Monday, April 11, 2011

Peru election

Populism is a reflection of, among other things, dissatisfaction with the status quo and established political parties.  In that context, media portrayals of the Peruvian election show a consistent contradiction.

As it currently stands, Ollanta Humala and Keiko Fujimori would go to a second round.  That could change as more votes come in, but the basic idea is the same.  Peruvians are not happy with the status quo and are open to potentially very radical change based more on individuals than on parties.

So CNN International's rhetorical question "Who will make the most of the recent combination of good macroeconomic management and high commodity prices?" is misplaced.  A more accurate question is why so many Peruvians don't believe "macroeconomic management" had any impact on them at all.  Or we have the Wall Street Journal: "financial markets fret that Mr. Humala might reverse the market-oriented policies that have helped turn Peru into one of the world's fastest growing economies." Bloomberg gets more to the point, though far down in the article:

Under Garcia, Peru created 2.5 million jobs and had its first-ever investment-grade ratings from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings. A third of Peruvians still live in poverty, most of them in the Andean highlands where support for Humala is strongest.

This is an old, old story.  Marcoeconomic indicators look great, so the country must be doing all the right things and is held up as a model for others to follow.  So we are perplexed when a majority of people seem so dissatisfied.  The result is that we get the essential causal question backwards.  Instead of asking what effect populism will have on the economy, we need to ask how economic policy helped generate populism.

10 comments:

ConsDemo 9:09 AM  

Let's also be clear, populism is no magic elixir, often quite the opposite. It always yields authoritarian governments that play favorites in the economy. Yes, the people in favored industries have job protection, everyone else has to make in the informal economy that is created because the excessive taxes and regulations shrink the private economy. Since populist governments also take steps to limit political opposition and ensure the ruling party's control of government, it often doesn't get a fair second hearing. A populist government can win popular support if it has a valuable export commodity, but when they stack the elections, it is hard to tell.

Nolan,  9:45 AM  

"It always yields authoritarian governments that play favorites in the economy."

That's a massive generalization. Lula's PT government relied on populist sentiment, and was hardly authoritarian. I really don't see how there is any connection between economic liberalization and opening political opportunities, as the likes of Calderon and Uribe/Santos are no more tolerant of opposition than the Kirchners or Chavezs of the region.

The liberal policies of Toledo and Garcia in Peru that have opened Peru's economy have not done anything to integrate everyone into the formal economy.

I agree that populism is not the answer to everything, but I strongly disagree with your overgeneralizations. If there is a lesson to be learned from the Peru election results, is that economic growth that ignores the most marginalized third of the country is not enough. There's nothing authoritarian about appealing to the people outside of Lima.

Anonymous,  10:07 AM  

I always find amazing how the right wing media describes everything they don't like as populism. If an important fraction of the population doesn't benefit from a process and a politician represents this interest, what's so populist about that? When the rich successfully lobbies and politicians represent this interest, is that plutocracism or they are so wise to know what is good in the long run? After 10 years of high growth, poor Peruvians are still flying to Argentina just to find an opportunity. Do you imply that they are voting wrongly?
Martin

Vicente Duque 10:42 AM  

Five Andean Nations : Bolivia, Colombia, Ecuador, Peru, Venezuela

All of them are extremely backward in JUSTICE, put any adjective before the word JUSTICE. They are backward in Social, Economic, Tributary, Fiscal, Police, Psychological, Human, Moral Justice ....

Justice is very UNJUST in all of them : Kafkian, Inefficient, Corrupt, Partisan, Justice of Cliques, of corrupt parties, or heavily influenced by mafiosos, narcos, criminal bands, etc ...77

There is very little access to Justice in those countries for the poor man ... The Fiscalías and Procuradurías which are the District Attorneys are ridiculous and almost useless ....

Peru and Colombia seem more advanced in Democratic Institutions and Free Press ...

Newspapers are extremely free and even admirable criticizing the Government, but those newspapers represent few members of elites.

So when analyzing why people are not neocons, neo-liberals and Budget-Cutters organizing shutdowns of Government in the Andean Countries, think of this :

The Human Being is constantly crushed by the Inefficiency and Corruption of Government and the lack of access to JUSTICE ...

People do not vote for Economic Progress or Economic Theories per se, they want to be more respected and valued ...



Vicente

Tambopaxi 11:22 AM  

Assuming the Bloomberg number (2.5 million jobs generated) is accurate, I have to wonder, what more does the Peruvian electorate want? Five million jobs or the like?

Bloomberg also mentions that a third of Peruvians still live in poverty, so creation of additional jobs (and let's add that important caveat, sustainable/sustainable jobs)is important, but do Peruvians really think that Humala is going to do that? If they do, I fear that they're in for a rude awakening...

ConsDemo 11:23 AM  

Nolan, you are assuming "populism" is a euphemism for left of center or socialist economic policies. That is not how I define it. The developed world left is, for the most part, not populist although they sometimes resort of populist rhetoric. I would also say Lula da Silva’s economic policies in Brazil were not populist, for the most part. Implementing progressive taxation, welfare benefits, or a publicly financed pension system (e.g. social security in the US) is not fundamentally populist in my mind because you can make sound rational arguments for them. What is populist is demagoguery that implies a certain political group is going to take over the government and give everyone (or at least everyone who isn’t superwealthy) everything and if they are unsuccessful it is only because of evil capitalists or the US. Governments can’t guarantee everything anyway (no nation has been able to guarantee full employment) while you can point to some successes by populist governments, there a plenty of failures, such as a large informal economy, capricious economic decision making, currency debasement, just to name a few and populists frequently trample on rule of law and suspend political pluralism in order to get their way. That does characterize Venezuela today and I wouldn’t wish it on any other country.

Anonymous,  12:30 PM  

In latinamerica when statistics show that two people ate one chicken, it means that one of them ate one and the other none.

Alfredo 7:14 PM  

Poverty and hunger are very powerful motivators, that's why the marginalized voted in large numbers for the “warrior who sees all".

Slave Revolt,  10:30 PM  

Please, let's be clear in the discussion.

Neoliberal capitalism feeds on desperately poor countries whose ruling elites fail to create a healthy economy with a robust democracy that can counter the forces of oligarchy.

The immiseratin of huge swaths of a society is a given with the neoliberal model.

"Populism" is coded language for any politician and program that attempts to counter the economic dynamics of the neoliberal and imperialist model. Populism is bad.

Which counties in the last decade have actually reduced poverty, decreased infant mortality, increased access healthcare and education?

Further, was this done with the neoliberal model?

Any answers would be helpful to this discussion.

leftside 2:04 PM  

Maybe someone can provide that these 2.5 million new Peruvian jobs actually exist. I know the 2.5 million was a campaign pledge of Garcia's but is there any proof that he achieved it? After all, the Peruvian Central Bank's unemployment rate is actually higher today than it was in October 2006.

Maybe someone can also tell me how exactly Humala qualifies as a "populsist" - other than the fact that Chavez is a supporter?

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