Elections in Peru: Slow Results and Uncertainty

In this episode of Sustainable LatAm, hosts Alberto Souviron, Andrew Thompson, and Julian Seydoux are joined by Oxford academic and Andean expert, Professor John Crabtree. Together, they unpack the administrative chaos and political uncertainty surrounding Peru's recent first-round presidential elections. The conversation delves into the logistical hurdles of managing 35 presidential candidates, the Trumpian fraud claims led by Rafael Lopez Aliaga, and the nail-bitingly close race to face Keiko Fujimori in the second round. 

Beyond the ballot box, the panel explores the surprising resilience of the Peruvian economy amidst a history of frequent presidential impeachments. They discuss how the return to a bicameral Congress might bring much-needed stability to the nation. The episode also analyzes Peru's delicate geopolitical balancing act between the United States and China, highlighting recent tensions over American F-16 fighter jets and the Chinese-built Chancay port. Finally, the discussion tackles the rising concerns over extortion and common crime, alongside the deep-rooted regional and social divides shaping Peru's political and economic future.

Production: Sustainable LatAm

Presenters 

• Andrew Thompson - International journalist & political-risk analyst with deep LatAm coverage (OBG, EIU, Latin News; ex-Head BBC Learning English).
• Alberto Souviron - International journalist and digital comms leader for EM investors; ex BBC/Newsweek/Lloyd’s Register. 
• Julian Seydoux - AI-driven finance entrepreneur (FirmView AI, Fast Audit AI); ex-Moody’s/Consilium; cross-border EM & LatAm focus. 

Transcript

Introduction

Alberto Souviron 0:34

Welcome everybody to another edition of Sustainable LatAm, a podcast that analyzes all the geopolitical, economic, and social trends in Latin America. With me I have, as always, Andrew Thompson, journalist like me. We both are co-presenting this podcast. And today we are honored by the presence of Professor John Crabtree. John has is an academic expert in Latin America with a long history of analyzing the Andean countries, especially Bolivia and Peru and Ecuador. He is currently a research associate at the LAC and senior member of San Antonio's College in the University of Oxford. He also provided the services to Oxford Analytica and Oxford is visiting researcher to Oxford Brooks University. He has several publications. One of the latest one is Business Power and the State in the Central Andes, that is a compare of Bolivia, Ecuador and Peru, published in 2023. He also wrote in 2017 Peru, Elite Power and Political Capture, and several other publications. John, it's a real pleasure to have you with us today. I will give you a little bit of the mic just to talk a little bit before we go into the questions. But first of all, well, thank you for being with us. And how about if you tell a little bit more about you to our audience?

John Crabtree 2:26

Okay, well, I'm talking about the Latin American Center at Oxford University for many years now, and with a specialist, as you mentioned, special specialism in Peruvian and Bolivian uh politics, but also extending a little bit more widely than that. But those are my the main focuses of my my research interests. And when you're uh dealing with uh uh my my CV, I might mention by birth a little bit of advertisement that um I have a book, an edited book, which is coming out um in a couple of weeks' time, um published by Routledge on mining in Peru. Um it's called titled Be Mining and the Peruvian State. So it's uh you know to look at the way in which uh uh um uh the the mining industry has evolved in Peru um and whether or not it can resolve some of the problems that it's had over the last 25 years over the next, which of course it'll be the great beneficiary of uh um of the energy transition and the demand, the huge demand that there will be for copper. So that's um, you know, if any of your your your viewers are interested, that that book will appear in the next published on the 11th of May.

Alberto Souviron 3:37

Well, first of all, congratulations. And yeah, definitely we are going to acquire the book and and once it is published, probably we're going to have another conversation talking about the book. Uh well, let's jump to business, and I will give the mic a little bit to Andrew to give a little bit of summary of what is the topic of today in our podcast. Andrew, go ahead, please.

Andrew Thompson 4:02

Right, this is kind of the topic and uh question John that I'd really like answered. Um I can be quite an impressionist impressionistic

Administrative Chaos and Trumpian Fraud Claims

Andrew Thompson 4:12

person. And looking at the first round of the ballot in Peru on the 12th of April last, it's being described as chaos. It's being described as fraudulent, although there's not much uh evidence backing it up. Um some votes have gone missing. Um one candidate has offered cash payments for uh for voting uh denunciations of fraud, and um we still don't have a formal result. So my question is um was it really that bad or by reference to other countries and other periods in Peru, was it uh a reasonable sort of election to try and take the temperature of uh for Peru as a nation?

