The Evolution of Peru’s Multidimensional Challenges, Part I: The Political Crisis
This article was adapted and updated from the Spanish-language version published by InfoBAE.
Image: Peruvian President Pedro Castillo delivers remarks. Source: Página 12.
The government of Pedro Castillo in Peru faces a significant crisis that has been building for years but has particularly blossomed during his presidency. In the words of one senior Peruvian analyst with whom I spoke, Peru is in the midst of a collapsed political system, with the public no longer perceiving traditional parties and leaders to have the legitimacy needed to sustain the system.
Peru’s deepening political and institutional crisis has played a key role in Castillo’s unexpected electoral victory in 2021 and contributed to the country’s current political turmoil. The increasingly likely scenario of Castillo’s government falling will deepen political polarization and fragmentation in Peru. The collapse will have negative consequences for the country’s institutions, democracy, political stability, economic performance, and organized crime within the nation’s borders and in the rest of the region. The fate of the Castillo experiment also foreshadows what could occur with multiple other governments across the region also undergoing similar political transitions. Many minority governments have orientations significantly different than the regimes they replace and are attempting to navigate an environment of enormous economic stress, fiscal weakness, and popular political pressure. Some have also been fueled by the COVID-19 pandemic and the global economic effects of the ongoing war in Ukraine.
This article is the first of three examining strategic challenges in Peru and their implications for Latin America and the United States. It will be followed by work analyzing Peru’s organized crime challenges and the country’s deepening engagement with the People’s Republic of China (PRC). This piece is the product of in-depth interviews conducted by the author with current and former Peruvian government officials, businesspeople, and academics during his visit to the country in June 2022. This series updates the parallel three-part series on Peru’s challenges previously published by the author in November 2020.
Context
Peru’s present political instability and other challenges reflect a combination of endemic corruption, underperforming government institutions, and a constitution whose rules create disincentives for executive, legislative, and judicial leaders to address the country’s problems effectively.
Peru’s political difficulties have long reflected citizen dissatisfaction with corruption and socioeconomic and geographic inequality, including governance problems in the country’s interior (and elsewhere) and associated criminal and insurgent activities there. These issues include illegal mining, coca-growing, and a bloody internal conflict that began in Ayacucho in 1980 by Abimael Guzman and his “Shining Path” terrorist movement that caused the deaths of over 69,000 people in two decades.
The legacy of corruption permeating through Peruvian politics, combined with independent executive, legislative, and judicial institutions working to check each other, has led to a continuous and increasingly frequent series of changes in the government tied to corruption. Every president in the past two decades has been charged with corruption either while in office, forcing his ouster, or following his departure. Alejandro Toledo, Alan Garcia, and Ollanta Humala were implicated on corruption charges after leaving office. Then, in March 2018, President Pedro Pablo Kuczynski was forced to resign over credible evidence that he had received a bribe from the Brazilian construction firm Odebrecht. His Vice President, Martin Vizcarra, who became president following Kuczynski’s resignation, was forcibly removed from office two and a half years later, in November 2020, by Peru’s Congress. Two-thirds of the body declared that the President’s actions showed his “moral incapacity.” Vizcarra was succeeded by Manuel Merino, who only lasted five days in office before being forced to resign. He was replaced by Francisco Sagasti, who served as interim president until Peru’s two-round elections, which elected the country’s current president, Pedro Castillo, in 2021.
Even before the current administration, Peru’s political system had long been fractured into a large number of clientelist parties. The division led to a unicameral Congress between a large number of parties and two rounds of a presidential election. Not to mention, many of the candidates in the first round lack a significant national-level base.
In recent years, the previously mentioned scandals, compounded by societal inequities and the de-facto exclusion of indigenous communities and others from the nation’s wealth and political power (particularly those in Peru’s mountainous and forested interior), have contributed to both the proliferation of new parties, politicians, and an anti-incumbent sentiment. The two contenders that emerged out of Round one of Peru’s presidential election in April 2021 received 33 percent of the vote.
