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President Pedro Castillo during the appointment of the new Prime Minister, Aníbal Torres.
New president falls victim to Peru’s messy politics
A series of scandals and resignations have forced Peruvian President Pedro Castillo to shuffle his cabinet four times in his first six months in office. Lawmakers have already tried to impeach him once. Though his latest cabinet shuffle could bring some respite, Castillo is not out of the woods yet — and may never be. Why all the turmoil? We asked Eurasia Group analyst Yael Sternberg.
Why is Castillo having so much trouble?
The most obvious reasons are that Castillo lacks experience, a clear ideology, and the ability to attract and retain talent. A former schoolteacher and union leader, Castillo was only loosely associated with his Peru Libre party until last year’s election, and his platform was written not by him but rather by Marxist party leader Vladimir Cerron. Castillo’s candidacy originated as somewhat of a compromise after the National Jury of Elections ruled Cerron couldn’t run because of a past corruption conviction. Because of this, Castillo’s success in the first round surprised many people, probably even Peru Libre party leaders, and it was not until the lead-up to the second round that Castillo started to put together a plan and team. After beating Keiko Fujimori, a three-time presidential candidate and daughter of imprisoned former president Alberto Fujimori, by a narrow margin in a very polarized race, we knew Castillo would struggle to chart a policy course that could please all the necessary stakeholders. So far, he has found himself at odds with both the more radical faction of his own party, as well as with business leaders and investors, all while trying to survive a standoff with a confrontational congress where he lacks a majority.
What might happen next?
Newly appointed Prime Minister Anibal Torres — whose predecessor resigned over domestic abuse allegations — now has 30 days to appear before congress and request a vote of confidence. Though there are several parties that have threatened to veto Castillo’s cabinets in the past, lawmakers ultimately provided them with votes of confidence. They will likely do so again in this case to avoid triggering a series of events that could lead to them losing their jobs. According to the constitution, the president can dissolve congress if it has denied the cabinet a vote of confidence twice, as occurred under former president Martin Vizcarra in 2019. If this were to occur, not only would protests surely emerge, but a new electoral field would not solve the problems facing this congress or administration, as a new body would be formed primarily by newcomers to politics without experience, strong affiliations to their parties, or strong ideological commitments.
How about impeachment?
A restive congress will probably continue to look for ways to obstruct and oust Castillo. Yet the path of impeachment also presents risks for lawmakers. If they try again and succeed in marshaling enough votes to impeach the president, Vice President Dina Boluarte will take office. But then if she were to resign or be ousted too, the president of congress would take office and need to call snap elections. The challenge here is that the constitution does not specify whether these elections would apply to the presidency only, or if they would include legislative elections, creating yet another risk of lawmakers losing their jobs. Boluarte seems to be backing Castillo at this point by suggesting she would go too if he is ousted, but there’s always a danger she could reach a deal with lawmakers not to resign if they impeach him and she becomes president.
Peru has had five presidents in five years – what accounts for this broader instability?
It hasn’t been an easy decade for Peruvians. In addition to political turmoil, the country has had the highest number of Covid-19 deaths per capita at various points and been scarred by continuous corruption scandals. The relationship between the presidency and congress has devolved into a protracted standoff, given the permanent threat that each side could oust the other at any moment. Changes of administration do nothing to relieve the tensions because of a serious fragmentation of the country’s party system. The big problem in Peruvian politics is that there are no parties really left, only groups who share some ideas and goals for the moment. This is part of the reason why it has been so difficult for Castillo and other party leaders to build coalitions in congress and why the last election was so difficult to predict.
Are there parallels between the situation in Peru and in other countries of the region?
Yes. Costa Rica’s first-round presidential election earlier this month saw an unprecedented number of candidates registered, which contributed to massive voter indecisiveness. The political situation there is by no means the same as in Peru, especially given Costa Rica’s peaceful and robust democratic history. Yet party fragmentation and abandonment are real risks in the region, along with voter discontent and incumbents being punished in the polls.
