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Exclusive: Peru's Sagasti says he will not push for referendum on constitution

LIMA (Reuters) - Peru’s interim President Francisco Sagasti said he will not push for a referendum on changing the country’s constitution to solve a biting political crisis that has seen loud calls in street protests over recent weeks for major reform.

Peru's interim President Francisco Sagasti talks to Reuters, in Lima, Peru November 19, 2020. Picture taken November 19, 2020. REUTERS/Sebastian Castaneda

Sagasti, a centrist lawmaker, took the reins in the copper-producing nation this week amid some of Peru’s most heated demonstrations against the political classes in decades, which saw huge protests in which two people killed and dozens injured.

He has managed to calm the waters in the short-term, but the country remains volatile with calls on the streets for changes to the constitution and an overhaul of Congress, especially amongst the country’s youth.

Over three million Peruvians took to the streets in recent days, according to a poll by Ipsos. Some 90% disapprove of Congress and most do not identify with any political party.

Sagasti, however, cautioned in an interview with Reuters that there would be no rapid movement toward a referendum on the matter, as happened in neighboring Chile after violent protests last year. Chileans voted overwhelmingly to rewrite their own magna carta.

“We think this is a task for a new government, freely elected by the people,” he said. “We don’t think this is a short-term priority,” he said late on Thursday at the presidential palace in capital Lima.

Sagasti, whose term runs until July and includes helming the country to new elections planned for April, said that his government was focused on “calming” the current situation.

Peru’s constitution, created by strong-man Alberto Fujimori in 1993 after he shut down its then opposition-led Congress, is controversial and has been unable to avoid regular bouts of political upheaval that have dominated its politics for years.

Much of the momentum for constitutional change will depend on whether Peruvians continue to protest and whether political tensions remain between Congress and the executive. Some fear that impeachment will become a constant threat with a divided legislature, fostering uncertainty.

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Peru’s police has also been criticized for its handling of the protests that led to the rapid resignation of conservative leader Manuel Merino. Sagasti promised there would be “no impunity” for those responsible for the deaths and injuries, but stopped short of committing to police reform.

“We will not leave unpunished in any way those who have committed these acts of violence and violation of human rights, but neither will we go to the other extreme saying that all the police are like that,” he said.

“We won’t tarnish all the police because of the behavior of some elements.”

Sagasti criticized the country’s top court for declining to hear a case that would have defined when a president can be impeached, saying some sort of guidance would have been “useful for the political stability of the country”

RAISING DEBT

Sagasti said Peru is planning to raise new public debt in the short term in order to finance the Andean country’s sky-high deficit and repay interest on old debt in 2021.

“Our country has the capacity to raise debt at interest rates that are relatively reasonable,” Sagasti, 76, said late on Thursday evening in his first interview since taking office earlier this week amid a biting political crisis in the country.

“When one has space to raise debt and you are going through a crisis, that is what you have to do.”

The former World Bank official became Peru’s third president in a week after his predecessor resigned after six days in office and the country’s much-reviled Congress ousted centrist Martin Vizcarra in an impeachment trial.

Peru had been an economic success story for almost three decades, but the coronavirus pandemic has hit the country’s mining-driven economy hard, pushing up poverty levels and driving it towards its biggest annual contraction in a century.

The government of Vizcarra had launched one of the region’s biggest economic package to weather the coronavirus crisis, including cash transfers for the most vulnerable, even as mining production was hit by a lockdown.

The stimulus package will cost around 20% of Peru’s pre-pandemic gross domestic product, though the economy is set to contract 12.5% this year and tax revenue has dipped 30%.

Sagasti says his interim administration is weighing the possibility of spending more on new cash transfers.

Reporting by Marco Aquino and Marcelo Rochabrun; Editing by Adam Jourdan and Alistair Bell

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