WASHINGTON—Anyone looking for a sure bet on Polymarket should steer clear of Peru’s 2026 election. On April 12, Peruvians will head to the polls to pick their next president, and the field is wide open. Thirty-five candidates are competing in the race. The frontrunner is Keiko Fujimori of the right-wing Fuerza Popular party, but the race for the second spot in the June 6 runoff is wide open. A tight cluster of five candidates trails Fujimori, each polling between 4 and 8 percent. They range from right-wing contender Rafael López Aliaga to populists Carlos Álvarez and Ricardo Belmont, centrist Alfonso López Chau, and leftist Roberto Sánchez. With 27 percent of voters still undecided, any of these candidates could clinch the second runoff position.
But this degree of fragmentation is a symptom of a deeper problem in the country. A decade of institutional decay has eroded trust in Peru’s political class, and this erosion is affecting US interests in Peru and the wider region.
Since 2016, Peru has cycled through eight presidents, largely due to repeated impeachments driven by a powerful and unpopular Congress. At the same time, public trust has collapsed: Roughly 90 percent of Peruvians disapprove of Congress, and recent Latinobarómetro data show the highest level of dissatisfaction with democracy since the survey began in 1995: 50 percent are “not very satisfied” and 37 percent are “not at all satisfied” with it. The result is a fragmented political landscape in which no candidate commands meaningful support, and where governance itself has become increasingly fragile.
Countering China’s influence
This institutional weakness has also shaped Peru’s external relationships. For the United States, Peru’s institutional deterioration is perhaps the main barrier to achieving key strategic priorities: countering China’s influence, combating transnational crime, and securing critical mineral supply chains.
In recent years, Peru’s institutional weakness has facilitated China’s expansion into strategic sectors, including shipping and public utilities. As political instability consumed Lima, regulatory oversight weakened and high-stakes decisions advanced with limited scrutiny. At the Port of Chancay, majority-controlled by China’s COSCO, authorities approved the first and only “private port for public use” designation for a Peruvian port. This decision reduced regulatory leverage over a critical national asset, impeding oversight over prices and the quality of services at the Port of Chancay. A more capable and coordinated state might have imposed stricter conditions or subjected the project to broader strategic review.
A similar dynamic unfolded in the electricity sector. Through separate acquisitions of Peruvian electric utility Luz del Sur and the distribution assets of Enel Distribución Perú (formerly a unit of the Italian conglomerate Enel), Chinese state-owned firms came to control all of Lima’s electricity distribution, creating a natural monopoly. These transactions were enabled by a fragmented political environment that lacked the capacity to assess long-term strategic risks. In both cases, institutional weakness, not just Chinese ambition, shaped the outcome.
Recognizing a growing liability
Peru’s erosion of governance has allowed illegal gold mining to expand, creating a growing challenge for US security policy. Peru is Latin America’s largest gold exporter. Yet in 2024, an estimated $4.8 billion of its gold exports—roughly 44 percent—were illegal, representing a sharp rise over the past decade. In addition to being a significant environmental problem, illegal mining has become a key mechanism for transnational criminal organizations to launder illicit proceeds through formal supply chains, generating high returns at relatively low risk.
Rather than curbing this activity, Peru’s political system has enabled it. Several congressional blocs include representatives linked to illegal mining interests and lawmakers have repeatedly extended temporary legal protections that shield illegal operators from prosecution. This permissiveness reflects a broader failure of state capacity and political incentives. For the Trump administration, which is prioritizing the fight against transnational criminal organizations across the hemisphere, Peru’s inability to confront illegal gold mining is a growing liability.
Sustaining coordination
Peru’s institutional instability is also complicating its potential role in US critical-mineral supply chains. The country is already a major producer of copper and other strategic resources, but attracting the large-scale, long-term investment needed to sustain and expand this output depends on policy continuity and regulatory predictability. Both are in short supply.
Since 2021, Peru has cycled through 173 ministers. This high level of turnover makes sustained coordination with investors nearly impossible. The impact is already visible. According to proprietary fDi Markets data, average annual US foreign direct investment in Peru fell 73 percent from $919 million between 2003 and 2015 to just $241 million between 2016 and 2025. While commodity prices play a role, the broader pattern is clear: As instability rises, investment falls. For Washington, this directly complicates efforts to build resilient, diversified supply chains in the Western Hemisphere.
Fostering institutional recovery
As US policymakers and companies look ahead to Peru’s election, they should resist the temptation to focus on any individual candidate as the key to improving bilateral relations. The central challenge is structural. Without stronger institutions, no administration, regardless of ideology, will be able to deliver the stability, regulatory coherence, or strategic alignment that US interests require.
At the same time, the election of a newly legitimized president offers an opportunity for Peru’s institutional recovery. And supporting Peru’s institutional recovery should be Washington’s strategic priority. That means expanding the use of targeted tools, such as Global Magnitsky sanctions, against Peruvian officials credibly implicated in corruption and illicit economic activity, including those linked to illegal mining networks. It also means deepening engagement with Peru’s economic and foreign policy institutions to support investment frameworks that reduce risk and encourage long-term US participation in strategic sectors.