The last 10 years have probably been the best decade in Peruvian history in terms of economic growth and social progress. As I’ve described before, Peru has become an increasingly successful market democracy. Growth averaged a yearly 5.5 percent since 2001 and the poverty rate fell from 54 to 30 percent in the same period. And yet, Peruvians elected leftist Ollanta Humala as president on Sunday in a contentious, polarizing and very tight race.
Humala narrowly beat Keiko Fujimori, daughter of former President Alberto Fujimori, now serving a 25-year prison term for corruption and human rights abuses conducted during 10 years in power (1990–2000) that also saw the defeat of the Shining Path guerrillas and the liberalization of the Peruvian economy. Fujimori had trouble condemning violations committed under her father’s rule. Humala is a nationalist, former army officer and coup leader who for years advocated populist, anti-market policies of the kind practiced by Venezuela’s Hugo Chavez or Bolivia’s Evo Morales.
Though the election pitted two aspirants with questionable democratic credentials against each other, it would be a mistake to interpret it as a rejection of Peru’s market-liberal path. The two candidates got to the second round of elections because the various other presidential contenders broadly supportive of democratic capitalism carved up almost half the popular vote among themselves in the first round of elections. Humala’s initial vote was still high (32 percent), but it is doubtful he could have been elected president had only one market democrat run.
Compared to other Latin American countries, Peruvians’ support for a liberal society should not be surprising. The country set itself apart by introducing perhaps the most far-reaching market reforms of the early 1990s, sticking to those reforms, deepening some of them after the return of democracy last decade, and avoiding major public policy mistakes that led to economic crises in other countries. The result has been a transformation of large parts of the economy and society. Non-traditional exports and industries have flourished; wages have increased; economic growth has spread throughout the coast and much of the interior traditionally little affected by economic progress; successful Peruvian multinational corporations have emerged from humble roots; and poverty reduction has meant both the rise of a middle class and a narrowing gap between the rich and the poor.