Girl power

Dina Boluarte becomes Peru’s first female president, but she inherits a difficult hand.

Dina Boluarte became the first female president of Peru on 7 December 2022 after Congress impeached the former president, Pedro Castillo, in an emergency session after he attempted to dissolve the legislative chamber as part of a so-called ‘self-coup d’état’. Boluarte is a 60-year-old lawyer who served as vice-president and minister of development during Castillo’s administration, despite having little political experience.

After assuming office, Boluarte vowed to install a government of national unity and called for opposition parties to accept a political truce. She also announced that she would appoint a cabinet that represents Peru’s diversity to revive trust in democracy in a country that has seen six presidents in four years.

It sounds easy, doesn’t it? The reality is quite different according to a political analyst in Lima, “Boluarte inherited a political nightmare and her first few weeks have been tough. It wasn’t so long ago that she publicly stated she would step down if Castillo was ousted, her change of heart makes her look weak. She’s also given in to the protesters instead of backing the Constitution, more weakness. For the time being, she appears to have the backing of Congress and the Armed Forces but she will face stiff political opposition and winning over public opinion won’t be easy.”

“For the time being she appears to have the backing of Congress and the Armed Forces but she will face stiff political opposition and winning over public opinion won’t be easy.”

Political analyst, Peru

Castillo’s supporters are livid and have organised large-scale protests on the streets which have left seven dead, so far. This social and political turmoil combined with micro and macroeconomic instability reflect Peru’s deep divisions which are unlikely to be solved by an interim government. Recognising this, Boluarte has proposed to bring forward the next general elections to April 2024. However, it is unclear if the new President will be able to hold office until then, as Castillo’s supporters continue to call for the dissolution of Congress.

A Peruvian security expert shared his view of the situation on the ground, “Everyone is very nervous; businesses are stopping or postponing investment and operations. The protests have caused chaos and the problems will be wide reaching, for example, the Gloria milk factory – the number one brand in Peru – has been destroyed. How do you explain to the people that they have caused a milk shortage? How do you explain to the public that the country’s economic problems are down to their own behaviour? 2023 is going to be very difficult in terms of Peru’s economy but also the security situation. Everything will remain very unstable and anyone who sees an opportunity to create chaos will go for it.”

“Everyone is very nervous; businesses are stopping or postponing investment and operations.”

Security expert, Peru

Meanwhile, the financial markets are on tenterhooks as investors and businesses await the results of the newly appointed Finance Minister, Alex Contreras – a technocrat with a limited ideological agenda and with years of experience as a public official. And, despite the business community’s relief to see Castillo go, the economy continues to underperform after the Covid-19 pandemic. The events this month have weakened Peru’s stocks, bonds and currency, in a broader context of low copper prices. This led S&P Global to revise the nation’s outlook from stable to negative due to institutional instability and the potential impact that prolonged protests could have on the country’s economy.

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