Presidential hopeful Keiko Fujimori conceded defeat to winner Pedro Kuczynski, but he faces the daunting task of reaching out to the opposition while fixing Peru’s economic problems. Fujimori has vowed to lead the opposition in Congress, but shares some of his views on market-oriented reforms. Peru is a commodity-driven economy that has suffered from lower commodity prices.
Keiko Fujimori is the daughter Alberto Fujimori, a right-wing authoritarian leader convicted on human rights violations and remains in prison. However, many Peruvians voted for her because of her father’s legacy.
The Fujimori's remain a divisive family in Peruvian politics, but they retain support due to Alberto Fujimori’s strong emphasis on national security and policies that led to sound economic growth. Her run for president harkens back to Peru’s dark past, especially among family members and friends who lost loved ones under Fujimori’s death squads. Keiko Fujimori was defeated, but she will not go away anytime soon, as her party won more seats than Kuczynski’s party.
Kuczynski is a former Peruvian central bank governor, investment banker and a market-oriented politician who has spent much of his time abroad. His key proposals include improving agriculture and increasing access to healthcare and education. He also aims to increase the fiscal deficit in 2017 to lower sales taxes and fund stimulus programs, notes Reuters.
With that, he does not favor widespread public spending and aims to incorporate the free-enterprise system to foster growth. Kuczynski is continuing the same market-driven policies as his predecessor, President Ollanta Humala. Despite the new president’s business-oriented approach, many investors are uneasy an over increase in the fiscal deficit.
Moreover, critics claim his proposals would threaten Peru’s fiscal integrity in the long-run and jeopardize any chance of a recovery.
He will have to gain approval from Congress before his agenda can take effect. Kuczynski may have won the election, but only by a margin of 50.1 to 49.8 percent and he does not have enough political clout to pass his reform measures with ease.
He will also have to tackle corruption, an issue that hampered Fujimori's campaign, as she has been tied to various corruption scandals. Corruption is an another factor holding back the economy, and it remains to be seen if the president-elect will take a stand against tainted rule so pervasive in Peru’s government. Among other issues, Kuczynski must contend with illegal mining and the growing drug trade.