Peruvian President Pedro Castillo won congressional approval of his cabinet last week, but he is also facing a new impeachment attempt. // File Photo: Peruvian Government.

Peru’s Congress confirmed President Pedro Castillo’s fourth cabinet in seven months on March 9, a vote that came as opposition lawmakers launched a second attempt to impeach him. Castillo’s government has been plagued by instability, and his most recent former prime minister lasted just days in office. How important of a win was Congress’ approval of Castillo’s current cabinet, and what does the close 64-58 vote mean for the government’s stability? Will Castillo keep facing repeated impeachment attempts during his term? What consequences have the impeachment attempts and cabinet shakeups had on Castillo’s ability to govern and on investors’ willingness to put money into projects in Peru?

Mercedes Aráoz, senior professor of finance at the Universidad del Pacífico and former vice president of Peru: “Despite Congress’ approval of Castillo’s cabinet, the government is facing an unstable equilibrium. It is true that the president achieved political momentum, but anything can happen. Another corruption scandal or a confession of one of his closest advisors can strengthen the possibility that he will be removed from office. However, opposition parties in Congress have been divided. In almost all groups there are members who support Castillo for different reasons—some because of their management of a ministry or other positions in government; some due to promises of infrastructure projects in their home areas; some due to political calculations as they try to benefit their candidates, or worse, related contractors; and some because they seek to protect some informal or illegal activities. However, the threat of impeachment exists, and Castillo will face it many times from now on. His power has weakened, and his popularity is dropping quite rapidly. The threat of further changes of cabinet members—or of the entire cabinet—also remains because of poor selections of ministers, who are ill-prepared for their positions and have horrible backgrounds. These conditions make for a meager ability to govern for any administration, but it is worse in the case of Castillo, who displays no clear objective other than survival. Investors are not blind, and surveys show a reluctance to invest, given the political uncertainty.”

Francisco Durand, professor of political science at the Catholic University of Peru: “Castillo finally has a chance to stabilize his administration, even if right-wing hardliners in Congress insist on impeachment. The confidence vote for the cabinet signals a major turning point. A combination of moderation (‘we do not want a confrontation’), including keeping a distance from his leftist allies and downplaying all reforms, has been part of his stabilization plan. Yet, the key factor was ‘negotiation’ with vested interests. Basically, he has shifted to the right. Although Castillo’s defense of the poor and his promises to lead a government that represents all Peruvians continue, Castillo himself now guarantees the continuity of pro-market and other policies that were condemned during his campaign. This is certainly a victory for big business. But the real worrying factor is ‘mercantilism,’ including shady deals of his inner circle in public works with support of some members of Congress. The current mineral export boom helps stabilization, although consumer prices are soaring. This opens a new front, and it is still unclear how the government (now mostly run by neoliberal technocrats or pro-market ministers) can use extra export earnings to deal with inflation. Internal political realism and international economic trends will prevail over political noise and attempts to impeach Castillo. Still, this is such a weak and incompetent government, vulnerable to corruption investigations, that it is hard to predict if Castillo will remain in office.”

Julio Carrión, associate professor of political science and international relations at the University of Delaware: “The vote of confidence is only a temporary victory. It was secured because Acción Popular, a center-right, nonprogrammatic party, split its votes, with 10 out of its 15 members voting to confirm. This happened despite the request that the party’s leadership made to deny such a vote. Members of other personalistic parties provided 10 additional votes. Almost all of them voted a few days later to accept a new motion to impeach Castillo. While only 52 votes were needed, 76 voted in favor—11 votes short of what will be required to remove him from office. Indeed, the new motion to impeach Castillo can generate real trouble. Castillo has been asked to appear in Congress on March 28 to answer the questions posed in the motion. Even though Castillo is not required by law to comply, previous presidents in similar circumstances have done so. A refusal to answer in person could further erode his support in Congress. But there are also risks if he agrees to testify, as potential lies or half-truths could complicate his situation. There are not 87 votes in Congress to vacate him now, but what transpires in the upcoming days could rapidly change the math. For instance, on Monday night, public prosecutors from the office against money laundering raided the apartment where two of Castillo’s nephews live. The nephews have been identified as members of an inner circle that makes decisions with the president, bypassing his own ministers. If evidence of their involvement in corruption is confirmed, Castillo could lose some crucial votes that are currently in his column.” 

Jose E. Gonzales, managing partner at GCG Advisors: “While it is hard to believe that the Castillo administration is in its fourth cabinet in less than a year in office, it is worth recognizing that the president has achieved a certain political détente. If the primary goal of any politician is to remain in office, Castillo has so far been achieving it against all odds. In order to do so, he has managed and negotiated alliances in Congress and within his political base that have allowed him to win the approval of his cabinet(s) regardless of troubled ministers and low popularity. The ‘hard’ opposition in Congress and within Peru’s political establishment that opposed Castillo even before he took office, questioning the legitimacy of his election, has not given any signal or indication of moderating its stance. In seeking to impeach the president, it is contributing to the current political conditions and circumstances of permanent confrontation rather than collaboration. The political milieu underlines the precariousness of Castillo’s handling of public policy, the shallowness of his political operation and his clumsiness in dealing with political conflict and day-to-day governing. This projects a wide perception of uselessness in the presidency, which has been accompanied by an extremely poor legislature. Fortunately for Peru, macroeconomic dynamics and balance of payments solvency have compensated for a rudderless leadership that is not contributing to social progress and investment dynamics. This might become troublesome in light of Vladimir Putin’s invasion of Ukraine and its impact on global economics.” 

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