Peru presidential race narrows to political extremes

A far-left dark horse has pulled ahead in Peru's crowded presidential election but his run-off rival from the other end of the political spectrum is still unclear.

Pedro Castillo, a labor union leader from a northern rural community, has garnered nearly 17pc of the votes in yesterday's election, with two-thirds the votes tabulated, far shy of the 50pc needed to win outright. Albeit by only razor-thin margins, he seems poised to carry as many as 18 of the country's 25 departments.

Bunched together behind him are three right-wing candidates battling to make the run-off: pro-market economist Hernando de Soto, Keiko Fujimori, the daughter of former president Alberto Fujimori aiming for her third consecutive runoff, and Rafael Lopez Aliaga, a businessman in the mold of former US president Donald Trump. Only a few decimal points separate them.

Whoever wins inherits a country engulfed in chronic political turmoil and an economy decimated by the Covid-19 pandemic. Most of Peru's foreign exchange comes from mining — mainly copper — followed at a distance by agriculture and hydrocarbons.

Peru is on its fifth president in as many years, and has one former president in jail and two under house arrest. GDP shrank by 11pc last year. Unemployment is above 13pc. The first week of April had the highest death toll from Covid-19 in nearly 13 months of the pandemic.

Castillo, who has never held elected office, blames the country's ills on bad policies, starting with the 1993 constitution that he wants to rewrite. He espouses greater state control over the economy and higher taxes on big business and the wealthy.

While short on specifics, Castillo promises to "recuperate" the country's natural resources, often mentioning the Camisea gas fields, copper and gold. Camisea is operated by Argentina's Pluspetrol, while the liquefaction complex it supplies is run by US firm Hunt Oil.

All of Castillo's potential challengers reject the need for a new constitution and want more private-sector investment, not state intervention. They preach small government and less red tape. De Soto claims his plans would generate $130bn in mining investment alone.

The next president will likely have to deal with a legislature fractured into 10-12 political parties, according to preliminary results.

Interim president Francisco Sagasti's term ends on 28 July.

In another closely watched election in the region yesterday, center-right former banker Guillermo Lasso trounced his leftist rival Andres Arauz in Ecuador.

By Lucien Chauvin