Pedro Castillo Can Help End Neoliberalism in Peru

Farid Kahhat

Peru heads for presidential elections on Sunday, when voters will have a choice between two very different candidates: left-wing trade unionist Pedro Castillo and far-right politician Keiko Fujimori.

Peruvian presidential candidates Keiko Fujimori and Pedro Castillo wave at the end of the final televised debate in Arequipa on May 30, 2021, ahead of the runoff election on Sunday, June 6. (Martin Mejia / POOL / AFP via Getty Images)

Interview by
Nicolas Allen

Peru heads for presidential elections on June 6, when voters will have a choice between two very different candidates: left-wing trade unionist Pedro Castillo and far-right politician Keiko Fujimori.

Castillo was a relatively unknown figure when, in April 11, he took first place in the general election. A trade-union leader from a peasant background, he has drawn comparisons to Evo Morales, and the former president of Bolivia has eagerly endorsed Castillo’s candidacy. In the words of Morales: “Castillo has a program very similar to our own.”

Castillo’s right-wing opponent, Keiko Fujimori, has been less sanguine about the prospects of “twenty-first century socialism” coming to Peru. The daughter of dictator Alberto Fujimori, she has taken a page from her father’s playbook and launched a relentless red-scare campaign against her leftist rival, hoping to capitalize on the public’s lingering traumas from the bloody war against the Marxist-Leninist guerrilla organization the Shining Path.

Whether Fujimori’s strategy will pay dividends remains to be seen — recent violence, questionably attributed to the Shining Path, has in fact led to Fujimori narrowing the gap with Castillo. Current polls suggest the two candidates are in a virtual tie, and, in a country where national elections are notoriously volatile, few analysts dare to call the outcome.

One thing is certain though: Peru has a choice between two very different futures. A win for Fujimori — who is running for president for the third time — would represent the worst kind of political regression, winding back the clocks to the authoritarian neoliberal regime imposed in the 1990s by her father.

Jacobin contributing editor Nicolas Allen spoke to Farid Kahhat about what a Castillo victory could mean for Peru and Latin America. Kahhat, an expert in international relations and columnist for Peru’s largest newspaper, El Comercio, spoke about Castillo’s political program, the challenges his government would face, and why a victory for Castillo would be tantamount to rewriting Peruvian history.

Nicolas Allen

If we were to believe the international press, the Peruvian elections have come down to a contest between the radical right and the radical left. How accurate do you think this characterization is?

Farid Kahhat

That characterization is obviously based on the general perception of Perú Libre, whose candidate is Pedro Castillo. Perú Libre has presented a platform called Ideario y Programa, where the party defines itself as a Marxist-Leninist formation. And that fits within a reasonable definition of the radical left. Their program talks about nationalizing strategic sectors of the economy, which is something that sounds quite radical even for most contemporary leftists.

Now, I have my doubts about the extent to which Pedro Castillo represents the program of Perú Libre — it is important to remember that Castillo is a candidate but not a party member. Due to his evangelical faith, we might even say he is more conservative than the ideals of Perú Libre would suggest. In any case, regardless of whether he is as radical as the party program, some of Castillo’s personal opinions are indeed radical. 

To give an example, although he does not speak of nationalizing companies, Castillo does speak of putting them under state control in a very similar sense to that used by Evo Morales. State regulation would in this case mean renegotiating contracts with extractive companies — mining, gas, etc. — according to the idea that it is lawful to tax windfall profits, which are the product of good international prices and not the merit of the company itself.

By Peruvian standards, this is quite radical. Never mind that the United States also had windfall taxes under Jimmy Carter — for Peru, the economic policies of Castillo are enough to scare the business class and ruling elite.

And clearly Keiko Fujimori can also be branded a radical, albeit a right-wing radical. Incidentally, Fujimori openly defines herself as right-wing. Like her father, Alberto, Keiko represents a brand of right-wing populism — fujimorismo is probably the first major political force in Peru to use a populist discourse, confronting the people as an undifferentiated whole against the political establishment.

