Peru's new president begins his term in office under a hail of uncertainty
Pedro Castillo, Peru's new president, begins his term in office under a hail of uncertainty. Photo: Shutterstock

Peru's new president begins his term in office under a hail of uncertainty

Pedro Castillo, without a parliamentary majority, will have to face a pandemic and an economic crisis... all this with a National Congress that likes to impeach presidents on duty

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In the historic Parliament building in Lima, scene of so many turbulent moments in recent Peruvian politics, José Pedro Castillo Terrones received the sash, the baton and the presidential plaque (Peru has three symbols of presidential power). A fervently religious man, he has sworn by God, by the peasants, by the teachers, and by a new constitution that he says the country will have in the future, in a time to be determined.

Castillo is a leftist politician in the economy, but ultra-conservative in the area of human rights. He is viscerally homophobic, against same-sex marriage and against the adoption of children by homosexuals. He claims that the family can only consist of “husband and wife,” and that he will eliminate gender teaching from schools. He is also categorically against abortion legalization.

Castillo, who rides a horse from time to time, always appears wearing a tall white straw hat called a “bambarquino”, typical of his region, handmade, which takes from three weeks to two months to make. At the inauguration, he wore one.

In his speech, he stated that this is the first time Peru will be governed by a person who was a farmer and a rural teacher.  To calm people down regarding possible companies’ nationalization and private property confiscation (issues that he himself had mentioned at the beginning of the electoral campaign), Castillo said that these were just lies and rumors. 

With his election slogan “No more poor people in a country so rich”, the new president has frightened the markets and the Peruvian elite in recent months. The national currency has devalued, the stock market has plummeted. In addition, foreign and domestic capital outflows have been registered. Thousands of people from the country’s upper and upper-middle-class began to open accounts abroad. No wonder that videos explaining how to open accounts outside the country became famous on Youtube. 

Castillo emphasized that he wants a predictable economy and that he will not nationalize companies or control the exchange rate. But he stressed that he wants mining projects to boost regional economies and increase state revenues and a system so that large companies do not circumvent the Peruvian equivalent to Internal Revenue Service.

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Castillo’s party explicitly advocated the nationalization of companies. Now elected, he has made it clear that his idea – in principle – is for the state to be more participative in managing the economy, especially to reverse the inequality that has affected Peru since the days when the Spanish conquistador Francisco Pizzarro began exploiting the dismantled Inca empire.

Discursive polemics 

At first predictable, Castillo’s inauguration speech surprised when he touched on a controversial topic: his plan for a constituent assembly.  He says that he will send a bill to Parliament to call a referendum for a constituent assembly to formulate a new Carta Magna. In defense of the bill, he argues that Peru is a “prisoner” of the current constitution. But for this, Castillo will need the backing of the new parliament, something that seems unlikely. The fear of the markets is that Castillo will find an alternative way to convene the constituent assembly.

Group of protesters haranguing when on the day of Pedro Castillo’s presidential inauguration his supporters take to the streets to demand a new constitution. Photo: Fotoholica Press/Shutterstock

Castillo has also declared that he will not live in the Pizarro Palace, the seat of the presidency, unlike previous Peruvian presidents. He considers the neo-Baroque building a remnant of the country’s colonial past. He did not explain where he will live and where his working office will be. Pizarro will be assigned to the “Ministry of Cultures”.

Within the quota of polemics, Castillo also drew attention when he declared that “Young people who do not work or study will have to do military service!” and when he promised to expel in 72 hours foreign immigrants who commit crimes in Peru. Until now, immigrants who committed crimes were tried and eventually arrested in the country’s prisons, just like any resident.

A homophobic prime minister begins to set the tone

One day after his inauguration, Castillo announced the name of his prime minister, Guido Bellido Ugarte, 42. Bellido is obedient to the president of the Peru Livre party, Vladimir Cerrón, who was disqualified for corruption and could not run in the presidential elections (which is why Castillo – a newcomer to the party – was given room to run this year). 

