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LatinNews Daily Report - 25 July 2013

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Peru congress rescinds controversial appointments

Development: As expected on 25 July, Peru’s unicameral congress annulled 10 controversial appointments it made last week to the constitutional court, the central bank and the public defender’ s office.

Significance: Having wiped the slate clean, congress will shortly head into recess, allowing the heated political atmosphere to cool down before it attempts a fresh selection process for the appointments – which have been pending for two years now – in late August. The main political parties will be under immense public pressure to show that the next procedure does not amount to a ‘carve-up’. An estimated 2,000 people demonstrated outside the congress building earlier this week, following a similar protest (organised mainly via social media) last week. Both demos ended with police firing tear gas at crowds.

Key points:

  • Ahead of the extraordinary congressional session, the appointees already had voluntarily agreed not to take up their new posts in the face of a scandal over the manner in which they were selected. A major political crisis - dubbed ‘the carve-up’ - erupted when an audio tape was leaked in which legislators were heard divvying up six appointments to the constitutional court as well as the post of the public defender between the main political parties. The opposition accused the executive led by President Ollanta Humala of trying to stack the court with loyalists, a charge the government staunchly denied. President Humala tried to remain above the institutional crisis in congress and was quick to call upon the controversial appointees to step aside in the name of the country; however the crisis appears to have further dented his weakening popularity, which has hit a new low just days before he marks two years in office.

  • Yesterday 107 of the 120 legislators voted to annul the appointment of the six new constitutional court magistrates, the most controversial of which was Rolando Sousa (linked to the disgraced former president Alberto Fujimori [1990-2000]). The other five were the former legislators Víctor Mayorga and Cayo Galindo (currently Peru’s ambassador to Cuba) and the jurist Francisco Eguiguren – all three linked to the ruling Gana Perú coalition —  as well as Ernesto Blume and José Luis Sardón.

  • The other most controversial appointee – Pilar Freitas— appointed ombudswoman before she too desisted from the post, was annulled by 108 votes, with one abstention.

  • The three appointments to the central bank board of directors (economists Franciso Gonzáles, Drago Kisic and Gustavo Yamada), who had not been questioned and enjoyed broad cross party support, were also annulled (with 99 votes and five abstentions), because they had been made as part of the questioned process.

  • Julio Velarde, the central bank president, complained that the vacancies were impeding the bank’s work. "The solution would be not to nominate anyone," he complained to reporters after the congressional session yesterday. "I would prefer that no one is appointed if they will not be good people”. The bank has been without a full board of directors since 2011.

  • The congress president Víctor Isla, whose re-election as house leader looks in doubt as a result of the crisis, said the new process would begin again in August. However analysts note that it could take up to six months, given that a new parliamentary commission to evaluate the various lists of names put forward by the political parties will have to be seen to do its work scrupulously and with utmost transparency and integrity. Yet at the end of the day, some kind of political deals inevitably will have to be struck to get consensus support for the eventual candidates.

Pointer: A cabinet reshuffle is traditional this time of year, before the president gives his annual address to congress (due on 28 July).  Given the pressure on the Humala administration, there were rumours that up to six ministers would be changed in a cabinet that has been unsettled since the outset. That was not to be. Yesterday Humala appointed three new ministers, all women, giving gender parity in his cabinet team (nine women and nine men). The three new appointees are: Mónica Rubio, Magali Silva and Diana Álvarez Calderón, who assumed the ministries of development and social inclusion (Midis), external trade and tourism (Mincetur) and culture, respectively.