Fri | Apr 20, 2018

Walter Molano | Peru: Political Cat and Mouse

Published:Friday | February 16, 2018 | 12:00 AM
In this October 6, 2017 photo, tourists walk the trails of the pre-Columbian archeological site Pucllana, surrounded by modern high-rises in the Miraflores district of Lima, Peru. Keiko Fujimori narrowly lost the 2016 presidential election, but her party won 71 of the 130 seats in the Congress, giving her full reign over her country’s legislature.

Like a sleek feline pawing a defenceless mouse, Keiko Fujimori holds a tight grip on the political survival of Peruvian President Pedro Pablo Kuczynski.

The daughter of former President Alberto Fujimori leads the Popular Force Party, which enjoys an overwhelming majority in the Peruvian Congress. Although she narrowly lost the 2016 presidential election, her party won 71 of the 130 seats in the Congress. This has given her full reign over her country's legislature.

Her political might was brought to bear at the end of last year, when the party brought impeachment charges against the president for his involvement in the Odebrecht scandal.

President Kuczynski served as President Ollanta Humala's minister of finance. The former president has been arrested, along with his wife, for taking bribes from the Brazilian construction company. President Humala's predecessor, former President Alejandro Toledo, is on the run and a fugitive from the law for similar allegations. His last whereabouts were in California.

President Kuczynski managed to survive the vote, but barely. Under the Peruvian constitution, a two-thirds majority, or 87 votes, is needed to impeach a sitting president, and 79 congresspersons voted in favour. In the meantime, he has been forced to fire or reassign 15 cabinet members.

It became clear who was in charge three days after the impeachment vote, when President Kuczynski suddenly pardoned President Fujimori, who had been serving a term of 25 years. The cat had the mouse firmly in its paws.

Former President Alberto Fujimori is a controversial and divisive person.

On one hand, he transformed Peru from suffering from hyperinflation, economic collapse and a violent insurgency to an investment-grade, exporting powerhouse. This year, Peru will be the fastest-growing economy in Latin America.

On the other hand, his government was accused of deep-seated corruption, widespread briberies and serious human rights violations. His right-hand man, Vladmiro Montesinos, was at the centre of the allegations. Through his control of the intelligence services and military, Montesinos helped former President Fujimori consolidate sufficient political power to help stabilise the economy and the security situation, but it came at a very high price.

This is the reason opinions on the former leader are so divided and visceral. Most of the upper classes and business elites consider him to have been the hero who brought the country back from the abyss. However, many of the rural poor who witnessed and suffered from countless atrocities harbour ill feelings.

Given that Peru is still a relatively poor country, it is no surprise that President Kuczynski was able to win the elections. The vote for the uncharismatic Kuczynski was really a vote against Fujimori.

Strained relationship

Ironically, the relationship between Keiko and her dad is less than idyllic. She blocked an earlier bill that would have allowed him to serve his sentence at home. Moreover, when he was recently hospitalised for heart issues, she stayed at the hospital for less than 10 minutes. There were rumours that Fujimori had refused to receive his daughter.

There seems to be signs that Keiko is very concerned about losing control of her Popular Force Party. Her younger brother Kenji, who is also a leading figure in the party and is very close to her father, is a contending voice within the organisation. On more than one occasion, he was openly sanctioned by his older sister for taking, more a moderate view on liberal social issues, such as gay rights. She took the ultimate step by ejecting him from the party.

Some political pundits believe that forcing President Kuczynski to pardon her father was more of a strategy to weaken the president, rather than to gain freedom for her dad. Ever since the pardon, President Kuczynski has witnessed a violent backlash from his political base. Virulent campaigns have spread across social media accusing him of being a traitor, and pardoning Fujimori only as a desperate ploy to save his own political skin.

With the legislature firmly in her grip and having emasculated the presidency, Keiko Fujimori has become the dominant political force in Peru. In order to let President Kuczynski have no doubts about who is in command, she has threatened to launch new impeachment proceedings for consulting work that President Kuczynski's firm performed for Odebrecht that had not been previously disclosed. This will surely keep him in line.

Like a purring cat glaring over her domain, the former president's daughter is exercising full control over Peru's political institutions.

- Dr Walter T. Molano is a managing partner and the head of research at BCP Securities LLC.

wmolano@bcpsecurities.com