38 The Americas The EconomistOctober 12th 2019
21Bello Vizcarra opens Pandora’s box
I
n this century Peru has stood out
from much of the rest of Latin America
for two reasons. First, thanks to free-
market policies, its economy has grown
much faster. Whereas 55% of the pop-
ulation were poor in 2001, today only 21%
are. Second, despite this rapid progress,
polls show that Peruvians are unusually
scornful of their politicians and their
democracy. Yet political stability has
been preserved.
It is now threatened. In July the presi-
dent, Martín Vizcarra, locked in a power
struggle with an opposition-controlled
congress, proposed a general election (in
which he would not stand) a year early,
next April. But a congressional commit-
tee rebuffed that idea. On September
30th Mr Vizcarra controversially dis-
solved the Congress, calling an election
for a new one for January.
This was not a coup, as more excitable
opponents claim. The courts and other
bodies of state are functioning normally,
as are the media and a permanent com-
mittee of the dissolved congress. Mr
Vizcarra’s action was wildly popular.
Many of his opponents in congress were
corrupt and self-serving, as well as ob-
structive. But the president’s fait ac-
compli is constitutionally questionable.
It may come to be seen as marking the
end of Peruvian exceptionalism.
The precarious political balance was
first endangered by the election in 2016,
won by just 41,000 votes (out of 17m) by
Pedro Pablo Kuczynski, a former banker.
His opponent, Keiko Fujimori, who had
won a majority in congress, never accept-
ed defeat. Though she had few ideologi-
cal differences with the government, she
set out to bring it down. After Mr Kuc-
zynski was forced to resign over corrup-
tion allegations, Mr Vizcarra, the vice-
president, took over. Ms Fujimori is injail, under investigation (though not
charged) for illicit campaign donations
from Odebrecht, a Brazilian construction
firm. Her supporters consider it a case of
partisan injustice.
Under Peru’s semi-parliamentary
constitution the president can dissolve
congress if it twice denies confidence to
his cabinets (it had done this once to Mr
Kuczynski). The conflict boiled over when
congress exercised its power to choose
new members of the constitutional tribu-
nal, to which Ms Fujimori is appealing.
Relying on a broad interpretation of the
constitution, and with congress seemingly
poised to impeach him, Mr Vizcarra chose
to make it an issue of confidence. “Every-
one played at the edge of the abyss, with
great irresponsibility,” says Martín Tanaka,
a political scientist at the Catholic Univer-
sity in Lima. The tribunal may rule on Mr
Vizcarra’s actions, but is likely to take at
least three months.
Ms Fujimori’s father, Alberto, ruled
Peru as an autocrat from 1990 to 2000. He
slew inflation and the Shining Path terro-
rist movement, but left a legacy of system-atic corruption and a country politically
divided.Fujimorismorepresents some-
thing deep in Peruvian society: popular
capitalism, the informal economy and
the idea that rules are to be manipulated
rather than respected. Partly under its
influence, political parties have been
hollowed out and turned into vehicles
for private interests.
Rather than working with congress,
Mr Vizcarra sought popularity by cham-
pioning anti-fujimorismo. His supporters
are jubilant. But without the glue of
presidential candidacies, the new con-
gress may be unruly. As part of an at-
tempt last year to reform political and
judicial institutions through a referen-
dum, Mr Vizcarra courted popularity
with a ban on legislators serving consec-
utive terms. Far from solving a problem,
that created one. Peruvians could already
throw out the dross, and often did. The
new rule will deprive the new congress of
experience.
Peru’s economic miracle was fading
anyway. Since 2013 growth has slowed
sharply. To revive, it needs help from
government. Several big mining and
irrigation projects are stalled. Mr Viz-
carra has blocked one mine, and has
proved a poor administrator. The risk
now is that politics harms the economy.
There are no easy answers to Peru’s
conflict of powers. In the 1960s a similar
stand-off ended with the president being
ousted by a military coup. At least Peru
today has been spared that. In many
ways, the fujimorista majority in con-
gress invited its own demise. But by
blundering into what some consider an
abuse of presidential power, Mr Vizcarra
has thrown into question the rules of
Peru’s political game. And he has set a
precedent which may be copied by rulers
whose intentions are far worse.The benefits and costs of Peru’s fratricidal political struggledled President Donald Trump. Along with
Mexico it negotiated a successor to the
North American Free Trade Agreement and
persuaded the United States to drop tariffs
on steel and aluminium.
It kept its biggest promise: to help the
middle class and “those aspiring to join it”
by cutting taxes and boosting benefits. This
included a transfer to families of up to
C$6,600 ($5,000) a year per child (see chart
on previous page). Mr Trudeau’s priorities
for his next term include another middle-
class tax cut and a ban on assault weapons
(though Canada has much less gun crimethan across the border).
With this record, Mr Trudeau should be
racing to re-election while dispensing ad-
vice to other leaders on how to soothe mid-
dle-class discontents and achieve liberal
goals. But his mistakes, coupled with the
high expectations he raised, have made his
campaign more of a slog than a sprint.
Trouble began when he failed to keep a
promise from the last campaign to change
Canada’s British-style electoral rules.
These award a seat in Parliament to the
candidate who wins most votes in a riding
(constituency), even if that is not a major-ity. This “first-past-the-post” system fa-
vours big parties. A decision in February
2017 to scrap electoral reform “was the first
unveiling that Justin Trudeau was not Jesus
after all”, says Richard Johnston of the Uni-
versity of British Columbia.
It was not the last. In August Canada’s
ethics commissioner scolded him for lean-
ing on the justice minister last year to drop
a prosecution for corruption of snc-Lava-
lin, an engineering firm based in Quebec, a
province vital to the Liberals’ electoral
prospects. Then pictures emerged of Mr
Trudeau as a young man wearing black-