Peru: government crisis reveals Castillo’s rightward shift

On Wednesday, 6 October, Guido Bellido resigned from the Presidency of the Council of Ministers and President Pedro Castillo announced a new cabinet that represents a clear shift to the right. Those ministers that the bourgeois press described as “radicals” and “senderistas” [Shining Path supporters] were turfed out. In their place came businessmen, the “moderates", and the so-called “caviar left” committed to the stability of the bourgeois regime. Finance Minister Francke, the fifth column of CONFIEP business federation in the government, remains in his post. The Peru Libre parliamentary group has declared it will not support the new government.

The fall of Bellido is the culmination of an incessant, 69-day-long campaign of harassment and demolition directed against Castillo and his government by the capitalist oligarchy of Peru and the multinationals, and the resultant tensions and disagreements that this caused between the government of Bellido and President Castillo.

The campaign of the capitalist oligarchy against the Castillo government

As early as the second round of the presidential elections, which culminated in the victory of teacher trade unionist Castillo, we saw the candidate of Peru Libre sending clear messages to the bourgeoisie and the multinationals, re-assuring them that their interests would not be touched. The appointment of Pedro Francke, first as campaign advisor and then as Minister of Economy and Finance, was the clearest of those messages. A World Bank economist, Francke promised CONFIEP “a responsible fiscal and monetary policy” and “protection of private property” – a far cry from Castillo’s original programme of nationalisation.

On 29 July, the very night that Castillo appointed Bellido's cabinet, the contradictions at the heart of his government were already coming to light. Francke threatened not to join the government if Bellido, seen as a “radical”, was the premier. Eventually the conflict was resolved with a public statement by Bellido in support of Francke's pro-capitalist economic programme.

The next major conflict led to the dismissal/resignation of Foreign Minister Héctor Béjar. A former guerrilla and agrarian reform activist during the Velasco Alvarado government, Béjar was the first minister against whom the capitalist oligarchy opened fire. Just two weeks after his swearing in, the capitalist press brought to light statements by Béjar from November 2020 in which he had demanded an investigation into the role that the Navy and the Army had played in terrorist acts during the conflict with the Shining Path.

This was a direct questioning of the state apparatus, something that could not be allowed. There was a concerted campaign on the part of the state apparatus, particularly high-ranking officials of the Navy, and the ruling class in a joint offensive against a minister of a democratically elected government. They wanted his head on a platter. Faced with this onslaught, both president Castillo and premier Bellido relented, which led to the departure of Béjar from the government.

As is often the case, giving in to the pressure of the ruling class and its public opinion did not have the effect of increasing the stability of the government, but on the contrary, it emboldened the oligarchy to continue and increase its offensive.

Next in the firing line was the Minister of Labour, Iber Maraví, a teacher unionist and former leader of the SUTE union in Ayacucho. Mysteriously, police reports were leaked to the El Comercio media group dating back to 1980 – more than 40 years ago – allegedly implicating Maraví in a terrorist bomb attack, which was published alongside all kinds of other accusations. We already know the line of argument: “the minister is a senderista, a terrorist and therefore he must be sacked”. The objective was clear and twofold: on the one hand, to get rid of a minister close to the trade union movement and as such a nuisance for big business, and at the same time to undermine the authority of Castillo himself. In this whole affair, the national leadership of the SUTEP teachers’ union played a despicable role, joining in the chorus of the bourgeoisie against the Minister of Labour.

At the same time, while the right-wing concentrated their fire on Maraví, the capitalist state apparatus continued the offensive in other directions, with state prosecutors filing accusations of corruption and terrorism (!!) against Prime Minister Bellido, the leader of Peru Libre Vladimir Cerrón and dozens of prominent members of his party.

In the case of Maraví there was a lot of toing and froing. Under pressure from the capitalist media and opposition members of parliament, he was forced to appear before congress. He later submitted his resignation, which the president did not accept. The CGTP union confederation mobilised, albeit timidly, in his defense. The right-wing opposition did not give up its efforts and collected signatures for a motion of no confidence. The Peru Libre parliamentary group and Bellido himself threatened to bring a muerte cruzada motion. That is, if Congress voted no confidence in the President, the powers of Congress would automatically also cease, thus forcing new congressional and presidential elections.

