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Peru

Peru: Will The Real José Pedro Castillo Please Stand Up?

A source of major concern for investors and the economic and political elite, Peru's freshly-inaugurated leftist president is now trying to make nice. What happens next, though, is anybody's guess.

Pedro Castillo talking to his supporters after election results in June
Pedro Castillo talking to his supporters after election results in June
Carlos Escaffi

-Analysis-

LIMA — Forty three days after the last votes were cast in Peru's presidential runoff, the country's electoral authority officially proclaimed as president-elect José Pedro Castillo Terrones, a socialist schoolteacher from Cajamarca in northern Peru. His inauguration, on July 28, coincides with the 200th anniversary of Peru's independence.

This was a narrow victory that had to ride a wave of challenges and calls to recount votes from Castillo's rival, Keiko Fujimori.

The 51-year-old Castillo is a Catholic and the spouse, for 21 years, to Lilia Paredes, also a teacher though evangelical. He has three children. In his youth, he was a member of the village "patrols' or rondas that kept the peace in the countryside and later resisted the violent Shining Path insurgency in the 1980s. He represents a break, in other words, from the country's ruling elite, established parties and dominant economic groups, and reached the presidency on the back of the votes of the Andean peasantry.

Castillo is giving representation to a sector of the population that has mostly been excluded from the country's socio-economic system.

Castillo is giving representation to a sector of the population that has mostly been excluded from the country's socio-economic system, and his discourse offers them hope of inclusion finally in a country that is often reluctant to give them visibility and recognition. His message centers around simple declarations such as "No more paupers in a rich country," statements directed at all those who have for decades felt sidelined and unseen, and that raise considerable social and welfare expectations.

While campaigning, the president-elect promised reforms to healthcare, education and farming, but also a million jobs a year. Above all, he has vowed to call a constituent assembly to write a new constitution within six months. The current one, he claims, unduly favors the free-market economy.

Castillo" in Peru's capital Lima on July 20 — Photo: EC/GDA/ZUMA

But Castillo also vowed, once his victory was confirmed, to reject "any bid to bring a model of hate. We shan't permit any imported model. This constitution remains in force until the people decide otherwise." Furthermore, he has promised juridical and economic stability for businesses, responding to the conservative Fujimori's calls not to "put up more obstacles' to the economy.

The president-elect promised reforms to healthcare, education and farming, but also a million jobs a year.

Castillo needs to be moderate, something it appears he has begun to understand. Part of that is the need to emit reassuring signals, both to rating agencies and to investors waiting to see what his final postures will be on a range of issues including investments, employment, COVID vaccinations and pandemic management. His earlier declarations in favor of nationalizations and state interventionism alarmed big, foreign investors. And yet, in June, he insisted: "We're not Chavistas or communists. Nobody has come to destabilize this country. We're workers, fighters and entrepreneurs."

Moderation must transcend words, and requires an understanding of what confidence-building entails. It also means working with parliament. The executive and legislative branches cannot continue to be at loggerheads as they have in the past five years, a period in which Peru had five presidents. Parliament will likely closely observe any bid to reform the constitutional principle of presidential incapacity or parliament's powers to sack the president, as it has in past years.

In short, the new president will have to forge pacts and build alliances to implement his promises on health, welfare and jobs, and to build his vision of national dignity and a Peru free of class and ethnic prejudices.



*Carlos Escaffi is an international relations lecturer at the Pontifical Catholic University of Peru.

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Economy

Russian Diamonds Are Belgium's Best Friend — But For How Much Longer?

Belgium has lobbied hard for the past year to keep Russian diamonds off the list of sanctioned goods. Indeed, there would be a huge impact on the economy of the port city of Antwerp, if Europe finally joins with the U.S. and others in banning sale of so-called "blood diamonds" from Russia. But a 10th package of EU sanctions arriving this month may finally be the end of the road.

Photo of a technician examining the condition of a diamond in Antwerp, Belgium

A technician examining the condition of a diamond in Antwerp, Belgium

Wang Xiaojun / Xinhua via ZUMA Wire

Since Vladimir Putin's invasion of Ukraine, the European Union has agreed to nine different packages of sanctions against Russia. With the aim to punish Moscow's leadership and to cripple the war economy, European bans and limits have been placed on imports of a range of Russian products from coal, gas and steal to caviar and vodka — were successively banned over the past 11 months.

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Still, one notable Russian export is a shining exception to the rule, still imported into Europe as if nothing has changed: diamonds.

Russian state conglomerate Alrosa, which accounts for virtually all of the country's diamond production (95%) and deals with more than one-fourth of total global diamond imports, has been chugging along, business as usual.

But that may be about to change, ahead of an expected 10th package of sanctions slated to be finalized in the coming weeks. During recent negotiations, with 26 of the 27 EU members agreeing on the statement that ALSROA’s diamonds should no longer be imported, the one holdout was not surprisingly Belgium.

The Belgian opposition to the ban is explained by the port city of Antwerp, where 85% of the rough diamonds in the world pass through to get cut, polished, and marketed. There are estimates that 30,000 Belgians work for Alrosa.

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