Peru: the institutional deficit

John Crabtree
22 May 2006

As the second round of presidential elections on 4 June 2006 approaches, the majority of Peruvians seem to be veering towards former president Alan García at the expense of his nationalist challenger Ollanta Humala. It seems that they see García as less of a risk than his opponent, notwithstanding his first government's (1985-90) disastrous record.

A televised debate between the two on 21 May was widely seen as a clear pointer to the likely successor to the current president, Alejandro Toledo. Even though García failed to deliver the knock-out punch that many had expected him to give, Humala will be hard-pressed to make up the 20%-plus difference that García enjoys in the opinion polls.

The organisers of the debate wanted it to focus on a number of key policy areas, including social and economic programmes, administrative decentralisation, human rights and citizen security. Perhaps inevitably, it ended up more a matter of scoring personal points rather than debating weighty matters of substance. Some issues, such as human-rights observance (where both parties have things to hide) were barely mentioned. As is usual in Peruvian electoral politics, the campaign so far has involved much mutual recrimination and mud-slinging.

Whether Ollanta Humala or Alan García is inaugurated as president on 28 July, he will inherit a country with a grave institutional deficit. Even though more than a quarter of a century has passed since the military relinquished the reins of government to civilians, Peru remains a country where longstanding social and ethnic divides remain unbridged by effective democratic institutions. A deep divide continues to separate state from society, government from voters.

John Crabtree is a research associate at Oxford University's Centre for Latin American Studies. He is the editor of Making Institutions Work in Peru: Democracy, Development and Inequality since 1980, published by the Institute for the Study of the Americas (in the United States, the book is distributed through the Brookings Institution)

Also by John Crabtree on openDemocracy:

"Bolivia's retreat from civil war" (June 2005)

"Peru: the next Andean domino?" (June 2005)

"Bolivia on the brink" (October 2005)

"An Andean crisis of democracy"
(November 2005)

"Evo Morales's challenge"
(January 2006)

"Peruvians prepare to bite back" (April 2006)

"Peru's chessboard" (April 2006)

"Bolivia stakes its claim" (May 2006)

The voters' disenchantment

The scale of the problem was graphically revealed in March 2006 in a survey published by the United Nations Development Programme (UNDP), which included the views of rural inhabitants whose views are not usually picked up by regular opinion pollsters. The results revealed profound scepticism about the role played by democracy in resolving people's problems, as well as about the way in which democratic institutions – in particular political parties, congress and the judiciary – actually work. The political class, it appears, is largely bereft of public confidence. Meanwhile ordinary people in Peru increasingly demand a return to more authoritarian government as the solution to key problems such as employment, poverty and insecurity.

It is in this sort of climate that Humala, a political novice with scant support at the beginning of the presidential campaign, managed to leapfrog his opponents in the first round of voting on 9 April and come out top with over 30% of the vote. Humala comes from a military background, inspired to no small degree by the figure of General Juan Velasco Alvarado. Velasco overturned an inept elected government in 1968 and set about using military might to transforming Peru's archaic political and social institutions. His leftward-leaning government nationalised key export industries, promoted industrialisation and initiated a far-reaching reform of the previously highly skewed system of land tenure.

Humala's radical rhetoric, however, has alarmed more conservative-minded Peruvians, especially businessmen, who remember Velasco's confiscatory policies. Alan García, himself a left-of-centre politician whose heterodox policies led to hyperinflation in the late 1980s, has sought to cultivate this climate of opinion. He claims to have learned the lessons of the past, and stands to profit electorally from those fearful of Humala.

García can count on the support of most who voted for the centre-right Unidad Nacional, which he narrowly beat into third place on 9 April. In contrast to Humala's demands for stricter controls on foreign investment, García now advocates the need to attract investors. The suspicion of Humala and his radical message should win him strong support in Lima, home to over a third of the electorate, where García came a poor third (behind Lourdes Flores) in the first round.

The frustration of reform

Since the restoration of civilian democracy in 1980, a succession of governments has sought to tackle the problem of institutional reform, but with scant success. The liberal reforming zeal of the Fernando Belaúnde Terry administration (1980-85) swiftly ran into the sand.

