Center-right rivals vie in copper, gas-rich Peru

OREANDA-NEWS. January 20, 2016. Peru's presidential race has entered the final stretch at a time when the copper and gas-driven economy is decelerating.

Keiko Fujimori, daughter of jailed former president Alberto Fujimori (1992-2000), would garner 33pc of the votes if the 10 April election were held today, according to a poll by Ipsos Peru released yesterday. Her total is more than double the second-place candidate.

If no candidate wins at least 50pc of the vote, a runoff would be held on 5 June. The battle today is among 18 candidates hoping to break out of the pack to face Fujimori. President Ollanta Humala is legally prohibited from seeking a consecutive five-year term.

Unlike previous elections, the top contenders offer similar center-right policy prescriptions to reinvigorate Peru?s commodities-based economy. The handful of top candidates would limit the state's economic role, bolster public-private partnerships in infrastructure, including the energy sector, and streamline bureaucracy to attract private-sector investment with a focus on natural resources. The Humala government lists more than \\$70bn in potential mining, oil/gas and electricity projects for development between now and the end of the decade.

Running neck-in-neck for the second spot are former economy minister Pedro Pablo Kuczynski, known widely as PPK, and Cesar Acu?a, who stepped down as La Libertad state governor last year to run. They poll 13pc each in the Ipsos Peru poll.

Following them is Alan Garcia, who served as president in the 1980s and again in 2006-11, and dark horse business consultant Julio Guzman, who broke out of the fringe pack this month to reach the fifth spot.

Luis Benavente, head of the Vox Populi communications firm, said two-thirds of voters remain undecided. "The electorate has always been volatile. There is always the chance of a surprise," he said.

Peru's economy is forecast to grow just below 3pc this year. It picked up steam in the final quarter, growing by 4pc year on year in November. The economy expanded by 2.7pc through November.

New copper mines are spearheading modest growth. Copper output jumped by 40pc in November and will accelerate further in the first half of 2016 when Chinese MMG?s Las Bambas mine comes on line and an expansion at Freeport McMoRan?s Cerro Verde mine is completed. Copper output is expected to nearly double to 2.6m t/y by the end of 2017.

The statistics institute (INEI) also forecasts strong growth in the power sector. Electricity generation has been growing solidly since August and the INEI's preliminary forecasts have generation increasing by 11.7pc year on year in December.

The leading candidates prioritize expansion of the country's existing natural gas pipelines as a cornerstone of energy policy. A 750km pipeline from the Camisea gas fields in the jungle to the Pacific coast has operated since 2004, while a second 1,000km pipeline from Camisea to the southern coast is under construction. It should be operating in 2018.

Fujimori and Garcia offer the most specific proposals. She calls for petrochemical development and a restructuring of state-run PetroPeru.

Garcia is promoting a \\$3bn northern gas pipeline, and another \\$3bn for the construction of hydroelectric plants with installed capacity of up to 1,500MW.