July 26, 2012 / 6:28 PM / 7 years ago

Peru Humala's party retains leadership of Congress in vote

LIMA, July 26 (Reuters) - President Ollanta Humala’s party held onto the leadership post in Congress in a vote on Thursday, a sign the one-time leftist still has sway in parliament and that long-delayed political appointments may soon be made.

Victor Isla of the Gana Peru party received 86 votes while Luisa Maria Cuculiza of the right-wing party led by Keiko Fujimori, who lost to Humala in last year’s election, got 42. Isla, a lawyer from the Amazonian region of Loreto, replaces Daniel Abuggatas, a former Humala aide.

Humala’s left-wing Gana Peru party won only 47 of 130 seats in Congress during last year’s election and had to stitch together alliances with centrist parties, especially former President Alejandro Toledo’s Peru Posible party, to pass legislation.

Humala was won approvals for a series of reforms he promised voters but several lawmakers have left Gana Peru in recent weeks complaining of his drift to the right and a harsh crackdown on anti-mining protests.

Lawmakers have also bickered for the past year over important appointments to key posts and failed to fill them - including two judgeships at the Constitutional Tribunal and the head of Peru’s influential and respected human rights office.

Investors are particularly concerned by Congress’s failure to appoint three members to the central bank’s board as required by the constitution.

Humala appointed three board members and asked renowned inflation-slayer Julio Velarde to stay on as central bank president a year ago.

Three members of the previous central bank board agreed to remain on an interim basis until Congress made new appointments, but then grew tired of the foot-dragging and started stepping down. Velarde has publicly complained about the delays, which could eventually hamper the bank’s ability to make long-term plans.

“We are aware that it is necessary to work together to build a parliamentary agenda that will permit us to organize legislation with the central government,” Isla said after a swearing-in ceremony.

Despite the delays in appointments, Humala managed to push ahead with reforms throughout his first year in office and this month signed into law the most significant changes to the country’s private pension fund system in its 20-year history.

The pension law is designed to lower fees and sign up more affiliates, while earlier this year Congress gave the finance ministry special powers to implement a tax reform aimed at raising state revenue by curbing rampant tax evasion.

Earlier, Congress raised royalties paid by mining firms after negotiating with companies and passed a law requiring indigenous communities to be consulted about natural resource extraction projects or laws that affect their lands.

Lawmakers in Peru, where new, personality-driven political parties are formed around presidential candidates every five years, typically have little party loyalty, making their legislative decisions difficult to predict.

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