Latin America Advisor 2022-04-11 – Inter-American Dialogue

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

April 5, 2022

What Can Be Done to Make Peru More Politically Stable?

President Pedro Castillo on Thursday ordered the armed forces to supervise Peru’s highways for the next month in the face of trucking blockades over inflation that have halted travel and commerce. // File Photo: Peruvian Government.

Q

Peruvian President Pedro Castillo, who has been in office just eight months, in late March survived a second impeachment attempt against him. Castillo’s opponents have tried to oust him on the grounds of alleged “moral incapacity,” the charge that was also leveled against former President Martín Vizcarra, who was removed from office in November 2020, ushering in a period that led Peru to have three presidents in fewer than 10 days. In a speech to Congress in mid-March, Castillo said Peru “is going through an institutional crisis” amid the instability, and analysts now see political turmoil as a major deterrent to investment in the country’s once-steady economy. What is at the root of Peru’s political instability, and what can be done to break the political paralysis brought on by repeated challenges to the president’s mandate? Could constitutional reforms calm the frequent political upheaval and, if so, what should they involve? How are investors dealing with the uncertainty, and how are key sectors, such as mining, performing amid so much volatility?

A

Pedro Francke, former Peruvian economy and finance minister: “There are two sources of structural instability in Peru. The first is the constitutional provision that allows Congress to impeach the president for ‘moral incapacity’ and without adequate judicial processes, and this must be reformed. The second is the permanent mistrust of citizens in their government, Congress, political parties and the media, with a patrimonial state and serious ethnic and regional inequalities. The victory of Pedro Castillo last year was the manifestation of the dissatisfaction of discriminated groups, who were hoping for profound change from a Castillo government…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.

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Diego Arria
Director,
Columbus Group

Merike Blofield
Professor of Political Science,
University of Hamburg

Devry Boughner Vorwerk
CEO,
DevryBV Sustainable Strategies

Joyce Chang
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J.P. Morgan

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Jon E. Huenemann
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James R. Jones
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Craig Kelly
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Int’l Gov’t Relations,
Exxon Mobil

Barbara Kotschwar
Professor of Political Economy,
Georgetown University

John Maisto
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US Education Finance Group

Nicolas Mariscal
Chairman,
Grupo Marhnos

Thomas F. McLarty III
Chairman,
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Beatrice Rangel
Director,
AMLA Consulting

Ernesto Revilla
Head of Latin American Economics, Citi

Gustavo Roosen
President,
IESA

Andrés Rozental
President, Rozental &
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Shelly Shetty
Managing Director,
Sovereigns, Fitch

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