Fractured Peru Congress Would Be Welcome News to President
January 24, 2020 - Original article: finance.yahoo.com

John Quigley (Boomberg) — Four months after the shock dissolution of Peru’s Congress, President Martin Vizcarra’s gamble looks set to pay off once new lawmakers are elected Sunday.

Polls suggest the parliament will emerge more fractured but influenced by a set of centrist parties more open to the president’s path of political and judicial reform.

At the same time, the opposition movement founded by disgraced former President Alberto Fujimori, which has dominated Peruvian politics since 1990 and has been the most vocal force in challenging Vizcarra’s agenda in the single-chamber legislative body, is rudderless and polling at just 5%.

The results, if along the lines indicated by the polls, could lead to greater parliamentary backing for Vizcarra’s attempts to fix a moribund system that led to political stasis and had lost the trust of voters: back in September, crowds took the streets of Lima to cheer the demise of Congress.

“It’s another triumph for the president,” said Mirko Lauer, a Lima-based political analyst, who said such a result would be good for the governability of the country.

Read More: As Crisis Rocks Latin America, Peru Is an Island of Uneasy Calm

Vizcarra, who took over from scandal-plagued Pedro Pablo Kuczynski in 2018 after resigning amid his own clashes with congress, confronted Peru’s establishment following graft probes involving politicians from all camps. He pushed to clean up the judiciary and political parties, fueling epic battles with the opposition-controlled legislature that subsequently ended in its dissolution.

Pressure On
While a more balanced congress could help ease the political deadlock, it would also put Vizcarra under pressure to quickly advance with his agenda. The economy likely expanded just 2.2% last year, the slowest pace in a decade, amid sluggish infrastructure investment and falling copper exports with a president focused on solidifying his power.

The election will help ease political uncertainty and reduce political confrontation, which may allow the government to move its economic agenda forward, said William Snead, a strategist at Banco Bilbao Vizcaya Argentaria in New York, in an e-mailed note to clients. “All in all, we believe this is positive for Peruvian assets.”

The new Congress will be favorable to Vizcarra as long as he can sustain his popularity, and that means his government needs to deliver in areas such as security, economic growth and reforms, said Adriana Urrutia, a political scientist at Universidad Antonio Ruiz de Montoya.

Vizcarra, who enjoys a 58% approval rating according to Ipsos, doesn’t have time on his side. Peruvians will return to the polls to elect the new president and congress in April 2021.

“The government has to hurry up and at least lay the foundations of a political reform on which it staked it’s legacy,” Urrutia said.

The ambitious agenda that Vizcarra would have to work out with the new lawmakers includes bitter political issues such as curtailing parliamentary immunity and tightening party financing rules.

Indifferent Voters
On the streets of Lima, in the meantime, apathy for Sunday’s vote is high as the election lacks the drama and emotion of a general election. A recent nationwide poll by Ipsos shows that 46% of those surveyed said they hadn’t chosen a candidate or were planning to cast a null vote, with no candidate garnering much support. Voting is compulsory in Peru.

The Popular Action party had 10% vote intention in the poll, while the Purple Party, which is seen as most closely aligned with Vizcarra, had 6%. Popular Force, led by Keiko Fujimori, the former president’s daughter, had 5%, the same as Alliance for Progress. Nine other parties had 2% to 3% support, below the 5% threshold they need to win any seats.

Of those, Popular Force poses the main threat to the government’s reformist agenda, though the party has been weakened by scandal and infighting after taking control of Congress in the 2016 election.

Fujimori, who narrowly lost the presidency at the time, has seen her popularity sink after prosecutors alleged she took campaign cash from disgraced Brazilian builder Odebrecht SA and sought to use her congressional majority to derail the investigation. A court is set to rule in the coming days whether she should be jailed while the probe continues. Her brother Kenji was suspended from Congress in 2018 amid a vote-buying scandal.

No Party
Vizcarra retained the support of Kuczynski’s party in Congress when he became head of state but defections reduced its seats to just five legislators by the time of the dissolution. These lawmakers aren’t running for re-election, putting the president in the unusual situation of having no party to represent him for Sunday’s vote.

“While he won’t have an obstructionist Congress, he also won’t have huge support since he doesn’t have his own political party,” Alfredo Torres, head of Ipsos Peru, said in an interview. “He’ll be looking to get to 2021 and follow public opinion more than trying to rock the boat.”

Ipsos will be publishing an exit poll at 4 p.m. local time Sunday and a quick count at 10 p.m., Torres said. More definitive official results may not arrive until later Monday.

Vizcarra, who says he won’t seek re-election, can instead focus on bolstering institutions and cleaning up politics before leaving. This appeal as a centrist willing to take on the establishment fits with Peruvians appetite for renewal amid political disenchantment, said Eileen Gavin, a London-based analyst at risk firm Verisk Maplecroft.

“The 2020 Congress is shaping up to be very atomized, with small parties needing to forge coalitions, which may give the Vizcarra administration more leverage in its final period in office,” said Gavin.

(Adds analyst comment in eighth paragraph)

--With assistance from Alan Crawford.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, ;Daniel Cancel at dcancel@bloomberg.net, Matthew Bristow