Pedro Castillo was a teacher from the remote interior province of Cajamarca. He was unknown outside his home province and lacked national experience. Castillo was selected to run as a candidate of the Peru Libre (PL) party by its head, Vladimir Cerron, a Cuba-trained neurosurgeon with a radical-leftist ideology, who had been disqualified from running for the presidency himself due to a prior corruption conviction.
In a contrasting manner, Castillo’s opponent, Keiko Fujimori, was better known and nationally experienced. She was the daughter of Peru’s prior controversial President Alberto Fujimori, whose government was credited with having defeated the Shining Path terrorist movement. While he brought relative order and economic stability to the country, his rule had trampled into Peru’s democratic institutions, including dissolving the Congress in 1992. His government was also convicted of corruption and accused of involvement in human rights violations. Keiko’s party, Popular Force, was one of the best organized nationally, but it was linked in the mind of many voters with the longtime politics of corruption and poor performance that they rejected.
In June 2022, during the second round of Peru’s election, the tainting of Keiko by anti-establishment sentiment, in addition to Castillo’s appeal as a new, if unknown figure, around whom the marginalized populations of the country’s interior could rally around, were sufficient for him to beat Keiko and win the presidency. Nonetheless, many of his detractors, particularly on the right, worried about Castillo’s possible association with the radical left through Vladimir Cerron, the terrorist group Shining Path, and its affiliated political and intellectual front Movadef. His networks in Cajamarca, including his newly formed National Federation of Education Workers of Peru (FENATE), an organization more radical than the traditional teacher’s union SUTEP, which has been resistant to some of Castillo’s more radical positions, created distress.
Castillo was elected with little national-level political experience and few trusted advisors with this type of experience, forcing him to forge a government of a combination of people who were not necessarily of his inner circle. Many of whose background, capabilities, and temperament did not appropriately fit the positions to which they were being entrusted.
In less than a year in office, there have been 45 changes of Ministers in Castillo’s government across 18 ministries. This includes the resignation of three Prime Ministers. After each PM’s resignation, Castillo was forced to reorganize his government. Guido Bellido resigned in October 2021 over apparent pushback against his radical agenda. Mirtha Vazquez resigned in January 2022, when corruption was at its highest in the Castillo government. Hector Valer, who was named to replace her, resigned just days later following complaints of physical abuse towards his wife and daughter that became public. Castillo’s current Prime Minister, Anibal Torres, has been helped by his extensive career experience and legal experience as a law professor and department head at the left-oriented San Marcos University. Nonetheless, he is known for his combative temperament and has drawn criticism for praising Adolph Hitler for his role in building the country’s highway infrastructure.
The scandals and turnover within Castillo’s government have shown no signs of dissipating in recent months. In May 2022, Castillo replaced an additional four ministers, including the Interior Minister, the Minister for Energy and Mines, the Minister for Transport and Communication, and the Minister for Agricultural Development. Also in May, Congress censured Labor Minister Betssy Chavez, a Castillo loyalist, over her handling of the air traffic controller strike. Castillo’s appointment of Hernan Yuri Condori as health minister was criticized over his alleged lack of aptitude for the position, including his high-profile promotion of unorthodox medical cures, leading to his ouster.
Castillo’s difficulties with his cabinet personnel have been compounded by his challenges with a fragmented Congress largely hostile to him. Yet, with some incentives not to vote him out of office, it adversely impacts their own political and institutional interests.
The Congresspersons filling the 130 seats in Peru’s unicameral legislature, were selected during the first round of elections in April 2021.The legislature initially included 10 parties, of which his Free Peru party had only 37 seats. Over the year that followed, the situation was complicated further by defections between parties and the creation of new legislative blocks. Even the party which had made Castillo its candidate split between those who supported its founder, Vladimir Cerron, versus those who had come into the party with Castillo and were principally loyal to him. The latter are known as the “Magisterial Block,” reflecting their backgrounds in education, like Castillo. As of July 2022, Castillo could count on less than 40 of the 130 legislators to block votes seeking to remove him from office, which used the previously mentioned vehicle of “moral incapacity,” and required 44 votes to defeat such a motion. In advancing actual legislation, Castillo’s position was even weaker since there were 16 members in Free Peru loyal to Vladimir Cerron. At the end of June, Free Peru demanded that Castillo resign from the party over their differences. Out of 130 legislators, the people who supported Castillo included 10 in his Magisterial block, plus a handful of others such as 7 in Democratic Peru, 5 in Democratic Change, and 5 in Peru Bicentenario.
