(Bloomberg Opinion) -- In a continent devastated by contagion and wealth destruction, Peru has fallen especially hard. Once the showpiece of Latin American economies — growing at a pacesetting 6.1% a year between 2002 and 2013 and lifting 6.4 million out of poverty — the country saw gross domestic product fall 30% in the second quarter, and is likely to finish the year aound 17% poorer before rebounding next year, according to Bloomberg Economics. Despite generous aid to the poor and strict social distancing rules that drew international praise, the Andean country has been burdened by the novel coronavirus with one of the world’s highest mortality rates.
Officially, the pandemic has claimed more than 31,000 lives, yet due to faulty reporting and a spike in unconfirmed but suspected deaths from Covid-19, the real number could be at least 74% higher, if not double the current rate. “The country once again is a graveyard,” said Jorge Valladares, a Peruvian national who works at Transparency International, in a reference to the 1980 — 2000 civil war that took 70,000 lives.
As if that weren’t misfortune enough, the tragedy has fueled political insurrection, lately bordering on farce. On Sept. 18, an opportunistic legislature tried to oust President Martin Vizcarra, who has been dogged by accusations of misusing public funds and then covering up the scandal.
The revolt fell flat. Just 32 lawmakers voted to remove Vizcarra, glaringly short of the 87-vote impeachment threshold, which is a good thing. Regime change on top of a public health hecatomb might have pushed the afflicted nation that much closer to collapse.
Yet a near miss is far from redemption. Now, one of Latin America’s most regicidal republics has to contend with another governability crisis on top of the historic threat to lives and livelihoods. Four presidents before Vizcarra were dogged with corruption charges, including one who fled into exile where he is fighting extradition, another who went briefly to jail and still another who took his own life to avoid arrest. Vizcarra himself owes his job to the removal of the man he served as vice president, Pedro Pablo Kuczynski, who was forced from office in 2018 on charges that his former consulting firm had profited from a crooked procurement scheme.
A former provincial governor, from a minority party and with scant ties to the dodgy political establishment, Vizcarra cannily leveraged his credentials as an indignant outsider and went after the ethically-challenged Lima-centered political elite. His integrity agenda and sweeping political reforms won over a media and public weary of partisan posturing and officials on the take. He had plenty to work with: No nation outside of Brazil was so heavily fouled as Peru in the continental contract fixing scheme tied to the Sao Paulo engineering giant Odebrecht S.A., which admitted to paying $29 million to high-ranking Peruvian officials.
Not surprisingly, Vizcarra initially saw his ratings soar. He outflanked the obstreperous opposition and last year invoked a drastic constitutional clause to dissolve parliament, clearing the way for legislative elections in January. Gambling on his Midas touch with the media and his vaunted anti-corruption drive, he snubbed organized party politics and skipped pushing for friendly candidates or sewing together a working majority.
But his aggressive anti-politics left him vulnerable to partisan appetites in a congress where any sitting executive is a trophy and all scandals are opportunities. Payback didn’t take long. Never mind the wan pretext: the Vizcarra government’s reported payments to a little known pop crooner named Richard Swing to give morale-boosting speeches to civil servants. As government stumbled through the pandemic, the new congress seated in April quickly turned on Vizcarra, accusing him of “moral incapacity.”
Vizcarra’s ability to beat impeachment attests to his still durable (57%) approval rating among Peruvians, three quarters of whom last year named congress as the nation’s most corrupt institution. The victory may prove pyrrhic, however, and the outlook for Peruvian governability and democracy, less than auspicious. “In a land with weak parties, Vizcarra made the people and the media his constituency, and they obliged him by helping maintain his Manichean vision of the world,” said Carlos Melendez, who teaches political science at Diego Portales University in Santiago, Chile. “That weakens democracy, which thrives on pluralism and tolerance, not polarization.”
Vizcarra runs some risks of his own, including that of being bested at his own antiestablishment game. “The integrity agenda was his main weapon to counter opposing factions,” said Valladares. “Now he’s been forced to spend valuable political capital answering charges of his own. That threatens the viability of his government. Even having survived impeachment, his legitimacy has been eroded. The implication is that we don’t know whether Peru’s current crisis will last one or two years, or for the next 10 or 15.”
Insisting on anti-politics amid a still uncontained outbreak while the economy languishes is not an option. “Peru’s sharp contraction is the result of strict government measures to contain the outbreak,” said Felipe Hernandez, an analyst with Bloomberg Economics. Unlike Chile, which allowed some economic sectors to continue operating, he noted, Peru all but shut down its breadwinning mining industry, so deepening the market contraction even as the contagion spread.
To cushion the blow, Vizcarra vowed to roll out one of the biggest fiscal stimulus packages in the region, headlined at around 12% of GDP. Tellingly, though, the overstretched bureaucracy has struggled to spend its own rescue budget, a worrying symptom of mismanagement. “For the plan to work, the government needs to work effectively and efficiently, and the political noise that we have seen doesn’t help,” Hernandez said.
For all Vizcarra’s outsider mojo, Peru’s emergency demands political leadership and consensus building, not a willful avenger with a cause and a crowd.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Mac Margolis is a Bloomberg Opinion columnist covering Latin and South America. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
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