Humala Leads Fujimori By About 20,000 Votes in Peru Election

Peruvian presidential candidate Ollanta Humala
Ollanta Humala, Peruvian presidential candidate and leader of the Gana Peru Party. Photographer: Geraldo Caso/AFP/Getty Images

Peruvian opposition candidate Ollanta Humala leads Congresswoman Keiko Fujimori by about 20,000 votes in the Andean nation’s presidential runoff.

Humala won 50.1 percent compared with 49.9 percent for Fujimori, after 78 percent of votes were counted. The tally corresponded to 12 million votes counted nationwide and abroad, most of them in Lima and other urban areas. A quick count at selected polling stations nationwide by Ipsos-Apoyo, a Lima-based researcher, favored Humala by 2.8 percentage points while another sample counting by Transparencia, an electoral watchdog, favored him by three percentage points.

Fujimori, before the first results were made public six hours after polls closed, urged her supporters to remain calm.

“If the official results confirm the quick count I will be the first to accept those results,” she told supporters gathered in Lima.

In the capital, Fujimori led with 58 percent to Humala’s 42 percent after 96 percent of ballots were counted. Peruvians voting abroad favored Fujimori by a more than two-to-one margin, with 9 percent of overseas ballots counted, according to Peru’s electoral commission. Peruvians abroad make up between 2 percent and 3 percent of the electorate, according to Ipsos-Apoyo.

Both candidates, after running populist campaigns in the first round, vow to maintain policies that have made Peru’s economy the fastest-growing in Latin America in the past decade. Pedro Pablo Kuczynski, a former finance minister who supported Fujimori, said a likely Humala victory won’t spell disaster for Peru.

No Great Danger

“I don’t see such a great danger. I don’t see a hecatomb,” Kuczynski said in comments to Lima-based America Television. “The big, big question of this election is how a country growing at full speed, without inflation, ended up voting for a radical.”

Each candidate has been dogged by their past. Even though Humala abandoned his support for Venezuela’s Hugo Chavez, stocks swung wildly last week on speculation backing for Humala was growing. Fujimori apologized for her father Alberto Fujimori’s crimes and ruled out a possible pardon for him amid voter concerns her victory may revive the corruption and authoritarian rule associated with his 10-year presidency that ended in 2000.

“This has been agonizing for Peru,” said Michael Shifter, who worked in Lima for the Ford Foundation in the early 1990s and is president of Inter American Dialogue in Washington, a policy research organization. “There’s a lot of baggage with Keiko and the problem with Humala is we don’t know who we are going to get when he takes office.”

Market Selloff

Fujimori, who has a MBA from Columbia University in New York, told supporters at her final campaign rally in Lima last week that she represented “change with responsibility.” Standing alongside Kuczynski, a former investment banker who finished third in the first round, the 36-year-old mother of two warned that a win by Humala would “plunge Peru into the abyss.”

Investors dumped Peruvian assets after Humala topped the field in the first round of voting April 10, with 32 percent of votes compared with Fujimori’s 24 percent, on concern he would boost state control of the economy if elected. The Lima General Index plunged to a six-month low of 17,449.48 on April 14 while the sol dropped to a 10-month low of 2.834 per dollar on May 2.

“Both camps need to step up to the plate and establish a serious plan,” said Jaime Valdivia, who helps manage about $1.4 billion of emerging market assets at Bluecrest Capital Management in New York. “Keiko has more leeway. The market will give her the benefit of the doubt.”

Stocks Rebound

In the past month, stocks rebounded 8.9 percent, the second-best performance after Venezuela’s stock exchange among 91 primary benchmark equity indexes tracked by Bloomberg, as Fujimori climbed in the polls. The sol gained 2.3 percent in the same period, the biggest gain among 25 emerging-market currencies tracked by Bloomberg.

Last week, stocks swung by more than 5 percent in three of five trading sessions on speculation Humala had climbed back and the race was a dead heat. The government last month cut its forecast for economic growth this year to 6.5 percent from 7.5 percent as companies froze spending plans during the campaign.

Humala, who lost to Garcia by 5 percentage points in 2006, has intensified his attacks on Fujimori in recent days. Backed by human rights groups and Nobel Prize-winning novelist Mario Vargas Llosa, the 48-year-old urged voters to reject a return to “dictatorship” and accused Alberto Fujimori of running his daughter’s campaign from his jail cell.

Alberto Fujimori

The elder Fujimori is credited with laying the foundations of the Andean nation’s economic boom by slashing inflation to 3.5 percent from 7,650 percent and luring foreign investment.

His government collapsed after his intelligence chief, Vladimiro Montesinos, was caught on videotape in 2000 bribing lawmakers. The former president is serving a 25-year prison sentence for directing a paramilitary death squad that killed civilians during a war against the Shining Path, a Maoist insurgency.

Keiko Fujimori became first lady in 1994 after her parents separated, and she’s surrounded herself during the campaign by her father’s aides. Her running mate, Jaime Yoshiyama, was a government minister during Fujimori’s first term.

Humala, like Chavez, led a failed coup as a paratrooper. In 2000, he directed 50 soldiers to seize and occupy for a week one of Phoenix-based Southern Copper Corp.’s mines to protest corruption in Fujimori’s government. The former army lieutenant colonel’s brother, Antauro Humala, is in jail for killing four policemen during the takeover of a highland town in 2005.

Emulating Lula

In recent weeks, Humala shelved his 198-page campaign platform to back away from an earlier pledge to rewrite the constitution and unilaterally raise royalty fees on mining and gas production. He’s also said he won’t use private pension fund savings to finance a state retirement plan.

Instead of looking to Chavez, he now says he would emulate the pro-market policies of former Brazilian President Luiz Inacio Lula da Silva, and hired two of Lula’s aides as campaign advisers.

“We understood the message of the first round and have broadened our following,” Humala told foreign reporters in Lima on June 3. “What hasn’t changed is our message of economic growth with social inclusion.”

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