the administrations of other neopopulists in the region, such as personally inaugurating public works, maintaining only a loose party organisation, employ- ing symbols and rhetoric that depict him as an ordinary citizen, and so forth. What stands in contrast to neopopulism, however, is his restricted personalisation of politics, namely his limited use of executive decree authority and his approval of the regional decentralisation programme. However, these and other aspects of his strategy have been strongly shaped by the political context. Toledo, in other words, has had to cope with certain obstacles to neopopulism. Most specifically, the common ‘adversary’ against which Toledo and others have campaigned is the legacy of the Fujimori regime. Solving the nation’s problems in this setting cannot credibly depend on a single, delegative leader; rather, it requires distributing power more broadly and making government more transparent. This contextual factor, where one neopopulist follows another, presents an interesting dynamic in that ‘fixing’ the nation’s problems means undermining the same concentrated institutional arrangement that facilitates neopopulism. In addition to the legacy of Fujimori, two additional contextual factors have created obstacles for Toledo’s neopopulism: the absence of crisis and the public’s weariness with neoliberalism. The former suggests that the opportunities, however risky, of building high levels of public support have not been available to Toledo. The economy was not performing well, but was nonetheless growing; and the crisis of the Fujimori regime moved past an acute phase with his replace- ment by Paniagua and with the capture of the elusive Montesinos. Toledo, then, could not play the populist role of national redeemer. Weariness with neoliberalism, moreover, has reduced the public’s tolerance of continued privatisation and market-oriented reforms. This raises the level of difficulty in building a coalition of both the nation’s poor and international financial interests. Although he has been unable to build the power of public support so far, at less than two years into his administration, it is too early to conclude that neopopulism has failed. One of Fujimori’s lowest periods, for instance, was during his first 18 months in office. By way of contrast, however, Toledo’s support is notably lower than was Fujimori’s during the same period, and the current administration may be undermining his potential for future neopopulist success. To be clear, lack of ‘neopopulist success’ does not mean that Toledo has been unable to make some kind of contribution to Peru nor that he will not do so in future. Instead, the term indicates that Toledo has not enjoyed the same paramount political standing that characterised the tenure of neopopulists and classic populists like Menem, Fujimori, Perón and Cárdenas. Finally, populism may continue to be a strong draw for aspiring leaders in Peru, as it has been in the past. High levels of inequality, large numbers of poor, and a fragmented party system help ensure that this will be the case. What may define populism or neopopulism in the near future in Peru is not its absence, but how it copes with the obstacles of second-stage neoliberalism, which entail status quo economic 1175 ROBERT R BARR policies and an intolerant public. Whereas classic populists could pursue expansive social policies, the first neopopulists required a more nuanced strategy of carefully targeting state spending. The current context suggests that today’s neopopulists may require even more nuance and creativity to be successful.

