Pedro-PabloKuczynski GS '61 will succeed current Peruvian President Ollanta Humala on July 28.
Kuczynski was officially confirmed as the president-elect of Peru in a ceremonyon June 5at the Municipal Theater of Lima, Peru,
Kuczynski ran on the Peruvians for Change party, and won the presidential election over his rival, Keiko Fujimori, in early June with 50.1% of the popular vote.
Kuczynski, who is better known as PPK, previously served as the Prime Minister of Peru from 2005 to 2006, and the Minister of Economy and Finance from 2001 to 2002 and from 2004 to 2005. He also held the position of Minister of Energy and Mines from 1980 to 1982.
Prior to running for President of Peru,Kuczynski was a strategic advisor at Pegasus Capital Advisors, L.P., a private equity investment firm in Greenwich, CT. Kuczynski also held a position at The Rohatyn Group, an emerging-market hedge fund in New York.During his presidential campaigns in 2011 and 2016, Kuczynski resigned from all of his private sector positions.
Alec Machiels, a partner at Pegasus Capital Advisors, noted that Kuczynski’s background both in government and the private sector makes him well-suited to lead Peru.
“It’s a very unusual background when you have someone who has both a deep understanding of the structural elements of the country, the political environment, and business in Peru and across Latin America,” Machiels said.
Julio Carrión, an Associate Professor of Political Science at the University of Delaware, explained that Kuczynski is viewed as someone who is affable, tolerant, knowledgeable, and a technocrat instead of a traditional politician. He also added that Kuczynski was the most right-wing candidate running in the election, but his personality helped win over both moderate and left-wing candidates.
Steven Levitsky, a Professor of Government at Harvard University, noted that compared to most of the other politicians in Peru mired in corruption scandals, Kuczynski comes across as someone who is clean and competent. However, he noted that Kuczynski’s biggest challenge will be convincing the public that he represents the common man instead of the elite.
In 2010, Kuczynski ran for President of Peru as part of the Alliance for Great Change, but failed to qualify for the runoff election. He decided to run again in 2015 on the Peruvians for Change party. Prior to the general election, Kuczynski was running third in the polls, a result that would’ve denied him qualification for the run-off race as only the top two finishers in the general election face off in the runoff election.
However in March 2016, Julio Guzmán, who was running second, was removed from the race due to violation of party rules in the internal election. Guzmán’s removal put Kuczynski in second place in the polls, and he narrowly beat Verónika Mendoza in the general election to qualify for the runoff election.
Jo-Marie Burt, an Associate Professor of Political Science at George Mason University, explained that in order to beat Fujimori in the runoff election, Kuczynski needed to win over some of the center-left voters, who disagreed with him on the economy and social issues. She noted that Mendoza and the center-left voters eventually supported Kuczynski’s candidacy, but not very enthusiastically.
“The thing that brought them together was their mutual distrust of a Keiko Fujimori government,” Burt said. “It was a tense embrace.”
Burt added that another factor that benefitted Kuczynski was his honesty and clean record, whereas Fujimori and her campaign faced allegations of corruption.
In the runoff election Kuczynski beat Keiko Fujimori, who was the first-place finisher in the general election, by a very thin margin.
However, Fujimori’s party, the Popular Force, won 71 out of 130 seats in the legislature, while Kuczynski’s party only won around 18 seats.
“More people voted for PPK because they were interested in wanting to see a government that would guarantee transparency and honesty in public administration,” Burt said.
Levitsky noted that one of Kuczynski’s largest challenges will be working with the legislature. He explained that it is possible that Peru could enter a governing crisis.
“At first blush, it looks like a recipe for crisis and a possible presidential failure before the end of his term,” Levitsky said. “It’s a real cause for alarm.”
Burt noted that despite the possibility of obstruction by the Popular Front, Kuczynski should be able to maneuver his way and govern effectively, since he and the Popular Front agree on many issues such as the economy and crime. However, Carrión added that many center-left legislators will push for changes in social policies, such as income inequality.
“Peru is not going to have a worse situation of government that it has had before,” Carrión said. “For almost 15 years, the party in power has not been the party with a majority in Congress, and that has not affected the democracy significantly.”
