Following a narrow victory on 5th June, new Peruvian President, former economist Pedro Pablo Kuczynski (PPK), will formally take office for a five-year term on 28th July. A four-day long count confirmed that Kuczynski secured 50.1 per cent of votes over the 49.9 per cent taken by opponent Keiko Fujimori.
While it is expected that PPK’s victory will herald a new era of economic prosperity for Peru, the election itself has been marred by corruption and scandal. PPK himself has sparked controversy throughout his election campaign for his alleged involvement with the Brazilian Petrobras scandal and public call for the release of Venezuelan political prisoners, including leader of the Venezuelan opposition Leopoldo Lopez. In addition, former first lady Nadine Heredia has been barred from leaving the country following the end of President Humala’s term while she awaits trial for money laundering charges, leaving the former and new administrations marred by corruption and uncertainty.
In spite of this, the new President-elect PPK brings a new era of politics to Latin America, leaving behind the radical leftist approach that has, until recently, dominated much of the South American political landscape. It is this new, bright political future which afforded PPK his leading edge over his rival Keiko Fujimori, the daughter of controversial, and convicted, former President Alberto Fujimori.
For Peruvian voters Fujimori was a divisive candidate; for supporters of her father she stood for a significant semblance of their political history, while for others her familial ties were a stark reminder of Peru’s corrupt and bleak past. It is perhaps PPK’s complete contrast to this piece of recent history which secured his narrow victory last month. However, it has been speculated that many of PPK’s voters were in fact ‘anti-voters’ of the controversial Fujimori, and despite winning the electoral race, PPK’s Peruvians For Change party has secured just 18 or 130 seats in congress, while Fujimori’s Popular Force party has 73 seats.
With this in mind, the new President-elect will have to work closely alongside Fujimori in order to bring forwards his proposed reforms. Yet despite recent political instability, Peru’s economic outlook, which has been steadily improving, remains positive. Although the country has suffered from a fall in commodity prices, manufacturing and fishing activity it has been able to avoid a recession similar to that of Brazil, so much so that last year growth in Peru rose by 3.3 per cent, with a further 3.5 per cent growth expected this year. In addition, quality of life in Peru is rapidly improving, with the rate of poverty falling dramatically over recent years, dropping from 58.7 per cent in 2004 to 22.7 per cent in 2014.
As the country’s new President, PPK will inherit one of the most vibrant economies in Latin America and the emerging market. With his former positions as economist for the World Bank, Investment Banker, Peruvian Finance Minister and Prime Minister, it is expected that he will be well received among the global markets, and forecasters are predicting that the new administration will unlock the country’s economic potential.
Regardless of Peru’s recent political turmoil, the country’s future is bright. With the new President at the helm and planned focus on infrastructure and anti-corruption bodies, we can expect that the Latin American country will maintain its positive growth trajectory and become an increasingly inviting and attractive opportunity for business and investment.