John Crabtree 5:01

As you said, there was no formal denunciation of fraud by the observers that went to Peru, um including those of the European Union. Um what there was was uh um a certain amount of administrative chaos, um, partly by virtue of the fact that the sheer number of candidates which the electoral authorities have had to cater for. I mean, there were 35 presidential candidates, which is twice the number um last time, which in itself was a record. So it's uh and then you're talking about not just um um candidates for the presidency, but also for the two vice presidencies for uh 60 members of the Senate and 130 members of um the chamber of deputies. So that's an a it's a huge administrative task, and there were certainly uh major uh uh problems on the on the election day in terms of the supply of um ballot papers and other other um materials to um the polling booth in various parts of Lima and also in various bits and parts in some cities in the United States. So this was uh a major hiccup, and the voting had to be in those areas had to continue the following day. So it was um, you know, and even then when the the the results of the elections were coming in, um voting was continuing. So with in that sense, there was a certain amount of irregularity. There have, as you say, been claims of fraud. Claims of fraud are not absent from Peruvian elections. Um you may recall that in the most recent, uh the 2021 elections, um uh um Keiko Fukimori, the um losing candidate in the second round, claimed to be the victim of fraud. Of course, no evidence was ever produced to that end, and no evidence has actually been produced as yet that um to back up the claims of fraud, which are coming mainly from the sort of populist right, um, in particular from um Rafael Um Lopez Aliaga, who uh who has been said that the procedure would be fraudulent even before the elections began. So, I mean, there is a there is a discourse of fraud here which echoes to a certain extent some of the kind of Trumpian politics which we've seen in the United States. You know, there's a there are patterns here um that you to delegitimize the results when you think you're going to lose, you you you you claim fraud. So um uh certainly there have been uh um administrative irregularities um and um those are quite serious. Um and indeed um the um uh head of the ONPI, the organization which administers the elections in Peru, has now been forced to resign, um, which is um an unusual step because um the uh um position is not supposed to be resignable uh um during the process of an election. Um but um he has been long been the target of um criticism both by the supporters of Keiko Fuki Mori and of Lopez Aliaga, who have been gunning him for for him for years now. So it's it's not surprising. Um but they have uh um the the uh um the chief public prosecutor uh um on their side. So um uh um then he is the person who is is now claiming that um he has to go into some preliminary um detention, which I mean, you know, this is all getting quite serious, I think, in terms of of of uh uh uh um repercussions. And one of the candidates, uh um Roberto Sanchez, uh who might be uh might be going forward to the second election, we don't know yet, um, is saying that um he's going to mobilize support in the pen in in defense of of Corvetto, the head of the OMP.

Andrew Thompson 8:43

Right. This is I've also heard uh that uh Lopezani has called for, I think he the words used as a civil insurgency. He had some very kind of dramatic uh uh descriptions of what should happen next.

John Crabtree 8:59

Well, this is all that sort of has Trumpian echoes, doesn't it? I mean, this is um you know, we've heard this before. Um and um there are a number of ways in which I think that uh um uh Lopez Aliaga's campaign has um sort of picked up on the on on the Trumpian playbook. Um also I mean uh echoed in various with various other uh um sort of candidates, if you want Michael populist right in other parts of the world.

Alberto Souviron 9:26

John, let me jump in in there. Yeah, it's really interesting what is happening in in Peru, but but it's not uh an unusual history in in elections in Peru. If we remind remember a little a little bit, the the time that it takes to get results are sometimes is quite long. It happens in 2021 as well. So a little bit my question is why Peru is so complicated to manage or or take so long to manage an election plus all all of the situation. And what is the impact in terms of of political stability in the country?

John Crabtree 10:04

Yeah, well, start it's it the system is not digitalized, so which takes longer. There are communities which are very remote, which takes time to sometimes to get the vote in from those. Um and um it's um a system whereby um the various people who observe the elections um from different political parties are able to impugn the results. And there are a large number of results which have now been impugned. Um I'm not sure exactly who's doing the impugning, but um there are quite a lot of uh um but and it takes special a special section of the of the electoral courts to go through these things one by one. I mean, often the results the things are like um, you know, the the the totals don't add up, or um somebody at the people is supposed to sign the the the the ballot t the tally have put their signatures in the wrong place. No, there's those those kind of you know procedural problems which are uh as they're certainly common in in in Peruvian elections and probably much less so when elections are uh elections are digitalized. But um so it it has it does take a long time. In this particular case, it's taking a long time because uh we simply don't know that the the the position for for who goes forward to the second round is so so narrow between um Roberto Sanchez and Rafael uh um Lopez Aliaga as to be um having to be extraordinarily careful um in terms of of um the the way in which they're uh um conducting the count. So I mean at the moment, I mean I was looking at the figures just now, we were on nearly nearly 95% of votes counted, um, and they are uh um with Fujimori on on 17%. So she goes forward anyway to the second round. Um and the the gap between um Sanchez and Lopez Aliaga is is nail-bitingly close. I mean, it's only 17,000 votes in it um in a in a in a um you know with amongst a voting public of 28 million, so it's it's tiny. Um and it could go either way. Um, you know, when there are a number of there are about sort of 5,000 or so uh um ballot tallies which are being being observed and looked at at the moment, and and really the the the result could go either way. So we don't know who uh um uh um Keiko will go forward to into a second round with, whether it's um Sanchez or whether it's Lopez Aliaga. And the results will the the the nature of the second round will be very different, depending who who goes forward in the in the end.

The Second Round Scenarios and a New Bicameral Congress

Alberto Souviron 12:47

Yeah, exactly. You were mentioned this, uh the difference is so narrow, but that is basically picturing a two possible scenarios. A scenario that is going to be uh right, conservative right and and far right, that's one possible scenario, or right, left underpolarization. That cause that is a little bit historical in certain parts of Peru as well. But it's not only that, in terms of governability for for the whoever wins the second round, uh, and even in these two scenarios, we are going to see again a very fragmented fragmented Congress. And how is it going to impact even with these two scenarios, the governability of the country and the managing of the country? Eight presidents already is is complicated.

