How Peru’s Caretaker-President Turned Into a Star

(Bloomberg Opinion) -- Peruvians have never been easy on their leaders. For the land that elected Alberto Fujimori and then watched him dismantle democracy, assail human rights and flee the country before returning in irons, maybe that’s for the best.

So when a low-profile vice president (Peru’s government has two) who doubled as ambassador to Canada was thrust into the top job in March, following President Pedro Pablo Kuczynski’s resignation via the sprawling Odebrecht graft scandal, Peruvians weren’t holding their breath. If political grandees like former presidents Ollanta Humala, Alejandro Toledo and Alan Garcia had fallen into disrepute or prison, what to expect from Martin Vizcarra, a caretaker with just two years to prove himself?

A good deal, as it turns out. Eight months ago 81 percent of Peruvians had never even heard of him; today Vizcarra's political star is rising. With the legislature, the judiciary and the central government in ill repute, Vizcarra played to the gallery, and won big. A poll released Sunday showed his approval rating at 61 percent, with only 28 percent of Peruvians disagreeing with his policies.

Peru’s stature among investors also has surged. After retracting since 2015, foreign direct investment jumped 43 percent in the first half of this year, trailing only Chile, even as it declined regionally by six percent. Sectors from copper to blueberries are flourishing. That’s good news in an economy that had lost momentum due not just to domestic turmoil but also the slowing world economy.

What Vizcarra grasped, and what ranking politicians across Latin America are learning the hard way, is that obscurity is the new charisma. Not least in the era of Carwash -- the crackdown on graft and payola in Brazil that has disgraced public officials and their crooked corporate enablers across the Americas. Playing the outsider’s card also “gave him a great deal of maneuverability in dealing with Congress,” said Abhijit Surya, of the Economist Intelligence Unit. Yet the real reason for Vizcarra’s success, says Surya, was what he did with his cachet.

From the beginning of his chair-warming term, Vizcarra leveraged his obscurity and thin ties to established parties to galvanize jaded voters. During his first days in office he announced an ambitious program of infrastructure development and reconstruction, and visited all of Peru's 25 administrative regions, to mingle with community leaders.

Vizcarra had excelled at shoe-leather politics during his term (2011-2014) as a provincial governor. “Peruvian politics are provincial, toxic and often dull, which is partly why the economy has continued to do well despite political turbulence,” said Sao Paulo-based financial analyst Guillermo Parra-Bernal, who reported on Vizcarra’s track record of defusing tensions between local communities and the mining industry. “He was always seen as a man capable of building up consensus in a place full of noise,” Parra-Bernal told me.

The test for Vizcarra came in July, as his approval rating began to slip, and the opposition-controlled legislature was pushing back against his drive to overhaul the compromised political and justice systems. Having taken office in the wake of scandal, Vizcarra had vowed to make fighting corruption “at any cost” his priority. His opportunity came in the guise of yet another scandal, this one involving some of Peru’s senior magistrates, who had been caught on audio tapes allegedly discussing a bribery scheme. 

On July 28, Peruvian Independence Day, Vizcarra called on Congress to pass his reforms and put them to a nationwide referendum. The centerpiece: a sweeping judicial reset that proposed unseating shady judges. 

Essentially, Vizcarra was challenging the congress to political poker: Pass the reforms or call new elections. The gamble was that having just deposed a president and roiling the country, even the most ardent partisans would balk at triggering more political turmoil.

A turn of fortune followed good politics. Earlier this month, in yet another phase of the Odebrecht scandal, police arrested opposition leader Keiko Fujimori, of the Popular Force party, and sought the arrest of a number of her closest allies. She has denied wrongdoing and was just released from detention, yet the charges have weakened Vizcarra’s fiercest political adversary (though they could trigger reprisals by the militant Fujimoristas).

How transformative Vizcarra's proposed reforms prove to be is an open question. Barring legislators from seeking consecutive terms could be innocuous (given the high turnover in congress) or worse, by eliminating the most experienced lawmakers from office. Restoring the bicameral system could strengthen consensus building -- or dilute it, depending on how a divided congress fine-tunes the law.

“The paradox in Peru is that although our political system has long been unstable, the economy kept growing,” Jorge Valladares, a scholar of democratic representation and former program head of the Stockholm-based International Institute for Democracy and Electoral Assistance. “What we risk now is political dysfunction and a sluggish economy. It’s a good time to fix the politics.”

Regulating campaign finance and restructuring the judicial system could be even more important to restoring Peru’s shaky rule of law and flagging trust in national institutions and their elected representatives. No one needs to convince Vizcarra how much that matters.

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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