[News] Peru - Humala's Big Win

Anti-Imperialist News news at freedomarchives.org
Tue Jun 7 11:35:49 EDT 2011

June 7, 2011

Game Change in Peru?

Humala's Big Win


The victory of left-populist candidate Ollanta 
Humala in Peru's election is a "big f*ng deal," 
as Vice President Joe Biden famously whispered to 
Obama on national TV in another context. With 
respect to U.S. influence in the hemisphere, this 
knocks out one of only two allies that Washington 
could count on, leaving only the right-wing 
government of Chile. Now Brazil, Argentina, 
Venezuela, Bolivia, Ecuador, Paraguay, Uruguay 
and Peru have left governments that are more 
independent of the United States than Europe is. 
And Colombia under Manuel Santos is now siding 
with these governments more than with the United States.

This means that regional political and economic 
integration will proceed more smoothly; although 
it is still a long-term project. On July 5, for 
example, heads of state from the whole hemisphere 
will meet in Caracas, Venezuela, to proceed with 
the formation of CELAC, (Community of Latin 
American and Caribbean States). This is a 
regional organization that includes all countries 
except the United States and Canada, and which – 
no matter what anyone says for diplomatic 
purposes -- is intended to displace the 
Organization of American States (OAS). The new 
organization is a response to the abuse of the 
OAS by the United States (which controls most of 
the bureaucracy) for anti-democratic purposes, 
most recently in the cases of Honduras and Haiti.

These institutional changes, including the vastly 
expanded role of UNASUR (the Union of South 
American Nations), are changing the norms and 
customs of diplomatic relations in the 
hemisphere. The Obama Administration, which has 
continued the policies of "containment" and 
"rollback" of its predecessor, has been slow to 
accept the new reality. As a result, it does not 
have ambassadors in Bolivia, Venezuela and Ecuador.

The election is also important for Peru, for a 
number of reasons. As conservative Peruvian Nobel 
literature laureate and politician Mario Vargas 
Llosa said, Humala's win "saved democracy." 
Former president Alejandro Toledo said, "The 
people have won, democracy has won, the memory of 
the people won. The people have opted for 
economic growth with social inclusion." Indeed it 
would have sent a terrible message to Peruvians 
and the world if the daughter of someone who is 
in jail for multiple political murders were 
elected president. Although she made some efforts 
to distance herself from his crimes, she was 
still running on his name and legacy, and with the help of his advisers.

The election is interesting for other reasons. 
First, it is another example of the voters going 
against the vast majority of the country's rich 
and elite, including the most influential of that 
group – the major media. Leftists may criticize 
Humala for some of the promises that he made 
(e.g., no nationalizations) in order to get the 
support of some political actors. But it remains 
clear that he was not the candidate of Peru's 
rich and powerful. This is one of the great and 
nearly unprecedented things about democracy in 
South America that has happened repeatedly in 
recent years – that those who control most of the 
income, wealth, and means of communication in a 
country can be defeated in an election. We are 
still a long way from any such result in our own 
presidential elections in the United States.

It is also interesting that Peru's traditional 
elite were defeated – in both the first and 
second rounds of the election -- despite record 
economic growth over the last decade. GDP growth 
has averaged 5.7 percent annually since 2000, 
about the highest in the region. To give credit 
where credit is due, these governments (Alejandro 
Toledo's and Alan García's) got their most 
important macroeconomic policies – fiscal, 
monetary, and exchange rate – basically right, 
which has not been the norm in the neoliberal 
era. They also responded to the world recession 
with counter-cyclical policies and minimized the 
economic damage. As would be expected from the 
economy's rate of growth, there were some 
improvements in peoples' lives, including many 
poor people: The official poverty rate declined 
from 55 percent in 2001 to 35 percent in 2009. 
Life expectancy rose 70.5 to 73.5 and infant 
mortality fell from 35.1 to 19.4 per thousand (from 2000-2009).

But by 2009, Peru still had 62 percent of its 
population living on less than three dollars a 
day, and the percentage is certainly about the 
same today – Peru is a majority-poor country. 
With vast regional, urban-rural, ethnic, and 
overall income and wealth disparities – the 
poverty rate is 60 percent in rural, versus 21 
percent in urban, areas -- most people 
understandably felt cheated. Most importantly, 
the governments of García and Toledo didn't 
deliver on the kinds of big initiatives that the 
left governments in the region delivered. Bolivia 
lowered the retirement age from 65 to 58 and 
greatly expanded the public pension system, 
nationalized its hydrocarbons industry, and 
increased social spending. Ecuador expanded 
social spending, especially on health care. 
Venezuela provided free health care to its 
citizens and tripled real social spending per 
capita, greatly expanding education, including 
free university education. Brazil had a 60 
percent real increase in the minimum wage (in 
Lula's eight years) and some modest increases in 
anti-poverty spending. Peru's last two 
governments did not do these kinds of things.

The lesson is clear: those political parties and 
governments that want to make sure they are 
re-elected have to promise and deliver real 
economic and social change. South America's left 
governments of the past have helped to make this 
a part of the democratic process, and this 
influence is likely to affect the region for many years to come.

Mark Weisbrot is an economist and co-director of 
the Center for Economic and Policy Research. He 
is co-author, with Dean Baker, of 
Security: the Phony Crisis.

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