Notes This paper first appeared as part of a set of panels dedicated to neopopulism at the Latin American Studies Association conference in Dallas, TX, March 2003. The author would like to thank Bill Smith, Kurt Weyland and the anonymous reviewers for their comments and input. 1 Another usage of neopopulism refers to the most recent wave of populism, while the phrase neoliberal neopopulism describes the inclusion of neoliberal economic policies. For the purposes of this paper, however, I will leave aside the debate over terminology. 2 For discussions on the classic Peruvian populists, see S Stein, Populism in Peru: The Emergence of the Masses and the Politics of Social Control, Madison, WI: University of Wisconsin Press, 1980; Stein, ‘The paths to populism in Peru’, in ML Conniff (ed), Populism in Latin America, Tuscaloosa, AB: University of Alabama Press, 1999; and C Sanborn, ‘The democratic left and the persistence of populism in Peru’, PhD thesis, Harvard University, 1991. For a good summary of the various definitions of classic populism, see C de la Torre, Populist Seduction in Latin America: The Ecuadorian Experience, Athens, OH: Ohio University Press, 2001, pp 1Ð4. 3 J Crabtree, ‘Neo-populism and the Fujimori phenomenon’, in J Crabtree & J Thomas (eds), Fujimori’s Peru: The Political Economy, London: Institute of Latin American Studies, University of London, 1998; B Kay, ‘“Fujipopulism” and the liberal state in Peru, 1990–1995’, Journal of Interamerican Studies and World Affairs, 38 (4), 1996, pp 55–98; K Roberts, ‘Neoliberalism and the transformation of populism in Latin America: the Peruvian case’, World Politics, 48 (1), 1995, pp 82–116; and K Weyland, ‘Neopopulism and neoliberalism in Latin America: unexpected affinities’, Studies in Comparative International Development, 31 (3), 1996, pp 3Ð31. 4 For further details on neopopulism, see, for example, D Dresser, Neopopulist Solutions to Neoliberal Problems, San Diego, CA: University of California, Center for USÐMexican Studies, 1991; A Knight, ‘Populism and neo-populism in Latin America, especially Mexico’, Journal of Latin American Studies, 30 (2), pp 223–248, 1998; Roberts, ‘Neoliberalism and the transformation of populism in Latin America’; and Weyland, ‘Neopopulism and neoliberalism in Latin America’. 5 Apoyo, Informe de Opinión, various issues, Lima: Apoyo. These data reflect surveys conducted in the Lima metropolitan region. 6 K Weyland, ‘Clarifying a contested concept’, Comparative Politics, 34 (1), 2001, p 12. 7 IMF, ‘Peru: request for stand-by arrangement’, IMF Country Report, 02/27, Washington, DC: IMF, 2002, p 4. 8 Ibid, p 22. 9 Apoyo, Informe de Opinión. 10 M Tanaka, Los Espejismos de la Democracia: El Colapse del Sistema de Partidos en el Perú, Lima: Instituto de Estudios Peruanos, 1998. 11 De la Torre, Populist Seduction in Latin America, p 140. 12 ‘Known devil v unknown devil’, The Economist, 31 May 2001. 13 RA Mayorga, Antipolítica y Neopopulismo, La Paz: CEBEM, 1995. 14 Inter-American Development Bank, ‘Press Releases—Peru’, at www.iadb.org/exr/prensa/prper.htm, 2003; and World Bank, ‘Press Releases by Country/Region—Peru’, at www.worldbank.org, 2003. 15 Ministerio de Economía y Finanzas, as cited in IMF, ‘Peru: Article IV consultation, first review under the stand-by arrangement, and request for modification and waiver of performance criteria’, IMF Country Report, 03/72, Washington, DC: IMF, 2003, p 39. This item includes expenditures for education, health, sanitation and other social services. 16 Dañino had been a corporate lawyer in the USA and consultant to the Inter-American Development Bank. 17 The government will issue up to $1.5 billion in 10-year bonds. 18 IMF, ‘Peru: request for stand-by arrangement’, p 8. Fujimori privatised much of Peru’s state-owned interests. Toledo’s programme focused primarily on the energy sector and mining. 19 P Keller, ‘Peru finance minister vows to defy union opposition’, Financial Times, 10 May 2002. 20 Crabtree, ‘Neo-populism and the Fujimori phenomenon’; and Kay, ‘“Fujipopulism” and the liberal state in Peru’. 21 Weyland, ‘Clarifying a contested concept’, p 15. 22 For a discussion on the various types of decree authority and their distinctions, see JM Carey & MS 1176 THE PERSISTENCE OF NEOPOPULISM IN PERU?