Economically, Fujimori is mercantilist, in the sense that she promotes private enterprise but not necessarily competitive markets. Basically, it’s a capitalist model based on companies gaining market shares through political contacts. In that same sense, Fujimori represents the kinds of business interests that prefer to remain in the shadows, leading some to describe fujimorismo as a mafia-like phenomenon.

Finally, Fujimori, like her father, has a clear authoritarian orientation. That authoritarian streak could also be said to exist, to some extent, in Pedro Castillo; but it is important to underscore that Castillo and Fujimori are politically polar opposites, especially by the standards of Peruvian political debate. 

Undoubtedly, in all of Peru’s history, there has never been a candidate like Pedro Castillo in runoff elections. 

Nicolas Allen

Perhaps the candidate closest to Castillo in recent times is Ollanta Humala, Peru’s president between 2011 and 2016.

Farid Kahhat

Yes, but Humala was a retired military man. Humala was leftist in the sense that mid-ranking officers in the military often have left-wing views. The Peruvian Army is more plebeian than the navy and air force in its social composition (I also think this is pretty common throughout the region). The Peruvian Army has what we might call a left wing, but it is a “military left” in the sense that it promotes more active state intervention in the economy based on a sense of nationalism.

But Humala was not ideologically left-wing. He would not define himself as a socialist, whereas Castillo does have a more clearly leftist vision in terms of economic policy, and would not shy away from the term “leftist” as Humala did.

Even more importantly, Humala did not represent any significant social movement. Castillo, on the other hand, comes from the largest trade union in Peru: the teachers’ union has between 300,000 and 400,000 members.

The first leadership position Castillo held, and which later gave him political prominence as a trade-union leader, was in the rondas campesinas (peasant patrols). The rondas, which provide security in those areas beyond the state’s reach, began in the 1960s as organizations attempting to prevent cattle rustling. Then they joined the fight against the Shining Path guerrilla organization in the 1980s and ’90s. The rondas themselves include certain leftist currents, while also fighting against left-wing terrorism.

This is perhaps the biggest difference: Castillo has some level of social organization behind him that Humala lacked.

Nicolas Allen

You mention the rondas campesinas and the teachers’ unions as Castillo’s social base. How would you characterize his electoral base?

Farid Kahhat

You have to understand something about elections in Peru in order to understand Castillo. Since 1990, there has been a significant part of the electorate that lacks a natural candidate and tends to cast a protest vote. In 1990, Fujimori capitalized on that antiestablishment vote. That part of the electorate tends to only show up in the final stage of the campaign, and when they do, certain candidates that were lagging way behind in the polls two weeks earlier suddenly shoot to the top. In effect, this is what happened with Castillo.

It is usually a leftist candidate who benefits from this dynamic in national elections. In the 2016 election it was Verónika Mendoza who was the beneficiary, with the support of an electorate from the southern and central Sierra —the rural vote in Peru. That electorate has now migrated over to Castillo. 

Now, who makes up that electorate in the southern Sierra region? There are several common characteristics such as ethnicity or social class in the heavily peasant and indigenous rural vote. If we look at his combined electoral and social base, we notice that Castillo is actually very similar to Evo Morales. Castillo, like Morales, does not foreground his ethnic identity as a basis for political support. Actually, he doesn’t need to assert that identity — the electorate makes that association naturally.

In that sense, too, Castillo is very different from Yaku Pérez in Ecuador, who, as the candidate for an indigenous-based party, Pachakuti, made that identity the centerpiece of his campaign. Again, Castillo is in many ways similar to Evo Morales in that his indigenous and peasant identity is indissociable from his left-wing politics. His project in many ways recalls that of Morales’s MAS party, with its class ideology and popular social base. In other words, what defines Castillo’s political discourse is not an ethnic identity — but that identity is present anyway.

It is important to stress that this figure — a left-wing indigenous candidate — is something really novel for a presidential election in Peru. We’ve already had a president, Alejandro Toledo, who was of indigenous origin and explicitly invoked that identity. But Toledo was neoliberal in terms of economic policy. And, on the other hand, we already had a Marxist-Leninist movement like the Shining Path, but they always claimed that ethnic identity was a regressive element in politics.

