SPECIAL REPORT Peru: Analyzing the changes of the Ministerial Cabinet Lima, March 2014 BARCELONA BOGOTÁ BUENOS AIRES LIMA LISBOA MADRID MÉXICO PANAMÁ QUITO RIO J SÃO PAULO SANTIAGO STO DOMINGO PERU: ANALYZING THE CHANGES OF THE MINISTERIAL CABINET 1. VILLANUEVA’S RESIGNEMENT 1. VILLANUEVA’S RESIGNEMENT 2. THE CORNEJO CABINET In order to analyze why César Villanueva left the Presidency of the 3. PROFILES Council of Ministers it is necessary to review the circumstances that led LLORENTE & CUENCA to his resignation. It is well-known that the implementation of a political measure to increase the salaries of the Ministers was pending: the State needed technical specialists at a government level, and the salaries were not high enough to attract them. Subsequently, the ICJ judgment provided the appropriate context to implement the measure. This took Villanueva by surprise, and he was forced to find a conciliatory and much more political solution with sectors that also wanted an increase of the minimum wage; sectors which had already received a salary increase during that term. Even Minister Castilla pointed out in his presentation at the Congress that the salary increase benefited more than just the Ministers: “To this day, the income reform has benefited 740,000 people: workers and pensioners, members of the Armed Forces and National Police, teachers, professionals, technicians and health auxiliaries; judges and attorneys, among others, with an approximate investment of 5,000 million nuevos soles.” It should be recalled that this Government has already increased the minimum wage twice. As a result, discussing this issue once again could have been perceived as an intrusion into the competences of Castilla —Minister of Economy—, as the increase would affect sectors that had already received a salary increase. It is needless to say that Villanueva’s actions in this context could also have created problems at a political level. In the light of this, the statements of both the First Lady and Minister Castilla came as no surprise and triggered Premier Villanueva’s resignation. It is worth highlighting what the former Premier Óscar Valdés stated: “Villanueva has not been up to expectations”, suggesting that the departing Premier tried to act without taking into consideration the point of view of the President’s wife. He also added that “the First Lady abuses her power.” 2 PERU: ANALYZING THE CHANGES OF THE MINISTERIAL CABINET 2. THE CORNEJO CABINET necessary in the current model of governance. The Minister of Housing, “These ‘more technical’ Construction and Sanitation, In addition to Cornejo, who Ministers have an René Cornejo, was in charge of became the new President of rebuilding the Cabinet, which the Council of Ministers, other extensive professional once again seems to portray itself new Ministers took office, such experience; they have as more technical than political. as Piero Ghezzi Solís, who been part of multilateral These new and acclaimed replaced Gladys Triveño at the entities and hold technical profiles have silenced Ministry of Production; and to some extent the opposition, Eleodor Mayorga, who replaced postgraduate degrees which protested against the Jorge Merino at the Energy and obtained in prestigious “interference” of the First Lady Mining sector. Both of them Universities. They and against the empowerment of have a technical profile and are Luis Miguel Castilla. supported by different sectors have little political of the public opinion. Moreover, experience” These “more technical” Ministers Milton Von Hesse —who also had have an extensive professional a technical profile— replaced experience; they have been part Cornejo at the Ministry of of multilateral entities and hold Housing and Construction. postgraduate degrees obtained in prestigious Universities. They On the other hand, Carmen Premier René Cornejo taking have little political experience, Omonte, who until now was office. On alternate sides of the although it is not strictly congresswoman and spokesperson Premier: the First Lady, Nadine of Perú Posible, became head Heredia and the Minister of 1 All profiles can be consulted at the end of the Women and Vulnerable Economy and Finances, Miguel of the report Populations Ministry, replacing Castilla Ana Jara. This could mean that the government wants to build bridges with the Toledismo movement; an alliance that grows stronger despite the attacks related to the investigation of former President Toledo. It could also mean that the government is trying to look for support in order to guarantee its leadership in the next term. Furthermore, Ana Jara became the new Minister of Labour, replacing Nancy Laos, and Milton Von Hesse was replaced in Agriculture by one of his Deputy Ministers, Juan Manuel Benítes