Castillo of Peru, in his first speech as president, pledges to heal colonial wounds

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LIMA, July 28 (Reuters) – Pedro Castillo said Wednesday that Peru’s colonial wounds still run deep and that he will seek to heal them, while pledging economic stability in his inaugural address as president.

Speaking on the day which also marked the country’s 200th anniversary since Spain’s declaration of independence, Castillo said colonial-era divisions that separated classes and races in Peru remained.

“The defeat of the Inca Empire gave birth to the colonial era, it was then (…) that the castes and the differences that persist to this day were established,” said Castillo, the son of impoverished farmers whose path to presidency was motivated by the support of the rural poor.

“This is the first time this country will be ruled by a peasant,” Castillo said.

Sporting his trademark wide-brimmed hat, he also tried to set a conciliatory tone for investors, pledging to respect private property and set clear rules for miners, a critical sector of the economy.

Castillo, 51, was elected in a highly divisive election that highlighted the inequalities between urban and rural Peruvians. In the end, Castillo, an elementary school teacher backed by a Marxist party, won very close against Keiko Fujimori, a conservative background in the United States.

“The three centuries during which this territory belonged to the Spanish crown, they exploited the minerals that supported the development of Europe, largely with the work of many of our grandparents,” he said. stated in the broadcast speech.

In a symbolic gesture, Castillo said he would not be living in the government palace in Lima known as the “House of Pizarro”, named after the Spanish conquistador who defeated the Inca Empire five centuries ago.

Castillo’s election frightened investors and wealthier Peruvians alike, fearing his party would upend the economy with plans for a new constitution. He also said he wanted to increase mining taxes to fund health and education reforms at the world’s second-largest copper producer.

He reassured them on Wednesday that there was “not the most distant” plan to nationalize the industry, but said he would seek “a new pact” with private investors.

CHALLENGES AHEAD

Castillo will face significant challenges to accomplish effective reform, including an opposition-led Congress and tensions within his party. He has not yet appointed a cabinet.

“The firm and the team it announces will tell us even more about where we are heading,” said Jeffrey Radzinsky, a governance expert based in Lima.

The cabinet swearing-in was due to take place shortly after Castillo’s inauguration on Wednesday, but his party said it would be postponed until Friday.

It is not known if he has already finalized his choices or if the political feuds continue with the radical left arm of his Free Peru party and more moderate allies.

Sources close to Castillo have said the role of economy minister will likely fall to Pedro Francke, a moderate left-wing economist, who has helped soften the image of the foreign candidate and calm nervous markets in recent months.

Castillo also faces the world’s deadliest COVID-19 epidemic and a sharply divided nation that was nearly split in two by a June 6 polarized ballot which he won by a margin of just 44,000 votes. .

Fujimori had alleged fraud without proof and disputed the result, drawing comparisons to Donald Trump’s tactics after losing the 2020 US presidential election.

JP Morgan said in a note that the investment bank expects to revise its budget and growth forecast for Peru once Castillo unveils his cabinet and confirmed whether current central bank director Julio Velarde – who was seen as a firm hand on the helm in Peru through a time of turmoil – remains in office.

Castillo faces a balance between maintaining investor confidence and strengthening government coffers to improve the lives of the largely rural base that made up the bulk of his vote.

“Castillo needs to unite the hard core of his party, but he has to do it without destroying the image people have of him, that is, he is against radicalism,” Radzinsky said .

Report by Marco Aquino; Editing by Adam Jourdan, Marguerita Choy and Rosalba O’Brien

Our standards: Thomson Reuters Trust Principles.


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