Yael Sternberg is a researcher on the Latin America desk at Eurasia Group.
A protester wearing a protective mask stands in front of a banner during the demonstration. Thousands of people marched through Central London in protest of what the demonstrators call Ethiopia's and Eritrea's "genocidal war" on the region of Tigray.
What we’re watching: Tigray ceasefire, Peruvians protest endless election, North Koreans cry for Kim, Tour crash suspect vanishes
Ceasefire in Ethiopia: In a stunning about-face, Ethiopian forces on Monday withdrew entirely from the Tigrayan capital of Mekelle, and declared an immediate, unilateral ceasefire. War has raged in Tigray since November, when a dispute over election dates ignited long-simmering tensions between Tigrayan militants and Ethiopian government forces. Since then Ethiopian government troops, aided by soldiers from neighboring Eritrea as well as irregulars from other parts of Ethiopia, have waged a brutal campaign in the region — pushing it to the brink of famine and, human rights watchdogs say, committing war crimes. In recent weeks, Tigrayan forces had mounted a forceful counterattack, regaining control over vast swaths of the region. The current ceasefire is meant to last until the end of the planting season, in September. Can the central government and the local Tigrayan leadership reach a more durable political agreement before then? After eight months of war, there is little trust and lots of bad blood.
Election protests in Peru: Elections aren't over until they're over. And even then, they aren't always over. According to the vote count in Peru's presidential election, left-wing schoolteacher Pedro Castillo defeated right-winger Keiko Fujimori by a margin of just 44,000 votes out of a total 19 million cast — that's a margin of about a tenth of a percentage point. International observers say the count is credible, but Fujimori, daughter of former strongman Alberto, has alleged fraud and demanded a recount of thousands of ballots. Although she hasn't supplied hard evidence, electoral authorities have said they'll take a second look. But that process itself has been marred by the resignation of one of the recount justices. All of which is to say: tensions are running high in the deeply polarized Andean nation, which is struggling with one of the worst COVID tolls in the world and recently had three presidents in the space of a week. Over the weekend supporters of both candidates took to the streets in the capital of Lima. With just weeks until the July 28 inauguration, tinderboxes come to mind as we watch the latest.
North Korea cries for Kim: As North Korean TV tells it, citizens of the totalitarian police state are in tears over recent pictures that showed their Dear Leader, Kim Jong Un, looking unusually thin and pallid. (Narrator: "unusually" thin for the 37-year old 5-foot-8 Kim means he seems to weigh a mere 260 pounds now rather than his previous 300, according to experts). The images had surfaced amid reports of growing food shortages, as the nuclear-armed autocracy grapples with sanctions over its nuclear program and border closures due to the pandemic. Given the opacity of North Korea and the lack of any clear successor, there is often speculation about Kim's health. Is the paunchy, hard-drinking, chainsmoker turning over a new leaf diet-wise? Or is he suffering a health issue that could raise questions about the future of the country? Here's a handkerchief if you too are welling up just reading about it.
A moron on the lam: What we know is this — a roadside spectator caused a massive crash during the opening moments of the Tour de France when she waved her "hi grandma" sign right into the path of the oncoming cyclists. One racer hit the sign and went down, taking dozens with him. But here's what we don't know — where is she now? Race authorities want to sue her, but reports say the woman, believed to be German, has fled the country in a "breakaway" of her own. Is this going to become an EU extradition crisis? An Interpol intrigue? We don't know, but between this and those chainsaw-wielding maniacs who chased Colombian superstar cyclist Egan Bernal up the Alps in the Giro d'Italia last month, we're thinking pro-cyclists are probably a little on edge these days.Peru's socialist presidential candidate Pedro Castillo addresses supporters while holding an oversized pencil, a symbol of the Peru Libre party, at a rally in Lima.
Peru makes a radical choice. Will it pan out?
