Pedro Castillo celebrates one year in power in the midst of a political crisis

LIMA – Leftist President Pedro Castillo celebrates one year in power on Thursday, July 28. Castillo, a former rural teacher, is going through a complex political landscape according to opinion polls that show that he has a disapproval of around 80%, a figure not seen in any of his predecessors in the last 20 years.

“It is a government that is very complicated in terms of fighting corruption,” political scientist José Alejandro Godoy told the voice of america. “After a year in office, we have a ruler who has five open tax investigations that put him in a delicate situation,” he added.

The Public Ministry is investigating Castillo for five cases, the first of which has to do with irregular promotions in the Armed Forces and the National Police in November of last year.

Also for an alleged favoring of a company to achieve a contract with the Peruvian state oil company. Later, for plagiarism in his master’s thesis and for the bidding for a bridge in the country’s jungle.

And most recently, for an “alleged cover-up” to avoid catching fugitives from his government, including Bruno Pacheco, who was Castillo’s personal secretary.

Pacheco, who surrendered to justice after being on the run for more than 100 days, is a key man in the investigations against the president, and confessed that he gave the order to facilitate his escape in March, when he was sentenced to preventive detention for three years. . He also said that there was a network of bribes to promote members of the Police, according to the authorities.

In parallel to the corruption scandals, the Castillo administration has appointed more than 60 ministers so far in government.

“There have been no major changes or reforms that Castillo promised in the campaign. There has been no clear direction where this government wants to go. There is a lack of direction and leadership from the president,” said Godoy, professor at the Pontifical Catholic University of Peru.

Castillo appointed congressman Guido Bellido, representative of the Free Peru Party, which brought the president to power, as head of the cabinet of ministers. He then opted for Mirtha Vásquez, a progressive lawyer who led Parliament in 2020; For a brief period, he had Congressman Héctor Valer, who resigned due to allegations of family violence, and finally placed his trust in the jurist Aníbal Torres, who served as Minister of Justice.

“The president is alone. He no longer has as many allies when he came to government. The leftist coalition that initially supported him has split. The progressive left, closer to Veronika Mendoza, and the radical faction, to Vladimir Cerrón, have different priorities,” Godoy said about the alliances that Castillo would have to hold on to the presidency.

The president will send a message to the nation this Thursday, from which “very little is expected,” Godoy said.

“He is a president who does not have many achievements to display because he has dedicated himself to surviving in power,” he said.

Godoy mentions that Castillo could perhaps mention as some achievements that, during his administration, the vaccination process against the coronavirus was accelerated to prevent a third wave of the pandemic from having negative effects. In addition, he adds, that he gave economic aid to 13.5 million Peruvians and reactivated the tourist activity so badly hit in the last two years.

For their part, opposition congressmen have pointed out in recent days that there are two ways to end the political crisis: a vacancy due to moral incapacity or a political trial of President Castillo.

Economic crisis

According to the Central Reserve Bank of Peru, the economy of the South American country would close this year with 2.5% growth. This figure, the monetary entity predicted, would be even much lower in 2023.

The perception of regression is already felt in the population, according to a survey by the consultancy Activa, which revealed that 90% of Peruvians consider that the country is stagnant or regressing in all aspects: political, economic and social.

The economist Mercedes Aráoz, minister in the second government of Alan García (2006-2011) and vice president in the administration of Pedro Pablo Kuczynski (2016-2018), maintains that Pedro Castillo’s management has had an anti-business discourse that motivated the lack of private investment and has created the perception that Peru does not offer legal certainty for companies.

The former parliamentarian said that the government recently published a rule that encourages the creation of more labor unions and the viability of strikes without any type of restriction.

“It is a clear anti-work rule. Practically, strikes can be called for any reason and that will affect the productivity of the companies that come to invest in the country”, he pointed out.

According to data from the National Institute of Statistics and Informatics (INEI), Peruvians with formal employment add up to 3.9 million in the country of 33 million inhabitants. The population with informal employment reaches 9.5 million. In addition, 90% of the companies are micro-enterprises. Regarding this scenario, Aráoz points out that the government has not dedicated itself to generating jobs to reduce the informality gap that has affected the country for decades.

Last May, inflation reached 8.7% nationwide, according to the INEI. In this regard, Aráoz assures that the correct measures have not been taken to reduce this phenomenon that has been unleashed at a global level. Cutting taxes on food and gasoline hasn’t helped either, he said.

Aráoz said that Economy Minister Óscar Graham “has allowed several populist initiatives to pass, such as the withdrawal of private funds and the increase in the minimum wage. Let’s say that he has been a goalkeeper who has scored several goals,” he concluded.

Unkept promises

The former Minister of Development and Social Inclusion, Carolina Trivelli, maintains that the Castillo government has maintained all the progress made in social programs despite the political turbulence that has been seen in this first year of administration.

However, there have been no improvements in the programs, which continue as they were created 10 years ago, he said.

“That could be seen as a sign of institutionality and continuity, but it is also the opposite. There has been neither the time nor the interest of the political forces to carry out innovation and adaptation processes because the situation of vulnerability of Peruvians is different from that of 10 years ago”, he said.

Trivelli indicated that the government should take some measures to face the food shortage, such as granting a food voucher for those who are enrolled in social programs, helping shelters and providing more vouchers that cover the economic needs of the most vulnerable people.

According to an analysis by the consulting firm Macroconsult, the monetary poverty rate would be 25% in Peru. This percentage represents an increase compared to what was registered in 2019 when it was 20.2%.

The assessment made by the consultant in question about the poverty rate is that the country’s economic rebound at the end of last year has not been enough to return the spending capacity to households and allow more people to get out of poverty.

Macroconsult estimated that poverty, at the end of Pedro Castillo’s mandate, would be 29% in 2026. Nine points more than in the last ten years.

Another of Castillo’s promises was to convene a Constituent Assembly to draft a new Constitution, unify the public health system, develop a second agrarian reform and protect the quality of the university system, but they have not yet been carried out.

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