- Peru's new President is off to a bad start, selecting contentious ministers, alienating allies and setting the scene for a brutal face-off with congress within days of his appointment.
A rural teacher and union activist, Pedro Castillo won the election after reassurances that he is his own man, not beholden to his party's Marxist ideology or head.
But when he named his cabinet - including a prime minister who is being investigated for being an alleged apologist for terrorists - analysts, opposition figures and even some who had backed him expressed alarm so much that the word 'impeachment' was heard more than once.
'His political capital went into smoke in 24 hours, said Rodolfo Rojas, a partner of the Lima-based Sequoia political advisory group. Impeachment isn't likely, Rojas said, but a clash with congress looks imminent. While Peru has made a habit of ousting presidents, it's rare for such a debate to take place within days of inauguration.
Investors also are deeply concerned. Stocks plunged 6% in one day, bonds are piling up and the Peruvian sol is the worst-performing currency in the world since Castillo was elected. Barclays estimates that investors have pulled an average of $3 billion daily from the country since the April election.
Several key backers have split with Castillo, including Partido Morado, a centrist party, La Republica, a national newspaper supporting him, as well as a teacher's union.
Impeachment of presidents in Peru is easier than anywhere on earth. Castillo's opponents would just need 87 out of 130 votes in the single chamber congress and he could be disregarded under the loosely defined'moral incapacity' clause. Former president Martin Vizcarra was impeached last year under it and almost every Peruvian president elected since 1985 has been impeached, imprisoned or sought in criminal investigations.
Castillo's party has only 37 seats, including allies, it's still fewer than 50. In other words his opponents dominate Congress.
Some suspect can cause Bellido to name Castillo to rig on Congres in order to set-up a confrontation with castillo. Under the country's unusual constitutional rules, if Congress twice rejects his cabinet, the President can dissolve the chamber and call for new elections.
If they don't like the Cabal del Sol cabinet, they'll give it a vote of no confidence and we immediately present another cabinet, said Guillermo Bermejo, a congressman for Castillo's Free Peru party. 'And if they don't like that one it's goodbye congress!
That could set the stage for what Hugo Chavez has said he wants - a constitutional assembly to rewrite the nation's charter, something done by other Latin American radicals, such as Castillo Chavez in Venezuela. Castillo is also being watched as a predictor of what could be a leftward shift in investor standouts with elections due in Chile, Colombia and Brazil in the coming 14 months.
Keiko Fujimori was a virtual unknown before the presidential race when he ended at the top of a group of candidates and set up a runoff with Castillo, from the nation's most powerful political clan. He squeaked past her by 40,000 votes and had to endure weeks of recounts and legal challenges before being declared victorious.
Bellido is a Cuban Marxist, who has never held high office, and considers the communist government in Cuba a democracy. Other controversial cabinet picks include the foreign minister Hector Bejar, who was a guerrilla leader in the 60 s.
Many of the new ministers lack experience or qualifications for their new responsibilities that will include trying to restore some normalcy after one of the worst Covid 18 outbreaks anywhere.
Even members of the new government appeared to have reservations about some of their colleagues. Shortly before the cabinet was sworn in on July 30 castillo's picks for economy minister and justice minister were walked out and were sworn in the following day, apparently after receiving reassurances from Castillo.
The selling of assets in the country was briefly reversed when Pedro Francke, a world bank economist popular with investors, agreed to take over the role of economy minister.
Castillo had toned down his weak performance in the runoff and tried to broaden his appeal beyond his heartland in poor rural areas. But when he took power, he'returned to his roots' said Rojas.
The prime minister and some of the other appointments that most spooked investors are people close to Vladimir Cerron, a Marxist neurosurgeon who leads Castillo's party in congress. Castillo's revolutionary followers without doing away the more moderate leftist allies will require a lot of political skill, and it's unclear whether Cerron has it.
Although Castillo has'shot himself in the foot' in his first few days, his government isn't on the verge of collapse, said Jo-Marie Burt, a Peru specialist for the Washington Office on Latin America, which promotes human rights and democracy. And just like congress can impeach him, Castillo can dissolve congress if it rejects two of his cabinet members.
She added: 'It seems that coming out of the gate, Pedro Castillo barely has that nuclear sash on, and both the President and Congress seem to be reaching for those presidential options at the outset.