Business is betting that Keiko will be first past the post in a photo-finish

By Nicholas Asheshov

If the secret polls are right, and the stock market, which shot sharply up seven points on Thursday, clearly thinks they are, Keiko Fujimori will squeak past Ollanta Humala to win the run-off election on Sunday June 5 and become president as of July 28, 2011 through 2016.

As Keiko-backers see things, there was a nasty moment, polls-wise, over last week-end and at the beginning of the week when Datum’s three-point lead for Keiko, announced Sunday, slid to just a sliver and headed south.

Two or three weeks ago the tight-knit Keiko squad had been confident of a safe though perhaps not solid victory.  But reacting with a touch of panic, a word used by one of her advisors, to the week-end slouch in the polls, Keiko rallied the troops, and on Thursday morning the TV programs showed Keiko wheeling out Pedro Pablo Kuczynski, Hernando de Soto, Mercedes Araoz, Maximo San Roman, Luis Castañeda and others –the solid, as they themselves see it, capable Center-Right.  Perhaps a bit of a muddled middle, but that is a characteristic of the hard-core center everywhere.

On Thursday evening PPK was the key-note speaker, apart from Keiko herself.  He had got 18+% of the votes in the first round on April 10, behind Keiko’s 23.5% and Thursday’s collection of anti-Humala worthies turned this into a pro-Keiko governing alliance.

Humala, a dangerous far-left fascist-montesinista, as Gustavo Gorriti and Alvaro Vargas Llosa among others, called him in the last election, is of course also seeking the votes of the same people of which there are surely now few.  The polls, the TV shows and the newspapers show a country passionately divided down the middle into anti-Humalas and anti-Keikos.

The one-half of the country that will vote for Keiko on Sunday see Humala as a re-run of the blundering statists of the 1970s, here and elsewhere, and their re-runs in Venezuela, Bolivia and Argentina today.

The Lima intellectuals, the Caviars, led noisily today by the died-in-the-wool Thatcherite Nobel laureate Mario Vargas Llosa, who treated Humala as an untouchable in 2006 and, in fact, till just a few weeks ago, today bill him as the last rampart of democracy against a reprise of the bad old ’90s when bullying kleptocrats, with Alberto Fujimori as president, cut a vicious swathe through Lima.  Keiko has become today’s untouchable.

Keiko and her people say they will be the first to steer clear of any new version of closed-door corruption.  They say that Keiko, 36, is first of all an unusually, perhaps unexpectedly capable, decisive administrator with five years as a congresswoman on her CV.   Certainly her campaign stump style has been as polished and silver-tongued as anyone’s.

Quite sharp, too: she told Humala on the TV to go and talk it over with her dad in jail if he wanted to complain about the old days.   She easily trounced the gloomily confused zoot-suited “Comandante” Humala in a last-ditch TV face-to-face on Sunday evening, and this was reflected in the poll figures used by the bankers and stock-brokers who came back to the market in mid-week.

Money talks as clearly here as elsewhere and what the market is saying is that it expects from a Fujimori government all the good things and more that it got from Alberto Fujimori 1990-95 in the way of pro-business, pro-growth legislation and non-bloated administration.

This may not have been such a many-splendored thing but it was so much better than the economic nonsense of the previous 30 years that it stands out as Peru’s first 15 minutes of flame.

Other effects are flowering a decade and more later.   Indices of poverty have come down sharply for millions of campesinos, according to studies being produced regularly by Richard Webb’s Instituto del Peru.

It was Fujimori I who introduced privatization, more sensible tax codes and up-graded public works –roads, electrification, schools.  The follow-up Toledo (2001-6) and Garcia (2006-11) administrations have bumbled through along these same lines, backed by record copper, gold, silver and other metals prices. This has come together with an international you-can’t-go-wrong easy money financial market.

This international bounty is a far cry from Fujimori 2 (1995-2001) and, of course, from Garcia I (1985-90).  And it will certainly too, be a distance from the shortening of commodity prices, the increase in inflation, the fall of the dollar that many bankers and businessmen are expecting for fasten-your-belts 2012+.

This is not the time, the Keiko people say, to be fooling around with state-run experiments that have never worked outside Northern Europe.  This is not just a question of political culture.  The Scandinavian model needs a tradition of administrators and, with it, a ton of real money.

This would not be the case with the motley crew of up-the-workers political drifters who have wandered into the Humala camp.  Been there, done that.

This is what Keiko Inc has been trying to get across these past few months without, a la peruana, actually saying so.  The code for this is:  We Must Abolish Poverty.  Keiko says, Grow out of poverty.  Humala says, Take it, Redistribute.

The juxtapositions of prominent names on both sides shimmered through the social pyramid as mobs sacked downtown Puno, including an army barracks, customs warehouses and the tax office.  “Humalists in Terror Infierno” said one headline.   It was so bad that it looked as though Puno, with 800,000 voters, would not vote on Sunday.   But things have calmed down for the moment because most of these votes are for Humala.

On a machete-edge call like Sunday’s, those votes will all count.

It has been an undistinguished campaign, these past several weeks.  Humala has focused on the inglorious past, and Keiko on a don’t-rock-the-canoe future.  There has been no talk, excepting earlier from PPK, of Peru in a world where Peruvians are young, unlike the Chinese and Europeans, nor of nano-technology, genetics and climate change, of viral pandemics and the fall-out from Moslem arcs-of-instabilit.

Neither of the candidates has made any promise to reform the judicial system root-and-branch and both have solid reasons for reticence even though all the voters understand that this is a top priority.  Humala has been financed illegally and almost openly by millions of dollars in suitcases from Col. Chavez in Caracas, and he is facing witness-tampering and torture court cases, and he has a brother doing a 25-year stretch for political murders which Ollanta himself instigated, according to electronic taps, now public.  Meanwhile Keiko has a father also doing 25 years for human rights violations, with scores of fin-de-siecle generals and ministers also behind bars.

Looking a month or three into the future one of Peru’s top business figures warns of big problems in the Congress for whoever is president, and indeed some new congressmen have already been migrating from the party for which they were elected –for instance Yehude Simon, a former PM, has switched from PPK to Humala.

But it is the overall quality of the new membership that has the business leader worried.  He says: “Compared with the incoming 2011-16) Congress, we will look back on the present (2005-2011) Congress as if it had been the classic Greek agora of Socrates and Plato.”

Published June 3, 2011 by  


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