Kuczynski did not respond to a request for comment.
Kuczynski was born in Lima in 1933, and attended high school at the Rossall School in Lancashire, United Kingdom. He received a scholarship to attend Exeter College at the University of Oxford in the United Kingdom, where he majored in politics, philosophy, and economics.
After graduating in 1960, he received the John Parker Compton fellowship to attend the Wilson School, where he graduated in 1961 with a Masters in Public Affairs. He joined the World Bank as a regional economist covering Central America, Haiti, and the Dominican Republic.
In 1967, Kuczynski returned to Peru to work in the Peruvian central bank under President Fernando Belaunde Terry. In 1969, Kuczynski left Peru for the United States in exile after Terry was overthrown in a military coup by General Juan Alvarado.
Kuczynski rejoined the World Bank, and served as a chief economist for northern Latin America and eventually became Chief of Policy Planning. In 1973, Kuczynski joined the investment bank Kuhn, Loeb & Co. as a partner, and in 1975 he joined the International Finance Corporation as its Chief Economist. In 1977, he was appointed the President of Halco Mining, which was based in Pittsburgh.
In 1980, Terry was re-elected President of Peru, and Kuczynski returned to serve as the Minister of Energy and Mines. Kuczynski held this position for two years, and helped promote oil and gas exploration. Kuczynski resigned his post in 1982, and joined the private sector in the United States.
In 1983, Kuczynski was named co-chairman of First Boston, an investment bank based in New York City. In 1992, Kuczynski founded the Latin America Enterprise Fund in Miami, Florida, and invested in companies in Mexico, and Central and South America. From 1992 to 2001, Kuczynski was the Chief Executive Officer of the Latin America Enterprise Fund as well as Westfield Capital.
In 2000, Kuczynski returned to Peru and joined the presidential campaign of Alejandro Toledo Manrique. After Manrique won, Kuczynski was appointed Minister of Economy and Finance, and in 2005 was appointed Prime Minister of Peru.
Machiels noted that Peru’s economy is much stronger than that of its neighbors, and part of that can be attributed to a regulatory framework Kuczynski and his team put in place during his tenure in the government.
“It helped create a very stable environment for business,” Machiels said. “This allowed entrepreneurship to thrive, a middle class to spring up, and generated growth all across the country.”
In 2006, Kuczynski once again returned to the private sector, and founded Agua Limpia, a nonprofit that provides drinking water systems to communities in Peru. He also joined The Rohatyn Group as a partner and was the chairman of its Latin America Private Equity (LAPE) fund. He was also a Strategic Advisor to Pegasus Capital Advisors.
Kuczynski joined The Rohatyn Group in 2007 after being introduced to Nick Rohatyn, the CEO of The Rohatyn Group, by a shared colleague. The Rohatyn Group is an emerging markets asset-manager, and the LAPE fund specifically focuses on middle-market companies in a variety of sectors.
“We congratulate Pedro-Pablo Kuczynski on his election as President, and believe that he will do an extraordinary job for the people of Peru,” a spokesperson from The Rohatyn Group said.
Machiels noted that Pegasus Capital Advisors reached out to Kuczynski due to his strong business background, and asked him to advise the company on managing one of its assets, the largest fuel import terminal on the western coast of South America, located in Callao, Peru.
Kuczynski has authored numerous works including Latin American Debt, which was published in 1998, and After the Washington Consensus: Restarting Growth and Reform in Latin America, which he co-wrote with John Williamson GS '63 in 2003.
Williamson explained that he and Kuczynski wrote the book in order to help countries in Latin America, which had suffered through failed left-wing policies, by coming up with a set of policy and economic proposals to restart their economies. He added that he and Kuczynski sat together in the classroom, and described Kuczysnki as a good person.
Machiels highlighted Kuczynski’s clarity, economic experience, and down-to-earth style, and explained that Kuczynski represents all Peruvians.
“He’s the type of person who responds to your phone calls within a day, and he never feels too important that he should neglect someone,” Machiels said. “He’s a president for everyone.”
Image Courtesy BBC