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¡¡¡¡Financial markets were on tenterhooks as Peruvians voted on Sunday in one of the most polarised elections in the country¡¯s history, with private polls showing the candidates neck and neck.

¡¡¡¡The election pits Pedro Castillo, a rural primary school teacher turned hard-left populist, against Keiko Fujimori, the widely disliked daughter of Peru¡¯s authoritarian former president Alberto Fujimori. The election takes place during a time of historic challenges for Peru, which is struggling against one of the world¡¯s worst coronavirus pandemics, corruption, inequality, poverty and political infighting.

¡¡¡¡The prospect of a Castillo victory has sparked panic and capital flight among the Peruvian elite. According to Scotiabank, the currency, the sol, has depreciated further against the dollar than any other in the world since the first round of voting in April, when Castillo first emerged. Dollar-sol transactions have jumped by about 20 per cent in the past month.

¡¡¡¡Private polls circulating on social media show the contest neck and neck.?Surveys initially gave Castillo an ample lead but now suggest Fujimori has closed the gap.

¡¡¡¡¡°For Peru¡¯s sake I hope it¡¯s true,¡± one woman told the Financial Times after voting in the upmarket neighbourhood of Miraflores on a grey, misty morning in the Peruvian capital. ¡°If not, we¡¯re lost.¡±

¡¡¡¡Castillo¡¯s party, Free Peru, is led by a Marxist advocating widespread nationalisation, higher taxes, a new constitution and a curb on imports in one of the world¡¯s biggest producers of copper, zinc and precious metals.


¡¡¡¡Pedro Castillo waves to supporters on his arrival to the city of Tacabamba, Cajamarca region, north east of Peru, on Saturday ? Ernesto Benavides/AFP via Getty

¡¡¡¡¡°The worst outcome would be if no one wins convincingly,¡± said Paula Mu?oz, a political scientist at the University of the Pacific in Lima. ¡°The loser would likely cry fraud and it could spark unrest.¡±

¡¡¡¡Last week a group of retired military officers said they were deeply concerned about ¡°the radicalisation of a large part of our population¡±. The defence ministry has reported civilians in some parts of the country ¡°passing themselves off as members of the Peruvian army¡± and in well-to-do areas of Lima people have stockpiled food in anticipation of post-election shortages and possible violence. Heavily armed soldiers were standing outside polling stations on Sunday morning.

¡¡¡¡The massacre of 16 people in a remote area of Peru on May 23 ¡ª an attack blamed on remnants of Peru¡¯s Maoist guerrilla group Shining Path ¡ª has added to the tension.

¡¡¡¡¡°The atmosphere has been poisonous for weeks,¡± said Enrique Grau, a 38-year-old shopkeeper. ¡°It speaks poorly of us as a people that we can¡¯t do better than this.¡±

¡¡¡¡Since winning the first round with just 18.9 per cent, Castillo has been rousing people in neglected, dirt-poor villages in the Andes with a simple but powerful message: ¡°No more poor people in a rich country¡±.

¡¡¡¡At his closing rally on Thursday, he appeared on a balcony in Lima¡¯s historic centre wearing the giant straw hat and waving the large inflatable yellow pencil that have characterised his campaign. The hat marks him out as a man of the countryside while the pencil is his symbol of education.


¡¡¡¡Soldiers stand near voting booths being set up a day ahead of the run-off elections on Saturday ? Sebastian Castaneda/Reuters

¡¡¡¡¡°I bring you greetings from those who have no voice, those who are anonymous, those who are considered third or fourth class citizens,¡± he shouted to thousands of red-flag-waving supporters in the streets below.

¡¡¡¡¡°This is what we¡¯ve been waiting for, for decades,¡± said 47-year-old housewife Mariela Rojas, yelling above the din. ¡°Finally we have a candidate who understands us.¡±

¡¡¡¡Fujimori¡¯s closing rally on the outskirts of Lima was far more subdued. Her bid to become the first female president in Peru¡¯s history has been complicated by corruption allegations that she denies. Prosecutors accuse her of being the head of a criminal organisation and say she should be jailed for 30 years.

¡¡¡¡Many middle-class Peruvians say that while they dislike and distrust her they will vote for her anyway to keep Castillo from power. They accuse him and his supporters of being communists and, in some case, terrorists.

¡¡¡¡¡°I¡¯ll vote for Keiko because I don¡¯t want my country to become the next Venezuela or Cuba,¡± said Mar¨ªa Alejandra Lozada, a 24-year-old law student who came out to greet Fujimori on the campaign trail in the northern city of Trujillo.


¡¡¡¡Keiko Fujimori, accompanied by her family has breakfast at San Juan de Lurigancho district, starting her activities on the presidential election run-off day in Lima on Sunday ? Luka Gonzales/AFP via Getty

¡¡¡¡The atmosphere has deteriorated as the vote has drawn near. In the final televised debate, Fujimori produced a large rock which she said had been thrown at her entourage during campaigning in the Andes and christened Castillo ¡°Pedro the stone-thrower¡±.

¡¡¡¡Both sides have suggested that the other might steal the election, which has played out against the awful backdrop of the pandemic. This week Peru revised its death toll upwards from fewer than 70,000 to 180,000, giving it the highest death toll per capita in the world. A strict lockdown last year plunged the economy into a deep recession but failed to curb the spread of the virus, fuelling indignation. Many voters were wearing plastic face shields as they went to vote.

¡¡¡¡While many Peruvians are repelled by both candidates and might wish to stay at home given the pandemic, voting is obligatory in the country of 32m.

¡¡¡¡¡°I¡¯ll rip up my ballot paper,¡± one woman told the Financial Times on the eve of voting. ¡°I just want to get this farce out of the way and get home safely.¡±