John Crabtree 13:38

I think that the Congress will be less fragmented than the previous one. Now, we've got this for the first time they're reintroducing the Senate. And I think that we we don't know what the what the seat allocation will be in any precise terms, but it's probably only four parties which will be represented in the Senate, which are actually passed the the 5% required, 5% of the vote which is required to achieve representation. So that's going to reduce the number of parties quite considerably. Now, of course, those parties can split into little bits because the parties aren't solid, um, and which is of course what to a certain extent what happened in the previous uh Congress. I mean, the um probably in the Chamber of Deputies you may get six parties or something like that. Um it's not clear entire entirely clear uh how many there will be, but it'll probably be less than in the previous Congress, at least at the outset. Um I mean, in the previous Congress, for example, Peru Libri, which is the party that won the 2021 elections, um, has now fragmented into about four or five sort of little subparties, um, all of which have their own agendas and have led to a degree of chaos. So also the reintroduction of the Senate has an important implications for um the possibilities of impeachment. Now, we have seen um in the last ten, no, whoever gets elected, um this time will be the ninth president in that in only 10 years. There have been impeachment has become a kind of uh um customary uh device, which it was never intended to be in the amongst the constitution makers. Um but it's been used um repeatedly um to get rid of unpopular um to get rid of presidents who who who don't um um follow the w what the majority in Congress want. Um so I think that now with two chambers, it has to go through two chambers, it has to get two-thirds of the vote in both chambers for an impeachment to be valid. So it's actually maybe slightly less uh um volatile going forward than has been the case in the last five years.

Economic Resilience and the Persistence of Fujimorismo

Alberto Souviron 15:52

Well, that that that that can be really as good news for Peru and uh and whoever wants to do business in Peru, which paradoxically, as you follow Peru, it is really interesting to see the resilience of the Peruvian economy, regardless of the uh political uncertainty.

John Crabtree 16:11

Well, the Peruvian economy is booming, well, not booming, but it's it's it's uh um about three 3.1% or something like that. It's it's doing better than the average for the rest of Latin America for sure. Um but I mean with with prices of minerals where they're at at the moment, particularly for copper and gold, which are the two things that produce Peru produces most of, it's not surprising that there's a you know that there are an economic uh um um uh uplift as a result of that. But I mean, and to a certain extent, as you you're suggesting, there is a sort of um uh autonomy between um what goes on in Peruvian politics and the way in which the economy works. Um and even Castillo, president of the left-wing president who won 20 won in 2021 and was uh um ousted um at the end of 2022, even he didn't really upset the economic model. I mean, he he came in with lots of promises to be nationalizing, nationalizing anything, but um ended up not being able to do anything at all. So, I mean, you know, even candidates of the left are uh are fairly restricted in what they can actually get away with.

Andrew Thompson 17:20

Should Roberto Sanchez win uh would that be a situation where he's uh if you like criticized by the markets for uh spending a lot? I think he's promised to increase education and else spent the um major expansion of uh university-free university education. Is that something that business worries about, or do they think he would be quite uh comfortably contained by uh by Congress?

John Crabtree 17:54

Well, the first question is whether he will win. I mean, against I mean, if he's against uh uh um going against um Keiko Fujimori, it'll be a polarized, a polarized campaign for whether or not Sanchez is able to pull together the kind of um anti-Fujimori coalition which has deprived um Keiko of the presidency now. This is the fourth time, fourth election, successive election, um, in which she's narrowly lost um against a coalition of people against who have I have my doubts. I mean, I think that um if if I have to make a put a bet on it, I would think that in a in a uh Keiko uh um versus Sanchez contest, I would think that Keiko would probably um get would probably prevail. Um I think that he would uh um spend um a lot of ammunition trying to denigrate um Sanchez and to make him look as if he's a dangerous radical. Um and then irrespective of what he said in the campaign, I mean, one has to sort of uh um to um interpret that with some some caution as that doesn't isn't necessarily what's actually going to happen. I mean, everybody makes exaggerated campaigns in election, you know, make election claims or election promises in in election campaigns, but don't necessarily, when it when when when they actually achieve office, aren't able to actually uh um fulfill any of those um promises. I mean Castillo was a case in point in this regard. Um he failed to do anything pretty much in the in the time he was um in office. Certainly, um uh if he did win the election, which I say I think is on balance, probably improbable, but it might happen. It could happen. I mean, he could there are certainly those parties there are the the the the the degree of the anti-Fujimori. No, if you look at the polls, that the solidity of the anti-Fujimori sentiment is is very solid. I mean, it's um you know, those people who say they would never, ever, ever vote for Fujimori is higher than for most other candidates. But um it depends, I think, um, on whether or not um you can actually pull together a kind of uh a coalition um which um is able to um stop her. I mean, of course, in the first round she only got 17%, so there's an awful lot to play for. Um so one would assume that in a um in a um Fujimori versus Sanchez contest, I mean, all those who voted for Lopez Aliaga would vote for um would switch their votes to Fujimori, um, or at least the great majority, I have to imagine just about all of them, probably. Um, but there are also a lot of other sort of right and center right candidates um who didn't make it to uh um from the first round, um, who will also presumably um I think can be relied upon to provide a certain amount of grist to the to the um the Fujimori mill. Um so I I suspect that um A uh um it it on balance I think that probably Fujimori would win um an election, and even if she didn't, I don't think that Sanchez would have that much leeway in which to really to pursue very radical policies. That that answers your question.

