US embassy cable - 05LIMA1017

UNCLAS SECTION 01 OF 02 LIMA 001017 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, PE, ATPDEA 
SUBJECT: PRESIDENT TOLEDO REALIGNS CABINET: POLS REPLACE 
TECHNOCRATS 
 
Sensitive But Unclassified, Please Handle Accordingly 
 
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Summary: 
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1. (U) President Toledo replaced four cabinet members on 
2/26, bringing in new heads for the Ministries of Justice, 
Agriculture, Labor and Production.  The new faces raise the 
profile of Toledo's Peru Possible party in the government -- 
two of the new ministers are strong party members and the 
third has been a close personal advisor to Toledo.  The 
changes are widely seen as a move toward a less technocratic, 
more political cabinet that will dedicate itself to raising 
the President's approval numbers and Peru Possible's 
prospects in the run-up to the next elections, through 
programs like Toledo's recent proposal to pay a USD 30 
subsidy to citizens under the GOP's poverty line.  Brief 
sketches of each of the new Ministers follow.  End Summary. 
 
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Justice 
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2. (U) The incoming Justice Minister is Eduardo Salhuana.  He 
was elected to the Congress in 2001, where he served on the 
Justice, Constitutional and Budget Commissions, and was also 
a spokesman for the Peru Possible party.  Previously, he was 
dean of the Law School in Puerto Maldonado in the Madre de 
Dios Region (eastern jungle).  He has been a legal advisor to 
various organizations in that region.  Salhuana replaces 
Carlos Gamarra. 
 
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Agriculture 
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3. (U) The new Agriculture Minister is Manuel Manrique.  He 
is a civil engineer who has studied at Northwestern 
University.  He was the Executive Director of a major 
irrigation project for the Ministry of Agriculture.  Manrique 
is not seen as an expert in a wide range of agricultural 
issues.  Manrique replaces Alvaro Quijandria. 
 
4. (SBU) According to an Embassy alternative development 
contact, Manrique is a close associate of former Agriculture 
Minister Jose Leon Rivera, who was forced to resign from the 
cabinet in April when news broke that he was part-owner in a 
hotel that hosted a brothel with underage prostitutes.  Leon 
was often at odds with Embassy interests because of his 
attempts to cater to the cocaleros, and Manrique has already 
announced his intention to "engage" with cocaleros.  The same 
contact advises that President Toledo treats Manrique like a 
family member (although he is not), and that Manrique has a 
close relationship with First Lady Eliane Karp. 
 
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Labor 
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5. (U) The new Minister of Labor is Juan Sheput.  He is an 
industrial engineer who taught at Frederico Villareal 
University and who studied at the University of the Andes in 
Colombia.  During the Toledo administration, Sheput served as 
a personal advisor to the President, and was also Head of the 
Council of Advisors at the Interior Ministry.  He has been a 
frequent and helpful contact of the Embassy.  Sheput replaces 
Javier Neves Mujica. 
 
6. (SBU) Neves Mujica was a technocrat who was perceived by 
business as being too pro-labor, and recently had public 
differences with Finance Minister Pablo Kuczynski over 
proposals to make the labor market more flexible.  Some 
commentators have speculated that his departure could 
contribute to greater labor union militance against the FTA. 
 
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Production 
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7. (U) The new Minister of Production is David Lemor, a civil 
engineer, and a graduate of North Carolina State University, 
who speaks fluent English.  He is a textile producer and has 
been the Vice President of National Industrial Society, a 
pro-protectionist organization of textile manufacturers. 
Lemor is the only member of the new group of ministers not 
closely associated with Peru Possible.  He replaces Alfonso 
Velasquez. 
Comment: 
8. (SBU) The latest cabinet changes move President Toledo 
away from the course many editorialists and opposition 
members had urged him upon, i.e., to name credible 
technocrats to his cabinet and let them govern.  Also of note 
is the absence of any figures from the Independent Moralizing 
Front (FIM), Peru Possible's governing coalition ally, in the 
Cabinet; however, Peru Possible leaders denied any change in 
their alliance as a result of the naming of the new 
ministers.  It has been reported that Toledo consulted 
closely with FIM leader Fernando Olivera before making the 
last changes, and Olivera has predicted a second round of 
cabinet changes around the middle of the year. 
STRUBLE