Peru’s New President Seeks Unity After Tight Race

Peru's new president must collaborate with the opposition, which controls parliament.

Kuczynski won, but his rival’s party controls

Even though Pedro Pablo Kuczynski was elected Peru’s new president by a whisker, his victory was greeted with enthusiasm at home and abroad.Still, he has to convince half of the country that he is the right choice.

A former Wall Street banker and World Bank economist, Kuczynski is expected to strengthen the free-market policies that have made of the Andean country the fastest-growing in South America, bringing more investments and wealth. He has promised to cut value-added taxes and boost infrastructure spending.

PPK, as he is called at home, has been able to unify the right (to which he belongs) with the left in a fight against Keiko Fujimori, the daughter of former president Alberto Fujimori, remembered for his authoritarian regime.

Nobel Prizewinning novelist and former president Mario Vargas Llosa and left-wing candidate Veronika Mendoza supported PPK, who won 50.1% of the vote, versus Fujimori’s 49.9%. His supporters are mostly in the rich South, while her fans are largely from the poorer North.

For PPK, the challenge is to govern a country where Fujimori’s Popular Force party controls just under 60% of parliamentary seats.

“In these coming weeks, before PPK will take power at the end of July, he will have room to negotiate with Fujimori. [Fujimori] has a choice: She can give in to the compromise and prepare herself as the next president for 2021, or she can oppose him and give up on her future role,” predicts Antonio Villa Mardon, founder and CEO of Lynx Capital in Peru, an investment bank boutique.

Fujimori’s and PPK’s platforms ahead of the elections were not so different, another element that should facilitate conciliation.

“PPK’s election raises some political risks, (but) we doubt there will be a major impact on the economy in the near term,” says Adam Collins of Capital Economics in a note. “We will be keeping a close eye on the developments between the PPK camp and the Fujimori camp, but the key point for 20162017 is that Peru should remain one of the fastest-growing economies in Latin America.”