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Ollanta Humala's win is a promise to Peru's poor PDF Print E-mail
Written by Mark Weisbrot   
Wednesday, 08 June 2011 11:06

Source: The Guardian

The victory of left-populist candidate Ollanta Humala in Peru's election is a "big fucking deal", as Vice President Joe Biden famously whispered to Obama on national TV in another context. With respect to US influence in the hemisphere, this knocks out one of only two allies that Washington could count on, leaving only the rightwing government of Chile. Left governments that are more independent of the United States than Europe is now run Brazil, Argentina, Venezuela, Bolivia, Ecuador, Paraguay, Uruguay and Peru. And Colombia under President 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 5 July, 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 organisation 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 Organisation of American States. The new organisation 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 (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 has "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 Keiko Fujimori 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 criticise Humala for some of the promises that he made (such as no nationalisations) 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 almost unprecedented features of democracy in South America, which has recurred repeatedly in recent years – that those who control most of the income, resources 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 was 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% annually since 2000, about the highest in the region. To give credit where credit is due, these governments (of Alejandro Toledo and Alan Garcia) 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 minimised the economic damage.

As would be expected from the economy's rate of growth, there were some improvements in peoples' lives, including for many poor people: the official poverty rate declined from 55% in 2001 to 35% in 2009. Life expectancy rose 70.5 to 73.5 years, and infant mortality fell from 35.1 to 19.4 per thousand (from 2000-2009).

By 2009, however, Peru still had 62% of its population living on less than $3 a day, and the percentage is certainly about the same today – Peru is a majority-poor country. With vast regional, urban-rural, ethnic variation and overall income and wealth disparities (the poverty rate is 60% in rural versus 21% in urban areas), most people understandably felt cheated. Most importantly, the governments of Garcia and Toledo did not deliver on the kinds of big initiatives that the left governments in the region delivered. The record is dramatically contrasting.

Bolivia lowered the retirement age from 65 to 58, and greatly expanded the public pension system, nationalised its hyrdocarbons industry and increased social spending. Ecuador expanded social spending, especially on healthcare. Venezuela provided free healthcare to its citizens and tripled real social spending per capita, greatly expanding education, including free university education. Brazil had a 60% real increase in the minimum wage (during President 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 recent past have helped to make this promise a part of the democratic process, and that influence is likely to affect the region for many years to come.

Mark Weisbrot is co-director of the Centre for Economic and Policy Research, in Washington, DC. He is also co-writer of Oliver Stone's documentary South of the Border.

 

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