On 6 October, the judiciary issued preventive detention orders against several leaders of Peru Libre investigated for money laundering, including the party’s national organisation secretary, Arturo Cárdenas.

The fall of Bellido

Finally, the constitutional conflict between Congress and the president over the Maraví case was resolved with the resignation of Bellido (forced by Castillo) and the appointment of a new cabinet by Castillo, of which Iber Maraví is not a part. Clearly, this is a further concession to the capitalists and multinationals by Castillo. Moreover, this is a fairly important concession that represents a qualitative change in the political situation.

After the resignation of Bellido, the leader of Peru Libre, Vladimir Cerrón, made some quite harsh statements in which he stated that “the President will have to choose and is faced with the options of what is conservative or what is revolutionary,” and added: “[the] cabinet reshuffle must exclude right-wingers, caviar [leftists] and traitors. It is time for Peru Libre to demand its rightful share of power, guaranteeing its real presence or else the parliamentary group will have to take a firm position.”

Betssy Chávez Chino - the only member of Peru Libre in the new government - came out publicly in opposition to the convention of a constituent assembly / Image: Presidencia Perú, Flickr

However, President Castillo did just the opposite. Presiding over the new government is Mirtha Vásquez, a moderate left-wing deputy from the Frente Amplio, who briefly served as president of the congress during the November 2020 unrest, playing the role of a “reasonable” left-wing figure who could guarantee bourgeois governance at a time of social convulsion.

Not only has Minister of Labour Maraví been removed, but in the new government there are no members of Peru Libre, the party for which Castillo ran. The only exception, significantly, is Betssy Chávez Chino, a Peru Libre congresswoman who came out publicly in opposition to the convention of a constituent assembly who has been described as a traitor by the rest of her parliamentary group. The new minister of energy and mines is businessman Eduardo González Toro. Francke, the man whose presence guarantees to the capitalists that the government is not going to get out of control, remains as Economy and Finance Minister.

In case we are left in any doubt as to the nature of this change of government, let's see what the imperialists think. The most serious newspaper of the British bourgeoisie, the Financial Times, celebrated these developments with this headline: “Peru’s president reshuffles cabinet in shift towards centre” and in the subtitle adds: “Pedro Castillo makes seven changes and ousts Marxist prime minister” [all our emphasis].

The article continues, in the same jubilant tone: “a significant cabinet reshuffle on Wednesday, ousting his divisive prime minister Guido Bellido and distancing himself from the Marxist party that helped to put him into power.” And it continues along the same lines: “In his boldest move since he took office in late July, Castillo replaced Bellido with Mirtha Vásquez, a young former congresswoman and moderate leftist who does not belong to the Marxist Free Perú party.” [Financial Times, 6 October, emphasis added.]

In reality, neither Peru Libre nor Bellido are Marxists, although they define themselves as such. However, what the Financial Times wants to highlight is that Castillo is breaking with these “Marxists”.

The substantive issues: multinationals and the constituent assembly

It is clear that the change of government is not simply a change of names, but rather reflects a substantive political conflict on two central issues. The first is the question of multinationals, mining and gas. In his programme, and in the first part of his presidential campaign, Castillo clearly proposed the nationalisation of the Camisea gas field – operated by a consortium of multinational companies (Argentine, US, Korean, and Spanish) – if it did not agree to renegotiate the contract on more favourable terms for Peru. The same threat (renegotiation on better terms or else nationalisation), were also left hanging over the country’s mining operations.

This threat was all but dropped in the second round of the elections. Francke, on behalf of Castillo, produced a blunt statement in which he spoke of the “legal security” for foreign investment. His message was clear: “There will be no nationalisations, no expropriations.” During President Castillo's recent trip to Mexico (to the CELAC summit) and to the United States (to attend the meeting of the OAS and the UN General Assembly), the Peruvian president reiterated the message in an attempt to convince multinationals to invest in the country.

