Paraguay: UNASUR will present report on the political situation in the country next week

The Foreign Minister of Peru, Rafael Roncagliolo said that on August, 9^th the first report of UNASUR’s  High Level Group on the political situation in Paraguay will be delivered.

In recent days, representatives of the regional bloc met in Lima, the Peruvian capital, to assess the political crisis in Paraguay established after the deposition of then President Fernando Lugo on June 22^nd. Peru holds the temporary chairmanship of UNASUR.

Paraguay was suspended from the UNASUR until the country’s general elections that will occur in April of 2013. Mercosur also suspended Paraguay for the same period. In the opinion of the authorities of the regional bloc, Lugo’s right to a due process of law was not fully respected, and thus Paraguay violated the democratic clause necessary for a country to be an active member of country’s association. The government was taken over by former vice president, Federico Franco.

The former president’s impeachment was approved by the House of Representatives and the Senate in less than 24 hours. The Paraguayan authorities deny irregularities.

PERU: Government will launch infrastructure program

Peru will launch a program of infrastructure projects in a public-private partnership that includes investments in the order of US$ 10.35 billion from May 2012 until the end of 2013, in order to maintain the current strong economic growth.

According to Minister of Finances, Luis Miguel Castilla, the project is critical because the investment is key to maintaining growth rates above 6%.

The minister said most of the project plans will occur in 2013. In 2012, the programs offered will amount between US$ 1.5 to US2.0 billion. Castilla said that about 60% of projects will paid for by the public sector and the rest by private investment.

Luis Miguel Castilla stated that in total the program will fund 26 projects, which range from construction and rehabilitation of roads, construction and expansion of airports and transportation of natural gas.

The minister pointed out that the president Ollanta Humala, who took office in July of last year will give priority to accelerate the mass of gas consumption, now centered in Lima.

The minister also stressed that the highway projects, alone, represent an investment of approximately US$ 3.8 billion, while the second metro line to Lima require another US$ 3 billion for its construction.

Peru: “We need to focus more on social development and less in military force” says Minister Otarola

The Peruvian government plans to focus more on development than the use of military force to curb drug trafficking in the region,  said the new defense minister, Alberto Otarola.

According to Reuters, Otarola said that Peru needs to invest in infrastructure and social programs in the region of the Valley of the Apurimac and Ene Rivers . At least ten soldiers and policemen were killed in the forest region in the last two years in confrontation with drug traffickers and members of the Shining Path terrorist group.

BOLIVIA: Evo Morales says that “fat” affects Alan García

The president of Bolivia, Evo Morales, said that “too much fat is damaging” his Peruvian colleague, Alan García, who joined Haya’s International Court of Justice with a demand about maritime limits against Chile. For Bolivian’s Chief of State, García is looking to improve his political image through this action.

According to Efe agency, Morales’s critics were done during his speech in the city of Cochabamba, during the presentation of titles of properties of lands and peasants. “Maybe too much fat is affecting the president of Peru, Alan García, and he’s not well informed. Bolivia is never going to resign the return to the sovereign sea”, he affirmed.

The president remembered that Bolivia did not resign to have an exit to the sea and says that the subject is being discussed in reunions with the Chilean government. In Evo Morales’s evaluation, the demand presented by Peru in Haya affected one of the solutions analyzed with Chile so that the country could obtain and exit through the Pacific.

Peru: The dispute in 2011 is expected to be very close

The Mayor of Lima, Luis Castañeda Lossio, considered quite conservative, and the leader of the left wing and former presidential candidate, Ollanta Humala, were shown to be leading the most recent public opinion survey on the vote for succession in 2011, carried out by the company CPI.

According to the polls, Castañeda Lossio has 18% compared to Humalla’s 16.9%. The third position is held by former presidential candidate Lourdes Flores, with 13.4%, technically tied with right wing congresswoman Keiko Fujimori (13%), daughter of former President Alberto Fujimori. Former President Alejandro Toledo holds 10%, president of the Board of Ministers, Yehude Simon, 3.3% and congresswoman from the Aprista Peruano Party (APRA), Mercedes Cabanillas, has 3.2%.

Even though the elections are a long way off (three years), the similar percentages of Castañeda, Humalla, Keiko and Toledo suggests that the scenario will lead to a very close run off among the various competitive candidacies. With such similar numbers, the probability of the dispute ending in the 1st runoff has become greatly reduced. Therefore, the goal of the players will be to win at least 20% of the votes to ensure a place in the runoff. 

