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Undoubtedly, Peru's headline event last year was the closely watched election of President Ollanta Humala. "It's kind of crazy what has happened here," says one attorney on the eve of the elections....

Undoubtedly, Peru's headline event last year was the closely watched election of President Ollanta Humala. "It's kind of crazy what has happened here," says one attorney on the eve of the elections. "We've had two or three months where the political elections captured everyone's attention." With two polar-opposite candidates jockeying in a close race, the market entered into a holding pattern as investors waited for results. "People are quite terrified right now," one partner says in the heat of the campaign season.

For most of the election, polls could not predict a victor, inflaming market uncertainty due to the stark contrast of the candidates. "This is our nightmare right now," says one partner, leading up to the elections. "We have two candidates and one is . . . a continuation of Chavez. It will bring the country down." His emotive response to Humala's chances were mirrored in the market as the Peruvian stock dropped when the leftist pulled ahead and climbed when Fujimori appeared on top the polls.

Confident that conservative candidate Keiko Fujimori would win, many in the legal community believed that business as usual would resume and the neoliberal policies that guided Peru's economic ascendancy would continue. But the election of former Peruvian President Alberto Fujimori's daughter was not to be, and Peruvian stocks dropped 12.5% after Humala defeated the conservative candidate.

Change will likely come as a shock to the steady development of Peru's economic model. "One of the strengths of the Peruvian economy is how little it changes," says one partner. "Over the last 20 years, we've been modifying and improving it, but always in the same direction."

Practitioners mentioned that a drastic transformation of the economy was unlikely and pointed out that Humala will need to negotiate amendments with Congress. But higher taxes, along with a more activist government, are likely. Humala's economic advisor already signalled an intention to renegotiate parts of the eagerly-anticipated integration of the stock exchanges of Peru, Colombia, and Chile, a move that formed Latin America's second-largest stock market. Furthermore, Humala will need to dampen down southern Peru's civil uprisings that flared due to the tight electoral spread.

The question,, moving forward, will be whether the newly appointed leftist will follow the moderation of Brazil's Lula or the heavy-handed socialism of Venezuela's Chavez. Many in the legal community are hoping for the former, but remain positive about the future of the Andean nation regardless. "The Peruvian economic model will prevail," declares one attorney.