With 89.2 percent of the ballots counted from yesterday’s presidential runoff election in Peru, first-round winner and Gana Perú candidate Ollanta Humala leads first-round runner-up and Fuerza 2011 candidate Keiko Fujimori by a less than 3 percent margin.

Shortly after midnight yesterday, Humala declared victory in downtown Lima and delivered a speech to supporters in which he pledged to fulfill his commitments to the Peruvian people. Fujimori has vowed not to concede until Peru’s official electoral body, Oficina Nacional de Procesos Electorales (ONPE), declares a winner. An ONPE interactive map shows Keiko winning in the capital Lima and surrounding areas as well as in northern coastal regions. Humala won by large margins in rural areas and in highland cities. Currently, Humala leads by nearly 375,000 votes out of roughly 14 million ballots counted.         

If Humala’s lead holds, his victory would signify a rebuke of outgoing President Alan García’s economic policies, which are credited with sustaining high growth levels, but also criticized for doing little to combat poverty and economic inequality. A survey last month revealed that only 22 percent of Peruvians believed that the García model should be replicated by his successor.

Analysts say Humala’s success at the polls in some of Peru’s closest-ever elections is due to the excitement his campaign generated as opposed to Fujimori’s candidacy which some say “lacked feeling.” Also, Humala largely avoided talking last week about his controversial economic policies, choosing instead to focus on combatting poverty and corruption.

This morning, the Bolsa de Valores de Lima (Lima Stock Exchange) temporarily suspended operations after its value declined by 8.7 percent mere moments after opening for morning trades.            

The presidents of Chile, Colombia, Mexico, and Peru are expected to sign the Pacific [Ocean] Agreement this Thursday in Lima—deepening multilateral integration between the four Latin American economies. The agreement aims to facilitate the movement of services, capital and goods through the shared Pacific basin. It is not a free-trade agreement.

Peruvian President Alan García praised the alliance, adding that these four countries “can be protagonists and play a first line role” looking forward. Jose Morales Disso, President of Peru’s National Confederation of Private Business Instructions (CONFIEP), noted that this agreement will strongly benefit Peru’s economy and microenterprises as Peru attempts to reach a wider market—maximizing its recent trade pacts with Asian markets.

The Pacific Agreement should not be confused with the Trans-Pacific Partnership (TPP), which seeks to integrate Western and East Asian/Australasian economies through a Pacific Ocean free trade zone. Brunei, Chile, New Zealand, and Singapore are current signatories. Australia, Malaysia, Peru, United States, and Vietnam are presently negotiating to join the TPP.

Peru is about to be divided, again. With the vote count nearly complete, it looks like the pre-election polls were spot on: first place is Ollanta Humala and second place is Keiko Fujimori. Exit polls also indicate that their two respective parties, Gana Perú and Fuerza 2011, won the most seats in Congress.

What would an Ollanta Humala presidency look like? Would he live up to his campaign promise to be a more center-left candidate, or would he backtrack on his recent character transformation? The problem is: no one knows. During the campaign, he appealed to the mainstream Peruvian electorate by portraying himself as a political centrist and Catholic conservative, and by shying away from his close ties with Presidents Hugo Chávez and Evo Morales. He has tried to portray himself as more like former Brazilian President Luiz Inácio Lula da Silva. However, many Peruvians—including several investors—believe this is just a façade. Predictions of an Humala victory have contributed to the biggest jump in the cost of insuring Peruvian sovereign debt in five years and the Peruvian Nuevo Sol has declined by 1.6 percent since March 20. We do know that Humala has said he might try to reform the constitution, redistribute wealth through a “national market economy,” and start a government pension program for the elderly.

And, what would a Fujimori presidency look like? It is possible it would look a lot like her father’s, with the first step being a pardon for Alberto Fujimori who is serving a 25-year sentence for human rights abuses and corruption. Nevertheless, Keiko Fujimori appealed to some voters because of her father’s record on the economy, anti-terrorism and populism—he frequently gave away goods and services to remote regions overlooked by other governments. Her presidency is not expected to be much different and there is no guarantee that she would adhere to democratic principles.