The capitalists will not be satisfied with having twisted Castillo's arm and having changed the character of the government. Their victory in this round will only embolden them / Image: Presidencia Perú, Flickr

In a meeting with capitalists hosted by the American Peruvian Chamber of Commerce, the president stated “the commitment of his government to guarantee the economic stability and legal security of the country, to promote an adequate investment climate.” Later, at the OAS meeting, he was even clearer: “We are not communists, we have not come to expropriate anyone, we have not come to scare away investments, on the contrary we call on large investors, businessmen to go to Peru.” (RPP Notícias). The message was clear, although it was accompanied by well meaning platitudes – “creating jobs", “fighting poverty", “ending corruption” – all of which are incompatible with the interests of multinationals and with the capitalist regime in crisis in general.

The problem was that while Castillo and Francke courted the multinationals in the US, Prime Minister Bellido was insisting on his threats towards the Camisea Consortium: “We summoned the Camisea gas exploitation and commercialisation company to renegotiate the distribution of profits in favor of the State, otherwise, we will opt for the recovery or nationalisation of our gas field,” he declared on Twitter on 26 September.

Castillo was quick to rebut his premier:

“We have a clearer conception of what private business is after we have gone abroad and we have seen many commitments from private companies and many businessmen from whom we have taken their commitment to come to Peru to invest. They should be at ease and if there have been some outbursts by the premier or another person we have corrected him.” (RPP Notícias)

The other underlying issue was the question of the Constituent Assembly. Bellido had promoted the collection of signatures for a referendum on convening a constituent assembly. The change from one bourgeois constitution to another would not really solve the serious problems faced by workers and peasants in Peru. However, the truth is that, in their eyes, this slogan represents the desire for a profound change – to sweep away the whole regime based on Fujimori's constitution.

The ruling class, which now has Castillo under its control through the mechanisms of parliamentary arithmetic, fears that the turmoil around the constituent assembly could open a gap through which the masses might express their aspirations to take their destiny into their own hands. All the Peru Libre ministers have therefore been eliminated from the government as the only ones consistently pushing forward this electoral promise. Meanwhile, Betssy Chávez, the PL congresswoman who broke with the PL parliamentary group precisely over this question, has been awarded a ministry.

One cannot serve two masters

In reality, there was an insoluble contradiction in the heart of the government between a policy in favour of the majority of workers and peasants, which inevitably would involve confronting the interests of the multinationals and the capitalists (represented, albeit timidly, by PM Bellido); and a policy of protecting the interests of the mining companies and CONFIEP, imagining that doing so would benefit the people (a policy represented by President Castillo, and above all by Francke and the “moderate” or caviar left). Such a contradiction could not last long.

The capitalist oligarchy launched a relentless campaign to destroy the Bellido cabinet, using all the means at its disposal: the state apparatus (including the secret services, the Army,Navy, and the judiciary), the monopoly capitalist media, bourgeois public opinion, etc. In this campaign, a broad spectrum of forces, ranging from Keiko Fujimori to the parties of the “moderate” (read: bourgeois) left and sectors of the union bureaucracy, acted in a united front.

In his resignation speech, the president of the Council of Ministers, Bellido, explained it clearly, and it is worth quoting him at length:

“The people are a witness that above the Executive Power there are forces and de facto powers that govern, pressure, coerce and persecute... starting from not wanting to recognise the electoral triumph of Peru Libre to opposition to the formation of the government itself. These financial, business and economic powers have captured the judicial bodies that, protected by the euphemism of the ‘separation of powers’, do not submit to elections and want to govern by criminalising all political opponents. The renegotiation of the Contract with the Camisea Consortium marks the breaking point between a surrendering, privatising and individualist State and a new one, which should rescue [natural resources] and is supportive, humanistic and sovereign.”

The question that we must ask is, if this is the case then why did Bellido accept the demands of the powers-that-be without putting up a fight?

This onslaught could only be resisted effectively with the mobilisation of workers and peasants in the streets. Peru Libre has just 37 of the 130 deputies in congress, far from a majority, and therefore governs with the permission of the parties of the moderate left, but above all of the centre and the centre-right bourgeoisie parties.

Bellido's threat to close down congress if a vote of no confidence was passed against the president was correct. The people voted for Castillo, if the congress does not want to accept the popular will, let's go to new elections and let the people decide. That is something that the bourgeoisie did not want in any way, because a new electoral campaign, in which PL would present itself with a radical programme, would further polarise the situation and could give rise to a left-wing majority.

