Congress approves Humala’s first cabinet following speech by Lerner Ghitis

Peru’s Congress approved President Ollanta Humala’s cabinet presentation Thursday  following an address by Cabinet Chief Salomon Lerner Ghitis and a 90-minute question time answered by some of his 18 ministers.

“I want to ask, in the name of the government, for a vote of confidence so that this cabinet, with the support of Congress, can develop its activities to transform the country in democracy,” Lerner Ghitis said.  He did not ask for executive legislation powers, expected by some analysts, and instead stressed working jointly with Congress to achieve the changes he proposes. 

The cabinet received the approval 90 votes in favor, zero against and 33 abstentions. The abstention votes were from the opposition Fuerza 2011 party,  supporters of jailed ex-President Alberto Fujimori.

Fuerza 2011 criticized Lerner Ghitis for not offering “greater details” about some of the government’s policy priorities, state news agency Andina said.

However, in general, Lerner Ghitis’ speech was well received by analysts and the business community, which has been skeptical of the new government’s plans. Since winning the first round vote in April, Humala has looked to build confidence with the private sector.

Humberto Speziani, the president of Peru’s private industry and business federation, Confiep, said he was generally in agreement with the presentation.

One of the main points during the presentation, which drew applause from many of the lawmakers, was the announcement that Peru’s government has reached an agreement with mining companies to increase taxes.

During his campaign, Humala said he would be looking to raise taxes on the sector, and critics were concerned the increase would jeopardize Peru’s competitiveness in relation to other mining countries.

After Humala won the elections in June, his government officials began to hold talks with Peru’s National Mining, Oil and Energy Society, SNMPE, to discuss the initiative.  The minister of Energy and Mines, Carlos Herrera, said the talks resulted in the mining companies accepting to pay triple their initial offer.

Lerner Ghitis said during his speech that the government intends to collect some 3 billion soles (around $1.1 billion) from the new tax.

Lerner Ghitis, whose speech has been published in full by newspaper El Comercio, also discussed priorities related to energy, education, citizen security, drug trafficking and corruption.

His Economy and Finance minister, Miguel Castilla, said the 2012 budget is to include historical increases for education and health

Lerner Ghitis also mentioned the building of the south-Andean gas pipeline, work to increase agro-exports by 20%, reduction of the housing deficit by building or restoring 100,000 homes per year,  increase the operational capacity of the Armed Forces by 20%, and work with Congress to create a new Ministry of Science and Technology, and to incorporate Human Rights into the purview of the Ministry of Justice.

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