Shugart, ‘Calling out the tanks or filling out the forms?’, in Carey & Shugart (eds), Executive Decree Authority, Cambridge: Cambridge University Press, 1998. 23 G O’Donnell, ‘Delegative democracy’, Journal of Democracy, 5 (1), 1994, p 59. 24 G Schmidt, ‘Presidential usurpation or congressional preference? The evolution of executive decree authority in Peru’, in Carey & Shugart, Executive Decree Authority, p 118. The tally for Fujimori includes his use of Decretos Supremos and Decretos Supremos Extraordinarios, which were replaced by Decretos de Urgencia in the 1993 Constitution. 25 This figure includes Toledo’s use of Decretos de Urgencia and Decretos Supremos, based on the author’s calculation. Data for the Decretos de Urgencia come from Congreso del Peru, Archivo Digital de la Legislación en el Perú, at www.leyes.congreso.gob.pe, 2003. Data for the Decretos Supremos come from ‘Normas legales, sistema de búsqueda’, El Peruano, at www.editoraperu. com.pe, 2003. 26 Fujimori created these positions to replace a system of regional governments that were created late in García’s term. These were to be temporary positions, but Fujimori found a means of keeping them in place. 27 H Dietz & RR Barr, ‘Fujimori and the mayors of Lima, 1990–2001: the impact and legacy of neopopulist rule’, paper presented at the conference ‘The Fujimori Legacy’, Washington, DC, March 2002. 28 All data for the 2002 regional elections come from Oficina Nacional de Procesos Electorales, Elecciones Regionales y Municipales 2002, at http://www.onpe.gob.pe/resultados2002/index.html, 2003. APRA competed in more regions (23 of the 25) than any other party. The second best returns went to a party with just two victories; Peru Posible was tied for third place with three other national parties. 29 Apoyo, Informe de Opinión. 30 C Conaghan, ‘Polls, political discourse, and the public sphere: the spin on Peru’s Fuji-golpe’, in PH Smith (ed), Latin America in Comparative Perspective: New Approaches to Methods and Analysis, Boulder, CO: Westview Press, 1995; and Crabtree, ‘Neo-populism and the Fujimori phenomenon’, p 18. 31 Dietz & Barr, ‘Fujimori and the mayors of Lima’. 32 Weyland, ‘Clarifying a contested concept’, pp 12–13. 33 Datum Internacional, Estudio de Opinión Pública en la Gran Lima, Lima: Datum Internacional, January 2003. 34 Ibid. 35 Apoyo, Informe de Opinión. 36 Datum Internacional, Estudio de Opinión Pública en la Gran Lima, Lima: Datum Internacional, March 2003. 37 Cocaleros are the farmers who raise coca, the raw material for cocaine. Although cocaleros are well organised and politically powerful in neighbouring Bolivia, only recently has a similar movement appeared in Peru. 38 ML Conniff, ‘Introduction’, in Conniff (ed), Populism in Latin America, p 4. 39 K Weyland, ‘A paradox of success? Determinants of political support for President Fujimori’, International Studies Quarterly, 44 (3), 2000, pp 481Ð502. 40 To be sure, the absence of crisis in contemporary Peru is not a permanent feature. One should not conclude, in other words, that neopopulists will never again have the high-risk opportunities of generating support through crisis resolution. Instead, where the condition applies, successful neopopulism may require new and creative ways of producing abundant public support. 41 De la Torre, Populist Seduction in Latin America, p 139. 42 Roberts, ‘Neoliberalism and the transformation of populism in Latin America’, pp 113–114. 43 IMF, ‘Peru: Article IV consultation’, p 27. 44 MA O’Grady, ‘Kuczynski’s ideas could revive Peru, but where’s Toledo?’, Wall Street Journal, 14 December 2001. 45 Datum Internacional, Estudio de Opinión Pública, March 2003. 46 The issue may be salient, but not predominant. The protests against privatisation demonstrate that Peruvians have more pressing concerns on their minds. 47 P Drake, ‘Comment’, in R Dornbusch & S Edwards (eds), The Macroeconomics of Populism in Latin America, Chicago, IL: University of Chicago Press, 1991, p 36. For a discussion of this phenomenon, see also SC Stokes, Mandates and Democracy: Neoliberalism by Surprise in Latin America, Cambridge: Cambridge University Press, 2001. 48 K Weyland, The Politics of Market Reform in Fragile Democracies: Argentina, Brazil, Peru, and Venezuela, Princeton, NJ: Princeton University Press, 2002, pp 4Ð8. 49 The pro-neoliberal candidate, Gonzalo Sánchez de Lozada, took office in part because of the fragmentation of the protest vote among several parties.

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50 IMF, ‘Peru: request for stand-by arrangement 2002’, annex, p 3. 51 De la Torre, Populist Seduction in Latin America. 52 RR Barr, ‘Between success and survival: devolution and concentration in Latin America’, PhD dissertation, University of Texas at Austin, 2002. 53 Instituto Nacional de Estadística e Informática, Perú en Cifras, at www.inei.gob.pe, 2003. 54 The 92% includes the tally for the AP, APRA, IU, PPC and their alliances from 1978 to 1989, including the constituent assembly, municipal, presidential, lower house and upper house results (author’s calculations). In the 1995 presidential contest APRA, with 4%, was the only one of these parties to receive any votes. Oficina Nacional de Procesos Electorales, Historia y Estadística Electoral, at http://www.onpe.gob.pe/onpe/pire/consulta_ant95.php, 2003. 55 Apoyo, Informe de Opinión.

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