How Failure of Peru's Neoliberal Model & Need for Industrial Growth Created Castillo's Phenomenon

Earlier this month, Peruvian presidential candidate Pedro Castillo outperformed his right-wing competitor Keiko Fujimori from Fuerza Popular (Popular Force) in the second round by a razor-thin 0.28 percent margin. However, Fujimori refuses to concede. In the wake of the second round she asked the National Electoral Tribunal (JNE) to nullify the results at 802 polling stations, which equates to 200,000 votes. 

What's Behind Castillo's Phenomenon?

During the first round of the presidential elections José Pedro Castillo Terrones, a schoolteacher, union leader, and politician, went completely unnoticed by most media outlets, analysts and social scientists, says Carlos Mamani Aliaga, a Peruvian sociologist and analyst at Proyecto Patria, a Cajamarca political organisation.

"Practically nobody considered Castillo as a possible candidate for the second round," Mamani says. "Already in the second round, he was on stage in two debates with Keiko Fujimori showing that he obviously has no training as a statesman, however, despite everything, he managed to give a good fight in the debates."

Commenting on Castillo's phenomenon, the Peruvian sociologist draws attention to the deep divide between the country's capital and province. The central-southern highlands and the eastern Amazon differ much from the capital city of Lima being a sort of "parallel world," according to him. While Lima, which accounts to a whopping 30 percent of the country's population, is clearly "adverse" to Castillo, he's very popular in the province.

"His image of a provincial, humble man has managed to resonate with millions of Peruvians from the inner lands who fully identify themselves with his provincial, national and popular discourse," Mamani notes, describing Castillo as a Peruvian-style "revolutionary conservative," with "a drive for social justice."

According to the analyst, Castillo "has managed to capture the Peruvian collective unconscious" that in general terms has always been "culturally conservative," pro-family and pro-life and has nothing to do with either globalist left-wing progressivism or right-wing elitist conservatism.

One shouldn't underestimate the fact that Castillo is also an evangelical Christian, notes Argentine political analyst and author Gonzalo Fiore Viani – the president-elect vehemently opposes legalising abortion and allowing same-sex marriage, contrary to typical left-wing progressives.

Castillo is also an ardent defender of indigenous people's rights and calling for re-writing Peru's constitution "with the colour, scent, and flavour of the people." In addition to that, Castillo does not rule out nationalising the mining industry, as well as oil and gas extraction and overhauling the country's pension system to favour workers. Apparently therefore, he's seen as an "extreme leftie" by his opponents, according to Viani.

"Time will tell whether he can effectively implement his programme, truly revolutionary not only for Peru but for the current Latin American political context," the Argentine political analyst says, adding that Castillo has already received support from ex-president of Uruguay José “Pepe” Mujica and former head of Bolivia Evo Morales.

​According to Viani, the Peruvian economic model has proven ineffective especially in reducing inequality and poverty in the country: "That’s why a politician like Castillo has had such a great performance coming virtually from nothing," he says. "He represents the country populations' discontent and disbelief in establishment politicians."

Bankruptcy of Neoliberal Model in Peru

Once inaugurated on 28 July, Castillo will have to govern an extremely divided country, Mamani stresses, adding, however, that any other president, including Keiko Fujimori, would have faced a similar challenge.

The president-elect's greatest obstacle will be putting an end to a long period of political and institutional instability in the country. Last year Peru saw three presidents in just one month, while some of their predecessors faced corruption charges.

"We live in a permanent state of political crisis fundamentally associated with the plague of corruption that, year after year, bleeds the People down, subtracting a significant percentage of GDP (3%)," says Mamani.

While Peru is going to celebrate its 200th anniversary of independence on 28 July, the country has suffered from political instability, division, and social and economic strife, with deep demographic-territorial imbalances for almost two centuries, according to the sociologist.

​Implementation of the neoliberal economic model in the last three decades has proven ineffective and aggravated matters even further, Mamani says. According to him, Peru has turned into a mere supplier of raw materials, while any initiatives aimed at launching sovereign industrial projects employing the country's strategic resources of copper, lithium, etc. have been prevented.

"There can be no political sovereignty without economic sovereignty, and this will never be possible or true without a clear industrial project, which takes us out of the periphery of the world and allows us to be what we really should be: a powerful country," the analyst insists.

However, Castillo is unlikely to carry out an economic transformation of that magnitude, according to Mamani. On the one hand, hard left and progressive globalists in the president-elect's entourage could hinder such attempts, he believes.

On the other hand, a fierce opposition from the Congress of the Republic of Peru as well as the Armed Forces (and especially the Navy), could undermine Castillo's reformist agenda, the sociologist says, referring to speculations about a possible coup d'etat.

Fujimori's Chances of Upending Castillo's Victory

Meanwhile, Castillo's political rival, Keiko Fujimori is fighting tooth and nail to overhaul the results of the presidential election.

The right-wing presidential candidate is a daughter of former President Alberto Fujimori who is serving a 25-year sentence for corruption and human rights abuses, notes Gonzalo Fiore Viani: "During the campaign she had assured that she would pardon her father if she was elected president," he adds.

Despite this controversial record, she is popular with a considerable part of the population.

"While Castillo took the south-central area of the country with percentages of up to 80 percent, Keiko won by a wide margin in the center-west: Lima and Callao, the two cities with the most voters in Peru," Viani notes.

In addition, a novelty for Keiko's latest campaign is that she commands support from all Peruvian elites, including writer, college professor and Nobel Prize laureate Mario Vargas Llosa, who previously opposed "Fujimorism," says the Argentine author. 

Llosa threw his weight behind Keiko at the same time denouncing Pedro Castillo a "danger to democracy" because of the latter's political and economic proposals, according to Viani.

"Remarkably, shortly before the elections, practically all of the liberal-progressive media were openly critical of Fujimorism, but once in the middle of the electoral contest they paradoxically shifted their support to Keiko Fujimori by initiating a media demolition campaign against Professor Castillo," says Carlos Mamani Aliaga.

Meanwhile, losing is obviously not an option for Fujimori given that a series of lawsuits for alleged corruption cases is haunting her, the Peruvian analyst notes. If she loses, she could face over 30 years in jail over taking money from Brazilian company Odebrecht to fund her failed presidential bids in 2011 and 2016.

​Therefore, she is playing her last cards by filing lawsuits over alleged election irregularities. Besides this, Keiko Fujimori still enjoys support from the media, Armed Forces and traditional primary-export business sectors.

It's unclear how the situation will pan out, but it's very likely that no matter how hard Keiko Fujimori tries to challenge the votes, Castillo will be president, Mamani suggests.

However, there could be one trump card upon Fujimori's sleeve, according to the sociologist: Fujimori may try to delay Castillo's triumph until 28 July. If there's no clear winner on that day, one of the congressmen may call for new elections.

"If this is the case, Keiko Fujimori would fully comply with the following expression: 'If the presidency is not mine, it will not be Castillo's'," Mamani concludes.