Pedro Castillo’s first decisions as president of Peru have scared the markets. The Lima Stock Exchange has fallen more than 6% and the dollar exceeds four soles for the first time in history. Castillo on Thursday named a Marxist politician with a bigotry character as prime minister. His election generated a trail of criticism that culminated in the resignation of Pedro Francke as Minister of Economy, the most solid man in the Castillo government, the one who had reassured companies and embassies about the direction the Peruvian economy was going to take. The combination of both created a black day for investors.
Change of Government in Peru
Francke’s fright made the Economy portfolio, the most important position after that of the president, remain vacant. Castillo has not been able to find at the last minute someone of prestige who would like to occupy the Justice portfolio. The left-wing groups that supported him during the second round have felt betrayed by his first appointment. The appointment of Guido Bellido, 41, dashed hopes that he would elect someone moderate and conciliatory to a key Cabinet position. Criticism has been unanimous among political analysts. “The calamitous first day of Pedro Castillo ends”, Gonzalo Banda wrote, from the Catholic University of Arequipa. “President Castillo lived through intense cross pressures, and he did not know how to resolve them,” said Martín Tanaka, a political scientist. The newspaper Trade has dawned with this headline: “Unacceptable and shameful.” The Republic has not been left behind: “No, Mr. President.”
Castillo’s decision, on the other hand, did satisfy the harshest and most reactionary wing of his environment, that of the members of Peru Libre, the party under whose initials the rural school teacher ran for election. Vladimir Cerrón, the leader of that regional formation, an avowed Marxist-Leninist who speaks in public conferences of the need for the left to find ways to stay in power, he congratulated himself on this “brand new council of ministers and its premiere [primer ministro]”. Cerrón does not have any position in the Executive, in part because the law does not allow it since he was convicted of a corruption case when he was governor of a region of Peru. However, putting Bellido in that position is a victory for him, as he will be able to influence Castillo through an intermediary. Cerrón and his allies defend themselves from the criticism by assuring that it comes from “los Caviares”, as they disparagingly call the moderate left.
The president, after appointing almost all his ministers on Thursday night, went home to Lima where he sleeps and holds meetings. After midnight, Francke arrived there. He was inside the house for two hours. The economist, according to several sources, has set conditions for him to accept the position again. That would be a new turn in the development of events. Castillo’s presidency is counted on hectic days. For now he does not know calm.
In the midst of this crisis, Castillo has attended two scheduled activities, an evangelical ceremony and the military parade on the day of the national holidays. Halfway through the parade, an earthquake occurred in the north of the country, and he traveled there: it is a region that has not recovered from natural disasters that occurred between 2016 and 2017. He has not given any news about the formation of his Cabinet, and this it has increased uncertainty in the markets and concern among analysts.