Andean Group - 8 March 2005
Reshuffle does little to appease opposition
After facing two months of heavy pressure from opposition parties, trade unions and civic organisations, President Alejandro Toledo finally announced four changes to his cabinet on 25 February. Only one of the appointments was "independent"; the rest were drawn from the ranks of the ruling Perú Posible and, as such, proved deeply unpopular choices.
The only independent appointment was that of David Lemor, a textiles manufacturer and the vice-president of the Sociedad Nacional de Industrias, who replaced Alfonso Velásquez as production minister. Juan Sheput, Toledo's political adviser, replaced Javier Neves as the labour minister. Eduardo Salhuana, a PP legislator, was picked as justice minister. He came in for Carlos Gamarra. The agriculture portfolio, held by Álvaro Quijandría, went to Manuel Manrique. Manrique will face a testing time. He will be responsible for overseeing talks with disgruntled coca growers (see page 6) and organising alternative development projects in lieu of coca production.
The mini-reshuffle bore the main hallmark of previous changes: an ill-considered response from a government that is simply out of tune with the population. A survey carried out shortly before the reshuffle showed that 77% of Limenos wanted to see non-partisan appointments. Unsurprisingly, bringing in Sheput, who is closely associated with the unpopular Toledo, to the labour ministry had the effect of antagonising the trade unions. The president of Peru's largest and most influential trade union, Confederación General de Trabajadores del Perú, Mario Huamán, warned that the government could expect strikes and demonstrations ahead. He also said that the reshuffle did not go far enough. He wanted to see the prime minister, Carlos Ferrero, and the economy minister, Pedro Pablo Kuczynski, replaced. Medical workers went on strike on 2 March to demand that the government dismiss the health minister, Pilar Mazzetti, and adhere to an agreement in 2004 to increase their salaries and supply more modern medical equipment to hospitals.
Subsidies for the poor
The Toledo administration is finally trying to take advantage of the stellar economic growth that Peru has registered over the last few years by implementing a welfare programme to assist Peru's most needy. Under 'Pro Perú' the government will hand out direct subsidies of NS$100 (US$31) a month to the poorest families in Peru. ProPerú will be launched in June. According to official figures 25% of the population live in extreme poverty.
The initiative, which is expected to cost US$90m a year was criticised by the opposition as improvised and a form of early electioneering (Peru holds presidential elections in 2006). It is however the kind of populist gesture that the public has been calling for several years and might just revive Toledo's desperately flagging popularity.
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ECONOMIC OVERVIEW: PERU
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Exports grew by 37% in 2004 to US$12.37bn. Both traditional and non-traditional exports grew by roughly the same amount. Higher prices, rather then increased volumes are boosting exports. A study by a consultancy, Malaga & Webb, which took 2002 as its base found that export receipts in the first 10 months of 2004 brought in a third more in cash terms (FOB) but in volume terms were only 90% of what had been exported in 2002. Comparing 2003 with 2004 gives a slightly more encouraging picture: prices were up by 38%, but volumes were up by 8%. The proportions appear to be pretty standard for the whole of the country's exports. The top 30 categories, which account for 76% of total exports, were up by 41% in cash terms and by 8% in volume terms. The bulk of the 30 categories are traditional exports: gold, copper, zinc, silver, lead, tin, refined fuel and iron ore. There are eight non traditional exports in the top 30 categories. The most important is coffee (which comes seventh); followed by cotton T shirts (11th) and fresh asparagus (14th). Interestingly each of these three categories, and indeed most of the non-traditional exports increased their volumes. The biggest increases were in clothes and drink. Exports in January: Exports in January were up by 41% on January
2004 at US$1.21bn, the Asociación de Exportadores reported. This was the
second highest monthly figure on record: the highest was the December
2004 figure of US$1.34bn. According to Adex, among traditional exports,
agricultural exports were up by 88% and fish exports were up by 81%. Among
the non-trads, chemical exports were up by 138%. |