Perhaps his most important, if most unpredictable potential allies are the so-called “caviar left,” a group of approximately twenty relatively progressive politicians who have played a key role in multiple parties and as technocrats in multiple governments in recent years. Generally from wealthy backgrounds and Peru’s best universities, they are spread across a number of small parties, including the “Purple Party” of Peru’s former President Sagasti and “We are Peru.” Although they do not have a formal hierarchy, Gustavo Gorriti, who has played an influential role as a journalist and advisor of numerous governments with his Legal Defense Institute (IDL), is broadly considered one of their key leaders. These same “caviar leftists” also are represented as technocrats within key ministries of Castillo’s government, including the Interior Ministry, the Foreign Ministry, the Justice Ministry, the Economics Ministry, and the Agricultural Ministry.
Castillo’s supporters in Congress also contributed indirectly to the issues surrounding the President’s image. One Castillo loyalist, Pablo Bermejo, has been accused of terrorism. A report by the Peruvian counter-terrorism directorate DIRCOTE mentioned that he previously met with members of Shining Path.
In opposition to Castillo’s fragile minority coalition are a diverse group of center and right parties. These included the previously mentioned Popular Force, which was the largest party in this block, holding 24 legislators, followed by 15 seats of the center-right Popular Action party of the current Parliament head Maria de Carmen Alva Prieta, 14 seats for the Alliance for Progress (APP), “Advance Country” with 10 seats. Other parties include the Popular Renewal, which is a conservative party with ties to the Catholic organization Opus Dei, and whose members include two decorated retired Navy Admirals, with 9 seats, and “We are Peru” with 5 seats. This diverse opposition has continued to splinter into different “factions” in Congress, creating a shifting and unpredictable political dynamic. Some members are sometimes interested in pragmatically working with Castillo in a transactional “patronage politics” orientation, while in other moments, they seek to oust him.
As a reflection of Castillo’s difficult legislative position, he has been unable to push significant initiatives through the Peruvian Congress. He has also been blocked in implementing a campaign promise, strongly supported by his party’s leader Vladimir Cerron, to change Peru’s 1993 constitution as part of the solution to address Peru’s continuing political crisis. In April 2022, Castillo submitted a bill to Parliament to initiate a Constituent Assembly Process. The head, Maria Carmen de Alva, called it unconstitutional and unfeasible and did not submit the bill for consideration. Even after the rejection, however, leftist politicians, particularly from Peru’s provinces, and striking transport workers, continued to clamor for a Constituent Assembly as an essential element to alleviate Peru’s political crisis.
Beyond problems associated with his ministers, and the blockage of his agenda, Castillo has been beset by multiple accusations of, and investigations into personal and institutional wrongdoing. Some are being considered by the Attorney General, who is part of Peru’s independent Judicial branch. Others are being investigated by Committees in Peru’s Congress, as a reflection of the nature of the charges.
Arguably the most serious group of cases before the Attorney General, involves alleged bribes by Peruvian businesspeople to the Minister of Transportation and Public Works, Juan Silva, and the Secretary of the Presidency Bruno Pacheco. These cases involve fifteen contracts with four Chinese construction companies, known as the “China Construction Club” scandal. The case possibly implicates Castillo himself as well as Castillo’s nephews. The matter came to the national spotlight when a bag containing USD $20,000 in cash belonging to Pacheco was found in the bathroom of the Presidential Palace. Pacheco, reportedly also implicated by text messages that he sent, has now fled justice and become a fugitive, as have Castillo’s nephews. Businessman Zamir Villaverde, now in prison, and lobbyist Karelim Lopez Arrendondo, have been implicated and are both reportedly cooperating with authorities on the matter. As this article went to press, Villaverde was threatening to leak new audios and videos to the press, further implicating Castillo and strengthening the consensus in Congress to remove the President. The principal alleged recipient of the bribes, Juan Silva, has also gone into hiding. Many in Peru interviewed for this piece speculated that Castillo loyalists in the Interior Ministry, police, and intelligence services are helping the fugitives evade the law and worry that their capture could lead to their testimony or the turnover of evidence more directly implicating the President, further contributing to Congress arriving at the two-thirds supermajority required to oust Castillo under the constitution’s provision of “moral incapacity.”
