President Pedro Pablo Kuczynski completed the first year of his term on July 28, with little to show. Corruption, an economy in recession, social conflicts and a hostile Congress has taken its toll. His popularity has fallen from 61 percent when he first took office, to 32 percent right now.
“In our first year the government faced, regrettably, various unexpected setbacks such as Lava Jato and the Coastal El Niño phenomenon. Maybe I underestimated the titanic effort that was required to re-establish the economic growth in such a context. I apologize if this was the case. I did not imagine that two such extreme events that were outside of our immediate control would coincide in just a few months,” said Peruvian president Kuczynski in his message to the nation.
“The Lava Jato scandal in Brazil has generated dreadful consequences in our country. In order to combat that wave of corruption we have had to put an end to important contracts that generated thousands of jobs. The payment chain of various contractors was interrupted. But it was of more importance to show that here, in Peru, we take immediate and vigorous action against corruption; actions that have been recognized in other parts of the world and looked upon as an example in the Latin American region. The so called Coastal El Niño hit us at around the same time, causing tremendous damage, particularly in the northern coast, but also in the highlands,” he added.
Although Prime Minister Fernando Zavala, has assured that Lava Jato — which involves Brazilian construction companies such as Odebrecht and OAS, who since 2001 had paid millions of dollars in bribes to senior government officials to, in return, approve megaprojects in Peru — probably resulted in a two point reduction of the gross domestic product; neither this case nor the Coastal El Niño — the abnormal warming of the waters off the Peruvian coast that presented itself between January and April, causing hard rains, overflowing of rivers, floodings, and mudslides that devastated half the country — can explain the critical economic situation nor the governmental paralysis.
According to projections from the Economic Commission for Latin America and the Caribbean (CEPAL), the GDP growth for this year will be of 2.5 percent. Although the Labour Ministry has said that the goal for this year is to generate 240,000 jobs, some economists have stated that the figure is not enough; reasoning that to generate 300,000 formal and quality jobs, the economic growth needs to be of at least 4 percent.
Economist Pedro Francke said, that “these results will not be achieved unless there is a boost in the most intensive job generating sectors such as tourism, agriculture and industry. In the first year alone, the sudden brake put on public investment brought the industry to a standstill and prevented the employment of numerous people. The goal is the correct one, but the policies are wrong.”
Some things that did call the attention were the silence, omissions and voids in the message of Kuczynski. The indigenous population, the environment, decent employment, the right to health care, quality education, and social conflicts were simply not mentioned.
At taking power on July 28, 2016, Kuczynski, who had won the election by a narrow margin, said he wanted “a social revolution for my country. I long for a Peru in five years that is modern, fairer, more equitable and socially committed.” “What does a modern country mean? It means that the inequalities between the poorest and the richest must be reduced by raising the income of the poorest,” he said.
One year later, this social revolution has not yet seen the light. Although Kuczynski has had to face a hostile Congress, with an overwhelming Fujimorista majority of 73 out of 130 seats, whose only objective was to take revenge on who has snatched the presidency from their natural leader, Keiko Fujimori, the reality is that the “dream team,” as he referred to his cabinet, has not shown its efficiency.
The majority of his ministers are technocrats from the private sector, some with previous experience working for the state, but with enormous political incapacity. The objective of Kuczynski and Zavala is to preserve the trend of the neoliberal economy, but they never understood the reason behind the effort of the Fujimorismo to hamper the progress of the government if they share the ideals of defending the economic model followed since the 90s by Alberto Fujimori (1990-2000) and maintained by the governments of Alejandro Toledo (2001-2006), Alan García (2006-2011) and Ollanta Humala (2011-2016).
The Fujimorista majority in Congress, represented by Fuerza Popular (Popular Force), censored two ministers — Jaime Saavedra Chanduví, from Education, who had continued on the post from the Humala government, and Alfredo Thorne, from Economy and Finance — and forced Vice President Martín Vizcarra to renounce as minister of Transport and Communications.
In order to prevent that the Fujimorismo continue hindering the progress of the government, Kuczynski and Zavala gave them more space by granting them important public posts, including two members to the directory of the Central Reserve Bank (BCRP), the Comptroller Office and supervisory bodies, among others.
Also, the opposition majority removed from various legislative decrees any mention of gender approach, sexual orientation, gender identity, human rights and interculturality.
Between Lava Jato and the Fujimorismo
The Lava Jato scandal has caused enormous havoc in the political scene. The last three presidents since 2001 are under investigation for this case. Toledo, who lives in the United States, is under an extradition request accused of having received a multi-million dollar bribe from the Brazilian construction company Odebrecht during his term in office; Humala and his wife Nadine Heredia are in preventive custody while they are being investigated for having received money from the Venezuelan government to help in their presidential election campaign in 2006, and from Odebrecht for their 2011 campaign. Alan García, who resides in Spain, is getting away of having a detention order thanks to the control that the Partido Aprista (Apra Party) has over the judiciary and the Public Prosecutor’s Office.
Something that could explain the reason behind the persecution of Toledo and Humala is the fragile situation experienced by them at the moment. Toledo no longer has a party to back him up and Humala, who just over a year ago was president, has no one now to defend him. The Public Prosecutor’s Office, faced with pressure from the media and in their attempt to show some concrete achievements, decided to go after the two with the least possibilities to establish a defense.
Kuczynski has also not been able to evade being investigated in the Lava Jato case for his participation in the Toledo government as Prime Minister and Economy Minister, in relation to the Interoceanic Highway pushed by Brazil to connect the Pacific and Atlantic oceans and to be constructed by Odebrecht. In the end, this route has only served to have illegal mining grow in the Madre de Dios region, bordering the Brazilian department of Acre and the Bolivian department of Pando, while destroying vast areas of Amazon rainforest.
The next four years of the Kuczynski government will be marked by the rivalry with the Fujimorismo. One of the most contentious points is a possible pardon to Alberto Fujimori, who since 2007 has been serving a 25-year prison term for corruption and human rights violations.
Shortly before July 28 there were strong rumours that Kuczynski would grant Fujimori the humanitarian pardon. Keiko Fujimori maintains that she is fighting to obtain her father’s freedom because he is innocent of the crimes for which he was convicted, although she does not agree with a presidential favour because this would mean an acceptance of culpability; and also to have Alberto Fujimori out of prison, who would return to the political stage and the control of the party.