Monday, February 16, 2004

From combined dispatches

LIMA, Peru — The jury was still out yesterday on whether President Alejandro Toledo’s latest Cabinet reshuffle — his fifth in 30 months — would be enough to restore his credibility and stave off early elections.

After a week of consultations with political, business and union leaders, the new-look Cabinet announced Sunday night brought in seven independent figures to breathe new life into Mr. Toledo’s 21/2-year-old government and try to restore his popularity, which currently stands at 7 percent. The newcomers — all political independents — join nine holdovers from the previous Cabinet.

Mario Vargas Llosa, one of Latin America’s best-known writers and until now one of Mr. Toledo’s strongest supporters, worried that the Cabinet shuffle would not be enough to quell discontent.

“The president doesn’t realize the seriousness of the situation and the need for radical and profound changes,” Mr. Vargas Llosa told television news program “Cuarto Poder” late Sunday.

“I don’t believe this will calm the political crisis,” he went on. “Toledo is weak and lacks leadership.”

The new Cabinet — whose centerpiece is the return of Wall Street darling Pedro Pablo Kuczynski as economy minister, a post he occupied in Mr. Toledo’s first Cabinet from 2001 to 2002 was sworn in yesterday at 1 p.m. EST.

Lourdes Flores, leader of the opposition Unidad Nacional party, called the Cabinet “a final opportunity that we hope won’t be thrown away.”

Mr. Toledo’s woes were brought to a head by a run of corruption scandals since November that ousted four ministers and the vice president, and by a recording of a presidential adviser discussing bribing judges with a member of the state-sponsored corruption network that flourished in Peru in the 1990s.

Polls show Peruvians are fed up with hearing what they see as hollow promises of job creation while the country’s strong 4 percent economic growth does nothing to better their lot.

Many opposition lawmakers and Peruvians believe Mr. Toledo’s problems are beyond repair and that early elections are the only answer.

“No one can restore credibility to Toledo,” said Christian Martel, 24, as he distributed newspapers on his bicycle.

Giovanna Rodriguez, 25, a housewife, voiced uncertainty. “We’ll have to wait and see. I think Toledo is capable. He promises to change. We’ll have to see,” she said.

Mr. Kuczynski, a blunt-talking fund manager seen as a safe pair of hands for Peru’s $60 billion economy, said he had to have his arm twisted to return to government, but had done so to ensure that constitutional order was maintained.

“I’m prepared to do this for a time,” he told RPP radio, adding that economically, “this could be a very good year.”

Mr. Kuczynski has already made plain his dislike of a controversial tax on bank transactions due to take effect next month, which the government says is vital to fund teacher pay increases.

But he supports privatization — a thorny subject in Peru since the government was forced to slam the brakes on its ambitious privatization program in 2002 after fatal street protests.

Alfredo Torres, head of pollster Apoyo, said Mr. Kuczynski would have his work cut out to win support from the poorest in Peru, who see him as a “gringo” businessman. They voted for Mr. Toledo as a man of the people, but are now among his sternest critics because they feel he has failed them.

Cesar Zumaeta of the opposition American Popular Revolutionary Alliance party said the new-look government falls way short of expectations. “We expected a total renewal … [this Cabinet] was born very weak,” he told RPP.

Besides Mr. Kuczynski, Mr. Toledo chose political independents to head the ministries of Justice, Education, Health, Work, Production and Transportation.

Seven other ministers remained in their posts and Jaime Quijandria moved from the Finance Ministry to Energy and Mines. Only three, including Prime Minister Carlos Ferrero, belong to Mr. Toledo’s political party.

Mr. Toledo and his new Cabinet may not have to wait long to be put to the test: Planned strikes and protests by farmers and transportation workers are on the horizon, and coca growers hold a big meeting in Lima this week that the interior minister has warned could be hijacked by troublemakers.

Mr. Toledo, 57, took office in July 2001 heralded as a champion of democracy. At the time, his popularity rating stood near 60 percent and he promised to build a strong democracy that would crack down on corruption after 10 years under former President Alberto Fujimori.

Mr. Fujimori’s iron-fisted regime imploded in November 2000 amid a corruption scandal centered on Peru’s all-powerful spymaster, Vladimiro Montesinos, now on trial in Peru on charges he planned a vast gunrunning operation to Colombian leftist rebels in the 1990s. The case is being heard in a courtroom on the naval base where Mr. Montesinos has been held since his arrest in June 2001.

The term-low popularity ratings of Mr. Toledo have provoked calls by some opposition politicians for Mr. Toledo’s resignation.

Mr. Toledo offered to create the independent Cabinet as a way to reach the end of his term in July 2006. To that end, he consulted last week with politicians, governors from Peru’s 25 geographic departments and union leaders.

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