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Leftist's victory rattles Peruvian stock market

After his narrow win, Ollanta Humala seeks to reassure the business class, but his previous pledge to work for better distribution of the nation's silver and gold wealth sends the market down more than 12%.

June 07, 2011|By Tracy Wilkinson, Los Angeles Times
  • Ollanta Humala acknowledges supporters after the presidential runoff election in Lima, Peru, which he narrowly won.
Ollanta Humala acknowledges supporters after the presidential runoff… (Martin Mejia, Associated…)

Reporting from Lima, Peru — The narrow victory of leftist nationalist Ollanta Humala in Peru's contentious presidential election triggered serious jitters throughout the Peruvian stock market and business establishment Monday but also words of conciliation from some of the president-elect's most implacable enemies.

By a thin margin in Sunday's vote, Humala defeated Keiko Fujimori, a conservative 36-year-old lawmaker who is the daughter of Peru's disgraced former President Alberto Fujimori. The elder Fujimori is serving a 25-year jail sentence for corruption and authorizing death squads.

Reacting to Humala's pledge to work for better distribution of Peru's wealth from silver and gold mines, the stock market plunged by more than 12% despite suspended trading at one point; media here described it as a record fall.

Humala sought to reassure investors and the business class, the motor and benefactors in Peru's remarkable economic growth of the last decade. Speaking to supporters late Sunday, he vowed to form a consensus government that would continue to welcome investment. He has said he will tax mining profits but pledged not to expropriate private property or businesses, and to respect the constitution.

But he also said he understood his victory, where he won overwhelmingly in Peru's vast, impoverished highlands and rural countryside, was a call for improved status for the poor and working class.

"We must have workers of the 21st century, not the 17th century," he said. "Peru has to advance, but for that, every Peruvian family must also advance."

Fujimori on Monday conceded defeat. She recognized that Peruvians had voted for "change" but also offered to "build bridges" and to work with the new government as "constructive opposition."

"The country must not be held back," she said in a brief news conference. "We will defend our convictions and prioritize the interests of the country."

Given the narrow margin of Humala's victory, he will have to make compromises with opponents while holding together his rather disparate coalition, some of whose most prominent members supported him mostly out of opposition to Fujimori.

Analysts attributed Humala's win to his success in softening his image from the more radical leftist who ran unsuccessfully for the presidency in 2006. The former army colonel sought to portray himself as more like popular former Brazilian President Luiz Inacio Lula da Silva than radical socialist Venezuelan President Hugo Chavez.

And serious mistakes by the Fujimori camp compounded her loss. Several of her closest associates at times appeared callous when addressing the abuses of her father's regime, including the forced sterilization of 300,000 impoverished women.

Humala also faced questions about his own human rights record as a military officer during the government's brutal war with the Maoist Shining Path guerrilla faction. In the end, though, many voters seemed to overcome their doubts or at least decided to give Humala a chance.

Speaking to The Times ahead of the vote, former New Mexico Gov. Bill Richardson, part of the Organization of American States election-observation team, said he believed Humala to be "educable."

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