Peru – New Prime Minister and Cabinet Reshuffle

Previously on this blog, I have discussed the Peruvian political tradition of frequent cabinet reshuffles. Well, it continues apace. On Monday, the Peruvian Prime Minister, César Villanueva, tendered his resignation in Latin America’s only semi-presidential regime, just four months after his appointment by President Ollanta Humala. Villanueva was Humala’s fourth prime minister since he became President in July 2011, and his resignation this week precipitated yet another reorganization of Humala’s cabinet.

Villanueva’s departure appears to be the result of a disagreement he had with the Finance Minister, Luis Miguel Castilla, over increasing the minimum wage. Last week, Villanueva publicly floated the possibility of the government raising the floor of the minimum wage in Peru, but a couple of days later, Castilla rejected Villanueva’s statement, and insisted the government was not planning any changes to the minimum wage. What is more, the First Lady of Peru, Nadine Heredia, also publicly contradicted Villanueva, and re-iterated Castilla’s denial.

When he arrived in office, Humala, elected on a vaguely left-leaning, economic nationalist platform, raised Peru’s minimum wage to 750 soles (US$268) a month. However, given the recent slow-down in economic growth, and an increasingly unhappy and fractious private sector, particularly the all-important mining industry, an increase in the minimum wage right now would be too politically costly for Humala.

Consequently, Villanueva’s statement received no support from Humala’s inner circle, and he was left with little choice but to tender his resignation. In his stead, Humala has appointed René Cornejo, previously Minister of Housing. Cornejo is Humala’s fifth prime minister.

At the same time, Humala replaced a further seven cabinet ministers. Ana Jara, formerly Minister of Women and Vulnerable Populations became Minister of Labor; Carmen Omonte replaced her. The former Minister of Agriculture, Milton Von Hesse, was made Minister of Housing, while Juan Manuel Benítez Ramos became the new Minister of Agriculture. In addition, Paola Bustamante was appointed Minister of Development and Social Inclusion; and Piero Ghezzi Solis is the new Minister of Production.

Apparently, Luis Miguel Castilla also offered his resignation to Humala this week. Nonetheless, he retains his post, perhaps no surprise given Castilla’s importance as a signal of economic stability and orthodoxy. However, Humala did accept the resignation of Jorge Merino, formerly the Minister of Energy and Mines. Eleodoro Mayorga Alba replaced Merino.

 

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