Bellido is a notorious homophobe. In recent months he has stated that he believes in the existence of a gay lobby. According to him, the “faggots” (slang in the Spanish-speaking world for homosexual men) are a kind of “degeneration”. And he cites as an example what Fidel Castro said about homosexuals in 1963: “The revolution doesn’t need hairdressers.” Bellido stated, “I don’t see lesbians and gays organizing demonstrations.”

Bellido’s designation is a clear sign that de Castillo had to give in to the Peru Livre party. 

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During the campaign, Castillo’s main economic advisor was the moderate Pedro Francke, an economist respected by businessmen and academics. He was tipped as the future Minister of Economy. However, with Bellido’s designation as Prime Minister, Francke chose to decline.

Throughout Friday (30), Peru experienced a day of market tensions. The stock market fell and the rating agency Moody’s declared that it would be difficult to maintain Peru’s rating at A3 due to uncertainties about public policies. In the end, Castillo convinced Francke to be the new Minister of Economy and it is hoped that his presence could calm the market.

Francke jabbed Prime Minister Bellido in his oath: “For equal opportunities, without differentiation of gender, ethnic identity or sexual identity, for democracy and national reconciliation, yes, I swear it!” Hours later, Francke posted on social media that he will fight homophobia.

Another crucial ministry, Foreign Affairs, will be headed by sociologist, Héctor Béjar, 85, who was a guerrilla fighter in Cuba at the end of the Cuban Revolution in the late 1950s. An unconditional admirer of Fidel Castro, upon returning to his country in the mid-1960s, Béjar founded his own guerrilla group. However, he never succeeded and was arrested. Béjar is an important academic, although he is considered to be from an anachronistic left-wing.

Castillo’s cabinet has 18 ministries. Of these, only two are headed by women, which indicates that it is one of the most misogynistic presidential cabinets in South America, something that was expected due to the president’s conservative and religious profile. The defense of equality and the fight against discrimination are not priorities of the new administration.

The two women designated by Castillo took the Ministry of Women and the Ministry of Inclusion. In fact, Castillo appointed her vice president, Dina Boularte, to the Ministry of Inclusion. Feminist groups consider that, as far as the fight for gender rights is concerned, the country has gone back 15 years with the new government.

An opposition Congress that likes impeachments

One of the first tasks of the new government will be to propose by August 30 the National Budget bill for 2022. In addition, it will have to define what to do with all the fiscal rules that have been temporarily suspended due to the pandemic. 

But, there is one crucial factor for any of Castillo’s measures in the economic area: he does not currently have a parliamentary majority. And Peru has a semi-presidential (or semi-parliamentary) institutional system, in which Parliament has a lot of power and the president is more limited than his fellow presidents in neighboring countries. 

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Castillo faced his first setback in this area earlier this week, when an alliance of conservative opposition parties elected Representative Maria del Carmen Alva Prieto from the Popular Action party as President of Parliament. The 2nd and 3rd parliamentary posts also went to the opposition.

This is a tough defeat for Castillo, who had planned to put center-left deputies at the head of Parliament. Castillo has a minority in Parliament.  His party has only 37 seats. He has gained only 8 additional allies. Thus, he has only 34% of the seats in Parliament.

Years of being an example of macroeconomic stability and then, the pandemic

The fifth-largest economy in Latin America, Peru has been a role model of macroeconomic stability.

Over the past decade, Peru‘s GDP has grown by an average of 4.8% per year while inflation has hovered between 1% and 3% (less than Argentina’s monthly inflation, for example). The fiscal deficit in 2019, before the pandemic, was 1.6%. The Peruvian Central Bank’s international reserves are equivalent to 36.7% of GDP. And poverty had been falling persistently, from 60% in 2001 to 21%.

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But then, the pandemic hit the country.  Poverty has risen again and currently afflicts 30% of Peruvians. More than two million people lost their jobs during the health crisis. The economy was semi-paralyzed for more than 10 days between March 15th and July 1st of last year, plunging the country into recession. The fiscal deficit reached 8.9% and GDP plummeted 11.1%, the worst 2020 fall in South America (and the worst performance of the Peruvian economy since the 1980s).

