Peru’s April election just keeps getting more interesting. It’s a real black and white choice for Peruvian voters, nothing complicated, quite simply a contest between the good dignified low-key free-market lady and the racist tinpot dictator wannabe. There’s also plenty of sideshows to keep it interesting. In fact, this Peruvian election is shaping up to be every bit as interesting as Mexico’s in July.

Hugo Chavez has gotten involved of course, as he has in Mexico’s, hurling loud public insults at the distinguished Lourdes Flores, while cavorting for the cameras and flashing his checkbook with the bad guy, Ollanta Humala.

Chavez’s actions have done Humala no favors, though. Shortly after a particularly vicious round of abuse against Flores, an episode that resulted in Peru recalling its ambassador from Caracas, Flores rose 10 points in the polls. The whole lift that Humala got from the Evo Morales election in Bolivia was dissipated by the one round of Chavez’s opening his mouth. His lead may also have dimmed on the example of the peaceful, orderly election of Michelle Bachelet in Chile. Flores went from dead-even in the polls to eight points ahead.

Now, with the wind at her back, she’s pulled out an even bigger campaign weapon, announcing that the great Hernando de Soto will lead her economic team.

Talk about awesome! De Soto is the world-class economist who leads the Institute for Liberty and Democracy who went to the shantytowns of Lima to find out what poor people really need. His result was the stunning book, ‘The Other Path‘ about the number of petty, expensive, unnecessary regulations it takes to start a business. De Soto’s next book was even more revolutionary, and I mean revolutionary: his realization that what poor people need are not fax machines, not Blockbuster video, not Nikes, not cellphones … but capital. And more scarily still, they were sitting right on top of it, in the shantys they lived in, but couldn’t capitalize, only because they lacked title deed as a means to access capital. His findings, published in ‘The Mystery of Capital,’ shook the world, one of the strongest and most original ideas to come out of the 20th century.

Peru, like Mexico, has made a hell of a lot of progress on title deed but hasn’t got to the finish line yet. De Soto says that oftentimes superficial understandings of the concept make the process incomplete. De Soto doesn’t have a superficial understanding of the concept.

There also are signs of good things happening in Peru. Trade is rising. U.S. store shelves are brimming with Made In Peru merchandise – I just saw that Whole Foods has a nice new Peruvian organic coffee – and when was the last time you … ever … saw Peruvian coffee? Target is selling Peruvian handicrafts that most definitely are not Made In China. Trader Joe’s has beefed up its Peruvian seafood selections. Trade with the U.S. and Peru is roaring, and better still, it will roar even more when a free trade pact is signed with Peru, something that is all but done. Peru is further along on the free trade pact route with the U.S., the world’s largest market, than any nation in Latin America. As for Humala, it sounds as though the reality of this is beginning to hit him. He had concilatory things to say today (last part of the article) about Peru’s trade with the United States.

In light of these good trends, and with the stellar introduction of Hernando de Soto, it looks like there’s going to be good news coming out of Peru.