Peru's Presidential Runoff

The outcome in Peru's presidential runoff may hinge on whether voters fear Hugo Chávez more than they dislike their former President Alberto Fujimori. The runoff, on June 5, pits Ollanta Humala, an admirer of the Venezuelan strongman, against Keiko Fujimori, a daughter of the President who ruled Peru from 1990 to 2000 and now sits in a Lima jail after being convicted in 2009 of directing a death squad.

Many voters feel they must choose the "lesser of two evils," says Enrique Alvarez, head of Latin America fixed-income at researcher IDEAglobal in New York. Some Peruvians worry that Humala will boost state control of the economy and squander the country's recent economic progress. His rival, meanwhile, evokes for many voters the traumas associated with Fujimori's administration, members of which have been convicted of human rights abuses, embezzlement, and graft. Although Humala faces opposition from Peru's growing middle class, "Keiko generates so many antibodies in Peruvian society that it's possible Humala could win," says Alvarez.