Date first published: 15/06/2021

Key sectors: all

Key risks: political stability; policy continuity; governability


Risk development

The winner of the 6 June presidential runoff election is yet to be officially announced over a week after the votes were cast. With 99.98 per cent of the ballots counted at the time of writing, far-left candidate Pedro Castillo had a 0.25 percentage points lead – or 44,816 votes – over his conservative opponent, Keiko Fujimori. The runoff confirmed the two main trends observed throughout the electoral process: uncertainty and unpredictability as a new common feature of the political landscape and divisions within the Peruvian society arguably at unprecedented levels.

Why it matters

The country’s democracy is being tested. Fujimori, who has so far refused to concede, has asked electoral authorities to nullify around 200,000 votes, requested an audit from the National Office of Electoral Processes (ONPE) and challenged claims that the request to nullify votes failed to meet the established deadline. Even though the fraud allegations were not echoed by election observers, Fujimori’s Fuerza Popular party has launched a full-scale legal battle against what appears to be Castillo’s win.

Castillo’s win would make him the first hard left president in the country’s recent history. This could certainly have an impact on policy direction, with one of his advisers recently clarifying that Castillo would keep a ‘market economy’ and that his administration would not look into ‘massive intervention’. The statement was far from random. It was directly linked to significant concerns raised by private and foreign investors used to the country’s longstanding tradition of macroeconomic orthodoxy and relatively stable regulatory frameworks. Therefore, any disruption would take place amid record polarisation, cementing the potential for persistent anti-government sentiment and likely unrest.


If the first poll released after the 11 April first round is anything to go by, it can be argued that the runoff further accentuated the divisions within the populace. On 18 April such polls showed that Castillo had an 11-percentage point advantage over Fujimori. As the second round approached, the difference shortened, leading to a situation in which ‘every vote counts’ is far from being an overstatement.

The tension and anxiety around the final results have so far stoked mostly peaceful demonstrations led by supporters of both candidates. Although the country has not witnessed the highly disruptive waves of nationwide unrest recently observed elsewhere in the region, disenchantment should be expected once the results are officially announced, adding to governability risks which also stem from a fragmented Congress expected to challenge and/ or temper the policy agenda of whoever ends up securing the presidency.

Risk outlook

Peru’s divisive drama will intensify over the coming days and will continue to consolidate when the new administration takes office on 28 July. On 21 June a court is expected to rule on a prosecutor’s request to put Fujimori under preventive detention for meeting with a witness in the trial that she faces over alleged involvement in the Odebrecht graft scandal. Should Fujimori win the vote, the trial would be delayed. The stakes are as high as they have ever been for both sides. Key to avoiding a further deterioration of the country’s governability prospects will be to ensure that the final results are respected and that both candidates call on their supporters to refrain from contesting them in the streets. A rather unusual recommendation for a country like Peru – until now.