Keiko squeaks past rival in Peru, investors exhale

The investor community's pick Keiko Fujimori is on track to become Peru's next president, breaking barriers and squeaking past her upstart rival with nearly 90pc of the vote counted after yesterday's hard-fought election.

Keiko garnered 50.4pc to 49.6pc for leftwing schoolteacher and union organizer Pedro Castillo, according to electoral authority ONPE.

The tight run-off election had sent jitters through the business community partly because of Castillo's plan to nationalize strategic mining and natural gas assets now in private-sector hands. The local stock exchange and currency trading are likely to reflect buoyant investor sentiment when markets open this morning.

Fujimori, 46, is poised to become Peru's first woman president and the first child of a former president to be elected here. Her father, Alberto Fujimori, governed with an iron fist in 1990 to 2000, and is currently imprisoned on corruption and human rights charges. Keiko, as she is known, has said she would pardon him if she were to reach the presidency. She ran for the top job and lost in 2011 and 2016.

Keiko's tight apparent victory and her own legal troubles – she has been detained three times in an election fraud and money laundering case – will require a great deal of political finesse as the economy crawls out from the Covid-19 pandemic. Vaccinations are minuscule, with less than 10pc of the population inoculated as of early June.

Peru has had four presidents in five years in a reflection of chronic political turmoil wrought by a system marked by a low bar for impeachment. Caretaker president Francisco Sagasti will hand over the sash on 28 July. Keiko and Castillo were the top vote-getters in 11 April elections, but neither garnered a large enough margin to win outright.

Castillo's supporters are alleging fraud after a quick count by a polling company, Ipsos Peru, gave him a narrow victory.

Regional pattern

Peru's economy expanded by 3.8pc in the first quarter after tumbling by 11pc in 2020. Unemployment remains at 15.1pc. The government at the end of May dramatically revised up its Covid-19 deaths to more than 184,000. It now leads the world in per capita deaths, according to Johns Hopkins University.

In a widely expected regional pattern, Fujimori dominated Lima with close to 66c of the vote. The capital represents one-third of the electorate. She also obtained close to 60pc along the vote-rich northern coast, home to the country's most productive oil wells and state-owned PetroPeru's Talara refinery.

Castillo swept the south of the country with more than 80pc in four regions, including Cusco, where the Camisea gas fields are located. He carried all of the big mining regions as well. Peru is the world's second largest copper producer after Chile, and is among the top producers of gold, lead, silver and zinc.

Fujimori plans to make direct payments to residents of mining zones using 40pc of taxes paid by companies. She also wants mining companies to make a "voluntary contribution" in line with rising mineral prices to pay for agricultural projects, especially irrigation.

Sagasti took office in November after one president was impeached and another forced to resign in less than one week. He was ineligible to run for a full five-year term.

By Lucien Chauvin