The case has also tainted former President Sagasti, whose functionary approved a change in the regulation regarding the required qualifications to head the Secretariat of the Presidency. On Sagasti’s last day in office, it became possible for Castillo to hire Pacheco, who would not have been qualified under the prior existing laws.
Beyond the “China Construction Club” scandal, there is another case being examined by a committee in Peru’s Congress investigating a set of accusations that Castillo, Pacheco, and the Interior Minister, in exchange for bribes, manipulated standards to force the retirement of personnel to promote Castillo loyalists into key ranks in the police. As noted previously, the case has taken on an added dimension with the speculation that the Castillo-loyalist Interior Minister, Dimitri Senmache, and some of those improperly promoted, may be involved in protecting the fugitives from capture to avoid their testimony or more evidence that could bring down the government.
Additionally, there is a case being examined by the Congress involving accusations that Castillo, in conjunction with the country’s former Minister of Defense Walter Ayala and the Secretary of the Presidency Bruno Pacheco, obliged the head of the Army General Jose Vizcarra, and the head of the Air Force Jorge Luis Chaparro, to promote unqualified Castillo loyalists to the rank of general. The complaint, which comes from the two former service chiefs, argues that because they resisted the pressure from the President and Defense Minister to promote the individuals, they were forced to involuntarily retire shortly thereafter, obliging them to publicly denounce what had happened to the Congress.
Furthermore, a committee of Peru’s Congress dedicated to “Constitutional Accusations” is examining charges over Castillo’s purported treason of collaborating with the Bolivian government on a deal potentially restoring Bolivia’s access to the sea through Peruvian land concessions. The charges are based, in part, on conversations that Castillo held with Evo Morales in Bolivia in 2018, as a union leader, before becoming President. However, the critical characterization of his position during a public interview with CNN reporter Fernando Rincon, suggested that his intentions to negotiate the handover of Peruvian territory might have continued after becoming president.
While there is a general consensus that Article 117 of the Peruvian constitution gives the president immunity against all but grave charges such as treason, stopping elections, or dissolving Congress, it is more ambiguous regarding whether a sitting president may be publicly investigated. Peru’s former prosecutor, Zoraida Ávalos Rivera, maintained that presidential immunity also prevented him from being investigated for crimes, dropping lines of investigation into other officials where they implicated Castillo. Her interim replacement, however, Pablo Sanchez, permitted such investigation. Indeed, under Sanchez, in June 2022, Castillo was publicly brought in for questioning. Sanchez was, however, only the interim attorney general. At the end of June 2022, the Justice Ministry named a new attorney general Liz Benavides Vargas, a respected professional who is expected to continue the investigation, although possibly in a lower-key fashion than her predecessor.
Beyond such investigations, Castillo has even been subject to accusations for allegedly plagiarizing his master’s thesis. Complicating matters, the thesis was done for Cesar Vallejo University, which is owned by Cesar Acuña. Mr. Acuña is blocked from entering the U.S. following a criminal conviction and is also the head of APP, an opposition party that generally opposes Castillo. The fluctuating position of the Acuña-affiliated University during its investigation regarding whether there is evidence of plagiarism by Castillo has been interpreted by some as part of Acuña’s maneuverings to cut a deal with, or alternatively destabilize, the President.
Although the Peruvian constitution generally protects Castillo from criminal charges, the numerous cases are a vehicle for building consensus within the Congress to arrive at the two-thirds supermajority needed to oust the President for “moral incapacity.”
While Castillo continues to draw support from the economically and politically marginalized populations of Peru’s interior to whom he gives voice, many Peruvians have become increasingly alienated by the constant air of scandal within the Castillo government. In a June 2022 IPSOS poll, 70 percent of Peruvians expressed disapproval of Castillo, up from 62 percent in January 2022 that thought Castillo should resign.
