Ollanta Humala, Peru’s Next President
On Sunday June 5, 2011, Ollanta Humala defeated opponent Keiko Fujimori in the Peruvian presidential elections. However, many Peruvians and international observers, including U.S. investors, are uncertain of what Humala’s victory means for Peru.
A populist and a nationalist, Humala belongs to the Peruvian Nationalist Party (PNP). Many investors and right-wingers fear a return to the nationalistic policies that originally dominated Latin America from the 1930’s to the 1950’s and that are currently implemented by Venezuelan President Hugo Chávez.
During this period, nationalist leaders denounced foreign capital in Latin America as imperialistic. Nationalists also promoted protectionist economic policies, such as implementing tariffs on foreign exports and encouraging government ownership of utilities like railroads and of industries like mining.
In fact, the 2011-2016 government plan entitled The Great Transformation written by Humala’s party, the PNP, espouses many ideas reminiscent of mid-1900’s nationalistic rhetoric: “[Peru’s] current approach to development only emphasizes foreign markets” and “[Peru’s] current opening to the world is dependent and subordinate”.
However, nationalist policies did not serve most Latin American countries well in the 20th century as massive spending on social projects and reliance on underdeveloped domestic economies ran their economies into the ground. During the second half of the 1980’s in Peru, President Alan Garcia drove wages up and held prices down, a tactic that resulted in inflation reaching 7,500% by the end of his term in 1990.
Perhaps for this reason, a more radical Humala slinging an anti-capitalist platform lost the presidential election in 2006. Conversely, during this year’s election campaign, Humala has adopted a more moderate tone, promising to keep inflation low and promote a suitable environment for foreign investors. His platform has revolved around a theme of economic growth and social inclusion.
Nevertheless, some are still worried that Humala will pursue radical leftist policies and widespread nationalization once he assumes office in July. Humala did announce, for example, in early April, that he would nationalize Camisea gas if elected. Investors and right-wing citizens worry that Humala’s shift from radical left to left/moderate center was merely a campaign strategy designed to hook centrist voters.
In response to cries of financial and ideological ties to controversial Hugo Chávez , Humala says, “The Venezuelan model cannot be applied in Peru; we won’t because it’s a different reality. We are coming out of a dictatorship, and we won’t return to an authoritarian government where the executive manages the economic policies.” Humala references here the dictatorship under candidate Keiko’s father, Alberto Fujimori, who was sentenced to 25 years in jail following a conviction of human rights violations including kidnapping, murder, and the forced sterilization of tens of thousands of Peruvian women and men.
What Humala does with his presidential power has yet to be seen. If he follows through with his campaign promises, how he negotiates the balance between foreign business interests and domestic social interests will truly be something to witness.