Alberto Souviron 21:24

John, it's yeah, thank you. First of all, I want to welcome Julian Seydoux, uh our third co-host who just joined us. Julian, welcome. Julian is uh our economic analyst uh in Sustainable Latam. He always viewed all the perspective of as an investor of what is going around, and probably he's going to make a couple of questions uh while we develop on this. But I want to jump in one thing. We we have talked about the resilience of the economy, certain scenarios, uh, and a scenario, uh probably scenario uh of Sanchez Fujimori. But talking about resilience, we are talking about Fujimori, fourth election is going around that, and uh a persistence of Fujimorismo in Peru. Highly resisted some for for one side, but highly supported on the other through through the years, despite all the controversies that's going around Fuji Morismo. Can you help us understand why is so powerful the Fujimorismo in Peru?

John Crabtree 22:28

Yes, well it goes back, I think, to the legacy of um Keiko Fujimori's father, um Alberto Fujimori, and to which um she put quite a lot of emphasis in the campaign about uh um uh Fujimori father's uh um you know uh success in stabilizing the economy in the 1990s, uh liberalizing the economy, making it a very business-friendly uh uh economy, um, and um was very successful in terms of you know uh um stimulating a return to growth and so forth, uh, but also in terms of um suppressing um Sendero Luminoso, the Shining Path, which um they have can you know the Fujimoristas have continually invoked um the legacy of um of Alberto Fuchimori in that regard, in terms of bringing and and and and in opposing uh um attempts by the human rights community to um to um submit members of the armed forces to um judicial remedy of one kind or another. Um so I think there's the the legacy of Fujimori, Fujimori father is is is strong. Um though, of course, as time goes by, an increasing number of electors would not even have been born during the time of uh Fujimori. So that I think that effect diminishes over time. Um but she's time, I think, has put together uh and compared with uh Lopez Aliaga um has played a more a more um um type, um uh um she has um not been as uh as vitriolic as uh as um Lopez Aliaga in terms of um claims of fraud and and so forth. Um she's behaved in a if you might use the term in a in a slightly more statesman-like or statesperson-like, I should say, uh way, um and has avoided the kind of histrionics of campaigning. And I think that's probably brought us some credit amongst people. And of course, I think to a certain extent, inasmuch as Lopez Aliaga has sort of tried to outdo her on the far right, she has managed to sort of appeal to a more a more centric centrist um opinion. Now, of course, uh the party which um Keiko set up, uh Fuerza Popular, is I would think the organized political party in Peru these days. I mean, um, and that's perhaps overemphasizing it asaggerating a little bit as to uh the other political parties are simply personal vehicles of individual politicians. Fuerza Popular does have some sort of organized organized presence um across Peru. Um Lopez Aliaga, for example, is who was previously the mayor of Lima um before he gave up to campaign for the presidency. Um his this space is pretty solidly uh Lima. Um he doesn't, if you look at the voting returns, yeah. Very few people outside Lima have much time for Lopez Aliaga. Whereas Fuerza Popular and Keiko Fuji Moriad, its leader, has uh um a quite a strong um presence throughout the country. And he's managed to build a kind of electoral uh um machinery um um in conjunction often with sort of local politicians, which has actually been quite durable over time. And of course, I think that um the experience of the last um five years shows that Fuerza Popular is uh one of the few um uh fairly disciplined um political organizations in Peru in terms of its presence in Congress. It does not it has not suffered um in the internal splits that most other parties have suffered, um which have led to a kind of frag a total fragmentation of political representation in the Chamber of Deputies. So I think those are some of the elements that sort of uh um that um help explain her per persistence. And of course, you know, she's not not a person without um degrees of um she has various charges out against her. She's been in jail for quite a lengthy period of time um over um the receiving, allegedly receiving large uh um campaign contributions um as part of the Lava Jato scandal, um and contributions which were never properly uh um uh um admitted to the the electoral authorities. Those um those charges against her, partly because of the way in which she's managed to control uh or Fuerza Popular has managed to exercise a degree of control over the judiciary in the over this over this period, um, has led to the fact that these that the the the charges against her are effectively being quashed. Um so I mean she's quite a you know she's somebody who is had has uh legal has had legal pro no severe legal problems against her. Um and um but I think to a certain extent those have tended to sub subside a bit in the lot in as as in in people's minds over the last um year or so.

Alberto Souviron 27:53

Andrew, Julian, uh time for you to jump in.

Andrew Thompson 27:58

So I I've got a quick question. I don't want to steal time from Julian, but if um just following on from what you're saying, John, if Korea wins the room, will uh Lopez Aliaga be a uh collaborative coalition partner for uh or will he be much more uh if you like adversary?

