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First woman named Peru prime minister

Peruvian President Alejandro Toledo applauds the new Prime Minister Beatriz Merino at Government Palace in Lima, Peru.

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LIMA, Peru (Reuters) -- Peruvian President Alejandro Toledo, plagued by a popularity rating of 11 percent, named a new cabinet on Saturday and placed a woman at the helm for the first time in the Andean country's history.

Beatriz Merino, the 54-year-old head of the tax agency, was sworn in as prime minister, six days after Premier Luis Solari and the cabinet resigned to allow Toledo to refresh his government's image.

A wave of social protests, a month-long strike by teachers and the resurgence of guerrilla activity pushed Toledo's popularity to a record low in the last month. For the first time in his government, Toledo imposed a 30-day state of emergency.

Opposition politicians last week called on Toledo to resign two years into his five-year term for failing to fulfill his promises to the poorest classes, in which he was born.

In the swearing in ceremony, Toledo blamed his difficulties on the state of the nation he received after autocratic President Alberto Fujimori's government collapsed in a corruption scandal in late 2000.

"When we opened the closet to see grandmother's jewels, we found that everything had been stolen," said Toledo, a former World Bank economist and Peru's first elected president of Indian descent.

But he recognized the need to make changes. "This act is only the beginning of a turning point for my government, a relaunching of my government."

Merino is a former congresswoman, associated with conservative parties and an associate of one-time presidential candidate and author Mario Vargas Llosa. She is respected for raising tax revenue in Peru, a nation of 27 million where 54 percent live in poverty.

"In a difficult moment for the country, we will all have to work together and I want this Cabinet to build a democracy based on consensus, on harmony," said Merino, wearing the traditional red and white belt of ministers.

Toledo retained Javier Silva Ruete as economy minister.

In the first four months of 2003, Peru's economy grew 4.4 percent with a strong boost from fishing and mining.

Toledo also kept Allan Wagner as foreign affairs minister and Aurelio Loret de Mola in the defense portfolio, while replacing six other ministers.

In his speech, Toledo sent a message to the Maoist Shining Path guerrillas, who have staged two attacks in the last month after remaining dormant for a decade. Last week, they ambushed an army patrol and killed one soldier.

"May those who are still hidden in the mountains hear me. I am not going to give you a truce," Toledo said.

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