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Who is Pedro Francke, the Minister of Economy who seeks to reassure the markets in Peru

At the end of a stormy day in the markets, the new president of Peru, Pedro Castillo, finally appointed the moderate economist Pedro Francke as Minister of Economy.

This key position was in doubt during a day full of speculation, last minute negotiations and criticism of the cabinet who will accompany the president, made up of the toughest wing on the left.

Late on Friday, when the Lima Stock Exchange had closed with a 6% drop and the dollar had skyrocketed To the record of more than four soles, Castillo took the oath of the two ministers who had been left in limbo on Thursday, when the other 16 took office, including the controversial Guido Bellido.

The chief of staff, a 42-year-old legislator, low profile until now, became the epicenter of controversy for having launched homophobic and macho phrases on their social media for the past few years.

In addition, he is being investigated for alleged apology of terrorism, for statements about the Shining Path group.

But this Saturday, Bellido used Twitter to call for agreement: “No more confrontation between the people and the media, it is time for unity to fight corruption,” he wrote. And he expressed his support for Francke.

On Friday, in addition to Francke, the Minister of Justice, the lawyer Hannibal Torres, 78, the other position that was empty.

Suspicions, criticism and mistrust

“For sustained progress and a good life, for equal opportunities without distinction of gender, for democracy and national consensus, yes, I swear,” Francke swore.

A 61-year-old economics professor, Francke has been advising Castillo since May and met, together with the now president, with investors and businessmen to attenuate mistrust in the rural teacher who surprised much of Peru with his electoral victory, in a country polarized between the left and the more conservative right.

Neither Francke nor Torres explained why they were sworn in a day after the other ministers. Political analysts believe it was due to an initial disagreement over the appointment of Bellido.

But it is not clear what negotiations were behind and what agreements were reached so that they finally agreed to join the cabinet. Some voices point out that Castillo may have had to give in in some way.

The swearing-in act of the ministers, on Thursday at the Grand National Theater in Lima, was delayed for two hours, without official explanations and in the middle of suspicions and suspicions. The press did not have access to the theater, only public television, which broadcast the ceremony.

The local media slipped possible last minute meetings and some slamming doors by the more moderate.

“Francke left the cabinet for Bellido,” said the newspaper The Republic.

Since taking office, Castillo has not made statements to journalists in any of his public activities.

Peruvian media released on Friday a chorus of angry criticism against the cabinet appointed by Castillo. “Unacceptable”, “Shameful”, “Terrible sign”, were some of the adjectives used by prestigious newspapers such as Trade, among others.

In addition to the controversial Bellido, the list of ministers included as chancellor, former guerrilla Héctor Béjar.

“The government of President Castillo has shown signs of weakness, of weaknesses, of internal struggles for the appointment of his cabinet, and an uncertainty that was already coming from the second (electoral) round has been caused,” he analyzed for the AFP agency the independent economist Jorge González Izquierdo.

Francke, an economist who worked at the World Bank, the Inter-American Development Bank and other international organizations, assured in July that the government will respect private property, the savings of Peruvians and that it will continue to maintain the autonomy of the Central Reserve Bank “to ensure that investment in Peru does not skyrocket. ”

He was also in favor of raise taxes on the profits of mining companies due to high copper prices. Peru is the second world exporter of this mineral and the sixth of gold.

Shaking in the markets

On Friday, while the mystery about the Minister of Economy continued, the dollar exchange rate rose more than 3% and exceeded four Peruvian soles – a jump that will possibly be reflected in the prices of basic foods – and the general index of the local stock market fell 5.8%.

“(The rise in the dollar) is a response to the uncertainty that exists regarding the appointment of the cabinet,” former Peruvian economy minister Alonso Segura analyzed in an interview with TV N channel. And expressed his doubts about whether Francke will be able to work with the rest of the cabinet ministerial directed by Bellido.

“I hope (Francke) has a good management. He will have it complicated due to the situation he inherits. He will have to play a juggler’s role,” added Segura, who held that position during the Ollanta Humala government (2011-2016 ).

Economy in intensive care

The job will not be easy for the Minister of Economy. Peru, one of the countries hardest hit by the coronavirus, with more than 196,000 deaths, plunged into an abysmal crisis due to the pandemic.

The economy closed last year with a collapse of 11.12%, the worst setback in 30 years, according to the National Institute of Statistics.

Poverty reached 30% of its inhabitants, an increase of 10% compared to 2019 and that translates into some three million new poor, in a country of 32.5 million inhabitants. One third of the Peruvian population cannot meet their basic needs.

Against this background, the new government promises to encourage investment to create new jobs and reactivate sectors that suffered a real blow.

The cabinet of ministers must appear within a month before Parliament – dominated by the right-wing opposition – which can admit or reject it.

Lawmakers have yet to give clear signals on whether they will support Castillo’s team. If not, the president should look for other names to accompany him in his five-year term.

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