Peru's Humala Proves He's No Chávez

On June 6, 2011, the Lima Stock Exchange fell 12 percent, its biggest drop ever, as investors reacted to the election of Ollanta Humala as president the day before. Affluent Peruvians feared the ex-officer and one-time ally of Hugo Chávez would take Peru down the same path of nationalizations as practiced in Venezuela.

A year has passed. Peru has the fastest-growing economy in Latin America. The stock market is up almost 8 percent. Foreign investment is pouring in. What happened to the next Chávez? Even before his election, Humala had shelved his most radical proposals, such as obliging private pension holders to pay into a state retirement plan or rewriting the constitution to boost the role of the state in the economy. Humala has dispelled most investors’ doubts about his pragmatism and commitment to keeping Peru’s $176 billion economy open to trade and investment, says Raul Salazar, a partner at Lima-based consulting firm Macroconsult.