After a year, the country seems to be starting to recover: in May the economy registered a growth of 47.80% compared to the same month in 2020 thanks to the recovery of most productive sectors. The IMF, on the eve of Castillo’s inauguration, announced that it forecasts Peru will have 8.5% growth this year. Between January and May, the GDP grew by 19.69% compared to the same period last year. 

This is the economic scenario Castillo finds when he becomes president of the country which, according to its 1993 constitution, has a “social market economy”. 

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Castillo’s views on how to manage the Peruvian economy fluctuate.  Last year he affiliated with the Peru Livre party, a party that calls itself Marxist-Leninist. Months ago Castillo said he would nationalize public utilities. Then he said he would only create a law stipulating that multinationals would have to reinvest a good part of their profits in the country. 

In recent times he has softened his speech. “We are not Chavistas. We are not communists. We are not going to take the properties of any person,” Castillo explained days before the inauguration.

Castillo states that he wants a “popular economy with a market. This term did not exist before. The president-elect himself has never explained exactly what it means. Analysts deduce that it is a kind of protectionist policy, with a more present state in the economy – but still a capitalist economy. 

Pandemic scandals 

As if last year’s economic setback and Peru‘s peculiar political-presidential history were not enough, Castillo takes over a country shaken by scandals concerning the management of the pandemic.

Although in the beginning, then-president Martín Vizcarra adopted a strict sanitary protocol, with lockdowns throughout the country (and later quarantines in specific regions), it wasn’t long before scandals of all sorts began to appear. The biggest of these was what became known as “Vacuna-gate”, a reference to the famous Watergate episode that resulted in the resignation of U.S. President Richard Nixon. 

Vaccination of the elderly in Peru. Photo: Fotos Públicas

In the Peruvian “Vacuna-gate,” a batch of 600 vaccine doses was diverted to be secretly given as a “courtesy” to politicians, instead of being given to health professionals or the elderly people. The list of VIPs included 487 people, among them the Apostolic Nuncio Nicola Girasoli, that is, the Vatican ambassador (the representative in Peru of God’s representative on earth for Catholics).  Monsignor Girasoli, unable to find an ad hoc biblical argument for the situation, claimed that he was vaccinated in the category of “ethical affairs consultant.” 

Then it came to light that Vizcarra, who in the last troubled years had become the “anti-corruption leader”, was vaccinated while still president.  Ironies of life, the slogan of Vizcarra’s advertising campaign when he was president was “First, my health” (the slogan got a different interpretation after “Vacuna-gate”). 

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Peruvians have witnessed other controversies since the beginning of the pandemic, from the shortage of oxygen in hospitals to the government’s attempt to block the border with Ecuador and stop the permanent entry of unauthorized migrants who supposedly could bring new strains of the coronavirus to Peru, to the spread of “miracle” remedies by the political class, against the grain of science. 

The fact is that a year and a half since the beginning of the pandemic, Peru has accumulated more than 2.1 million people infected and 196,000 dead. Vaccination started late and is taking place at a slow pace. So far only 21% of the inhabitants have been vaccinated with at least one dose, and 14% with both doses.

The Fujimoris

It is impossible to talk about Peru‘s recent political history without mentioning the Fujimoris. 

Castillo’s very coming to power was marked by rivalry against Keiko Fujimori, daughter of the former dictator and former president Alberto Fujimori. Defeated candidate for the third time, Keiko tried desperately to contest the second round of the elections, as she needed the privileged forum since she is indicted in the Peruvian edition of Lava-Jato. 

Peru’s former president Alberto Fujimori, 2003. Photo: Masatoshi Okauchi/Shutterstock

There are three Fujimoris in Peru’s politics: Alberto, who ruled Peru between 1990 and 2000; his daughter Keiko, head of her father’s party and a three-time presidential candidate; and Kenji, the former dictator’s spoiled son, Keiko’s brother and his ally or his enemy, depending on the case.

