Peru’s Castillo tries to right stumbling government with new shake-up

Six months in office, four prime ministers, three foreign ministers, two finance ministers and one unanswered question: how long can Peru’s leftwing president Pedro Castillo remain in power?

Ever since he was sworn in last July as the most unlikely leader in the country’s history, Castillo — a rural primary school teacher with no previous government experience — has led an administration in constant flux.

He has made 20 ministerial changes — an average of nearly one a week. A foreign minister quit after being outed as an apologist for the Maoist guerrilla group Shining Path; an interior minister was axed for hosting a party in breach of coronavirus restrictions; a defence minister quit in a scandal over the promotion of officers in the armed forces; this week, Castillo’s third prime minister resigned after just four days amid allegations he physically assaulted his wife and daughter.

The upheaval has not been limited to ministries. Resignations and sackings have occurred in the police and armed forces too. In November, prosecutors found $20,000 stashed in a bathroom inside the presidential palace. One of Castillo’s top aides said the money was his legitimate savings but quit anyway.

“Back in July we all had the impression this was going to be a very improvised government, totally lacking in experience,” said Oswaldo Molina, executive director of Peruvian think-tank Redes. “Unfortunately, it’s exceeded our worst expectations.”

Women protest in Lima against the then-prime minister Héctor Velar, who has been accused of domestic violence.
Women protest in Lima on Friday against prime minister Héctor Velar, who has been accused of domestic violence. He resigned on Saturday © REUTERS

Castillo has been widely criticised for flip-flopping on policy and for making statements he later had to retract or qualify. He recently suggested Peru might cede territory to Bolivia to give the landlocked nation access to the sea. He then said he had no such intention.

“He’s not prepared for the job and he doesn’t have the leadership skills needed for it,” said Jorge Nieto, a former defence minister and leader of a small centrist political party.

In response, Castillo says he is the victim of a rightwing plot to oust him and that a powerful, conservative Lima-based elite have never given him a chance to govern. In an address to the nation on Friday he urged legislators to consider more than 20 pieces of draft law his administration has sent to congress in recent months.

The latest chapter in Peru’s turmoil began last month when the interior minister complained of corruption in the police force and asked the president to help him tackle it. The minister said support was not forthcoming so he quit.

That prompted more departures, including that of prime minister Mirtha Vásquez, who in her resignation letter said the “doubts and indecision” that characterised Castillo’s leadership were “unacceptable”.

Castillo then announced the third cabinet reshuffle of his tenure, changing more than half the ministers. He named Héctor Velar, a little-known congressman who has flitted between political parties and has no ministerial experience, as his new prime minister.

Hours later, Peruvian media revealed that five years ago Velar’s wife and daughter reported him to the police for assault and that a judge placed a restraining order on him.

Velar denied the charges but, under intense pressure, quit on Saturday.

“[Castillo] insists on naming people who have been accused of crimes, and people who have no experience whatsoever in the positions he’s appointing them to,” said Alonso Segura, a former Peruvian economy minister and professor at the Pontifical Catholic University in Lima.

The president still has to submit his rejigged cabinet to congress for a vote of confidence. Castillo will probably have the support of Free Perú, the Marxist party that propelled him to power last year and is the largest party in congress with 32 of the 130 seats. Other parties have yet to make their positions clear.

Ultimately, a reasonable chance exists that legislators will acquiesce and give Castillo the votes he needs, even if they dislike his choice of ministers.

That is because under Peru’s peculiar political system, congress has only two “silver bullets” — two opportunities to defy the president in votes of confidence during one five-year term. If he is defeated in both, the president has the right to dissolve congress and rule by decree. Legislators therefore have to think carefully before voting against the executive.

“Congress might decide to keep its silver bullets in reserve for now,” Segura said.

The other option Castillo’s opponents have is to try to impeach him, most likely on the vague grounds of “moral incapacity”. The Peruvian constitution allows for that and it has been used against previous presidents.

But it will not be easy. They need a two-thirds majority in congress — 87 seats. They tried to oust him in December and failed. Nevertheless, in the light of this week’s events, some parties have vowed to try again.

Analysts say the most likely short-term scenario is stalemate: congress will reluctantly approve Castillo’s new cabinet and the opposition will fail in any push to oust him. He will continue in office and will increasingly be co-opted by different lobbies and interest groups.

“It’s a sad film,” said Rodolfo Rojas, director of Sequoia, a Lima-based political risk consultancy. “You have a president who has proven himself to be inept, a cabinet that doesn’t work properly, a government that doesn’t do anything and a congress that can’t impeach him.”

Barring a dramatic event such as the president’s resignation there is no clear way out of the crisis. Even if Castillo is impeached his vice-president would take over. While she might prove a more effective leader she could struggle to garner support in congress. Last month, she was kicked out of Free Perú for criticising its hardline Marxist leader.

Analysts say the one silver lining from the past week is the appointment of Oscar Graham as the new finance minister. He is a technocrat with years of experience at both the ministry and the central bank.

The currency, the sol, weakened only slightly this week and has since recovered. Business leaders say they hope Graham’s appointment will ensure Peru’s post-pandemic economic recovery remains on track.

Castillo still had the support of a third of the country in the most recent poll carried out by Ipsos in early January, although the head of the polling company in Peru says his rating is “probably worse now”.

The president came to power with an alluring promise of “no more poor people in a rich country”. It was a message of hope for millions of poor voters in rural Andean communities, some of whom still regard Castillo as a good man trying to do a tough job.

But analysts say the constant upheaval in government has stymied any attempt to bring about the social and economic changes that Castillo promised and Peru needs.

“This is no longer about ideology and left and right, it’s about different interest groups within government, some of them very small and some of them corrupt,” said Paula Muñoz, a political scientist at the University of the Pacific in Lima.

“There is no one governing and no one co-ordinating,” she said. “There is no direction.”

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