In other words, there are people who will vote for Castillo because he is a leftist, and those who will vote for him because they feel a sense of social and cultural identification.

Nicolas Allen

The anti-Fujimori bloc could also be a third variable, right? I’m particularly wondering if the liberal and center-right of the anti-Fujimori electorate will vote for an openly left-wing candidate.

Farid Kahhat

Anti-fujimorismo is a very peculiar movement. Strangely enough, it kind of resembles anti-correismo, although of course with a very different political orientation. Anti-fujimorismo, like anti-correismo, is extremely ideologically diverse and, as a political tendency, it can be very volatile.

The right wing of the anti-Fujimori bloc is liberal. To be more precise: the liberal right in Peru tends to be anti-Fujimori. What we’re seeing in this election is that the traditional right wing of the anti-Fujimori bloc is fragmenting: a few liberals are with Castillo, but not many. Others have simply gone over to Fujimori, while the rest are probably undecided.

But, again, anti-fujimorismo as a phenomenon ranges from the liberal right to the radical left. That is to say, it is an electorate that, taken as a whole, has nothing in common except its opposition to everything that Fujimori represents (corruption, authoritarianism, etc.). But in circumstances like the current election, and in a second round where, historically, anti-fujimorismo tends to rally around whoever Fujimori’s opponent happens to be, if that bloc is properly mobilized it could indeed end up defining the election in Castillo’s favor.

Now, anti-fujimorismo has not yet been massively mobilized as it was in 2011 and 2016. It was that movement that defeated Keiko Fujimori in 2016, when she was five points ahead of Pedro Pablo Kuczynski about seven days before the elections.

Again, the peculiarity of these elections is that the anti-Fujimori bloc has splintered and there is actually a segment of that electorate that might throw in with Keiko Fujimori, although they might not do so publicly.

Nicolas Allen

But there are some liberals from the traditional anti-Fujimori bloc that have voiced their support for Keiko. I’m thinking in particular of writer and politician Mario Vargas Llosa.

Farid Kahhat

Exactly, Vargas Llosa is the archetypal example of the right-wing anti-Fujimori vote that basically has been scared into voting for Fujimori. But Vargas Llosa has a habit of issuing categorical judgments that later make him look ridiculous. In the 2011 election he said that having to choose between Humala and Fujimori would be like choosing between cancer and AIDS. And then, in the second round, he campaigned ardently in favor of cancer. Now he is basically calling on us to vote for AIDS.

So Vargas Llosa has lost credibility. Moreover, I think Vargas Llosa is becoming increasingly less liberal — having once been the standard-bearer for liberalism — and has basically settled on a conservative politics. His relationship with Álvaro Uribe in Colombia or the People’s Party in Spain suggests as much. Frankly, any Peruvian who has followed Vargas Llosa’s career realizes that he is not worth taking seriously.

Nicolas Allen

I want to move on to examine Castillo’s program, since his plan for government was finally made public these days. In that document, Castillo raises the banner for some left-wing slogans that Verónika Mendoza had also proposed: agrarian reform, a new constitution, and regulation of extractive industries. When we look at the fine print, what is behind these slogans?

Farid Kahhat

Pedro Castillo presented a twelve-page document that is his plan for the first one hundred days of government, but it also gives a glimpse of what his government would be like in case he wins. Before that, the only thing we had was the Marxist-Leninist program of Perú Libre. 

The document that Castillo issued is clearly a step in a moderate direction. This is a very common dynamic in the second round, where what you want is to be the lesser evil and win over the electorate that didn’t vote for you in the first round. It’s important to point out that this doesn’t necessarily mean running to the center; it just means that Castillo will try to convince those who did not vote for him in the first round that he is the better alternative.

