Peru Elections: The Lesser of Two Evils

Elected president of Peru on June 4, Alan García faces a challenging road ahead. Considered the lesser of two evils by most voters, García lacks popular support as well as sufficient representation in congress. Given his limited ability to implement dramatic changes and the public's lingering memories of his disastrous performance during his first administration in the 1980s, the new president's job will be a delicate balancing act.

* García needs to find a cautious middle ground between retaining policies that foster economic stability and growth and addressing pending issues such as urgently needed fiscal and labor reforms.
* Although Peru's overall economy has improved remarkably, the population's standard of living has remained stagnant, demonstrating that good macroeconomic performance does not necessarily yield social equity and political stability. Aggressive implementation of significant social programs will be an overriding priority.
* Although García's energy program calls for private participation, it is still too early to tell whether his policies will have a clear positive impact. Moves like the revision of existing contracts and the restructuring of Petroperu, however, suggest otherwise.

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