Fed up with years of political dysfunction, and wracked by the world's worst per capita COVID death toll, Peruvians have made a radical new choice for president.
After a day or so of nail-biting uncertainty, the results of Sunday's runoff appear to show that Pedro Castillo, a Marxist-leaning former schoolteacher who gets around on horseback and carries an oversized pencil with him everywhere, has edged out Keiko Fujimori, the authoritarian-minded daughter of the country's former dictator.
Who is this guy? Barely known to most Peruvians until just months ago, Castillo shocked the political establishment by advancing to the second round of the presidential election with just under 19 percent of the vote. Now he has won the top job by defeating Fujimori, a deeply unpopular yet immensely powerful rival who has lost her third bid for the presidency.
Castillo's victory is a backlash against the political class. Last November, mass street protests erupted when the country churned through three presidents in a single week following the impeachment of the incumbent for a vote-buying scandal years before he took office. With about half of Peruvian lawmakers currently under investigation for crimes from money laundering to homicide, it's no surprise that turnout was well below Peru's historical average for presidential votes, and that a (slim) majority of voters have placed their trust in an outsider like Castillo to stand up to Lima's corrupt swamp.
Indeed, Castillo styles himself as a man of the people. His signature is a cowboy hat, and his horsemanship is part of his rustic appeal. The giant pencil, meanwhile, symbolizes his party's focus on educating the rural poor. At the same time, he's also a pragmatist — to broaden his appeal beyond the countryside, in the past he has been willing to strike deals with players as wide-ranging as former members of the far-left Shining Path guerrilla movement on the one hand, and members of Fujimori's party on the other.
What are the next president's plans for Peru? Castillo has ambitious policy proposals, which his supporters say most Peruvians want: rewrite the constitution, spend 10 percent of GDP on education and health, and redistribute mining profits to fund social programs. Perhaps in a nod to more moderate voters, he's already walked back earlier calls to dissolve Congress if lawmakers don't agree to reform the charter, and nationalize strategic industries.
For his opponents, however, Castillo is another Hugo Chávez who will turn Peru into Venezuela by overturning three decades of pro-business reforms that have brought prosperity to the country. So far, the markets agree — the value of the Peruvian sol sank on Monday to its lowest value against the US dollar in seven years, and the stock market plunged more than seven percent.
Castillo's agenda will face tough roadblocks in a highly fragmented and dysfunctional Congress. His party only has 37 of the 130 seats in parliament, which is dominated by smaller right-wing formations that are more likely to cut deals with Fujimori. What's more, the bar for impeaching a Peruvian president has lately been set so low that if Castillo pushes lawmakers too hard, two-thirds of them could vote to oust Castillo over the vague charge of "moral incapacity."
And don't forget... Perú is still being pummeled by twin health and economic crises. Last week, the government revised its official COVID death toll upwards, to nearly triple the earlier number, which means the Andean country has the world's highest death rate per capita. And nearly 28 percent of Peruvians now live in poverty due to COVID, almost double the figure before the pandemic struck.
So, what comes next? It's hard to say. A polarizing election means that half of the country will be against whatever Castillo wants to do, while the other half will be willing to take to the streets if the political establishment stands in the way of the change they want.
Without a sweeping popular mandate or strong backing in parliament, there's only so much an outsider can do to stand up to an entrenched elite. Peruvians' frustration with dysfunction brought Castillo to power, but will he be able to change things?
What We’re Watching: Peruvian presidential runoff, EU push to tax multinationals, Japan’s post-Olympics election
Peru's divisive choice: Peruvians head to the polls on Sunday to choose between two deeply polarizing candidates in the presidential runoff election. One is Pedro Castillo, a far-left yet socially conservative union leader and teacher. Castillo wants to rewrite the constitution to curb the power of the business elite and distribute more mining wealth to social programs. The other is rightwing firebrand Keiko Fujimori, who says she would continue the free-market policies championed by her strongman father in the 1990s. Fujimori says the country needs a demodura ("hard democracy"), a somewhat milder version of the dictablanda ("soft dictatorship") her dad once led. Castillo is beloved by rural Peruvians and anti-establishment urban voters, but his embrace of Marxism and Venezuela may alienate moderates. Fujimori, for her part, is backed by big business, but very unpopular outside her base, and negatively associated with her father's authoritarian rule and corruption — not to mention her own multiple legal troubles. Castillo is currently leading in the polls, but Fujimori has a shot at victory if voter turnout is lower than expected.
