On 6 October, President Pedro Castillo announced that he had sought the resignation – duly offered – of Guido Bellido as president of the Council of Ministers. He appointed Mirtha Vásquez as his successor as cabinet chief.

Bellido’s removal is widely seen as a shift towards the centre and a rebuff to Vladimir Cerrón, the founder and leader of Peru Libre (PL), the party with the largest number of seats in Congress. The question is whether or not this will further weaken Castillo’s position in Congress or whether the PL members will remain loyal to him.

Through his Twitter account Bellido has repeatedly clashed with Castillo in the last two weeks, not least with respect to his threat to nationalise Camisea if the consortium in charge of the project fails to agree with changes to its contract. More recently, it seemed that Bellido was behind an attempt to oust Foreign Minister Oscar Maúrtua.

The divisions within the cabinet have become ever clearer in recent weeks, a struggle for power between the factions closes to Cerrón and PL which sought to maintain a leftist orientation and the more pragmatic wing of the cabinet, led by Economy Minister Pedro Francke which seeks to reassure the private sector and promote economic reactivation after last year’s disastrous contraction. In announcing the cabinet changes, Castillo justified them in the name of “governability”.

In response, those close to Cerrón have threatened to withdraw their support. Waldemar Cerrón, Cerrón’s brother who leads this group in Congress, is quoted as saying “The parliamentary bench of Perú Libre do not support this government, because we see it as betraying the majorities which have waited for many years to reach power so that [their demands] are heeded”.

Vásquez had previously played an important role as president of the previous Congress following Francisco Sagasti, her predecessor, taking up the role last November. She is a human rights lawyer associated with defending community rights in Cajamarca in the NGO Grufides. PSG members may recall her participation in our last (pre-pandemic) annual conference at the end of 2019.

As well as Vásquez’s appointment, a number of cabinet members deemed to be close to Bellido and Cerrón have lost their jobs. They include Labour Minister Iber Maraví whose censure at the hands of Congress was all but a foregone conclusion for his supposed role (which he denied) in Sendero Luminoso at the beginning of the 1980s. He is replaced by Betssy Chávez, a PL congresswoman who has distanced herself from Bellido in recent weeks.

Another significant change is the appointment of Eduardo González as minister of mines, replacing Iván Merino. Merino had been a close colleague of Bellido but, as minister, had played a significant role in seeking to calm the fears of extractive industries about the possibilities of their being nationalised. González is an engineer by profession and the former general manager of a technology company.

Other ministers to go included those in charge of the ministries of the interior (Juan Manuel Carrasco), education (Juan Cadillo), culture (Ciro Gálvez) and production (Yvan Quispe). They are replaced by Luis Roberto Barranzuela, Gisela Ortiz, Carlos Alfonso Gallardo, José Incio respectively.

The new appointments should lead to a more coherent policy line emanating from the cabinet, putting an end to the infighting of recent weeks. It also increases somewhat the number of women in the cabinet, from two to five.

The cabinet change coincided with Castillo’s delayed ratification of Julio Velarde as president of the Central Bank (BCRP). The appointment of Velarde, a conservative economist first appointed by Alan Garcia in 2007, is designed to reassure market sentiment. His staying on as BCRP president had been previously negotiated by Francke but not formally ratified. The executive has also appointed three members of the BCRP board: Roxana Barrantes, José Távara and Germán Alarco. All three are moderate leftists close to Francke. The other members of the board still need to be appointed by Congress.

The changes will probably do little to satisfy the far-right parties in Congress (Renovación Popular, Fuerza Popular and Avanza País). They will continue to harry the government at every turn seeking, eventually, to oust Castillo from the presidency. The reshuffle may, however, placate some of those on the centre-right for whom maintaining democratic stability is a priority.

It remains to be seen, however, how PL will respond. The shift away from the left may create splits within the party, with those loyal to Castillo marking their differences from those closest to Cerrón. Some PL members of Congress had previously complained at the way in which Cerrón spoke for the parliamentary party as a whole.

The new cabinet will need to go before Congress within 30 days to receive a vote of confidence. In this session, Vásquez will outline the new cabinet’s programme. This could be a moment in which Cerrón seeks his revenge by pushing his group to vote with the opposition.