There are at least two sides to the Peruvian elections: the divide which separates the traferos and the non-traferos.  Trafa, in Peruvian jargon, is a noun that joins Trampa (cheat) with estafa (fraud) and is very Peruvian. A trafero is a noun that identifies someone who commits a trafa, and the verb is trafear.

Among the trafero candidates who are standing in these elections are Fujimori, García and Toledo[i]. The three trafean when they say that they are not expressions of corrupt power. Fujimori has her paternal family fleeing from justice; García with his thousands of narco pardons; and much else; and Toledo with assets inexplicably disproportionate to his income. Humala, who is leaving power, is the newest: he made a trafa with the electorate. None of the parties of the ex-Presidents have been elected and they have done very badly, except for Fujimori. The question is why.

On the other side are the honest or apparently honest candidates who are Kuczynski, Mendoza, Barrenechea and other minor candidates who left the run after the first ballot.

One good thing about this campaign is that the orthodox right did not need to deny itself to win the election. They did not deem it necessary to assault the opposition candidate in order to govern as has happened over the last two decades. This honesty makes the analysis easier, although we have to see what will happen in the second ballot. The second round is inside the economic right between the honest and the trafera, Oddly the analyst Jorge Nieto Montesinos refers to the Frente Amplio, no longer running, as the extreme left, giving the impression Peru was facing something like “the Soviet revolution” or rather “the Chinese revolution”.  It is true that to be pro-abortion and in favour of civil unions in Peru is radical but from there to the extreme left is an exaggeration.  The most radical aspect of the Frente Amplio is their vision of the country as multicultural and multilinguistic.

Among the honest, the field can be divided between orthodox and non-orthodox in their economics. This is more realistic than dividing them between left and right, which is a division relative to where the analyst is located. In the orthodox field are Pedro Pablo Kuczynski and Barrenechea and in the heterodox is Veronika Mendoza (Frente Amplio). The orthodoxy of Kuczynski can be read in Toward Renewed Economic Growth in Latin America, Balassa, Bela; Bueno, Gerardo M.; Kuczynski, Pedro-Pablo; Simonsen, Mario, Institute for International Economics, Washington, D.C. 1986. The essence of this work constitutes the text of John Williamson, published by the Institute for International Economics (Now the Peterson Institute for International Economics), 1990, “What Washington Means by Policy Reform” in Latin American Adjustment: How Much Has Happened?

The other orthodox in this contest was Alfredo Barrenechea who associated with Hernando de Soto, the only genuine ordoliberal in Latin America, having been a disciple of Röpke, in the Institute of International Studies in Geneva. Röpke founded, together with Hayek and von Mises, the Societé de Monte Pelerin in 1947.

The heterodox side is politically represented  by Veronika Mendoza of the Frente Amplio and has the theoretic economic support of the professors of the Catholic University, Oscar Dancourt, ex vice Governor of the Banco Central de Reserva del Perú (BCRP) who has written on monetary themes for the last three decades and is a former member of the Board of the Bank from 2001 and 2005 and former vice-President from 2004 and 2005; Dr. Félix Jiménez, father of the concept of Humala’s La Gran Transformación and who has work concentrated on productivity, macroeconomics and fiscal aspects of growth; Pedro Francke, works on the most salient questions on public expenditure and economic adjustment. He was the head of the Fondo Nacional de Compensación and Desarrollo Social.  Francke comes from the BCRP before his university life. This side is now out of the run and holds 20% of congressional representation. The other 80% is the orthodox right.

The Peruvian question is whether citizens will vote more for the trafero side or for the honest side in the second ballot given both have the same economic agenda. The key in the second ballot is the appreciation for institutions.  We know what Fujimori father did with institutions, including the First Lady of the Nation (Keiko). He destroyed them in order to consolidate his personal power and that’s the profile of his Government. There is no other. Because of this the former first lady, now presidential candidate, had no need to intervene in Congress where she was elected for five years between 2006 and 2011. The closing down of Congress (1992) and its reconversion from two chambers to one; the change of the constitution in 1993, the transformation of the diplomatic corps (1992); the transformation of the Judiciary (1994), of the electoral power (1994) (see their role in these elections), etc. all were made to order. When institutions do not accommodate the Fujimoris, they change them.  Recently, on April 3, a leader of their party announced they would cancel Fujimori’s father’s sentence, annulling it and let him out of jail. So the Judiciary will be intervened in order for a sentence to be produced annulling the previous one. With the same political operators and the same economic interests behind them, Fujimori is and will be Fujimori. Like father like daughter. Do they hold the same interests in drug trafficking as before?   Are these the same as those behind García? Fujimori father was supported by Pablo Escobar in the first election in 1990, and his Government saw the scandals of the presidential aircraft filled with cocaine; and various Peruvian Navy ships stuffed with tuna tins filled with cocaine, all cases that have been filed. Is it a coincidence that in a firm where Kenji Fujimori is a shareholder, LIMASA, (with what money?) there appeared 100 million dollars in cocaine in March of 2013?

One has to recall the end of Fujimori’s government, when the sale of weapons to the FARC (Colombian guerrillas) by (presidential adviser) Vladimir Montesinos became public.  He is now in prison for 20 years, among other things, for these sales, according to El País of Madrid, December 22, 2006. When the news came out that weapons were transported from Jordan to the FARC in Peruvian Air Force planes, between January and June of 1999, the scandal broke out. The weapons where paid for allegedly in cocaine. The result was a memorable 21 minute interview by Nicholás Lucar in channel 2 with both Montesinos and Fujimori wearing the same necktie, “like twins” said the interviewer at the time (see https://www.youtube.com/watch?v=y5rsDepbOjI). This was the beginning of the end. Intermin President Paniagua, who took over when Alberto Fujimori fled the country in November 2000, responded to Lucar and described him to the interviewer as a human being. (See https://www.youtube.com/watch?v=zFGwLBbcEx4)

The kind of people behind Fujimori’s power can be seen for example in the statements made by a witness in the FARC / Fuerza Aerea Peruana case (http://larepublica.pe/21-03-200/hermanos-aybar-cancho-compraban-armas-con-droga-de-las-farc-revelador-testimonio-de-nar). So, are the 100 million dollars in cocaine in the LIMASA warehouse of Kenji Fujimori, (a business set up with funds of doubtful origin) related to the cocaine traffic of the Fujimori government? Or are they something different?  Why did the Judiciary file the LIMASA case?

Hence the Peruvian elections are between trafa/drugs and honesty. One can only hope that honesty wins. All the information presented here comes from the internet.

11/04/2016

(Translated for ALAI by Jordan Bishop)

- Oscar Ugarteche, Peruvian economist, is a researcher with the Institute of Economic Investigation, UNAM (México), SNI/CONACYT, Coordinator of the Obela project www.obela.org.