Peru's bribery scandal

A bribery scandal and escalating inequality has rocked Peruvian hopes for a new political era argues

Alan García, Peru’s President, is facing one of the most difficult moments of his long political career.

Last week, reports two senior members of his government and political party (APRA) had accepted bribes to award oil drilling concessions were made public; his cabinet has resigned; and the Lima Stock Exchange has plummeted as a result of the global economic crisis and national political uncertainty.

The recording of the conversation between the two has enjoyed a tour on radio shows and television programmes on a scale that has not been seen since the release of the first vladi-video in 2000.

That showed Vladimiro Montesinos - adviser to now ex-president Fujimori’s - bribing a congressman.

How ironic that García’s worst blow on his presidency mimics the fall of his former political enemy.

But the irony does not end here. García won a second presidential term despite being responsible for a government that brought the country to its knees in the late 1980s.

He must have thought that a government of managed inflation, peace and international integration would revise his place in history.

Indeed, his second government has experienced nothing but constant economic growth. Poverty levels have dropped since he came to power. Peru signed a highly publicised Free Trade Agreement (FTA) with the United States; it has maintained a stable development process amidst political chaos in the Andean region -in Bolivia, Venezuela and Ecuador; and has celebrated the achievement of investment grade rating earlier this year (before the financial crisis reached its current dramatic state).

All along, however, Mr. García has been a highly unpopular President – with approval ratings hovering around 20 per cent (and now standing at 19 per cent). The very same sources of his pride fuelled the opposition to his government: his support for a FTA that grates with popular movements; highly unequal growth; his unwillingness to explore alternative and more inclusive development models; and his cosiness with the corporate sector.

García’s predecessor, Alejandro Toledo, received the same treatment: unpopular despite economic growth.

But where Toledo faced disapproval largely based on racism, García’s unpopularity is entirely based on policies.

Corruption has changed the rules of the game for García. It is now also about the values that he represents. Association with him and his party, despite the economy, is becoming a liability for anyone with a reputation to protect.

García’s cabinet members have resigned and opposition is mounting. He is finding Peruvians had, after all, not entirely forgotten about his first government.

Across the board, what he is portraying as an isolated act of corruption, has been interpreted as the return to the mafia that ruled the country in the late 1980s when corruption was endemic; and that he had promised to keep at bay.

Few are willing to give his party another chance. García will have to be swift and Machiavellian in his next steps. Fortunately for him this is his second nature.

This crisis comes at a time when, ironically, the Peruvian government was showing signs of taking inequality seriously.

Specifically, the ministry of trade has been actively engaging with local researchers on how to implement the FTA in ways that would benefit the most exploited and vulnerable.

The Economic and Social Research Council (CIES) in Peru, supported by the Overseas Development Institute (ODI) in the UK, have been working closely with various policy actors on this issue.

And at the regional level, CIES has been working to more effectively improve policies by embedding evidence-based policy-making processes. In general, even the private sector is showing clear signs of concern regarding the increasing levels of inequality across the county.

With an optimistic mind, I see this as a sign of maturity. For the first time in ages, the source of unpopularity to a political leader in Peru is legitimate: it is based on disagreements over policies, and not politics; and on a newly-found zero tolerance for corruption.

If García is as good a politician as he is thought to be, he will address these issues openly and humbly.

He will recognise that the country is experiencing the beginnings of an eagerly awaited institutional change.

The appointment of Yehude Simons, president of the Lambayeque region in the northern coast and well known for his links to social movement and human rights organisations, has already been seen by political analysts as a move in the right direction.

If the new cabinet reflects a serious commitment to addressing raising inequality and corruption, he might very well survive and deliver us into the third consecutive democratically elected government in a decade. If he doesn’t, we will have missed yet another chance to grow up.