Turmoil in Peru as PM quits
Friday, August 12, 2005 Posted: 0001 GMT (0801 HKT)
LIMA, Peru (Reuters) -- Peruvian President Alejandro
Toledo said Thursday he had asked all his ministers to
tender their resignations and would evaluate who would
stay on in their jobs.
The government was plunged into crisis earlier when
Prime Minister Carlos Ferrero quit, following the
appointment of Toledo's controversial top ally,
Fernando Olivera, as foreign minister.
Housing and Construction Minister Carlos Bruce also
Bruce and Ferrero both publicly split with Olivera
over legalizing some cultivation of the raw material
for cocaine, and their resignations signal more
turbulence ahead for the unpopular Toledo in his final
months in office.
Under Peru's constitution, once a prime minister
resigns all ministers must tender their resignations.
"Carlos Ferrero has tendered his irrevocable
resignation as prime minister," a statement from his
Ferrero, a veteran lawmaker who has been prime
minister since December 2003, would have had to quit
the Cabinet by early October if he wanted to run for a
congressional seat, but the timing of his announcement
-- minutes after Toledo's closest ally was sworn in as
foreign minister -- was a surprise.
There was no immediate word on who would replace him.
Toledo has lurched from crisis to crisis throughout
his four years in office.
His approval rating -- which has crept up to 14
percent -- could take another hit over the Olivera
appointment, judging by a flurry of indignant calls to
Toledo is barred by law from running in elections in
April 2006 and will leave office in July. But he needs
to keep a firm grip on the country until then with
signs public spending is rising too fast and more job
and pay protests are brewing.
Both Bruce, Toledo's longest-serving and most popular
minister, and Ferrero had opposed Olivera's vocal
support for a regional law declaring some coca crops
legal in parts of southern Peru. Critics feared that
could spark a rise in cocaine production in the
world's No. 2 producer.
Olivera, 47, is leader of the junior coalition party
whose support is crucial in a Congress where Toledo
lacks a majority. He was justice minister in Toledo's
first Cabinet in 2001 and was ambassador to Spain
until his appointment.
Olivera's appointment triggered an avalanche of
criticism, including from members of Toledo's own Peru
"It couldn't be worse," ran the banner headline in La
Analysts did not expect Olivera's entrance or
Ferrero's exit to spook investors immediately and
Peruvian bonds took the news in their stride, with
prices little changed.
But his support for a highway linking Peru and Brazil,
despite criticism of its high cost, could worry
investors after the government admitted it had already
overshot this year's spending target.
Olivera won notoriety in 2000 when he presented to the
media the video of former spy chief Vladimiro
Montesinos paying off a congressman -- explosive
evidence of corruption at the heart of ex-President
Alberto Fujimori's government. The video triggered an
unprecedented scandal that felled Fujimori.
But his abrasive manner has made him plenty of
He publicly refused to shake hands last week with
Bruce -- ironically on a day honoring diplomats.
He once slammed a car door on a journalist's hand when
she was trying to interview him and told another
bluntly to "shut up." He also called the government's
drugs chief inefficient and urged him to quit.
"I don't know how someone who behaves like that can be
foreign minister," said Toledo party lawmaker Doris Sanchez.