In his place, García (1985-90) sought to construct what he called un Perú diferente, but any initial achievements were wiped out by a combination of hyperinflation and political violence perpetrated by the Maoist-inspired Sendero Luminoso (Shining Path). Then Alberto Fujimori (1990-2000) sought to rebuild Peru along neo-liberal lines. However, his credibility evaporated when his government was brought down by scandals involving unparalleled institutional corruption.

Fujimori's flight from office, the brief caretaker presidency of Valentín Paniagua (2000-01) and the election of Toledo in 2001 awakened new hopes that the country's institutions could be remodelled along more democratic lines. Revulsion against the way Fujimori had ruled the country – galvanised by images on television of Vladimiro Montesinos (Fujimori's right-hand man) bribing politicians and opinion-formers – led to a consensus that things had to change.

The period of the so-called "Lima spring” (2001-03) witnessed a number of important initiatives to try to build democratic institutions. Reforms were made to the party system to encourage parties to become more democratic and representative; changes were brought about in the armed forces and police to increase levels of professionalism, inculcate a public-service ethic and make them more answerable to elected authority; an ambitious programme was introduced to advance decentralisation in a highly centralised polity; efforts were made to make top-down social programmes more responsive to ordinary people and their needs.

Similarly, a wide-ranging set of proposals was advanced for reform of the judiciary, traditionally one of Peru's most corrupt institutions. There were also constructive attempts to heel the social and political wounds left by twenty years of insurgency and counter-insurgency, with its death-toll of nearly 70,000. The 2003 report of the commission for truth and reconciliation was a wake-up call to the country's elite to heed the appalling situation facing the country's indigenous and rural poor.

But once again, the reformist impulse proved short-lived. One by one, these initiatives were abandoned, the proposals for institutional change shelved. The Toledo administration became bogged down in internecine feuds within the ruling coalition. Gradually, those opposed to reform – whether in the armed forces, the judiciary, the business community or the congress – managed to reassert themselves. Toledo's own ability to force the pace of change was hobbled by many of the self-seeking politicians around him. His room for manoeuvre was further reduced by his ebbing popularity; for much of his government his popularity rate scarcely reached double digits.

The institutional agenda

The government that takes over on 28 July may well find itself in a similar situation. While there is a demand for change, it is weakly organised and poorly expressed at the national level. Those opposed to change remain entrenched politically. Unlike neighbouring Bolivia, where a variety of social movements developed sufficient strength to take control of government with the landslide election of Evo Morales in December 2005, Peru's social movements are far more fragmented.

García has moved closer to the conservative camp. A de facto alliance with Unidad Nacional in the second round underscores his acceptance of liberal economics and the need for free markets and only limited state intervention. A García government, backed by his own Alianza Popular Revolucionaria Americana (American Popular Revolutionary Alliance [Apra]) party, will also be reliant on the votes of Unidad Nacional in congress to achieve a majority there. Still, García's campaigning – highlighted in his contributions to the televised debate – suggests more state involvement than under Toledo in the regulatory sphere and in subsidised credit to specific sectors like agriculture.

Humala's proposals give little idea of the sort of institutional changes he would introduce. Much of the emphasis of his campaign has centred on "nationalist" issues, such as revising the contracts of foreign investors (especially in the mining sector) and opposing the free-trade agreement (FTA) negotiated with the United States. On issues such as regionalisation, improving public security and raising educational standards, there appears to be considerable overlap between Humala and García. However, beyond general aspirations, neither has elaborated in any great detail on how they intend to proceed in policy terms.

Peru's longer-term political stability will depend crucially on whether institutions can be created that bring together widely varying social groups so that different interests can be dealt with and peacefully harmonised. However, past experience shows that building institutions is politically demanding. The challenges awaiting Toledo's successor in developing institutions that are durable and enjoy legitimacy are considerable. They will require leadership and a strong sense of direction. They will need to involve empowering beneficiaries at the expense of those who stand in the way. They will also require an ability to construct broad alliances and (with the help of the media) create a political climate conducive to change.

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