To date, President Castillo has survived two attempts by Peru’s Congress to remove him using the “moral incapacity” clause—in December 2021 and in March 2022. To date, the faction of Peru Libre loyal to Vladimir Cerron has supported Castillo against such motions and thus has been key to the President’s survival.
A complication in the calculations of Congressmembers and other elites regarding ousting Castillo is the question of his successor and their political orientation and alliances. Under Peruvian law, if Congress removes Castillo, the first Vice President, Dina Boularte, would become President (also making her Peru’s first female president). Boularte was originally Vladimir Cerron’s chosen running mate before the latter was disqualified from running for president. She is considered loyal to Cerron despite some public statements to the contrary. Without Cerron’s support, however, Boularte lacks a political base, a condition augmented, according to those consulted for this work, by her outspoken style. Boularte is also politically vulnerable because she ran an allegedly prohibited social club, the Apurimac Club, over which an investigation is currently underway. Boularte has also possibly violated Peruvian law by not initially quitting her position in Peru’s government civil registry organization, RENIEC, upon becoming Vice-President, although she eventually did so in April 2022. For some on the right fearful of a leftist-Boularte government aligned with and guided by Cerron, completion of legislative procedures to infiltrate Boularte must occur before any vote to remove Castillo, so that the presidency passes to the head of the Congress, and not to Boularte.
Within this complex context, the end of María del Carmen Alva Prieto’s one-year appointment as head of Peru’s Congress in July 2022 has taken on added importance since the person selected to replace her could become Peru’s next President. As of the time of this writing, the Congress’ selection of its new leadership was anticipated to occur on July 27, 2022.
In choosing the next head of Congress, according to those consulted in Peru for this work, those seeking to oust Castillo seek a consensus candidate with the aptitude and ability to manage the delicate transition period to the next elections if called upon to do so as well as a someone relatively free from corruption charges. The acceptability of the candidate within Peruvian society is also a consideration, given the possibility for protests and uprisings by Castillo’s supporters and other groups.
For those anticipating new elections, there is also interest by some Congresspersons in changing the Peruvian constitution to permit their re-election, so that those bringing down the government would not be permanently ending their legislative careers by doing so. Although there have been multiple amendments to the Peruvian constitution since the era of President Alberto Fujimori, the appearance of self-perpetuation by a Congress already viewed negatively by many Peruvian voters would likely generate public protest.
Despite the complex calculations regarding the removal of Castillo, during my conversations in Peru, I also uncovered a very different strategy being pursued by part of the Congress and their political allies. They are attempting to forge a pragmatic centrist coalition that would cooperate transactionally by the President, despite ideological differences and concerns over his performance, while divorcing him from Cerron. The strategy was based on a calculation of the inability to find votes to oust Castillo, and thus a need to make peace with Castillo to support the material interests of the Congresspersons and their supporters while in office. Toward this end, there was a movement to create a new centrist political block “Everyone for Peru,” from defectors of a range of centrist parties, including Popular Force, Advance Country, and Popular Action. By early July, the block believed that it had enough support to elect its candidate, Mauro Gonzales, to head the new Congress when elections were held at the end of July and hoped to become a new centrist party for the next election “Always for Peru.” At the very least, the victory of Gonzales would significantly increase Castillo’s prospects for survival as President.
Apart from the Gonzales option, because of an informal “pact” between blocks in Congress that had allowed Maria Carmen Alba of the Popular Alliance to head the Congress, prior to the present moment, the parties had understood that the next head of Congress would have to come from the APP. This informal agreement positioned Gladys Echaiz for the position, particularly if the Congresspersons expected to politically incapacitate Boularte and oust Cerron. Echaiz is a respected former prosecutor, generally free of corruption allegations, and viewed by many as having the character and level of acceptability among the population that would allow her to manage a transition if Boularte and Castillo were ousted. On the other hand, if the parties decide to work with Cerron, thus removing such “acceptability” calculations, some expected that Cesar Acuña himself, or his brother Hector, could be the APP candidate. Another candidate mentioned was Darwin Espinoza, head of the Popular Alliance, the largest block, although his selection was considered less probable since it would violate the previously mentioned “pact.”
