: SPECIAL REPORT Peru Elections 2016: A political crossroad that threatens economic growth Madrid, April 2016 BARCELONA BOGOTA BUENOS AIRES LIMA LISBON MADRID MEXICO CITY MIAMI PANAMA CITY QUITO RIO J SAO PAULO SANTIAGO STO DOMINGO PERU ELECTIONS 2016: A POLITICAL CROSSROAD THAT THREATENS ECONOMIC GROWTH 1. INTRODUCTION It is clear that the recent presidential elections in Peru have 1. INTRODUCTION developed in the most atypical scenario, not necessarily 2. FRAUDULENT PROCESS? because of the tense political confrontation, but because of the 3. ELECTIONS 2016: organizational disorder triggered by the role of the National NATIONAL OVERVIEW Elections Jury (JNE), the electoral body that supervises the 4. THE INCOMING CONGRESS compliance of laws during the electoral process. 5. WHAT WILL THE SECOND ROUND HOLD? The latest data provided by the National Office of Electoral AUTHOR Processes (ONPE), with 91.5 % of national votes counted, show the following results: • Fuerza Popular (Popular Force), Keiko Fujimori, heads the list with 39.73 % • Peruanos por el Kambio (Peruvians for Change), Pedro Pablo Kuczynski (PPK), reached 21.04 % • Frente Amplio (Broad Front), Veronika Mendoza, obtained 18.79 % • Acción Popular (Popular Action), Alfredo Barnechea, reached 6.96 % • Alianza Popular (Popular Alliance), Alan Garcia, obtained 5.85 % • Democracia Directa (Direct Democracy), Gregorio Santos, with 4.09 % These numbers confirm the trend that was already present in the quick count conducted by major pollsters such as Ipsos Peru and GFK, confirming that a second round between Keiko Fujimori and PPK will take place in June. The latter, a former prime minister and finance minister of president Alejandro Toledo (2001-2006), is a liberal candidate to the right of the political spectrum, who managed to achieve second place after defeating the candidate of the left, Veronika Mendoza, with whom he disputed every vote until the very last minute. 2 PERU ELECTIONS 2016: A POLITICAL CROSSROAD THAT THREATENS ECONOMIC GROWTH 2. FRAUDULENT PROCESS? Acuña’s candidacy, former regional governor of La Libertad If there was something that and leader of Alianza para el defined the recent election, it Progreso (Alliance for Progress), was the role played by the JNE, and Vladimiro Huaroc´s, Keiko along with the implementation Fujimori´s vice presidential of the new Political Parties candidate, for donating money Act (Law No. 304141) that was and goods in the middle of a approved by Congress last year proselytizing act. However, the and that, contrary to all logic, biggest controversy emerged “A few days before forcefully went into effect in the after images of candidate Keiko the election, the JNE middle of the current electoral Fujimori leaked, showing her process. On the performance handing money over at an event decided not to apply of the JNE and the ambivalent organized by a group of citizens Article 2 of the new implementation of the new affiliated to her party. In this law and leave the standard we can identify three case, the JNE ruled in Fujimori´s key moments. favor, a decision that was highly electoral hurdle at 5 %” questioned by public opinion, The first was the exclusion arguing that the application of of Partido Todos Por el Perú the norm was disproportionate (Everyone for Peru), led by in regards to Acuña´s case. Julio Guzmán, for making an incongruent procedure Finally, a few days before the regarding its internal rules, election, the JNE decided not to which presumably affected apply Article 2 of the new law the internal democratic basis and leave the electoral hurdle at of the party. Guzman’s party 5 %, or the minimum amount of argued that the failure was votes that a party must achieve administrative in nature, and to be represented in congress, that the constitutional right to despite the new rule that representation prevails. However, specifies that groups that form the JNE declared the appeal an alliance must exceed 7.5 %. ill-founded, leaving the party This last disposition of the jury out of the process even though was widely questioned, given it positioned itself as the second that it directly benefited the political force after Fujimori. alliance between Partido Aprista Peruano (Peruvian Aprista The second key fact was the Party) and Partido Popular application of article 42 of Cristiano (Christian People's the new political parties act, Party), two traditional parties which prohibits the exchange that would have been left out of money, gifts and bribes, of parliament and without the among others, either directly possibilitof getting registered in or through a third party. This the future had the new law been marked the end of Cesar implemented.2 1 El Peruano (2016). Ley Nº30414. Ley que modifica la Ley 28094. [online] 2 larepublica.pe. (2016). JNE fija la valla electoral para partidos políticos y alianzas en 5 %. 