John Crabtree 28:27

I mean he he himself won't be represented in in the Congress. But uh I think that um probably, I mean, ideologically, there's not much to divide, you know, there's not an awful lot to divide between the two of them. I mean, they've they have um they've had the their um differences over the last five years, but there have been a lot of collaboration between um Fuerza Popular and Um and Lopez Aliaga's uh um party too, so which have you know between them really managed to steer things um through the Congress. I mean they have effective with other with one or two other people had an effective majority of conservative majority in the Congress. And I would think that um that would that would probably persist. Um I mean he may or may not have presidential ambitions in 2031, you know, but who knows what will happen then, but that's a long way off yet. And um I I would think that um given the sort of um quite strong representation of of um of center-left um and and left parties, I mean there will be that no, even if Keiko wins, um there will be um uh quite a strong representation in in both houses of both both houses of of the legislature um of centrist and left of center parties. So they won't necessarily have it all their own way. I mean, to give you some idea, I mean it's it's uh calculated that probably Fujimori would have 21 seats in the 60-seat Senate. Um and uh um Sanchez would probably have about 15 um and uh um uh um Lopez Aliaga would probably have about nine. Um and then but the rest of it would be made up of of more center center centrist and center left parties. It won't won't necessarily be an absolute majority, and it may be difficult to, you know, they'll so I suspect that probably um there would be a degree of collaboration between Frugimori and and um um and and um Morgan Taliago's party renovation popular

A Geopolitical Tug-of-War Between the US and China

John Crabtree 30:56

one thing we might we might talk about before we talk about the economy is is the sort of international um aspects of this because Peru is a country in which um depends an awful lot on China. Um I mean it's the major investor, it's the major market for minerals, um and uh its relationships with the United States and is under pressure. Um an indication of this has been incidents that have taken place in in recent days, in fact, over the acquisition of American um F-16 um jet fighters. Um and this has led um, I just you know to be announced um earlier today to the the the resignation of the Minister of Defense. There seems to have been a major rush between the Ministry of Defense and the Armed Forces on the one hand, and the President, who is or the interim president, who is saying that the the this this deal should be uh um is too big and too too important to be uh um legitimately agreed by him. And it can be better to postpone it until you know a government is in place. This has created all sorts of ruptions with the US Embassy. Um and um uh um and the ambassador, um um um Trump's ambassador has been fairly fairly vocal in terms of expressing his points of view in terms of the importance of this deal going through over the heads of of other possible suppliers who are also complaining that they've been uh been sidelined um by the United States. This is the um the French French uh producer um Rafael and and to um to Stab in Sweden. And so it's Peru is in a in a in a bind, because it wants, on the one hand, to to maintain close relations with the United States, but at the same time is not going to be pushed around that much in terms of of um endangering its its relationship with with China. And uh one of the flash points here has been the the port of Chang Kai, which is um built uh built by the Chinese for the Chinese, basically, um uh and whether or not this is um yeah there's been a um a polemic, an ongoing polemic, over to the extent to which um the prouven authorities actually exercise any control over what happens in the port of Chiang Kai. And this has been again a flashpoint in in relationships between Washington and Nima. So I'll just add that in as a sort of extra extra element.

Alberto Souviron 33:34

No, that that that's right. In our latest episode when uh Andrew Chulen and I were talking about this game, geopolitical games that that is playing China and the US and Peru is part of these pressures going around that. And probably from what you're saying and and what we are seeing, more pressure from the US are going to come. I don't think China is going to let this easily go because it has invested for many years. Julian was saying, uh and correct me if I'm wrong, Julian, but uh the the interests in the of China in Peru are quite high. They have invested a lot of money, and I don't think they are going to just let it go uh around. On the other side, the level of uh pressure of the US could be high, but how much uh capability to maneuver uh are going to have the the US government with with such a strong presence of China through through the years is a question going on. Julian, I don't know what what what what you're seeing on that.

Julian Seydoux 34:38

Yeah, I mean we we China is the main partner for Peru. Um as as John was saying. And you know, we're talking more than double of it of of uh of exports to to China compared to the US. So you know that's that's several billions that uh that the that the US need to fill up if they want to compete with uh with uh with China, which they may do. Now uh Peru is rich in in uh in copper, is rich in iron, is rich in uh a whole range of uh of minerals that could be of interest, and certainly the U the Trump administration has been very active uh across the continent to secure. We just saw some big deals coming into uh into Lulu's uh Brazil. So uh they they they are they are very active. It's uh it's uh I'm I'm really interested to hear the the this this so I hadn't it I didn't catch the the F-16 or the scandal there, but of course it's uh you know everything all of this is is uh you know with there's there's there's immense pressure uh as we know, you know, if you go south of the border, there's pressure. If you go further south, there's uh pressure and uh and huge uh support. Uh and uh and Peru is in between uh countries which have uh which have somewhat turned uh more in more recent years. So so the so we'll see what happened in in with the port. Um you know the you know we'll see if uh uh you know I'm you know the we understand that things are moving very fast in Latin America from from what we can see and and uh it'd be good to see you know what what happens in these elections. I think that if you remember as as we discussed earlier at Alberto, when when I was asked last time who's gonna win, I didn't want to commit because I hadn't I couldn't see anything. Uh I wasn't I wasn't totally sure.

John Crabtree 36:51

But um yeah, it's uh I'm gonna claim that even if ACO wins the election, um that the room for maneuver for um adopting a uh uh an anti-China policy is very limited. I mean it'll be particularly interesting to see what happens in Chile. I mean, with caste is also in the same rather in the same sort of bind, you know. Um Chile is also depends on you know hugely on China as a market and for its uh for its copper. Um I mean how far are they going to jeopardize there's a limit to which uh but I think what will be happening is will be the that the the uh um Peruvian administrations will be looking to be sort of um help trying to to to meet the demands of Washington in other spheres, like for example buying um military hardware from them, which of course locks them into a kind of into a into a defensive logic.

