PERU: ALAN GARCÍA, Peru's president, has appointed a popular left-wing regional governor as prime minister following the resignations of his entire cabinet over alleged corruption in the granting of oil concessions.
Yehude Simon, a congress member during Mr García's first administration in the late 1980s, served time in prison for alleged links to the Tupac Amaru guerrilla movement and was pardoned in 2000. Although Mr Simon was not first choice for the job, many observers say he is a good choice, who may help Mr García's administration communicate with Peru's disenchanted left-wing parties and unions.
The president's approval ratings had dipped to 19 per cent even before the oil concession scandal broke. The allegations of kickbacks in the granting of concessions to Norwegian company Discover Petroleum arose after local television aired a series of audio tapes in which two members of Mr García's Apra party discussed alleged payments. The company denies it paid any bribes.
The government has ordered an investigation into all concessions granted since 2006.
"Mr García's unpopularity is not an ideological issue," political commentator Mirko Lauer said. The president could "put on a bright red dress and dance the tango" and it would not make a difference to his approval rating, as it was directly linked to issues such as employment, income, ecology and mining.
"I think what Yehude can do, and this may improve Mr García's popularity in an indirect way, is to blunt - to take part of the edge off - social protest," he said.
Mr Simon said that holding talks with unions would be a priority, as well as tackling corruption and making improvements in education and health.
Mr García must now reconstitute his cabinet less than a month before Peru hosts the Apec summit, amid an escalating global financial crisis.
Several key ministers are likely to stay in the new cabinet, including José García Belaunde, the foreign minister, and Mercedes Araoz, the trade minister.
But austerity measures introduced by Mr García may be making his job harder. - ( Financial Timesservice)