Peru: Administration in Crisis

Alejandro Toledo
Gallows humor? Peruvian President Alejandro Toledo jokes with Enrique Iglesias (L), chairman of the Inter-American Development Bank, March 26, 2004 (Photo: Jaime Razuri/AFP-Getty Images).

Peruvian President Alejandro Toledo is struggling to hold on to his job as he moves into the second half of his five-year term. Toledo’s support in February public-opinion polls dropped to a single digit, and a string of mismanaged scandals since he took office has seriously undermined trust in his administration. Only in the past six weeks, Vice President Raúl Diez Canseco quit because of a tax scandal, two Cabinet ministers resigned on corruption charges, and Toledo’s personal lawyer, Cesar Almeyda, was arrested for attempting to manipulate the justice system.

To counteract the political meltdown, the administration announced a $2.4-billion spending package for social programs, relaunched an anti-corruption plan, and reshuffled the Cabinet for the third time in eight months, bringing in political independents to help manage the government.

While Toledo got a three-point boost in the polls after announcing his new Cabinet, opposition leaders and the media are not convinced that the moves are enough to help Toledo avoid the same fate as other Latin American leaders, including his predecessor Alberto Fujimori, who were forced to resign in the past four years. In a Feb. 18 poll, 62 percent of voters said this Cabinet change was Toledo’s last chance to get his administration on track.

In a rare front-page editorial on Feb. 11, El Comercio, the dean of Peru’s dailies, stated that “the country is submerged in a grave crisis of governance and on the verge of collapse, and something urgent and decisive needs to be done to avoid this.”

El Comercio stopped short of calling for Toledo’s resignation, suggesting instead that he step aside from the day-to-day management of the country. “This means that [Toledo] should remain as the head of state, representing the country internationally and carrying out tasks related to national security and other areas that cannot be delegated but must transfer the political management of the nation to a prime minister and an independent Cabinet.”

In a rare recognition of problems, Toledo announced in mid-February that he would be giving his ministers greater freedom and that he would concentrate on anti-poverty programs.

Other media outlets doubt that a Cabinet change will be enough to save Toledo. The financial daily Gestión warned in a Feb. 10 editorial: “If the administration does not see the seriousness of the crisis, believes it is a passing phase and a few Cabinet changes will allow it to continue dragging along, we will have reached the point of no return.”

For many Peruvians, the source of the current impasse is not government policies or programs, or even the economy, which is performing better than it has in decades, but Toledo himself. Indeed, in public-opinion polls, 74 percent of people surveyed say they disapprove of Toledo because he lies. 

Toledo’s administration, which began in July 2001, has presided over one of the most sustained economic expansions in recent memory.  The economy is growing at 4 percent annually and has expanded every month except one since Toledo took office. Inflation was only 2.4 percent last year, tax receipts are up, international reserves have increased by more than $2 billion, and the country has run back-to-back trade surpluses, the first time that has happened in nearly three decades.

“The issue plaguing the administration is not corruption, even though it exists, or the results of a conspiracy, even though there are some elements of this, but is essentially political—the lack of presidential credibility and leadership,” according to a Feb. 6 editorial in the conservative daily Correo.

In the left-leaning La República, editorialist Mirko Lauer wrote on Feb. 5 that the “Cabinet needs to resolve the inefficiency, the near paralysis, in the bowels of the administration without affecting institutional order.”

The daily Perú.21, which has been one of  Toledo’s harshest critics, took an optimistic stance: “As the Chinese proverb goes, ‘crisis’ not only means problems, but also possibilities,” stated the paper’s Feb. 10 editorial.