Julian Seydoux 37:45

Um absolutely uh I mean uh you know I think a lot depends on uh as we you know a lot depends you know this for better words, you know, I'll I'll be quite uh quite brutal. There is a there's uh this we are in a third cold war, a cold war between China and and and and the US, uh which is manifesting itself across many countries, and in that um we can see it in in a variety of uh where the US is securing uh a lot of a lot of places and making moves. Um and underlying this, we come back to what are the what are what is the US after? And so from from what we can see in the discussions on the economic spot, I'm not talking about the politics, which is to m to some extent a th from my view, it's pretty relevant in the Trump administration. Uh, you know, it's it's actually securing everything which is linked to uh to energy, to critical minerals, resources, uh rare earth uh minerals, um and uh and of course Latam in itself is uh is uh it's it's closest and it's something that you know we well probably what the it's not the the Trump doctrine these days, I can't remember what the name is, but uh but but certainly they're much more aggressive in in all of these uh in securing the rights. And this is where it comes to competing. And on the other hand, they are attacking China indirectly in many ways. Um and uh we can see that uh you know China needed commodities massively for for the last uh two decades, more or less, because of its massive investments in you know in its cross development, but that's fading away. Um you know real estate fell by in China that is real estate uh prices fell by 30-40 percent. Uh this there's been there's been a huge uh backlogs of uh of uh of things to to to be built which haven't been built. Um so so to some extent, you know, there's a rebalancing at the moment uh happening, and uh this is what I'm saying. So if we have exports to China from Peru of 23 billion or so, and exports to the US of 9 billion, again, there's a lot, there's uh there's many billions to to catch up. But uh but maybe there is uh maybe they maybe maybe they will be. Maybe the US is prepared to actually make the the investments. Certainly on we uh I know of of private equity firms, US private equity firms, who are active in the Peruvian landscape, perhaps not directly in in minerals, but in other in other things. So it's there.

John Crabtree 40:47

It's just just needs to Peru's capacity to produce uh um rare earths and and and other strategic minerals is I think probably largely unknown as the moment. I mean what is known is that I mean there certainly are certain strategic minerals which have um been identified and which can be uh you know that which will be important in the future, even if they're not actually very important in terms of production at the moment. I mean, one of the one of one of the areas, of course, is lithium. Um Peru um is not one of the lithium triangle countries, um, but um it has um proven reserves of lithium, it's rock lithium rather than than than um so it's a mining um venture in in Punam, um which could be quite important. Um we don't quite know. I mean, a Canadian company has been doing in been in investigating investing in this um production hasn't begun as yet, um, quite when it will, I'm not sure. Um, but I mean Peru's potential as a producer of of strategic um in minerals is is is is very potentially important. I mean um it has it had Peru as the producer of copper has has fallen. I mean it's produced we used to be the world's second largest producer of copper after Chile. It's now sort of fallen back into third place after the Democratic Republic of the Congo. Right. Um and and and investment in mining has suffered, I think, because of political instabilities and and and um in recent times. But I I rather suspect it'll pick up um and we'll if uh um the demand for strategic minerals is as um important as it is as it's um touted to be. Because um you know simply for in terms of copper, the world demand for copper is will will will almost certainly increase significantly, and Peru has a you know major pup possibilities of of opening up new new copper mines.

Alberto Souviron 42:52

Going back a little bit with the sorry andrew, just a little question on that. Coming back a little bit to what are the geopolitical pressures are are around that. So far, uh we have been an election that reflects a little bit the polarization in the country left, right, uh, but also these differences between Lima and the rest of the regions. But in terms of international element, can we expect, especially for the second round that is coming, regardless who is going to be in the second round, can we expect more uh interference like uh it happens in Honduras, for example, with the Trump government? Can we expect this kind of pressure in Peru for the coming months after for the elections?

John Crabtree 43:44

The United States enjoys more leverage in in smaller, smaller countries. Peru is not a small country in Latin America. I mean it's it's not one of the biggest, obviously, but it's it's a just a sizable country. It's uh um a country with a long and quite proud tradition of of of independence. And is not likely to be quite so susceptible to the kind of maneuverings that can take place in Honduras or Guatemala or central other countries of Central America, where you know the role of the United States has always had a much more direct um impact on policy making than than than countries in in most of South America. And I would say that it's probably less susceptible to pressure than than say in Ecuador, for example, where under Nobo once once seen very sick clear moves towards accommodating US interests, including the resuscitation of the airbase in Manta, which is important, amongst other things, for drug um drug control. Peru on that particular point, I mean Peru, it should be indeed to remember, is the world's second largest producer of coca, still is, and it's proved very difficult to control coca production. But Peru has had never had the kind of stick that Colombia or Bolivia have had in terms of uh um the difficulties of controlling coca. Um the United States have avoided the kind of rhetoric uh um which was being common um under the the mass administration in in Bolivia or uh um or more recently in in Colombia um on the drug issue. Um but I mean this is an area where you know the the future governments will will seek to be accommodating towards to towards um towards Washington. Um this is not an unimportant um sphere of of policy so far as Washington's concerned.

Andrew Thompson 45:44

Right.

Rising Crime, Extortion, and the Debate Over "Mano Dura"

Andrew Thompson 45:45

This is I wanted to jump in quickly going back to the election. Um crime and security figures very prominently are cat maybe. Yeah. Um I just wondered, do you see the approach changing under a new government? Or will it still be, if you like my Lord of Manuel, and focus on um putting down crime directly rather than social work and other approaches?

