Peru's business community is bemoaning the line-up for a presidential run-off that pits an obscure far-left teacher against the corruption-tainted heir of a right-wing political clan.
Pedro Castillo, a teacher and union leader from a small rural community in northern Peru, stunned the country in the 11 April elections, receiving more than 19pc of the vote. Even though the 130-member congress elected on the same day will be fragmented, his Peru Libre party will hold about one-fourth of the seats, more than any other.
Castillo had been polling in the low single digits in polls a week prior to the elections.
In the 6 June run-off, Castillo will face Keiko Fujimori, who came in second with 13.5pc. She is making her third bid for the presidency with her Fuerza Popular party.
Keiko, as she is known, is the daughter of jailed former president Alberto Fujimori (1990-2000). She herself served time for money laundering and was only released a year ago because of the Covid-19 pandemic.
Although participation is mandatory, nearly 30pc of voters did not cast ballots and 17.6pc of ballots cast were blank or spoiled, reflecting popular rejection of Peru's unstable politics and a perceived lack of representation.
The race is shaping up to be the most polarized in decades.
Trade groups have not commented on the electoral outcome. But privately, they say the options could not be worse, with Castillo's positions and Fujimori's legal troubles likely to keep investors at bay.
"Castillo's party has called for nationalization of mining and gas assets, which has everyone worried. Fujimori is also a concern, but not as serious," a spokesperson for one of the industry groups told Argus.
Diego Macera, who heads the pro-market Peruvian Economic Institute, said he expects several turbulent months as two-thirds of the electorate who voted for other candidates make their choice.
Castillo supports a new constitution to replace the 1993 charter that was drafted by Fujimori's father. Keiko is vowing to defend it.
While Castillo has said he would welcome private investment, his party's governing plan presented last year, before he was the candidate, has alarmed big business.
Naming names
The plan calls for the state to nationalize mining, hydrocarbons and electricity, citing mines by name, including Quellaveco, the $5.4bn copper project under construction by Anglo American in the south. It also cites the Camisea gas fields operated by Argentina's Pluspetrol, with revenue channeled into education. Camisea supplies a liquefaction facility run by US Hunt Oil.
The party's manifesto states that the "presence of foreigners is not essential" for these companies to operate.
The plan would eliminate tax stability contracts and review free-trade agreements.
It references Bolivia, which nationalized natural resources in 2006 during the tenure of former president Evo Morales, who endorsed Castillo.
The run-off winner will replace interim president Francisco Sagasti.
The elections took place amid soaring Covid-19 infections. Peru the highest per capita death rate in Latin America, according to the Covid-19 tracker at Johns Hopkins University.
