By Erasto Almeida
News that reputable surveys show nationalist candidate Ollanta Humala is the frontrunner in Peru's presidential race after overtaking former president Alejandro Toledo forced a recalibration in markets about the dynamics in the race and its possible implications. But concerns about Humala are overblown and he is unlikely to join Presidents Evo Morales of Bolivia, Hugo Chavez of Venezuela, and Rafael Correa of Ecuador as a populist president. There is in fact less to this than meets the eye. While Humala's rise in the polls reflects a desire for change among the electorate that most have observers have underestimated, he is unlikely to win, if, as appears likely, he faces former president Alejandro Toledo in a run-off.
The latest opinion polls show Humala continuing to gain ground. According to an Ipsos/Apoyo poll released on March 27, Humala now leads with 21 percent support (up from 17 percent a week ago and 15 percent two weeks ago), while support for former president Alejandro Toledo has dropped to 20 percent (down from 23 percent a week ago and 26 percent two weeks ago). Keiko Fujimori ran third with 19 percent and was followed by Pedro Pablo Kuczynski with 15 percent and Luis Castaneda with 14 percent. Another poll with ballots conducted by Datum and released on 25 March showed Toledo still ahead with 19.4 percent support, followed by Humala with 17.6 percent, Pedro Pablo Kuczynski with 17.5 percent, Keiko Fujimori with 16.1 percent, and Luis Castaneda with 15.5 percent. The results suggest the race is very tight, but recent trends indicate that Humala will probably be in the run-off.
The question is who he will face. The odds that Toledo will make it to the run-off have diminished, but the chances of him winning in the second round are still slightly above 50 percent. Toledo appears to be losing support among the poor, which is problematic for him. If current trends continue and Humala gains ground, Toledo could fall to third behind Fujimori. But Toledo's appeal balances change and centrist moderation and could staunch any further declines. He could also benefit from campaign dynamics. As the frontrunner, he faced more attacks than other candidates, something his opponents may also face as the race tightens. If Fujimori loses support to Humala among the poor, Toledo could actually benefit. Also, potential Kuczynski voters may shift to Toledo.
If Toledo makes it to the run-off, he would probably be able to isolate and defeat Humala as President Alan Garcia did in 2006. In fact, Toledo's centrist profile puts him in a better position than Fujimori or Kuczynski to repeat President Alan Garcia's strategy in 2006. The 2006 run-off was not a choice between radical change and the establishment. Garcia instead sold himself as representing moderate change while questioning Humala's nationalism by pointing to his ties with Venezuelan President Hugo Chavez.
But if Toledo doesn't make it to the run-off, Humala would have the edge. None of the other candidates are likely to run a viable race. Keiki Fujimori has problems casting herself as pro-change given her family connections, while both Kuczynski and Castaneda are too closely tied to the establishment.
Even if Humala were to win, the issue is how much he could push policy to the left. He would probably push the limits on macro and microeconomic policy, but radical change is unlikely given his own preferences (he has repeatedly stressed a commitment to stability) and significant institutional constraints. His party would not have a majority in congress, so it would be difficult to, for example, undermine the autonomy of the central bank or abrogate contracts. The end result would probably be a gradual deterioration in the policy outlook, but not the populist regimes seen in in some neighboring countries.
Erasto Almeida is an analyst in Eurasia Group's Latin America practice group.
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