Pedro Castillo holds a big pencil, symbol of the Perú Libre party, as he greets his supporters during a campaign rally ahead of the June 6 runoff election, east of Lima on May 25, 2021. (ERNESTO BENAVIDES / AFP via Getty Images)

Having said all that, Castillo’s is a rather radical program by Peruvian political standards. He talks about the nationalization of companies, but he goes on to clarify that he doesn’t mean expropriating companies, just renegotiating contracts so that part of Peru’s gas reserves are earmarked for the domestic market, guaranteeing cheap energy consumption for the population. Were he to do that, it would still be more than any government has tried to do in the past.

As for agrarian reform, when Castillo talks about a “second” agrarian reform, he is referring to the fact Peru already had such a reform — unlike countries like Colombia or Brazil, which never did. Peru had an agrarian reform under a military government — that of Juan Velasco Alvarado in the 1970s — that defined itself as socialist and revolutionary. So a good part of the redistribution of land had already taken place. But after that process took place, there was a subsequent process of land concentration in the country’s agro-export zones.

Castillo’s plan, then, is to investigate cases of land grabbing and regulate the concentration of land ownership. But his plan is not to expropriate land; he ultimately just wants to replace food imports with local production. In the agricultural sector, liberal governments in Peru have only ever supported industrialized agro-exports. This support was embodied in a very controversial law — which has now been repealed — called the Agricultural Promotion Law, which degraded labor standards and gave tax exemptions for the agro-export sector.

Basically, what Castillo proposes is to support family and community agricultural production —by generating special lines of cheap credit and other instruments. Again, if he does this, it is more than any democratically elected government has done in more than twenty years.  

Then there is the issue of changing the constitution. There is just one line at the end of his government program on the subject, where he says that any change to the Constitution will be made in accordance with the current constitutional and legal terms. And that actually already limits the possibility of a constitutional change. It does because Castillo says that he will call a referendum for the people to decide whether or not to call a constituent assembly — but to even call a referendum he needs to first put it to Congress, where the proposal needs a simple majority. Pedro Castillo does not have a congressional majority nor prospects of obtaining a majority. For the time being, he will have to try to make partial reforms to the current constitution.

Nicolas Allen

It might be interesting to think about Peru in a regional context. Specifically, I was thinking about Peru and Colombia —two notoriously conservative countries where, in a way, the Cold War never really ended. Despite that, we have a declared left-wing candidate on the verge of taking power in Peru, and in Colombia progressive candidate Gustavo Petro is the projected front-runner for elections in 2022. How do you understand this political shift?

Farid Kahhat

There are two economic factors that help to explain recent political changes in Peru. Many say that market reforms in Peru have yielded positive results in terms of reducing poverty — they say this about Peru but also about other countries in the region. But what the pandemic has laid bare, particularly in Peru, is that poverty was reduced while leaving the miserable state of public services unaltered — most clearly in the case of health services.

The other factor that helps to explain this political shift is that only part of poverty reduction was due to market reforms. The other part seems to have been due to the commodity super-cycle.

All countries in the region, regardless of political stripe, reduced poverty during the super-cycle, which runs roughly from 2003 to 2013. Most countries reduced — albeit marginally — inequality as well, whether they were left-wing or right-wing governments. But in the last five years, the commodity super-cycle has clearly come to an end, and this has undermined the legitimacy of governments regardless of their political orientation.

In Peru, poverty is no longer being reduced. For the last five years it has been stagnant, and with the pandemic, we have actually reverted to pre-2010 poverty levels. In other words, we have lost ten years of commodity-fueled poverty reduction.

I think these two factors — the social costs of market reforms and the end of the commodity super-cycle — help to understand the political shifts we are witnessing, especially in Colombia and Peru.

It might be too soon to say whether the Right is on the decline though. One thing we have to understand is that in Latin America, the radical right is different in origin from the European or North American radical right. The radical right in the northern hemisphere grew in contexts in which social democracy was retreating electorally.

In Latin America and the Caribbean, the radical right flourished as an opposition to the left-wing electoral victories associated with the Pink Tide. As a consequence, the anti-communist component is much stronger, and the radical right has a markedly stronger anti-left vision. To take a counterexample, in France, when the radical right twice reached the second round of presidential elections, it was competing with other right-wing forces: Chirac in 2002 or Macron in 2017.

