Can Peru’s Constitution Survive a Marxist Onslaught?

“The battle in Peru is no longer about who won the election; it’s about preserving the country’s constitution. Drafted in 1993, the current constitution underpins the free market policies that helped the country reduce its poverty rate by roughly one-half, nearly triple its per capita income, and even slash inequality (as measured by a 12-percentage-point reduction in the Gini coefficient between 1998 and 2019). As Ian Vásquez and Ivan Alonso write for the Cato Institute, during the last decades, “Peruvians have experienced dramatic and widely shared improvements in well-being.”

Peru’s economic success is a rather new development. As recently as August 1990, the country experienced a 397 percent monthly inflation rate. Previously, dictator Juan Velasco Alvarado, a military officer who led a coup d’état in 1968, had nationalized key industries, creating state monopolies in oil and mining, fisheries, and food production, among other key sectors. He also expropriated large tracts of land and severely restricted imports, all according to a five-year plan of national production. Economists César Martinelli and Marco Vega argue that Velasco Alvarado’s statist program cost Peru “sizable losses” in economic growth during two decades, leading to the hyperstagflation of the late 1980s.

Once in power, Alberto Fujimori, who won the presidential election in 1990, took drastic measures to stabilize prices, mainly by restricting the money supply and government deficits. Meanwhile, he deregulated markets and shrank the state’s size by privatizing state-owned companies.”

“Today, the constitution is the only obstacle in the way of President-elect Castillo’s party platform, which praises Vladimir Lenin and Fidel Castro while promising a back-to-the-past agenda of nationalizing the mining sector and other major industries, expropriating land, and getting rid of Peru’s successful private pension system, which administers approximately USD $40.7 billion in citizens’ savings. Much like Velasco Alvarado, who nationalized news media companies, Castillo’s “Free Peru” party plans to “regulate” the press, claiming that a “muckraking” media is “fatal” to democracy.”

“Castillo’s “Free Peru” party calls for a new constitution to replace the one in place, which it rejects as “individualist, mercantilist, privatizing, and defeatist” in the face of foreign interests.”

“According to a recent poll, 77 percent of Peruvians are against doing away with the current constitution. As YouTuber Mirko Vidal remarks, this suggests that a good portion of Castillo’s vote wasn’t pro-Marxist as much as anti-Fujimori.

It remains to be seen whether Peru’s institutions can withstand Castillo’s certain onslaught once he is in power. It would be no surprise if he tried to get rid of term limits, a classic recipe of 21st century socialists such as Venezuela’s Hugo Chávez and Bolivia’s Evo Morales, caudillos who, like Alberto Fujimori, won an election and changed the rules of the game so as to hold on to power. Another similarity with Chávez and Morales is Castillo’s blend of anti-capitalist dogma with a strong sense of social conservatism; he opposes same-sex marriage, a “gender-focus” in education, and large-scale immigration. Repeatedly, he has promised to expel all illegal immigrants—meaning many of the 1 million Venezuelans who arrived in the country as they fled from Chavista socialism—just 72 hours after taking office. While these stances are electorally savvy, they make Castillo an odd bedfellow of the foreign progressives who praise him with titles such as son of the soil.”

Will Peru Become the Next Venezuela?

“Pedro Castillo, a self-described Marxist-Leninist heading the Peru Libre (“Free Peru”) ticket, has secured a spot in the country’s June 6 presidential runoff election. The only person standing between him and power is Keiko Fujimori, the daughter of a former president who assumed dictatorial control in the 1990s and the leader of Fuerza Popular (“Popular Force”), a right-wing populist political party. If Castillo wins, he threatens to impose the same sort of ruinous policies that have decimated Venezuela.

Peru Libre’s platform calls for an economic transformation that would include nationalization of the mining, gas, oil, hydro-energy, and communications industries; agrarian reform which will include land expropriation and might involve land redistribution; elimination of private pensions; voiding contracts with the companies that are currently in charge of managing airports, railways, ports, and highways, and transferring these functions to regional governments and municipalities; and reviewing all trade agreements with an eye toward abrogating at least some of them.”

“Chavez nationalized Venezuela’s oil industry in 2005. Not only did state mismanagement prove fatal, but the lack of private investment also contributed to the demise of the once-mighty Venezuelan industry. Castillo’s plans to nationalize Peru’s powerhouse copper industry will lead to similarly tragic results. If Castillo wins, expect both government mismanagement and an output collapse that will cripple the nation’s copper production.”