	Political Background

President Ollanta Humala, of the left-wing Peruvian Nationalist party (PNP) and the Gana Peru coalit ion, is in the last year of his five-year term. Because none of the presidential candidates won an absolute majority, a runoff was held June 5. President-elect Pedro Pablo Kuczynski is to take office on July 28 for a five-year term. National Elections

Elections for the presidency and the 130-seat unicameral congress took place on April 10, 2016. Because no presidential candidate garnered 50% plus one vote, Peru held a run-off election between the top two contenders: Keiko Fujimori, aged 41, who won 40% of the vote, and Pedro Pablo Kuczynski, 77, who won 21% of the vote in the first round. Fujimori, of the conservative, populist Fuerza Popular (Popular Force) party, is a former member of congress (2006-2011) and daughter of discredited former president Alberto Fujimori, who is currently serving a 25-year jail sentence for crimes against humanity and corruption. As the younger Fujimori, remains strongly linked to her father and his legacy, thousands of Peruvians protested in the streets against her, shouting, "Never again." Economic Background

Peru's economy has been one of the strongest in Latin America since 2001. Peru's economic growth in 2016 could be negatively affected by the current El Niño weather pattern hitting the country, however. Humala's economic strategy has been to maintain free-market policies while also working to narrow the wide economic distribution gap and eliminate the social exclusion of Peru's poor, mostly indigenous population. Deep social divides over how to pursue this development have continued to undercut political stability in Peru, however, and have thwarted some of Humala's plans. Conflicts over Natural Resources

Social unrest and debate over exploitation of natural resources have long been and likely will remain major challenges for any Peruvian government. The more serious disputes have involved the mining industry and the rights of indigenous peoples in those areas where mining exists or where mining interests intend to operate. Humala has found it politically difficult to balance his stated desire to help the poor and indigenous with his effort to encourage investment by the business sector. U.S. Relations with Peru

Peru and the United States have a strong and cooperative relationship. The United States supports the strengthening of Peru's democratic institutions and its respect for human rights. The two countries also cooperate on environmental protection and counternarcotics efforts. In the economic realm, the United States supports bilateral trade relations and Peru's further integration into the world economy. Counternarcotics Efforts

A dominant theme in relations between the United States and Peru is the effort to stem the flow of illegal drugs, mostly cocaine, from Peru. Trade Issues35

The United States and Peru have a bilateral free trade agreement (FTA) that entered into force on February 1, 2009. In addition, both countries are party to the Trans-Pacific Partnership agreement (TPP), a proposed FTA with 10 other countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Singapore, and Vietnam.
This report provides an overview of Peru's political, economic, and security conditions and of U.S.-Peruvian relations.
As President Ollanta Humala is nearing the end of his five-year term, Peru held national elections for the presidency and the 130-seat unicameral legislature on April 10, 2016. Because none of the presidential candidates won an absolute majority, a runoff was held June 5 between two center-right candidates. Economist Pedro Pablo Kuczynski defeated former congresswoman Keiko Fujimori by less than 1% of the vote, 50.12% to 49.88%.
For months, Fujimori had maintained a strong lead in what began as a field of 18 candidates. However, there is strong sentiment against her candidacy, as well. Both the strong support for and the opposition to Fujimori stem mostly from the legacy of her father, Alberto Fujimori, whose harsh security policy helped to squash the Sendero Luminoso terrorist group but also entailed gross violations of human rights. The elder Fujimori is serving a 25-year prison sentence in Peru for crimes against humanity and corruption. In the first round, Keiko Fujimori won 40% of the vote and Kuczynski won 21% of the vote. Kuczynski pulled ahead in the final round in part because of support from anti-Fujimori voters, including leftist Verónika Mendoza, who had placed third in the first round. The new president and congress are to assume office on July 28, 2016, for five-year terms.
Since 2001, Peru's economy has been one of the strongest in Latin America. President Humala's economic strategy has been to maintain free-market policies while working to narrow the wide economic distribution gap and eliminate the social exclusion of Peru's poor, mostly indigenous population. Deep social divides over how to pursue this aim have continued to undercut political stability in Peru. Social unrest and debate over exploitation of natural resources has long been and will likely remain a major challenge for any Peruvian government. The more serious disputes have involved the mining industry and the rights of indigenous peoples in those areas where mining exists or where mining interests intend to operate. Humala has found it politically difficult to balance his stated desire to help the poor and indigenous with his effort to encourage investment by the business sector, especially the extractive industry. In addition, some observers project that the current El Niño weather pattern hitting Peru could hurt Peru's economic growth.
Peru and the United States have a strong and cooperative relationship. Several issues in U.S.-Peruvian relations are likely to be considered in decisions by Congress and the Administration on future aid to and cooperation with Peru. The United States supports the strengthening of Peru's democratic institutions, counternarcotics efforts, security and respect for human rights, and environmental protection. A dominant theme in bilateral relations is the effort to stem the flow of illegal drugs, mostly cocaine, between the two countries. In the economic realm, the United States supports bilateral trade relations and Peru's further integration into the world economy. A bilateral free trade agreement (FTA) between the United States and Peru entered into force on February 1, 2009. In addition, both countries are parties to the Trans-Pacific Partnership (TPP) agreement, a proposed FTA with 10 other countries.