However, no strategy for the defence of the Bellido government could rely solely, nor primarily, on parliamentary manoeuvres. The mobilisation of the worker and peasant masses in the streets would have been the only way. During the vote count in the second round of the presidential election, workers and peasants took to the streets, organised demonstrations and vigils to defend their victory at the polls. The CGTP, although mildly, called for the defence of the labour minister. But there was never – on the part of Bellido, and much less on the part of Castillo – any serious attempt to confront the offensive of the capitalists and the multinationals with revolutionary methods of struggle. Bellido resigned instead of fighting, just as Béjar had done before.

It should also be noted that neither Bellido himself, nor Peru Libre, nor Vladimir Cerrón, at any time advanced a socialist and anti-capitalist strategy, but rather clung to the idea that a “popular economy with markets” is possible, in which, supposedly, multinational mining companies are going to donate part of their wealth for the development of the country. That's like imagining that you can convince a tiger to become a vegetarian! In fact, the utopian character of this idea has been demonstrated in practice. At the first timid attempt by the government to renegotiate the Camisea gas contract... the bourgeoisie and the multinationals have overthrown the democratically elected government!

We must further warn that the capitalists will not be satisfied with having twisted Castillo's arm and having changed the character of the government. Their victory in this round will only embolden them. They have tasted blood and now they will want more. An editorial of El Comercio (the most representative organ of the bourgeois campaign against the government) with the title “Cerrón is still present”, celebrates that “finally, after 69 days, Guido Bellido fell yesterday afternoon. This was a person who should never have reached the Presidency of the Council of Ministers (PCM) and who debased such an important position.” But then it goes on to demand the heads of three other ministers! We ask ourselves, who should appoint the government: the president or the editorial board of El Comercio? It is obvious that the capitalists know that, in a bourgeois democracy, they are the ones who rule, regardless of parliamentary facades.

It is possible that the ruling class will want to use a domesticated Castillo to apply the policy they need without causing a social explosion. If the break with the Peru Libre parliamentary group is confirmed, Castillo is now a prisoner of the bourgeois parties (the “moderate” left is insignificant in parliament). But deep down they don't trust him – he's not one of them. At most they will squeeze him like a lime and then throw him away when he is spent.

When we celebrated Castillo's election we wrote:

“Castillo will now be faced with a dilemma. On the one hand, he can rule for the masses of workers and peasants who have elected him, which would mean a radical break with the capitalists and the multinationals. That can only be done by relying upon extra-parliamentary mass mobilisation. Or he can give in, water down his programme and accommodate to the interests of the ruling class, meaning he will be discredited among those who have voted for him, preparing his own downfall. If he attempts to serve two masters (the workers and the capitalists) at the same time he will please neither. “ (Peru: Castillo's election, a major political earthquake, 9 June)

And we added:

“The struggle has only begun. Every step forward which Castillo takes should be supported. His vacillations or retreats should be criticised. The workers and peasants can only trust in their own forces and these should be mobilised to strike blows against the oligarchy.”

The dilemma seems to have been resolved fairly quickly, in just 69 days.

Lessons needed to be learned

It may take time for the broad masses who voted for Castillo to draw all the conclusions from these events. The political-emotional bond that has been established between the oppressed of Peru and Castillo is strong, but inevitably practical experience will prevail. It is crucial that the most advanced sectors of the working class and the youth draw the necessary conclusions from this episode. We must speak clearly. The fall of the Bellido government and the entry of the Vásquez government represent the culmination of Castillo's turn to the right and the betrayal of the hopes raised by his campaign.

It is necessary to re-group the vanguard around a clear revolutionary socialist programme. It is not possible to negotiate a mutually beneficial pact with multinationals and businessmen, especially not in the context of the global crisis of capitalism. Only the revolutionary expropriation of mining and energy resources and large Peruvian companies under the democratic control of the working class can lay the foundations so that there are “no poor people in a rich country.” The revolutionary transformation of Peru would become an example for the workers and peasants of the continent, a continent in which the class struggle is in full swing.