Preliminary results from yesterday’s first-round presidential elections in Peru suggest that no candidate has received an outright majority of the vote, but that Ollanta Humala and Keiko Fujimori will advance to a runoff scheduled for June 5. At the time of writing, 76.5 percent of ballots have been counted according to Peru’s National Office of Electoral Processes (ONPE). In this tally, Ollanta Humala (Gana Perú nominee and former 2006 presidential candidate) received over 29.8 percent of the vote; Keiko Fujimori (Fuerza 2011 nominee and daughter of former president Alberto Fujimori) garnered 23.0 percent; and Pedro Pablo Kuczynski (Alianza por el Gran Cambio nominee and former economy minister) won 20.5 percent.

Peruvian online newspapers such as El Comercio and Peru21 awarded first place in yesterday’s election to Humala, while Keiko proclaimed last night in a victory speech that she will advance to the second round. Kuczynski appeared resigned to this reality as well, calling a Humala-Fujimori runoff “almost evident.” Peruvian President Alan García congratulated Humala and Fujimori this morning.

Humala’s advance to the second round was widely predicted based on polling data by Lima-based Ipsos Apoyo, which showed him with 26 percent support of likely voters as recently as April 5. Peru’s electoral laws prohibit official polling in the week before an election takes place.

After more than 90 years, Yale University has agreed to return 363 ancient artifacts excavated by Hiram Bingham, who is accredited with discovering Machu Picchu in Peru. According to the Ministry of Culture, the 363 Inca pieces that Bingham excavated will first be exhibited in Lima’s Museo de la Nacion in March 2011, and then will be moved to Cusco’s Casa Concha. The rest of the items will be returned by 2012.

The agreement came after national and international campaigns, a lawsuit and negotiations between delegations. The efforts even sought out help from Nobel Laureate Mario Vargas Llosa.

Although a memorandum of understanding was signed between Yale and President Alan García in 2007 for the return of the artifacts, problems arose when former Peruvian first lady Eliane Karp did not agree to the terms.  She wrote in an opinion piece in the New York Times that Peru would only receive a limited amount of the original artifacts, when in fact the Peabody Museum at Yale University would retain the rest of the artifacts, supposedly numbering 46,332 in total. 

From the Americas Society/Council of the Americas. AS/COA Online's news brief examines the major—as well as some of the overlooked—events and stories occurring across the Americas. Check back every Wednesday for the weekly roundup.

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Santos Surges in Colombia’s First Round as Polls Prove Inaccurate

Despite the fact that polls forecasted a near-tie in the Colombian vote, Former Defense Minister Juan Manuel Santos pulled in more than double the votes of his top rival, the Green Party’s Antanas Mockus. Still, with 46.6 percent of the vote, Santos fell just short of the requisite majority needed to win in the first round. Pollsters defended their surveys, saying that the shift in support for Santos grew as a result of voter discomfort with comments made by Mockus in the final days before the election. Colombian law requires polls to close 10 days before elections. A lack of accurate polling in rural areas and abroad may also have played a role. Santos and Mockus face each other in the second round on June 20.

AS/COA holds its annual Bogota conference on June 17, ahead of the second round of elections on June 20.

Read an AS/COA analysis on the first round.

Colombian Candidates begin Coalition ahead of Runoff

La Silla Vacía offers an analysis of how Colombian candidates Juan Manuel Santos and Antanas Mockus are seeking to build alliances ahead of the June 20 elections. With the remaining candidates from Sunday’s vote out of the running, Santos initiated a “National Front” to win over politicians from and supporters of the traditional Conservative and Liberal parties. Third-place-finisher Germán Vargas Lleras could be another important ally for Santos’ U Party. Meanwhile, Mockus indicated he would pursue a “citizen’s alliance” and the support of voters who abstained in the first round, along with parties that would like to form an alliance with the Green Party. The Democratic Pole, whose candidate Gustavo Petro won nearly 10 percent of the vote to finish fourth, may seek a coalition with Mockus’ party.

