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Peru Congress Backs Humala’s Fifth Cabinet to End Impasse

March 17 (Bloomberg) -- Peruvian President Ollanta Humala’s fifth cabinet in 2 1/2 years won a vote of confidence in Congress, ending a political crisis stemming from accusations that first lady Nadine Heredia is interfering in the government.

Lawmakers voted 66-52 in favor with nine abstentions, according to images broadcast on state television. The cabinet failed to win lawmakers’ approval in two votes March 14, leading Humala’s 19 ministers to offer their resignations. Cabinet chief Rene Cornejo moved to reassure Congress that he won’t allow “any intromission” in the cabinet’s workings.

“We’re marking the boundaries of the executive, there’s going to be a more active participation by ministers,” Cornejo said in a statement posted on the cabinet chief’s website before the vote.

Speaking to Panamericana Television last night, Cornejo said the government will work to eliminate the perception of a “co-government” between Humala and his wife, who’s co-founder and president of the ruling Nationalist party. Cornejo was appointed Feb. 24 after Heredia contradicted his predecessor, Cesar Villanueva, over a possible minimum wage increase, triggering Villanueva’s resignation and a cabinet reshuffle.

Confidence Votes

Cornejo’s cabinet became the first to fail to win a confidence vote since the ballot was introduced in the 1993 constitution. Congress voted 47-0 in favor of the cabinet, with 71 abstentions, in the first ballot on March 14, depriving the government of the quorum it needed for approval. A second vote was 42-6, with 73 abstentions.

Humala’s approval rating fell to 25 percent from 33 percent last month, matching December’s record low, according to a poll by Ipsos Peru published yesterday by El Comercio. Ipsos questioned 1,206 people in cities nationwide during March 11-14 and the poll had an error margin of plus or minus 2.8 percentage points.

The sol fell 0.2 percent to 2.81 per U.S. dollar at the close of trading in Lima, according to Datatec prices. The price of the nation’s benchmark 7.84 percent sol bond due August 2020 rose 0.136 centimo to 110.202 centimos per sol while the yield fell three basis points, or 0.03 percentage point, to 5.9 percent, according to data compiled by Bloomberg.

Cabinet Resignation

According to Peru’s constitution, the entire cabinet has to resign immediately should it lose a vote of confidence.

The political impasse risked damaging business confidence hurt by a slump in prices for copper, Peru’s biggest export, amid signs of slowing growth in China, business federation Confiep said in a statement yesterday.

South America’s sixth-largest economy expanded 4.2 percent in January, the slowest pace in eight months, after exports plunged while retailing and manufacturing slowed on weaker domestic demand, the statistics agency said March 15. The median estimate of analysts in a Bloomberg survey was for growth of 4.9 percent.

Opposition lawmakers jeered Cornejo’s cabinet as it departed the main chamber after the 10-hour session March 15. Legislators from Fuerza Popular, the party founded by Keiko Fujimori, the daughter of former President Alberto Fujimori, chanted “this cabinet’s going to fall.”

In response, Nationalist lawmakers chanted “dissolve, dissolve,” an allusion to Alberto Fujimori’s televised message in April 1992 when he announced the closing of the Congress.

According to the constitution Fujimori introduced the following year, the president is authorized to dissolve Congress should his cabinet lose two consecutive votes of confidence.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net Harry Maurer, Philip Sanders

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