That is not the case in Latin America — there, the radical right sees its opponent as the Left. And in the cases of Colombia and Peru, there is another factor: the war against armed left-wing groups like the FARC and ELN in Colombia, and the Shining Path and MRTA in Peru. These are forces that, unlike one-time guerrilla groups like the FMLN in El Salvador or the FSLN in Nicaragua, are extremely unpopular among the general populace, and the right wing makes the most of their unpopularity to disqualify the broad left as a whole by association.

Now, I believe that this association is beginning to give way, partly because Shining Path has been reduced to its minimum expression and, in Colombia, the armed activity of the FARC has been significantly reduced. I think that helps to understand why the Left suddenly has more room to maneuver in countries like Colombia and Peru.

Nicolas Allen

Beyond the economy and the retreat of the Shining Path, are their other political reasons for the evident decline of fujimorismo?

Farid Kahhat

We should remember that anti-fujimorismo has two components: the first, original one was the opposition to Alberto Fujimori’s government, associated with authoritarianism and extreme corruption. But from 2016 until today, Keiko Fujimori has created her own source of animosity, mainly due to her obstructionist behavior in Congress and her brazen corruption. According to Transparency International, between 1994 and 2004 Alberto Fujimori’s was the seventh most corrupt government worldwide. Complaining about corruption is a Latin American pastime, but when it comes to Peru, we have set the bar pretty high. And that continued under Keiko Fujimori.

There have been four attempts to impeach the president in recent years, one of which led to the resignation of the incumbent president and another to his impeachment — and this was all led by fujimorismo from Congress. This is what I mean when I say fujimorismo is perceived as an obstructionist force.

The clearest way to see that support for Keiko Fujimori has eroded is that in 2016 she obtained 39 percent of the vote in the first round and now, in 2021, she only won 13 percent. She only made it to the second round because of voter fragmentation among eighteen candidates — otherwise she never would have passed the first round. Never in history has someone with only 13 percent of the vote gone to the second round in Peru.

Nicolas Allen

For a while Castillo had a sizeable lead in the polls, but it shrunk considerably in the last few weeks. What are the key fights to watch in what remains of the campaign?

Farid Kahhat

The powers that be will never support a leftist figure like Castillo. But they would definitely support right-wing authoritarianism — they already did so with Fujimori in the 1990s. The evangelical churches, the armed forces, the media, business associations, and others would never support a left-wing candidate and will do their best to get Keiko Fujimori over the line. Most of the media has already closed ranks behind Fujimori’s candidacy. The El Comercio group, the largest media group in the country, has an oligopoly of newspapers as well as two television channels, one of which is the most viewed on television. And they are openly supporting Fujimori.

On the other hand, it obvious that Castillo has never run for elected office and that he lacks proper advisors. He’s committed a lot of errors. However, I think things are starting to change and I still believe it is possible for him to win.

What has Castillo done? He has distanced himself from Vladimir Cerrón, the leader of Perú Libre who has two convictions of corruption against him. Cerrón’s program could also scare away a large sector of the electorate — as I said, Perú Libre defines itself as a Marxist-Leninist party in a country where the term “Marxist-Leninist” and the hammer and sickle are associated with the Shining Path. So the fact that Castillo distanced himself from Cerrón has been key.

Finally, Castillo has put together a more or less competent technical team, made up of people who are not militants of Perú Libre. Furthermore, Pedro Castillo is finally trying to mobilize the anti-Fujimori vote — the most powerful political force in Peru in the last decades. I do think that if Castillo had not taken these steps, Keiko would win the election. Now I think Castillo has a chance to win.

Nicolas Allen

The fact that he reached an agreement with the other left-wing force, Verónika Mendoza’s Nuevo Perú, must have helped him toward consolidating a team with a stronger technical background.

