Peru’s Government Splits As Rebel Lawmakers Weaken Humala

Peru’s ruling Nationalist party verged on crisis yesterday, after six of its lawmakers resigned in protest at candidate selections for top  positions in Congress. 

The splintering leaves the government with 37 congressmen – one more than the main opposition group – critically curbing President Humala’s power to act on Peru’s slowing economy.

The dissident legislators formed the new ‘Dignity and Democracy’ (DD) bloc as they challenged the government’s selection of Ana Maria Solorzano for the President of Congress, and other leadership positions, ahead of a vote tomorrow.

“DD isn’t born of whim or political calculation,” said one of the congressmen, Juan Pari. “One has to put an end to saying one thing during the campaign and doing another thing in government.”

The defection weakens Humala whose approval ratings have plummeted from to 25 per cent from 60 per cent early last year, and this week named his sixth prime minister since taking office in 2011 after Rene Cornejo resigned following scandal.

Political leeway

Peru’s economy is slumping under weaker mining output and a widening trade deficit. Humala’s government passed an economic stimulus package this month to remove structural blocks and reduce bureaucracy to win back business confidence.

After being South America’s top performer in the last decade averaging 6.3 per cent growth, Peru registered 3.6 per cent for the first five months of the year, and grew a mere 1.8 percent in May.

Bank of America Merrill Lynch wrote on Wednesday that they are “concerned that authorities will not have the political leeway to carry out the necessary external adjustment, introducing the risk of a progressive deterioration in the quality of macroeconomic management.”

The central bank cut its outlook for GDP growth this year to 4.4 per cent from its past estimate of 5.5 percent, and made a surprise cut in its policy interest rate to 3.75 per cent.

Tight vote

The fault lines in Humala’s party now jeopardise his chances in achieving the estimated 64 votes out of 127 to have Solarzano, a 36 year-old Arequipa congressman and close supporter, elected.

Peru’s unicameral body has 130 lawmakers, though 3 are currently suspended and cannot vote.

The president said the “door was open” for others to leave as he stands firm on the selection, which was controversially chosen by wife and first lady, Nadine Heredia, after a lack of party consensus.

A pact with the Peru Posible bloc makes 47, though many others in Peru’s fragmented Congress, populated by numerous fringe parties in mutating coalitions, are yet to declare their affiliation.

Javier Bedayo is the alternative candidate with 48 assured votes so far. He’s, backed by the second-largest parliamentary bloc, Fuerza Popular bloc with 35 members, 7 from his own Popular Christian Party-Progress Aliance and 6 from Parliamentary Pact.

President’s weakness

Yesterday’s events mark the second crisis in three years for the president,  after four members of his party resigned in 2012.

An ex-cabinet chief in Humala’s government, Oscar Valdez, said one of the president’s weakness had been his “choice of ministers” as well as changes based on media pressure, in an interview Tuesday with Canal N news channel.

Humala will give an anticipated address to the nation on Monday as part of the country’s independence celebrations.

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