Financial Times: Peru Elite Braces for Possible Humala Victory

Peru elite braces for possible Humala victory
By Richard Lapper and Hal Weitzman in Lima
Financial Times Americas, March 21 2006 17:39
At a corner table in an exclusive coffee house in Miraflores, an upmarket suburb of Lima, an elderly man holds court. Over cappuccinos and exotic fruit salad, two entrepreneurs are telling him about the benefits of state funding for the arts.
The man, an aide to Ollanta Humala, the radical nationalist frontrunner in Peru’s presidential race, listens quietly to the pitch but makes no promises. He is sympathetic to the idea, he says, but reducing poverty will be Mr Humala’s main priority.
The outcome of the country’s general election on April 9 may be uncertain, but many within Lima’s political and business elite are planning for a Humala victory. A proponent of higher taxes and greater state involvement in the economy, Mr Humala is not a natural friend of business. But while some businessmen cling to hopes of a more traditional candidate winning, others are jockeying for position and trying to shape the policies of the next government.
Enrique Ghersi, a lawyer and former congressman, expects the lobbying effort to intensify. “The entrepreneurial class has no ideology, only interests,” he says. “They think Humala will protect national industries and raise tariffs.”
Mr Humala leads Lourdes Flores, the conservative free-marketeer who is his main rival, by four points, according to the most recent poll by Apoyo, a respected pollster. But as the election draws closer his campaign is gathering steam, while hers is faltering. Alan García, the controversial former president, is trailing in third place.
Much depends on the roughly 20 per cent of voters who are undecided. Most of them are expected to drift towards Mr Humala. Additionally, the polls fail to reach 20 per cent of voters in the poorest and most isolated areas of the country. They too are likely to be attracted to his anti-systemic platform.
“The message is resonating,” says a European diplomat in Lima. “A year ago, we thought he was too wild to get elected but we were wrong. The guy enjoys a lot of support from people who feel they have nothing to lose.”
Luis Benavente, a pollster at the University of Lima, forecasts the election will mirror the results of recent contests in Bolivia and Costa Rica, in which radical populists exceeded all expectations. “Humala’s rise looks unstoppable,” he says.
If Mr Humala wins, it would be part of an established pattern of victory for “outsiders”. Peru’s political elites have backed the wrong horse in almost all national elections since 1980.
This time around, the traditional parties have not inspired the electorate. Ms Flores made an early mistake by picking an elderly white businessman as her running-mate, reinforcing the common view of her as a defender of vested interests. Mr García, whose administration left office in 1990 amid economic and political chaos, is widely mistrusted. Forty per cent of the electorate say they would not vote for him under any circumstances.
One of these two will go into a second round, but on present form it will be a very tall order for either to halt Mr Humala’s bandwagon. Some speculate that the nationalist could even win the more than 50 per cent necessary to claim the presidency outright in the first round.
Although Peru’s economy has grown by an average of more than 4 per cent in recent years, but that has not created enough jobs for its expanding workforce. Poverty levels are among the highest in the region – about half the population earns less than $2 a day.
This has produced a rich vein of resentment, particularly outside the capital. On a dusty road near Yangas, an agricultural town in the Andean foothills some 60km north-east of Lima, the evidence of support for Mr Humala is everywhere. Some youths are painting “Ollanta presidente” on the wall of an abandoned farm building by the side of the road. “We want a change of system,” says Julio Diaz, an unemployed Humala activist supervising their work. “There’s so much neglect here. Other politicians have used us in the past.”
Polls suggest Ms Flores scores well with voters on social issues, but pledges by Mr Humala, a former army officer, to clamp down on crime and corruption are popular. He has evoked the memory of the left-leaning military government of Gen Juan Velasco Alvarado from 1968-75, alarming the middle classes. “There’s very little reassuring in Humala’s discourse,” says the European diplomat. “His general philosophy is to look backwards. The least bad thing that will happen with him is that the country would be treading water.”
But the appeal to the past evokes a fond nostalgia among the rural poor for the Velasco period’s social reforms. “In the days before Velasco, this whole area belonged to one landowner, and all the community worked for him,” says Moisés Cotrina, a bus driver in Yangas. “The rich are frightened of Humala, just like they were frightened of Velasco.”