John Crabtree 46:14

Well, you're right. I mean, the the the issue of security has been a key one in in the election, and one in which um the parties on the sort of center and center right um have been um have made a gr a great deal of emphasis and it and it is a serious problem. I mean it's it's not only a serious problem, but it's the problem has got a good deal worse over the last last few years. It's not quite on the same scale, I would say, as Ecuador. Um I mean, the the the degree of capture by um uh um drug drug organizations isn't so complete. Much of the the the the um its ceilings of insecurities is much more related to more common crime, um, particular um extortion by various organizations of small relatively small scale producers, bus drivers, and the like. This is uh um it's not on not it's not so much sort of narco crime, although that isn't not that it does does impact, but it's it but it it but it's something that is widely felt amongst the population. Now the problem is that up to now we we we we we hear of of um um Manodura and and you know trying to emulate El Salvador. Um I don't think this is quite as easy to to do in a big country like Peru um as it is in a small country like El Salvador. Um I mean the the the the the the usual response is to create what's called states of emergency for you know 60 days or whatever, which make very little difference. And one of the problems, I think, one of the serious problems is is is um the inefficiency of the of of the police force. Um and um I mean the the police force is part is isn't rather than being part of the solution is part of the problem. Um and um corruption in the police in the police force is is very widespread. So I think this is again this is something that's very difficult to root out. I mean, quite what the what the policy uh um um solutions would be to to to to to creating uh um um a more uh uh you know uh calmer kind of society is by no means obvious. I mean, I don't think you know building more jails is the answer. Um it may deter some, but um it's not uh or or trying to adopt the kind of hard hard-hitting policies which have been used elsewhere, I'm not sure are going to be that effective in terms of of getting on top of common criminality, which has I say has expanded a lot in the last five five to ten years.

Speaker 1 48:58

Right, this is much felt by the voting public too.

Alberto Souviron 49:03

Right, this is right, this is Yeah, well, uh uh uh uh as Andrew reminded uh and you already said the crime is probably high in the level of worries of the population, and has been seen in the in the in the elections rhetoric uh a little bit. It's one of the main areas that the common population has expressed their concern. But uh I I will emulate Andrew in that area. How much is perception and how much is reality in terms of crime on Peru when you're seeing the numbers?

John Crabtree 49:40

Yeah, I'm just uh I'm just like wrestling without somebody trying to make a phone call to me.

Alberto Souviron 49:47

It's alright. I I will do very quick because we are almost at uh at the end. But emulating a little bit, uh Andrew, uh we know that crime is one of the main worries in the electorate in in Peru. But how much is perception and how much is reality? Because we know that crime has grown, but is really a real problem in Peru or is more just a perception going through through a fashion that has been going all through Latin America that sometimes we are feeling that crime is something terrible, but when you see the numbers, it's not as big as as you really think.

John Crabtree 50:23

Yes, and when you you can you can compare sort of homicide rates in different countries, and Peru uh up until relatively recently has not been you know, compared with some of the countries of Central America, is it's relatively been relatively peaceful. But the level of homicides has increased substantially um in the last couple of years. Um it's really been so it's it's it's it's his experience, it is true, and it's certainly the question of perception is certainly there, but it the perception is not entirely erroneous.

Alberto Souviron 50:57

Right, this is well with that uh I will left to Andrea and and and and Julian to give a final thought on that, uh, and we will give you the mic to to to finish with with with you with your views of what is coming. Uh a little bit with an open question around that. After all what we are seeing in Peru, because probably that's the big question, whoever is going to be the next president, is it going to be business as usual, or or can we expect certain level of changes uh following the the history of Peru in the last years?

Andrew Thompson 51:35

My uh question, I think literacy question is possibly impossible to answer. Uh we've had uh nine presidents in ten years. Um and the question is uh the new approach, the return to uh two chainers of Congress. Is it likely to uh if you like, improve those numbers so that we get uh I don't know, six or seven presidents ten years. So after that, we need to uh travel in time, which is impossible, uh fortunately.

John Crabtree 52:12

I mean I don't really want to make sort of hard and fast projections about you know what what can happen because anybody you know any one of the things one of the things you can say about Peru is that it's very difficult to predict what's going to happen. Uh nobody nobody 10 years ago predicted this was going, you know, it was going to turn out like this. But my hunch would be, I mean, I'm going back to what I said about you know the way in which the the Congress is is is uh this is this is crucial. This is area, this is the congressional election is arguably more important than the presidential one. Um and um from what I've gathered and then I mean the figures aren't in yet, so it's difficult to make hard and fast projections out of this, but I do think that um, at least initially, the parties will uh there will be fewer parties in Congress, and it'll be relatively more difficult. They will be uh um it will be more difficult to impeach presidents. Um only has to be get a two-thirds majority in one house, you have to get a two-thirds majority in two, and that makes it more a little bit more difficult. So my guess is that maybe um, you know, um we may see the impeachment being used slightly less frequently than than has been the case in in in the past. Um and um one of the things that's uh that the new you know one of the constitutional changes that has been is that that the Senate has the uh um it is is in that position where um it cannot be it cannot be closed down. I mean it could the president cannot close the Congress down. Um in the same way as it there were procedures which haven't been actually used, but you know, there were the to to to to change the close down the the the chamber of deputies, which is what happened um under Vizcada in in in 2019, I think it was. Right. This is my guess would be that maybe one and I'm don't know maybe I'm going out on a limb here, but uh maybe um what we might see margin a little bit more stability and slightly less instability, but um one could always be wrong. That's interesting.

