Economist Hernando de Soto was appointed prime minister by interim president José María Balcázar. It is a surprise move that will reshape Peru’s fragile political transition with just four months left in the current president’s term.
The announcement ended speculation in Lima’s political circles following a meeting held at government headquarters late Sunday. De Soto is scheduled to take office on Tuesday and is expected to lead a cabinet that will mostly feature remaining incumbent ministers.
“He is a very broad-minded person and has an exquisite culture. He has the most modern and interesting international contacts, which we can use as a supplementary international credit,” Balcázar said publicly, praising the global influence of the 80-year-old economist. “You can’t govern with just common sense. You need a technical aspect as well.”
Former Prime Minister Luis Solari cited this appointment as a turning point.
“When Balcazar appointed Hernando de Soto as prime minister, the whole international perception changed. It was a powerful message,” Solari said.
He further emphasized De Soto’s global presence: “De Soto is like a key that opens many doors. He is in the halls of fame in China, the Arab world. He can pick up the phone and contact a former American president.”
Technocrats engaging in political gunfights
De Soto’s appointment is notable not only because of his age and lengthy resume, but also because of the ideological distance that many perceive between him and Balcazar’s political base.
Although Balcazar came from a left-wing political background, observers see the appointment as a pragmatic change aimed at reassuring markets and easing international pressure.
Solari saw this move as a decisive ideological signal.
“Balcazar spent days saying he was not a communist. By appointing de Soto, he sealed that message,” he said.
Peru is entering the final stages of a turbulent five-year term marked by a presidential transition, ongoing tensions with Congress and a lackluster economy. The new prime minister will have to navigate a divided legislature increasingly focused on electoral calculations.
A familiar and controversial figure
De Soto is no stranger to Peru’s political scene. He ran in the 2021 presidential election under the banner of Avanza País, failing to advance to the runoff but securing a parliamentary bloc that is still active today. During the campaign, he also held a widely discussed meeting with then-candidate Pedro Castillo. This was an early sign of a willingness to engage across ideological lines.
Critics have questioned whether accepting a four-month premiership would risk entangling de Soto in a government with limited time and uncertain political capital. Others argue that he has little to lose.
Solari, who worked with de Soto until mid-2025, strongly defended his intellectual abilities.
“He has a great mind. I worked with him until about eight months ago, and he has a great mind,” Solari said.
Mining, Security and Economic Agenda
Balcázar suggested that De Soto could take a different approach to long-standing issues such as illegal mining and criminal justice reform.
President Moon emphasized, “To lead the Ministry of Justice, you need a good lawyer,” and “technical knowledge and political acumen must be in harmony.” On illegal mining, he added, “Hernando has a different idea on how to solve it.”
Beyond specific reforms, the next prime minister’s main task will likely be maintaining economic stability. Peru is one of South America’s most resource-rich countries, but political instability has undermined investor confidence.
De Soto’s supporters say his international contacts and pro-market reputation could help attract foreign funds and reassure financial markets.
“There is no need to wait for the next government. Important steps can still be taken five months later,” Solari said.
A final act in turbulent times.
De Soto — founder of the Institute for Liberty and Democracy another way and the mystery of capital— The chancellorship could mark the final significant chapter in a decades-long career that has teetered between intellectual influence and direct political ambition.
It remains unclear whether he will be able to translate that experience into short-term governance benefits. With elections approaching and Congress in campaign mode, Peru’s interim government has limited time and little room for error.
Featured Image: Peruvian Prime Minister Hernando de Soto
Image source: Andina Agency
