June 5 (Bloomberg) -- Peruvians began casting their votes today to elect President Alan Garcia’s successor after a campaign that pit the daughter of a jailed former president against a one-time army officer promising to assert control over the nation’s mining wealth.
A poll published on the eve of today’s runoff vote had Ollanta Humala with a slight lead over Congresswoman Keiko Fujimori, while three others showed a statistical tie. Both candidates, after running populist campaigns before the first round, vow to maintain policies that have made Peru the fastest-growing economy in Latin America in the past decade.
Each 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.”
Humala had 51.9 percent support while Fujimori had 48.1 percent, according to a poll yesterday of 4,000 people nationwide by Lima-based Ipsos Apoyo. About 10 percent of Peru’s 20 million voters aren’t completely decided, which could affect the outcome, Ipsos said.
The poll, which had a margin of error of 1.6 percentage points, doesn’t include Peruvians living abroad who make up between 2 percent to 3 percent of the electorate. Three other polls last week showed Humala with a smaller lead that was within the margin of error.
Separately, Garcia said today guerrillas killed three soldiers yesterday on their way to guard a voting station in the southern jungle on the eve of the election.
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 Pedro Pablo Kuczynski, a former finance minister and 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.”
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.
“Once the elections have passed, the country has to get back on its normal path,” Humala said in an interview with America Television today, accompanied by his wife and three children. “Peru and its economy can’t slow down. Everyone has to keep working.”
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.
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.
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.”
To contact the editor responsible for this story: Joshua Goodman at email@example.com