Virtually all of the outcomes of Peru’s crisis involve the danger of further political polarization and radicalization. The faith of Peruvians in their democracy would be undermined on one hand by a block of parties that are skeptically viewed by many Peruvians, removing an elected President and Vice President. It would be as equally harmful to have a cynical pact between politicians that maintain in power a President seen by many as incapable, for the economic benefit of the elites. I was also reminded that worrisome possible future leaders wait in the wings, such as radical nationalist Antaruo Humala. Mr. Humala may complete his jail term for trying to overthrow the Peruvian State as early as next year and would consequently be fully eligible to run for Peru’s presidency in 2026.
In my conversations while in Peru, many Peruvians looked to signals from the U.S. in their calculations. A positive meeting between President Biden and Pedro Castillo at the June 2022 Summit of the Americas was interpreted by some in Peru as a subtle message of support by the Biden administration for Castillo and his continuity in office despite the scandals.
Outlook and Conclusion
There are at least three distinct possibilities for Peru’s political trajectory in the coming months, taking them in distinctive directions, none of them good for the political and institutional health of the country or the region in which Peru plays a key part:
In the first scenario, President Castillo could continue in power, albeit weakened, as more information continued to trickle out about possible wrongdoing by President Castillo and those around him. The election of Mauro Gonzales or another pragmatist to head Congress at the end of July would likely strengthen Castillo’s hand in this regard but is not the only avenue for him to continue in power.
In the second scenario, Castillo could resign, or Cerron’s followers could vote with the opposition, ousting President Castillo, then pivoting to ally with Vice President Boularte to impose a new, more ideologically-oriented leftist government. Doing so would likely unleash a new phase of political struggle, both on the streets and within Peru’s institutions, with troubling, unpredictable results. As one former official interviewed for this work put it, such a maneuver might be completely legal and constitutional but not perceived by an important part of the population as legitimate. A Cerron victory could set Peru on a path toward an authoritarian socialist government along the lines of Venezuela, likely with the support of Venezuela, Cuba, and other leftist actors in the region.
In a third scenario, the Congress could succeed in ousting Vice President Boularte through a two-thirds vote, based on the previously discussed cases of her improper running of a social club while in Congress and her failure to have quit her membership in RENIEC. The Congress could then separately vote to oust Castillo, elevating whichever centrist or right-wing leader the Congress selects as its leader at the beginning of July as interim president. This course would automatically trigger new national elections, with uncertain results. Although the constitution says such elections must occur “immediately,” those responsible for the transition would likely argue that they needed at least several months to prepare and that such elections should only apply to the Executive branch, while elected Congressmembers should be allowed to continue until the end of their terms in 2026.
Each of these three scenarios would raise important questions about the legitimacy of the nation’s political bodies. The extended political transition, amidst such difficult constitutional questions, would likely unleash significant social unrest among the left, Peru’s indigenous, people in Peru’s interior, and other marginalized populations who had previously supported Castillo. Outreach to these populations and the support of Peru’s security forces would likely be critical to the political survival of the new leader. Some figures consulted for this work suggested that the sensitivity of the position of the Peruvian Armed Forces in responding to protests could tempt them to refrain from acting. These thoughts evolved as a result of what occurred in Bolivia in November 2019 when the nation’s Armed Forces did not intervene against protesters challenging former President Evo Morales. Such a posture would have consequences, potentially allowing protesters to overthrow the interim president from Congress.
The outcome of Peru’s institutional crisis will impact not only political stability and democracy in the region, but will affect the ability of the country to manage escalating criminal challenges in its territory, including illegal mining, cocaine production, and the remnants of the Shining Path terrorist movement and its political arm MOVADEF. It will have significant implications for the country’s economic viability, and the future of its relationship with extra-hemispheric actors such as the PRC, as will be discussed in the two articles that follow in this series.
What happens in Peru will also profoundly affect the rest of the continent, to which it is bound by geography and significant economic activity, both licit and illicit. Peru’s neighbors are also currently navigating numerous delicate political transitions, strained by the lingering economic and fiscal scars of the pandemic and the impact of Russia’s Ukraine invasion on food and petroleum prices. Peru’s failure to maintain a stable democracy will likely have cascading effects on the political and economic health, as well as criminal dynamics across the hemisphere.