Julian Seydoux 54:28

Yeah, um I yeah, I think that's uh that's an interesting take. Um I I guess my so uh maybe I as you know yeah you're the specialist, uh of course. My my my my my take generally speaking in in in in what we've seen over the past uh two years or so is uh this you know these uh this flares of instability driven by uh US interventionist interventions uh across the across more interventions across the other the the continent. Um and in in relation to China, nothing to do with the country itself and and so on, but mostly in as a as a as a and and it seems to me that you know we see it in in Colombia, we saw it in Ecuador, uh we see in Mexico, we we see it in Panama, we obviously saw it in Venezuela, uh, we see more you know in in uh huge support in Argentina. Uh we see uh we see some you know some things in in Brazil itself, although you know it's it's uh still visible perhaps. We see it in in Brazil in terms of investments, some deals being made and and so on. And uh and Chile, of course, and of course you as you mentioned yourself, you know, Chile and and Peru are highly dependent to some extent on on the trade with China. Uh but if that is to be disrupted for whatever reason, then that brings instability uh in itself. And you know, we we speculated last time, you know, who who leaked the photos of the Chinese businessman having dinner with with the with the with the with president of of Peru or whoever it was at the time. Um and uh but at the same time, you know, when we look at the and as you mentioned yourself, you know, when you look at the decoupling between the politics and the economics, the economy is is by you know by all standards compared to some of the countries in the region doing doing doing pretty well uh altogether. It's very low debt to GDP, it's uh the crime rate is very low compared to some of the other countries. Uh the the the the economy is growing quite healthily as well. Uh and uh and given you know the demand for for its core resources, we can expect actually that uh there's it's uh it you know the they should be flying economically speaking. And and then the question is, you know, if there's more stability in the country and everything is going well for them, then then we we could could expect even even higher rates of growth for for that country.

John Crabtree 57:18

One of one of the problems, one of the historic problems,

Deep Regional Divides and the Challenge of Inequality

John Crabtree 57:21

I think, in Peru is that you know, in the way in which um the product of growth is is distributed, and I think this is one of the things that's created a gap. Um and the elections show very clearly to my mind the the the the divide between a Peru that has benefited quite considerably from growth over the years, particularly in Lima, but other cities as well, and the part of Peru which has um been um rather neglected by the benefit the benefits of growth, where growth has not trickled down um and hadn't brought many tangible benefits to people. And indeed, in some respects, you know, particularly this is one of the one of the aspects of mining conflicts has produced actually sort of detrimental effects on on local populations. So I think that you know the the the the gap between the right, the vote for the right and the vote for the left in this last election, and I mean to quite honestly, um the vote for Sanchez is very surprising. I mean, he wasn't somebody who who's been been been out there in in the opinion polls at all during the campaign. The vote for the vote for Sanchez, who which uh um self-consciously um adopted a sort of pro-Castillo uh um position, and Castillo has endorsed his camp candidate candidacy, and he actually lent him his his trademark straw hat to campaign with. Um that did that that that divide between um rural Peru and urban Peru, um particularly sort of northern Peru and Southern Peru, is has it has an electoral component to it. And I think that the results show that. Um so it's not a altogether um uh a sort of happy society, should we say? I mean, you know, not everybody's not everybody is is is is getting the benefits of growth. That's one of the big challenges. I mean, how do you distribute the benefits of growth more equitably? And I don't think Peru's cracked that at all yet. And probably, I mean, it's asking perhaps a bit much to do, so other countries haven't either, but um it's an it's an ongoing problem.

Alberto Souviron 59:27

Right? This is definitely it's going to be one of the challenges, not only for the next government, uh uh as you say, it it's a permanent challenge in Peru, as well as many countries in Latin America. Inequality is definitely uh one of the biggest problems. But yeah, uh one of the things that I would like to add of what you're saying, when you see the electoral map of the results so far, you can see this divide. The north in in a way has been supporting from from what they see in the uh the results, the coast and the north, Fujimori, while in the south, the those more or in the Sierras, you can see the support for Sanchez now. Uh that that comes a little bit with support for Castillo as well. This clearly differentiation of the regions between rural Peru and rural Peru, you can see in the electoral map. Yeah. And probably it's going to be one of the biggest challenges, whoever wins the election. Peru, we need in a way to find some kind of consensus in the future, because I don't think, regardless that the economy has the coupling for for the politics, it's not immune. And eventually it's going to pay some uh factor to to uh to to to to to the country that uh if nothing is done in the future.

John Crabtree 1:00:52

Yeah, I mean there are social divides, regional divides, ethnic divides, and those have been very persistent over time. And um uh and that I think is one of the sort of uh the factors behind you know not just this election, but previous elections too.

Alberto Souviron 1:01:10

With this, John, I think we are at the end. I don't know, Andrew or two children have any other questions. If not, we'll go to a close. John, once again, thank you very much for being with us. Uh it has been a real pleasure talking to you have this conversation. Uh, we're going to wait for for the next publication of your book. Please let us know because definitely we're going to comment it here. Uh and we would like to have you in another time for for another analysis, not only from Peru, you are an expert on the Andean region, so we hope to have you with us more frequently in the future. Okay, thank you very much. Thank you, thank you.