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17/09/2017 | Latin America - Can Peru’s Kuczynski Overcome a Hostile Congress and Recapture Public Support?

David Dudenhoefer

LIMA, Peru—After little more than a year in office, Peru’s president, Pedro Pablo Kuczynski, faces an uphill battle to realize his agenda of ramping up economic growth in order to reduce poverty and follow through on other campaign promises. Can PPK, as he is known in Peru, deliver?.

 

Kuczynski has faced some unexpected challenges over the past year. His administration was forced to funnel approximately $6.2 billion of federal funds into reconstruction of areas devastated by El Nino-linked floods in March, which Kuczynski says reduced economic growth this year by 2 percent. The administration is also struggling to restart major public works projects that it halted following revelations that the company executing them, Brazilian construction conglomerate Odebrecht, bribed public officials for contracts. However, beyond his own limited political skills and diminishing public support, the greatest obstacles hindering Kuczynski’s presidency may be the opposition-led Congress.

Despite having won last year’s election by the slimmest of margins, Kuczynski initially enjoyed the support of an ample majority of Peruvians. The 78-year-old president is dynamic and intelligent, a former World Bank economist, mining executive and investment banker who made millions in the private sector before running for office. He assembled a Cabinet of technocrats with comparable corporate experience, arguing that an effective government needs good managers. But their collective business acumen and experience have been of little use in helping the administration navigate Peru’s treacherous political waters, or address the concerns of many of its citizens.

Kuczynski has faced all kinds of social unrest during the past 13 months, ranging from communities blocking roads to demand compensation for the negative impacts of mines or oil fields to strikes by doctors, nurses and teachers. The teachers’ strike, which dragged on for almost two months before union leaders suspended it, has caused his administration the most damage. Congress summoned Education Minister Marilu Martens to a hearing last Friday, during which she had to answer dozens of questions about her handling of the strike, and she could face legislative censure.

Martens was the vice minister of education until last December, when Congress forced the previous minister, Jaime Saavedra, to resign due to irregularities in the ministry’s purchase of computers. Saavedra might have been able to resolve the strike more quickly, since he was familiar with the union leaders, having served as education minister in the previous government. 

Saavedra was one of several ministers who were forced to resign during Kuczynski’s first year in office, weakening his administration. In June, Congress forced out Finance Minister Alfredo Thorne, an Oxford-educated economist who held a senior position at JP Morgan Chase prior to joining the government, following accusations by Peru’s comptroller that Thorne had pressured him to approve a contract. Congress subsequently fired the comptroller due to various corruption allegations against him. 

According to Patricia Zarate, a researcher at the Institute for Peruvian Studies, Saavedra and Thorne were casualties of a political war that the opposition is waging against Kuczynski, whose party, Peruvians for Change, holds just 18 of the 130 seats in Congress. This unusual situation is a result of Kuczynski’s lackluster presidential campaign and Peru’s electoral system, in which the entire Congress is elected in a first round of voting, when many Peruvians cast all their votes for one party based on the presidential candidate they prefer. If no presidential candidate receives more than 50 percent of the vote, which rarely happens, the two candidates with the most votes face off in a second round. So presidents often come into office with minority representation in Congress, as Kuczynski did. 

Despite getting just 21 percent of the vote in the first round, Kuczynski managed to win the presidency with 50.12 percent. This was largely thanks to a last-minute surge of opposition to his rival, Keiko Fujimori, the daughter of former President Alberto Fujimori, who has been in prison in Lima since 2007, convicted of corruption and crimes against humanity during his time as president from 1990 to 2000. 

 

Though she lost the election, Keiko Fujimori remains a formidable player in Peru. She ran a vigorous campaign, remaking the political movement her father created by recruiting local leaders as congressional candidates for her Popular Force party. Those candidates won 72 out of 130 seats, which means Fujimori’s party virtually controls Congress. As she seeks to expand her party’s influence in regional elections next year, and prepares for a probable third run at the presidency in 2021, Fujimori could make it harder and harder for Kuczynski to govern.

Recent administrations have been able to establish alliances with other parties that created relative majorities in Congress, Zarate explains, allowing them to pass legislation. But Popular Force’s ample majority precludes that option for Kuczynski. Zarate notes that Peruvian presidents in the 20th century who were unable to cobble together relative majorities ended up being deposed by military coups. Though Zarate believes it is almost impossible that the military would remove Kuczynski from office, she noted that he is nonetheless in a precarious position.

“I believe that we are going to have a situation of permanent political instability,” she says.

Kuczynski might find it easier to get Fujimori’s party to support his initiatives if he had stronger public support, but his approval numbers have been steadily declining from a peak of around 60 percent shortly after his inauguration. The polling firm GfK recently released a survey that showed only 19 percent of voters approving of Kuczynski’s performance, though the president told RPP radio that he doubted the poll’s accuracy. A subsequent poll by Datum released last week found Kuczynski’s approval rating to be 22 percent. 

As dismal as those numbers may seem, past Peruvian presidents have survived lower public approval, and other Latin American leaders currently enjoy even less support. A recent poll found that only 5 percent of Brazilians approve of their corruption-plagued president, Michel Temer. 

The good news for Kuczynski is that Peru’s economy is picking up. Moody’s Investors Services predicts it will expand 2.7 percent this year, and a combination of growing export revenues and several large mines in development point to even greater economic growth in 2018. Kuczynski recently said that he would increase the government’s education budget by 5 percent and the budget for the national health system by 16 percent in 2018. The Interior Ministry has also made progress on fighting organized crime, arresting not just the hundreds of leaders of gangs that demanded protection money from businesses, but the police officers who cooperated with them. 

The question is whether Kuczynski can capitalize on such progress to improve his standing with a skeptical public. Though he has strong support among business leaders, Kuczynski has had a hard time connecting with the majority of Peruvians and overcoming their suspicions of both the government and big business. This often results in violent opposition to mines and other extractive industries that have traditionally produced a large share of government revenue. The run-up to regional and municipal elections in October 2018 is likely to exacerbate such protests in rural areas, as local leaders try to position themselves as candidates, which could create more problems for the administration.

Kuczynski has proposed improving the quality and coverage of public services in rural Peru, which he says will increase support for extractive industries and other major investments. This could boost incomes and government revenue, thereby enabling further spending on public services. However, to achieve such noble goals, the president will have to do a better job of playing politics and convince more Peruvians that he is working for their best interests.

**David Dudenhoefer is a freelance journalist and communications consultant based in Lima, Peru, from where he covers several South American countries. 

World Politics Review (Argentina)

 



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