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Peru: A Question Of When, Not If, Vizcarra’s Political Honeymoon Breaks

April 3, 2018
By Nicholas Watson

Martin Vizcarra has had a reasonably successful first few days in the presidency since he replaced Pedro Pablo Kuczynski on 23 March. Yesterday, 2 April, Vizcarra unveiled his new cabinet, which will be headed by Cesar Villanueva of the opposition Alliance for Progress (APP) party, who previously occupied the cabinet chief (PCM) position in 2013-14. Below we examine Vizcarra’s cabinet selections, and their implications for governability and the political outlook.

Vizcarra’s immediate task since taking office has been to distance himself from Kuczynski and mark his administration as new and distinct from its discredited predecessor. The new president’s regional visits, including to an area affected by last year’s floods, and a focus on the health sector – a hot-button domestic issue – were calibrated with this aim in mind. The new cabinet, which has been entirely renewed, continues in the same vein. All of this will help build public support for Vizcarra; in the final week of Kuczynski’s presidency, when political tensions were at their zenith, only 26% of voters supported Vizcarra’s seeing out Kuczynski’s term in office to 2021.

The cabinet needed to have the right mix of technocratic ability on the one hand, and negotiating know-how and political muscle on the other. The new line-up ticks the box on technical skills and experience: new Finance Minister (MEF) David Tuesta and Energy and Mining (MEM) Minister Francisco Ismodes are both market-friendly choices that signal policy continuity. Tuesta was previously at Spanish banking group BBVA and the Latin American Development Bank (CAF), while Ismodes has an extensive mining background in the private sector. Even in non-economic portfolios such as Interior, the choice of former police (PNP) general Mauro Medina Guimaraes looks solid.

On the other hand, the political skills that are required to negotiate with a highly partisan Congress, led by the frequently obstructionist Fuerza Popular (FP), are not overabundant in this cabinet. Vizcarra will be heavily reliant on Villanueva, the new PCM, who was one of the prime movers of the second impeachment attempt against Kuczynski. Villanueva will have his work cut out for him, especially once Vizcarra’s political honeymoon effect inevitably fades. New Justice Minister Salvador Heresi, who hails from the governing Peruanos por el Kambio (PPK), will be the conduit to the PPK party. Heresi’s previous support for the pardon of former president Alberto Fujimori (1990-2000) could put him in an awkward position if the Inter-American Court of Human Rights rules that Fujimori’s controversial December pardon should be reversed. A decision could come in the next few months.

The immediate challenge will be for ministers to demonstrate efficiency and results. On the economic front, that means reactivating the economy, principally by pushing for post-flood reconstruction to begin in earnest. In other areas, there will be an emphasis on health issues, from building new health infrastructure to containing a measles outbreak (the first in
at least a decade). In education policy, the roll-out of the controversial new curriculum needs to continue, while more teacher strikes must be avoided. Tangible progress on these bread-and-butter concerns will help to build popular support for Vizcarra, which would in turn help buttress the new president for the return to destabilizing bouts of politicking that it is highly likely he will face later down the line.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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