What Can Be Learned from the Humala Government?

By Rob Albro

President Humala inaugurating electric power in the rural district of Moro – Ancash Photo credit: Presidencia Perú / Foter.com / CC BY-NC-SA

As a candidate in Peru’s 2006 presidential election, one-time military coup plotter and current president Ollanta Humala presented himself as an anti-business socialist and nationalist happy to be a member of the “family” of left-leaning Latin American governments led by Venezuela’s Hugo Chávez.  In his second successful bid for office in 2011, Humala sharply changed direction and embraced a combination of pro-business and anti-poverty measures reminiscent of Brazil’s center-left Lula.  Humala’s shifts are a sign of the times in the Andean region:  a non-ideological search for how best to build democracies and grow national economies, while effectively redistributing wealth.

Driven by its mining sector and a commodity export boom, Peru’s economy has tripled in size over the past decade and is currently one of the best performing in the world.  Foreign investment is flooding in, particularly to mining, hydrocarbons, and big infrastructure projects – and Humala is now considered an “investor darling.”  While backing off electoral promises to nationalize water, electricity, mining and other sectors, Humala has created a new Ministry of Development and Social Inclusion and increased the budget for social redistribution and welfare measures to Peru’s poorest by 50 percent.  So far Humala has channeled the budget surplus of Peru’s export boom, including successful negotiation of a $1.1 billion increase in mining royalties in 2011, toward reducing the nation’s poverty rate by 29 percent.  And yet, at present there are more than 250 ongoing social conflicts in Peru, and Humala’s government has been accused of failures of “consultation,” often by grassroots and indigenous protestors opposed to Peru’s mining policies.  In response Humala has reshuffled his cabinet multiple times.  Skeptics suggest that his approval rating – currently 60% – will last only as long as the boom enables his top-down social spending.

Humala’s presidency suggests the limits of viewing current regional leaders through a comparative Chávez-or-Lula lens.  Arguments over the best conditions for “foreign direct investment” in the region often miss the different conditions under which it occurs or purposes to which it might be put.  Humala’s pragmatism demonstrates how distinct parts of government need not reflect a single unifying ideological or normative idée fixe.  Liberal democratic institutions and market freedoms increasingly coexist alongside alternative policies of social redistribution as a part of democratic enfranchisement in the Andes.  When conflict has broken out, however, Humala’s government has been willing to forego consultation with local communities to insure the economic resources it needs to continue its redistributive policies.  The challenge for him to achieve the best balance between competing democratic priorities will continue.  Humala’s government is an opportunity to explore new democratic institutions in Latin America, as with a recent CLALS research project on participatory democracy.