Farid Kahhat

Yes, in fact, Nuevo Perú has a team of mainly of left-wing economists who come from the Catholic University, which is one of the best universities in Peru. And these people have had experience in public office, so they offer expertise while also allaying some fears of radicalism. One member of his team was actually president of the Central Reserve Bank and was very prudent with monetary policy, keeping inflation at very low levels.

Nicolas Allen

Let’s suppose that Castillo wins the election. The Peruvian media is already warning that his presidency would result in a collapse of the national stock market, massive capital flight, etc. In other words, these statements could be a strategy to scare the electorate, but they could also be a real threat that would impose limits to any plans for more radical transformation.

Farid Kahhat

As I was saying, Castillo’s governing program distances itself from Peru Libre’s original program in an effort to calm the fears of the ruling class. But I’m afraid he won’t succeed. The fluctuating value of the Peruvian sol seems to revolve around how Castillo is doing in the polls, for example. I have no doubt that in the event of a Castillo win, as happened with Humala in 2011, there would be a significant drop in the stock market the next day.

To the extent that Humala bent over backwards to calm investors, the problem was that he stopped scaring them and rather started scaring off his old leftist allies; but when Humala gave reassuring signals, the economy stabilized again. However, I do not believe that this will not happen with Castillo — first, because Castillo is clearly to the left of Humala. But, second, because the program, modified though it may be, is still quite radical for a country in which business groups are extremely conservative.

There is an old saying in Latin America: there is no animal more cowardly than a million dollars. Well, I would say that a million dollars in Peru must be even more cowardly than the Latin American average. Our right wing is extremely paranoid and lives in fear of monsters of its own creation. So, the program that Castillo has come out with is not going to calm them down enough.

But, in addition, when Castillo announces things like the renegotiation of mining contracts and changing the constitution, that itself generates uncertainty. The time it takes to renegotiate contracts will be filled with instability and, intrinsically, a change of the constitution through a constituent assembly does too. So, even if the business sectors do not perceive Castillo as the incarnation of evil — which is, in fact, how they perceive him now — the mere uncertainty is going to be a problem for the economy.

Having said that, Castillo may have one advantage: some Peruvian export products are part of what people are calling a new commodities boom, although not as big as the one from 2003 to 2013. But in any case, we are going to reach the end of the year with most or almost all of the adult population vaccinated against COVID-19, and with an economy in full recovery with respect to 2020. This could help to ensure that political uncertainty does not end up sinking the economy.

Nicolas Allen

What would Castillo’s victory mean in historical terms? You already said that it would be the triumph of a peasant and indigenous candidate, something unprecedented in the history of Peru. But his candidacy also puts on the table long-standing struggles such as agrarian reform and constitutional reform. Could it “change history” in Peru, so to speak?

Farid Kahhat

One of the things that always struck me is that, despite the demonization of left-wing military general Juan Velasco Alvarado — a figure we’ve alluded to throughout this conversation — in an opinion poll, Velasco has the highest approval ratings of any president in the last decades in Peru.

I would have thought that, between the right-wing campaign to stigmatize his legacy and the passage of time, most would not even remember Velasco or would only remember him based on the image shaped by the media. But no, there is a very positive memory of Velasco —despite the fact that, for the Peruvian right, invoking Velasco is tantamount to invoking the devil.

The interesting thing about Castillo is that he may actually represent an equally significant change as Velasco at the level of the national economy. Moreover, it would be the first time that Peru elects by popular vote an indigenous leftist who has an agenda for real transformation. In that sense, his presidency could change this country, for better or for worse. I say for worse because if it ends up being a failed experiment, he will join Velasco in the pantheon of ghosts that haunt the Peruvian elite.

If he ends up being a success, Castillo could very well change the course of contemporary Peruvian history. In that sense, I think his could be the most important government since Velasco — and a government that people won’t soon forget.

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Farid Kahhat is a professor of political science at the Pontificia Universidad Católica in Peru and author of El eterno retorno, on the global radical right.

Nicolas Allen is a Jacobin contributing editor and the managing editor at Jacobin América Latina.

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