Peru: The impact of Obama`s victory

Peru is one of the countries expected to undergo little change in its relationship with the US. As its FTA (Free Trade Agreement) has already been signed, it has the support of Barack Obama and the Democrats. However, the more interventionist policies of the new American government may cause a few trade barriers. 

Peru: APRA optimistic

The Cabinet of Ministers chaired by Yehude Simon will be concluded by April 2009 after overcoming political issues, said the secretary general of the APRA party, Mauricio Mulder. According to him, the experience gained in this period will be fundamental to face the challenges ahead.

Mulder highlighted that Simon has already begun a negotiation process with all political and social leaders in Peru. According to him, the new government set-up will receive a vote of confidence from Congress. The secretary general also said that the APRA party as a whole will provide support in Congress. Despite Mulder’s optimism, local sources say that some wings of the APRA party are dissatisfied. They believe that the party lost political power in the current government, given a more technical set-up in the upper tier.

However, there will hardly be any short-term change. Alan García’s new government now aims at achieving independence from the political system, which ends up in a paradox. The government must have a more independent attitude, but at the same time needs party backing to support García’s unpopular administration.

Peru: García forecasts 7% growth in 2009

Despite the adverse international scenario, Peruvian president Alan García has affirmed that the economy will grow by 9% this year, and 7% in 2009. Besides, public investment in roads, water treatment and electricity will increase by 34% in comparison to 2007. According to the local press, García is confident in the nation’s potential. While talking to business people, he said that Peru is well positioned and that investments should be maintained. However, the Peruvian Chief of State asked for prudence in public expenses.

Behind García’s optimistic rhetoric there is worry with the political and economic situation. The political crisis has altered all his cabinet, and now financial market turbulences will serve the opposition well to challenge the efficacy of his government’s orthodox economic policies. 

Faced with this scenario, the government will need plenty of political skills to sew up an effective support base. Being in the government will carry an increasingly bigger burden, since there is a tendency for opposition criticism to connect more easily with public opinion wishes. Conversely, being in the opposition becomes more profitable. The main beneficiaries are García’s top opponents: the Workers’ General Centre (CGT) and nationalist leader Ollanta Humala. 

Peru: Oppositionists Increase Mobilization

The Peruvian opposition is expected to benefit from the political crisis. Not only unfavorable market conditions affecting the nation’s poor, but also the political predicaments of persons having close ties with Alan García have given ammunition for the General Labors Confederation of Peru (CGTP) to call for changes in economic policy.

The government has demonstrated its inability to conciliate economic growth and wealth distribution, say the oppositionists. According to the local media, popular manifestations against the president are a consequence of the Peruvians people’s frustration with the government, added to fears related to the international financial crisis.

In light of these circumstances, the lobby demanding Alan García to change economic policy, already strong in the past, will now increase in intensity. The first reaction by the Peruvian leader has been positive, however. He has adopted a fierce speech against corruption, thus avoiding that the implicated persons are linked to the president’s image.

Significant changes in his administration are virtually inevitable, however. The first sign of change has come from Jorge del Castillo. Prior to attending a meeting, he said that all ministers had resigned from office, and that Alan Garcia had accepted such resignations. The substitutes have yet to be appointed, however.

The government will have to form an “assault squad” in Congress upon forming the new ministerial line-up because an inquiry has been launched to investigate oil concession agreements. 

Peru: Alan García’s Administration Threatened by Scandal

A major political scandal hit president Alan García’s administration beginning last week.

A footage broadcasted by América Televisión’s program “Cuarto Poder” shows Rómulo León and Alberto Quimper discussing kickbacks to be paid for aiding Norwegian oil company Discover Petroleum in a bidding for oil exploration blocks. León is a former minister linked to the Aprista Party’s, while Quimper is a high-ranking officer of Petroperú, the country’s agency for promoting and negotiation hydrocarbon contracts.

The oil company, which eventually won the bidding, denies any form of illicit facilitation. However, another recording was disclosed in which León discusses a purported benefit for Jorge del Castillo, head of the Council of Ministers, with a representative of Discover Petroleum.

Since disclosure of the scandal the Minister of Energy, Juan Valdivia, and the president of Petroperu, César Gutierrez, have been removed from their offices. This is undoubtedly the biggest political crisis in Alan García’s administration so far. This situation is likely to develop further into a predicament for president García because of his close ties with the persons involved in the scandal.

The population’s confidence in his administration is very low as of now. According to the latest surveys, only 19% of Peruvians approve his administration. The crisis is likely also to have negative effects on the Peruvian Aprista Party (Apra) on account of the involvement of persons having close ties with the president’s party.