Early last year, Peru looked as if it had turned a corner. Thrust into office when political scandal toppled the president in 2018, stand-in leader Martin Vizcarra responded with straight talk and a sweeping reform agenda — and promptly soared in the polls. Yes, politics was messy, but the economy remained remarkably unscathed and investment grade. Fitch Ratings saw blue skies ahead.
It might have been a fever dream. Twenty-two months on, the country of 33 million people has been devastated by coronavirus, with one of the world’s highest disease mortality rates, a projected 13.9% drop in gross domestic product, spiking debt and a fiscal sinkhole. Despite massive emergency stimulus, poverty could reach 30% this year. As if that were not destabilizing enough, on Nov. 9, congress voted Vizcarra out of office, sending thousands of protestors to the streets. On Sunday, as fury turned to violence, the interim president who schemed for Vizcarra’s ouster also resigned, leaving Peru without a president for a day. Late Monday, congressman Francisco Sagasti finally drew the short straw.