EU's new law to tax multinationals: After five years of negotiations, the EU Parliament has reached an agreement on tax guidelines for multinational corporations operating within the 27-member bloc. Under the new law, American behemoths like Apple, Amazon, and Google that make more than $916 million annually in two consecutive years will have to report their income, taxes, and number of employees across all EU countries, as well as in certain non-EU states designated on a tax-haven "blacklist," like the Cayman Islands. For years, countries like France have been calling for stricter tax rules for large corporations — particularly Big Tech firms — that flood EU markets yet pay scarce taxes back to their governments. While this is a big development, the text of the law will now have to go through the labyrinthine Brussels bureaucracy, and ultimately get unanimous consent by all 27 EU member states. Given that EU countries like Ireland and the Netherlands have greatly benefited from operating as tax havens for multinationals to stash their profits, Brussels will need to engage in lots of bargaining to get the law through. Meanwhile, the Biden administration has been pushing hard for a global minimum tax. If the EU gets this done, it will surely push things in that direction.
Japan's snap election: Japan's Prime Minister Yoshihide Suga is planning to call a snap election after the Tokyo Olympics, set to begin next month. Suga was initially popular when he took over from his predecessor Shinzo Abe last summer, but his approval ratings have rapidly declined in recent weeks due to his insistence on holding the Olympics, despite widespread opposition amongst Japanese who fear the games will give rise to new COVID outbreaks. Japan's sluggish vaccine rollout has also hurt the ruling Liberal Democratic Party, which is now worried about losing its majority for the first time in almost a decade. And there's reason to be concerned: less than two months ago, the LDP lost all three special elections to fill parliamentary seats — seats that were vacated by LDP members implicated in bribery scandals at a time when the Japanese people are becoming increasingly frustrated with government corruption. Suga will now have to pull out all the stops — perhaps including a new stimulus package to revive Japan's pandemic-battered economy — if he wants to stay in power.
Peruvian flag during street protests in Lima
What We’re Watching: Peruvian runoff, Haitian resignation
Peruvian runoff: Perú's presidential election is going to a runoff in June between two surprise and polarizing contenders, each of whom won less than 20 percent of votes in a highly fragmented first round. Pedro Castillo, a far-left union leader and teacher who benefited from a late surge in the polls, will battle rightwing populist Keiko Fujimori, daughter of the country's imprisoned former strongman. Castillo wants to rewrite the constitution to weaken the political influence of the country's business elite and maybe to allow the state to nationalize parts of the mining sector to pay for social programs for the poor. Fujimori wants to use mining revenues to create jobs by investing in infrastructure and healthcare. The runoff will probably be a national referendum on Fujimori, a divisive figure running for the top job for the third time. No Peruvian president has ever left office without facing corruption charges, but Fujimori already faces several — and she'll avoid jail time if she wins.
Haiti PM out: Prime Minister Jouthe Joseph has stepped down in response to worsening unrest in Haiti, particularly the recent kidnapping by an armed gang of 10 people — including seven clergy members — for a $1 million ransom. Once the influential Catholic Church blamed the PM for the scandal, President Jovenel Moïse accepted Joseph's resignation and vowed to rescue the hostages. Moïse himself faces pressure from rivals and critics who say his elected term has ended. Moïse insists his terms ends next February. (The Biden administration agrees with him.) Either way, a new PM may bring temporary calm, but poverty and crime, the true sources of the unrest, will remain. And Haiti's political crisis will probably continue for as long as Moïse remains in power.