Peruvian President Alan García yesterday declared a 60-day state of emergency in the regions of Huánuco, Ucayali and San Martín following reports of increased narco-terrorist activity. The declaration suspends certain constitutional rights and freedoms like the freedom to celebrate meetings.

The decision was taken in the aftermath of an attack last month on a Peruvian police outpost that killed two civilians and one police officer and in light of pleas from Defense Minister Rafael Ray, who claims he has received death threats and requires more security.

The declaration came on the day of the 30th anniversary of the first terrorist attack by Sendero Luminoso (May 17, 1980). The 20-year guerrilla war that ensued claimed 70,000 lives and saw a dramatic rise in coca cultivation and cocaine trafficking in Peru. Today Peru is the world’s second-biggest producer of coca leaf, and the VRAE is the highest producing region in the country.

Although they lack the organization and numbers of the original Sendero, splinter groups are still operating in the Valley of the Apurimac and Ene rivers region and continue to engage in violence and trafficking.

You know it is election season in Peru when the number of public works projects (obras) increases so much that traffic comes to a virtual standstill. That’s how Lima is today ahead of the municipal and regional elections that will be held in October 2010. Much is at stake as the outcomes are a telltale sign for what may happen in next year’s presidential election

The massive display of obras during an election year is not uncommon.  In fact, they are strategic. Visible projects—like the construction of an electric train and bus system in Lima—are displays of what the government has done for its people, and are often used as a form of propaganda by candidates running in incumbent seats. Closely following the Latin American tradition of populismo, incumbent candidates appeal to the masses through these obras. Yet, the use of public works projects as propaganda can pose risks too. Publicly displayed accomplishments might also expose the corruption associated with their construction.  

Lima has a history of failed public works projects. During President Alan García’s first term (1985—1990) he invested in a national project to construct a Tren Electrico—a train system that would run through the city. However, the project was abandoned and some parts of the construction turned into artwork. At the same time President García was accused of rampant corruption and mismanagement of the project. Then after winning the presidency again in 2006, he promised to complete the project by the end of his term in 2011.

Peruvian President Alan Garcia cut short his trip to the Asia Pacific Economic Cooperation (APEC) summit in Singapore, returning to Lima this morning to deal with a brewing spying case. Mr. Garcia abruptly announced his return—which comes a day earlier than had been scheduled—in order to publicly address an alleged incident of Chilean espionage involving an officer from the Peruvian Air Force. This newest diplomatic spat between the two countries had already provoked the cancellation of a meeting yesterday between President Garcia and his Chilean counterpart, Michelle Bachelet.

The spying accusations follow the arrest on October 30 of Peruvian Air Force official Victor Ariza Mendoza, who is accused of passing secret documents detailing Peru’s projected future military acquisitions to Chilean intelligence officers in exchange for money. Peru has brought charges of treason against Mr. Ariza and indicated that it plans to bring charges against two Chilean officials as well.

Chilean President Michelle Bachelet has responded to Peru’s allegations by denying any accusation of espionage and warning Peru’s government from jumping to conclusions. According to a Chilean presidential spokeswoman, “When there are accusations of this type, governments must exercise caution…We want to be clear: Chile does not spy.”

President Alan García of Peru announced on Monday his belief that Bolivian President Evo Morales has successfully negotiated an “under-the-table” maritime deal with Chile that will grant sea access to the landlocked republic. The announcement provoked swift denials from both governments and is the latest development in the acrimonious diplomatic relationship between Bolivia and Peru. Chilean foreign minister Mariano Fernández called Mr. García’s allegations a “provocation” against Chile, but also expressed a commitment to settling the dispute peacefully.

According to a treaty dating back to 1929, Peru is permitted to approve any future bilateral agreement between Bolivia and Chile that pertains to ocean access that would require the use of territory that Peru lost to Chile in the War of the Pacific in 1884. Bolivia’s efforts to secure sea access have intensified in recent years as it has sought new markets for its expanding natural gas exports.