Peruvian leftist Castillo closes in on Fujimori in knife-edge election

Peru’s presidential election outcome was on a knife-edge on Monday, June 7, with conservative Keiko Fujimori clinging to a slender lead but socialist rival Castillo Pedro looking set to overhaul her in what could prove a photo finish in the polarized race.

The official count showed Fujimori with around 50.1% and Castillo on 49.9%, with nearly 93% of the vote counted. The leftist candidate was taking as much as 70% of newly counted votes in some updates and the gap was just 30,000 votes.

That current trend, if unchanged, would likely see Castillo overhaul free-market champion Fujimori, which spooked the country’s markets on Monday morning, with the sol currency and stock exchange both down sharply in early trading.

The tight result could lead to days of uncertainty and tension. The vote underscored a sharp divide between the capital city Lima and the nation’s rural hinterland that has propelled Castillo’s unexpected rise.

An unofficial fast count late on Sunday, June 6, by Ipsos Peru gave Castillo a fractional lead, after an exit poll had said rival Fujimori would eke out a win, leaving the copper-rich Andean country, investors and mining firms guessing.

Lucia Dammert, a Peruvian academic based in Chile, predicted that the coming days would be volatile, with potential challenges to the votes and requests for recounts. She forecast protests particularly if Fujimori were declared the winner.

“Whoever wins will have to dialogue with the (current interim) government and other political forces. We are in a polarized state,” said Lima-based political analyst Andres Calderon. “Right now the candidates need to remain calm.”

As first results trickled in on Sunday evening, 51-year-old Castillo, the son of peasant farmers who has pledged to shake up Peru’s constitution and mining laws, had rallied supporters to “defend the vote,” though later called for calm.

Fujimori, 46, the daughter of ex-president Alberto Fujimori, who is in prison for human rights abuses and corruption, also appealed for “prudence, calm and peace from both groups.”

Castillo’s Free Peru party said on Twitter that the candidate, who had been in his northern rural home district to vote, would arrive in the capital Lima on Monday morning, to “ensure the will of the people is respected.”

‘Heightened uncertainty’

J.P. Morgan said in a note that it could be days before the final outcome of the election was clear, and the two candidates might opt to wait for this process to finish before declaring victory or conceding defeat.

On Monday, Fujimori had 8.32 million votes to Castillo’s 8.29 million, with a gap of 31,089 that was narrowing as Castillo took the lion’s share of newly counted ballots. While the slower-to-count rural vote is expected to help Castillo, uncounted overseas ballots could still boost Fujimori.

“Unless the too-close-to-call scenario depicted by the quick count proves wrong, we seem poised for a number of days of heightened uncertainty ahead,” J.P. Morgan said.

Castillo’s sudden rise to prominence since winning the first-round vote in April has unnerved markets and spooked mining firms concerned over plans to sharply hike taxes on mineral profits and threats of nationalizations.

Analysts say, however, that whoever wins will have a weakened mandate given the sharp divisions in Peru, and will face a fragmented Congress with no one party holding a majority, potentially stalling any major reforms.

The two candidates pledged vastly different remedies for a country that went through three presidents in a week last year and has suffered a sharp economic slump brought on by the world’s deadliest per capita COVID-19 outbreak.

Fujimori has pledged to follow the free-market model and maintain economic stability in Peru, the world’s second largest copper producer, with a “a mother’s firm hand.”

Castillo, who has become a champion for the poor, has promised to redraft the constitution to strengthen the role of the state and take a larger portion of profits from mining firms. – Rappler.com