This coming Tuesday, 28 July, President Martín Vizcarra will give his last formal address to Congress on the event of Peru’s Independence Day. Next year a new president will take office on the event of the bicentennial of the country becoming a sovereign republic. Less than a week later, on 3 August, the new president of the Council of Ministers, Pedro Cateriano, will deliver his address to Congress in the hope of obtaining a vote of confidence in his cabinet. It will be therefore be a week replete with messages of intent.
As Vizcarra enters his last year, there is no shortage of huge problems on the horizon.
Covid-19 continues to lay waste to an increasing number of victims, overwhelming the ability of Peru’s fragile health system to respond to the demands put on it. Last week, Vizcarra was in Arequipa witnessing close-up the awful situation there to which we drew attention in our last newsletter. There is little the government can do in the very short run to alleviate the situation. It can just hope that the contagion peaks soon.
The Peruvian economy is set to have its worst year since the Great Depression of the early 1930s, some would say since the War of the Pacific in the early 1880s. The expectations for negative growth vary, but -16% is probably a fair guess. This will lead to a massive rise in unemployment as many firms, both formal and informal, go bust, being unable to restructure themselves. Larger companies are better placed to recover than small ones. Poverty levels will inexorably rise, and with them social inequality.
And the government will need to organise a presidential and legislative election against this backcloth while desperately seeking to remedy some of the many vices identified in the political and electoral systems over the three years of Vizcarra’s presidency. The Congress, for its part, is seeking to influence this agenda in ways that favour the personal or partisan interests of specific election players, further muddying the waters. With nine months to go before presidential elections, forecasts as to who will succeed Vizcarra are more unclear than in any election in recent memory.
In these circumstances, as we also suggested last week, the government has shifted to the right. The private sector has warmly welcomed Cateriano as one of its own, applauding the exit of his predecessor Vicente Zeballos. Even Keiko Fujimori, one of those favoured by Covid-19 through her release from jail, welcomed Cateriano who has been a stalwart opponent of fujimorismo since he first appeared in the 1990s as an acolyte of Mario Vargas Llosa’s Fredemo party.
The new cabinet will, in all probability, pass its vote of confidence at the beginning of next week, although there will be forceful voices of criticism, especially from the left. Vizcarra’s personal popularity – with two out of three still thinking he is doing a good job (Coronavirus and its effects notwithstanding) – provides an important political shield.
In his Independence Day speech Vizcarra will continue to give weight to the need for reforms to the political system, not least the vexed issue of removing indemnity from prosecution as a necessary step to ridding the Congress of corrupt influences. In his two past speeches on 28 July, Vizcarra announced surprises: the unveiling of plans for referendums on reform in his 2018 address and the announcement of his intention to bring forwards elections in that of 2019. He may seek to do something similar as a parting shot this time.
Meanwhile some uncertainty surrounds Keiko Fujimori’s plans for next year’s elections. José Domingo Pérez, the doughty prosecutor who has championed the anti-corruption campaign arising from the Odebrecht scandals, has initiated legal proceedings which, if upheld by the judiciary, could prevent Fuerza Popular (Fujimori’s party) from participating in elections for a further two and a half years. Fujimori is one of the sure-fire candidates for the presidency next year following her narrow defeats in 2011 and 2016, and in spite of the allegations of corruption for which she had been held in jail on remand. The case is already exciting strong opinions.