Guillermo Lasso and his wife Maria de Lourdes Alcivar react after Lasso wins Ecuador's presidential runoff vote.
What We’re Watching: Andean election results, China’s vaccine effectiveness
Andean aftermath: Two big weekend elections in South America produced two stunning results. In Ecuador's presidential runoff, the center-right former banker Guillermo Lasso upset early frontrunner Andrés Arauz, a leftist handpicked by former president Rafael Correa. Lasso will take power amid the social and economic devastation of the pandemic and will have to reckon with the rising political power of Ecuador's indigenous population: the Pachakutik party, which focuses on environmental issues and indigenous rights, is now the second-largest party in parliament. Meanwhile, in a big surprise next door in Perú, far-left union leader Pedro Castillo tallied up the most votes in the first round of that country's highly fragmented presidential election. As of Monday evening it's not clear whom he'll face in the June runoff, but three figures are in the running as votes are counted: prominent neoliberal economist Hernando De Soto, rightwing businessman Rafael López Aliaga, and conservative Keiko Fujimori, daughter of the country's imprisoned former strongman. Meanwhile, in the congressional ballot, at least 10 parties reached the threshold to win seats, but there is no clear majority or obvious coalition in sight.
Supporters of Peru's presidential candidate Verónica Mendoza hold a giant national flag during a campaign closing rally in Lima.
What We’re Watching: Andean elections, AstraZeneca’s hell week, former Aussie PM is designated driver
Two big Andean elections: This Sunday, Ecuadorians go to the polls for the second time this year in a close presidential runoff, while Peruvians will vote in the first round of their own presidential election. In Ecuador, the matchup is between the leftwing-populist frontrunner Andrés Arauz, who has pledged to blow up the country's IMF agreements and boost national oil production, and Guillermo Lasso, a pro-business candidate who is seen as the choice of continuity with the current market-friendly government. Voter abstention is likely to be high, and the final result could very well be close and contested in a polarized country that was struggling with massive social unrest even before the pandemic struck. Meanwhile in Peru — which recently went through three presidents in the space of a week — the candidate field is hugely fragmented. Those with a decent shot to make it to the second round include "change" candidates like the leftist former lawmakers Yohny Lescano and Verónica Mendoza, as well as the prominent neoliberal economist Hernando De Soto, who has recently risen in the polls. Former soccer star George Forsyth is also in the mix, as is Keiko Fujimori, daughter of authoritarian former president Alberto Fujimori. Both of this Sunday's elections will serve as a kind of bellwether for the political mood in a region that has been devastated by the public health and economic impact of the pandemic.
AstraZeneca under pressure: COVID jab manufacturer AstraZeneca has had a hell week. First, a top EU health official issued a confusing statement linking AstraZeneca's jab to blood clots, which has led some countries to limit its use on people older than 60 and younger than 30. And now the African Union is suspending further AstraZeneca purchases until the Serum Institute of India can ensure supplies for the global COVAX facility. The latter is a big blow to a lot African nations, since the AU was betting on AstraZeneca to inoculate the entire continent because its vaccine is cheap and doesn't need cold storage. On the other hand, it's also a vindication of early skeptic South Africa, which stopped using AstraZeneca even before the blood clots issue surfaced because it was not effective enough against the variant of the virus prevalent there. The broader problem is that unless the safety, supply and efficacy concerns are resolved soon, AstraZeneca's jab will lose the momentum it once had to end the pandemic throughout the developing world.
A famous chauffeur: Four inebriated Aussies stumble out of a bar in Melbourne to discover a driving rain. Having called Uber, they spot an idling car. They pile in and ask the driver to take them to Hastings street. About halfway home, one of the boys notices that their driver is Kevin Rudd, former Australian prime minister and current Eurasia Group senior adviser. Rudd had just dropped his daughter off at a restaurant when his surprise passengers arrived, and he agreed to take them home because Kevin is a fair dinkum gent.