Alberto Fujimori, a mediocre agronomist, ran in the 1990 presidential election against Mario Vargas Llosa. Fujimori won with a discourse between progressivism and populism and with the support of the evangelical churches.  Two years later he launched a self-coup: he closed the parliament, imprisoned his opponents, exiled several intellectuals and initiated a wave of repression, backed by a state torture machine.

In 1995, controlling the media and the state, he ran for reelection and won. But then the regime collapsed due to the scandals and Fujimori fled the country.

He remained a fugitive for a decade until, in 2007, he was extradited by the Chilean Justice and returned to Lima.  In April 2009 he was sentenced to 25 years in prison for murder, kidnapping and torture. Then he was again sentenced for embezzlement of public funds. He is currently on trial for the forced sterilization of almost 300,000 indigenous and peasant women in the 1990s.

Despite this succession of scandals and crimes, “fujimorism” remains strong in Peru. Strong enough that Keiko has been a presidential candidate in 2006, 2016 and 2021. 

Keiko Fujimori waves at supporters after casting her vote. Photo: Geraldo Caso Bizama/SIPA/Shutterstock

Keiko has been immersed in the power system since her teenage years. With the arrest of her father in 2007, she took over the command of fujimorism. Although defeated at the polls, she turned fujimorism into the main opposition force in the Legislative Branch. She became a sort of “serial knocker” of Peruvian presidents on duty.

Peru’s presidential scandals

In the last 30 years, Peru has seen five consecutive presidents involved in serious problems with the courts. The oldest is former dictator Alberto Fujimori. Then, with the return of democracy in 2000, came Alejandro Toledo, Alan García, Ollanta Humala, and Pedro Pablo Kuczynsky – all accused of involvement in the Odebrecht case. 

Not enough, in the last five years, Peru has had five presidents, four of whom fell by impeachments or popular uprisings. Starting with Kuczynski, who resigned in 2018 to avoid impeachment after a vote-buying corruption scandal. 

His first vice president Martín Vizcarra took over. However, he came into the crosshairs of political parties from the right and left by calling for a plebiscite to eliminate the re-election of deputies. At the time, 85% voted yes for Vizcarra’s proposal. 

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In 2019, things got somewhat electrifying again. The former vice-president, Mercedes Aráoz, overthrew Vizcarra in a famous parliamentary “coup”. 24 hours later Vizcarra was back in power, this time until 2020 when he was removed by Parliament on the grounds of “moral incapacity” due to an alleged case of bribery. 

Vizcarra was replaced by Manuel Merino, who could not even complete a week in power. He lasted five days in office, as a series of popular protests forced him to resign. Merino was replaced by the interim president, Francisco Sagasti, who became the fifth president in Peru in a five-year term. 


With an electrifying recent political history and the election of an ultra-conservative leftist candidate (that’s right), there was much talk of polarization in Peruvian society. This was not the case. Neither Keiko nor Castillo mobilized vast crowds.  

In the first round, there was an unprecedented hailstorm of candidates, a total of 18. Moreover, polls indicated an immense fragmentation in voting intentions, since until a week before the vote no one exceeded the 13% range of the vote. 

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The candidates’ menu was bizarre. Besides Keiko running on the populist right and Castillo on the populist left, there was a bit of everything: from a millionaire businessman under investigation for money laundering to a lawyer accused of sexual harassment to a former soccer player.

After all, in the first round of voting, from the almost 18 million Peruvian voters who went to the polls, Keiko and Castillo only gathered 4.6 million votes. That is, almost 74% of Peruvians opted for other candidates or voted blank or annulled their votes.  In other words, in the second round, the election was defined by the “anti” vote: those who didn’t want Keiko at all voted for Castillo. And those who can’t stand Castillo, voted for Keiko. 

Now Castillo is left to face – besides the challenges of the economy, the pandemic, and a Congress that likes impeachments – the furious Keiko trying to pull his rug in Parliament and try to escape the recent tradition of Peruvian presidents on duty lasting less than a Netflix series

Translated by Carolina Pompeo