Ramos, who also has a quite technical profile1. Finally, Paola Bustamente, who was Deputy Minister of Social Benefits at the Ministry of Development 3 PERU: ANALYZING THE CHANGES OF THE MINISTERIAL CABINET and Social Inclusion, will replace Minister of Environment, Manuel Monica Rubio and become head of Pulgar Vidal Otárola; and the the said Ministry. Minister of Culture, Diana Álvarez Calderón. In addition to this, several “After taking office, the Ministers remained in office, After taking office, the new new President of the such as the Minister of Foreign President of the Council of Council of Ministers, Affairs, Eda Rivas, the Minister of Ministers, René Cornejo, pointed Defence, Pedro Cateriano Bellido; out that his priority during his term René Cornejo, pointed the Minister of Economy and will be to promote investment in out that his priority Finances, Luis Miguel Castilla, order to improve the situation during his term will be the Minister of the Interior, of three specific areas: health, Wálter Albán Peralta; the Minister public safety and education. to promote investment of Justice and Human Rights, in order to improve Daniel Figallo Rivadeneyra; and It is worth highlighting that the situation of three the Minister of Education, Jaime the first sector that applauded specific areas: health, Saavedra Chanduví. these appointments was Peru’s National Confederation of public safety and Other Ministers also remained Private Business Associations education” in office, such as the Minister (CONFIEP by its Spanish of Health, Midori de Hábich acronym), which is the most Rospigliosi; the Minister of important business organization Foreign Trade and Tourism, of the country. The President of Blanca Magaly Silva Velarde the said organization, Alfonso Álvarez; the Minister of García Miró, stated that with Transports and Communications, this new cabinet, “President The new Cornejo Cabinet Carlos Paredes Rodríguez; the Ollanta Humala’s government has once again chosen wisdom and has a medium and long-term vision that will lead to growth and development.” The head of the business organization highlighted the technical and professional profile of Cornejo and his Ministers, and said that this approach consolidates the objectives set by the Executive regarding the economic growth and the fight against poverty. He stated that “the Ministers that have been appointed have the right profile to manage each of the Ministries in a technical and professional way (...) they are highly qualified professionals and we believe that they can achieve a great deal.” 4 PERU: ANALYZING THE CHANGES OF THE MINISTERIAL CABINET García Miro also pointed out (Spain) and holds postgraduate that the capacity of the current diplomas in Business Law and in Premier is not only technical; he Production Management. also has the political capacity to manage a government and “build He was head of the National bridges” with other sectors. Fund for the Financing of the Public Sector Companies (FONAFE) from 2000 to 2002. 3. PROFILES He was executive secretary of “Before working for the Housing Promotion Mortgage Humala’s government, René Herbert Cornejo Díaz Fund (MIVIVIENDA) from 2002 Cornejo was Project to 2004, and executive director He obtained a degree in Electrical of PROINVERSION (Private Manager of several Mechanical Engineering from the Investment Promotion Agency). projects that promoted National Engineering University private investment” (UNI) in 1985 and holds a Master’s He has developed, designed degree in Administration and managed both state and from the School of Business private infrastructure projects Administration for Graduates in different areas, including (ESAN). He also holds a Master’s ports, airports, energy, road degree in Applied Mathematics developments and agriculture, from the Pontifical Catholic among others. In addition to this, University of Peru (PUCP). he has developed social projects He was a doctoral candidate which required the involvement Premier Saliente César Villanueva in Administration at ESADE of the private and public sector. Before working for Humala’s government, Cornejo was Project Manager of several projects that promoted private investment, specially the Investment Bank Consulting for the Private Promotion Process for the Awarding of the Province Airports’ Second Group, the enlargement of Callao’s Port and the Electric Train. Eleodoro Mayorga Minister of Energy and Mining He is an engineer and begun his professional career in 1969 in PetroPerú. Three years later, he joined the MEM as planner of the hydrocarbon sector. He holds a Master’s degree in petrochemicals 5 PERU: ANALYZING THE CHANGES OF THE MINISTERIAL CABINET from the Catholic University of Piero Ghezzi Solis Leuven (Belgium); he studied at Ministry