3 PERU ELECTIONS 2016: A POLITICAL CROSSROAD THAT THREATENS ECONOMIC GROWTH Ambivalence and delays in the of Peru´s 25 regions, including publication of the resolution Lima. The geographical layout to the mistakes made by the shows an almost full presence JNE, along with irregular in the North and center of Peru, failures, created an atmosphere and especially in the Peruvian of distrust, to the extent jungle, an important stronghold that some analysts referred for Fujimorism. This would to the electoral process as prove that Keiko Fujimori, who fraudulent. Nevertheless, voters immediately began campaigning ultimately opted to reconsider after losing the elections in 2011 their political options, giving against Ollanta Humala, has way to the emergence and managed to position and build a consolidation of other groups. party of national pull. 3. ELECTIONS 2016: Meanwhile, PPK, despite NATIONAL OVERVIEW having finished second in the national election, only managed While awaiting the official final a majority in Arequipa. This figures, but having a quick count reflects the limited identification of the pollsters, the results of with the 77-year-old candidate the recent elections show the among the most popular sectors consolidation of Fujimorism of society, who see him as an as the political option with the option with a more urban greatest calling. Fuerza Popular profile, “very limeño.” (Popular Force) has obtained the majority of the votes in 15 out On the other hand, this has been almost a victory for the left, represented by Veronika Figure 1. Winners by region Mendoza’s Frente Amplio (Broad Front), despite having lost the pass to the second round. The group, a coalition of various small left-wing parties, won in 7 regions, most importantly those located in the south along with the poorest, including Huancavelica, Apurimac and Ayacucho. These regions, together with Arequipa, catapulted Ollanta Humala to the second round in 2011 and have ratified their preference for a leftist speech. Besides, Mendoza was second in the majority of the rest of the regions, except for Lima and the northern coast, with a greater population density Source: Ipsos Perú that favored PPK. 4 PERU ELECTIONS 2016: A POLITICAL CROSSROAD THAT THREATENS ECONOMIC GROWTH An exceptional case is that of observed laws, control key Gregorio Santos and his party commissions and even appoint Democracia Directa (Direct the President of Congress Democracy), who, despite with the support of her party. being in preventive prison for Furthermore, they would have a “If we observe the alleged cases of corruption, decisive vote in the censorship composition of which did not allow him to of ministers and the election of the parliament, we campaign like the rest of members of the Constitutional the candidates, ratified his Court and the Ombudsman. see that 4 out of position as the anti-mining the 6 powers could regional leader in Cajamarca, If we carefully observe the be placed under where he was governor. composition of the parliament, Paradoxically, Cajamarca is we see that 4 out of the 6 the center/right one of the regions with most powers could be placed under spectrum” mining potential in Peru. the center/right spectrum willing to maintain the 4. THE INCOMING current economic model, legal CONGRESS framework and the respect for the Constitution, as well The first quick count results as having an economic market presented by IPSOS3 indicate vision. That would guarantee, that the composition of both for Fujimori and PPK, the Congress would be as follows: possibility of undertaking the revival of economic reforms • Fuerza Popular (Popular Force): 68 both have suggested. • Peruano por el Kambio On the other hand, the parties (Peruvians for Change): 20 Frente Amplio (Broad Front) and Acción Popular (Popular • Frente Amplio (Broad Front): 20 Action) have been critic of the current economic situation. • Alianza para el Progreso However, they would only (Alliance for Progress): 12 represent 25 seats out of 130, so their legislative possibilities • Alianza Popular (Popular are much more limited and will Alliance) (APRA-PPC): 5 have to find consensus or be in constant public disagreement in • Acción Popular (Popular Action): 5 order to counterweigh in favor of their proposals. This configuration would give Fujimorism an absolute As for possible alliances, if majority in parliament and full Keiko Fujimori has the absolute freedom to perform functions majority, she won´t need any such as: approve laws, overcome political agreements in order to the presidential veto to the undertake the initiatives proposed 3 El Comercio. (2016). Composición del congreso [online] 5 PERU ELECTIONS 2016: A POLITICAL CROSSROAD THAT THREATENS ECONOMIC GROWTH in her plan of government. She predictions do not count. Both could even achieve the natural PPK and Fujimori being more adhesion of APRA, her ally during to the right (one liberal and the the government of Alan Garcia in other populist) would have to 2011. shift toward the center in order to gain the votes of those who In the case of PPK, the scenario supported Veronika Mendoza is different.