Peru’s Castillo Assumes Presidency, Pledging Economic Stability

Pedro Castillo on Wednesday vowed to tackle what he says are persistent social divisions in Peru that dated back to colonial days as he was sworn in as the country’s president.

In a speech shortly after he was inaugurated, Castillo, sporting his trademark wide-brimmed hat, struck a conciliatory tone for investors, saying he wanted the state-owned bank to compete with private lenders but that he would maintain economic order and predictability.

Castillo was elected in last month’s vote as a representative of a Marxist party, shaking the political elite and worrying companies fearful of his plans to hike taxes on mining to fund health and education reforms.

But he reassured them on Wednesday there was “not the remotest” plan to nationalize industry but said he would seek “a new pact” with private investors.

He wanted to streamline regulation of the mining industry to improve the local economy with tax revenue and net capital inflows, he added. Peru’s riches needed to be more equitably shared.

There is intense interest in the make-up of his cabinet of ministers, still under wraps amid horse trading between the radical wing of his Free Peru party and more moderate advisers and allies.

The cabinet’s swearing in was due to take place shortly after Castillo’s inauguration but his party announced on Wednesday morning that it would be delayed until Friday.

Sources close to Castillo have said the economy minister role will likely go to Pedro Francke, a moderate left-leaning economist, who has helped soften the outsider candidate’s image and calm jittery markets in recent months.