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Peru’s people lose faith in their leaders

Peru’s third president in a week broke down at the end of his inaugural address while quoting from a poem about reconciliation. As Francisco Sagasti, a 76-year-old former World Bank official, read a verse by national literary hero César Vallejo, appealing for tolerance after a week of extraordinary political turmoil, citizens reflected on the gulf between the erudite president and the legislators listening.

“I wish all members of Congress at least had a university education so they could express themselves like this,” said Anthony Aylas in a YouTube comment, which was liked 268 times.

“I can imagine the blank minds of the members of Congress, who are there without any qualification or studies or experience listening to his speech, which he closes with a poem that for sure few of them have read,” remarked Jorge Ara.

One of the most striking features of the mass street protests that have shaken Peru since the impeachment of popular president Martín Vizcarra on November 9 was the near-universal contempt in which the country’s political class is held by voters. 

The reasons are clear: about half the members of Peru’s unicameral Congress are under investigation, mostly for corruption. All are shielded by parliamentary immunity. None is able to stand for office again, so their main motivation is short-term. Lawmakers removed Mr Vizcarra under an arcane 19th-century rule which permits the legislature to throw the president out with a single, simple-majority vote on ill-defined grounds of “moral incapacity”.

The legislators’ choice to replace Mr Vizcarra proved disastrous: Manuel Merino, a conservative rice farmer from the provinces, who responded to nationwide demonstrations against his appointment with a clumsy police crackdown that cost two lives and injured dozens. 

With Peru in uproar over the police violence and the legitimacy of his appointment, Mr Merino was forced to resign after just five days and the technocratic Mr Sagasti emerged as a compromise choice to steady the ship ahead of elections in April.

“We now have a situation of calm but it’s too early to claim victory,” said Carolina Trivelli, an economist and researcher at the Institute of Peruvian Studies in Lima. “Sagasti’s government could last until the change of government due in July or it could last two weeks. It’s too soon to know whether things will calm down.”

Peru has been one of Latin America’s fastest-growing economies this century. Its gross domestic product has more than quadrupled since 2000, spurred by Chinese demand for its copper. The mini-boom, helped by the successful quashing of a Marxist insurgency in the 1990s, lifted millions out of poverty and greatly expanded the middle class.

But the coronavirus pandemic cruelly exposed the deficiencies of Peru’s economic model. Mr Vizcarra imposed a national lockdown early on, which crippled the economy but completely failed to halt soaring infection rates. With one of the world’s highest rates of labour informality, many workers ignored the rules. The fragile and under-resourced health system was overwhelmed. Money allocated by ministers in Lima failed to reach remote towns and villages.

Only months before celebrating their 200th anniversary of independence from Spain, Peruvians were reminded that too many citizens had been left behind, unable to gain access to opportunities reserved for the more privileged in society.

With 23 candidates, many little known, jockeying for position in April’s election, and a notoriously weak and fragmented party system, investors and business people fear a populist winner in hock to a Congress interested only in quick wins.

“The structural problem is that any president who does not have a solid majority in Congress is vulnerable, not only to not getting their agenda passed but to being removed by legislators,” said Diego Moya-Ocampos, a risk analyst at IHS Markit who grew up in Peru. 

An early indication of what might be in store came when Mr Merino, in his last hours in office, signed into law a measure allowing Peruvians to pull out and spend part of their pension savings early. Voices are already being heard on the left calling for a new constitution to overturn the “neoliberal” current charter and enshrine a greater role for the state.

“None of the political parties that aspire to win the presidency in 2021 seem to be defending the current economic model,” said Luis Oganes, a Peruvian who is global head of emerging markets research at JPMorgan Chase in London. “Economic populism is being seen as an easy way to win votes.”

Asked why nobody was willing to defend Peru’s model, Mr Oganes replied: “There is a generational change. The youth have not lived through the economic crises of the past. People aged 20 or 30 don’t remember hyperinflation and Shining Path [guerrillas]. They don’t value what has been achieved.”

 


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