[Marxism] Humala has edge in Peru's first round: former Pres.l Garcia becomes neoliberals' "lesser evil"

Fred Feldman ffeldman at bellatlantic.net
Sun Apr 9 20:21:10 MDT 2006

Bloomberg News - April 9, 2006 17:41 EDT
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Peru's Humala Wins Most Votes, Exit Polls Show 
by Alex Emery in Lima 
April 9 (Bloomberg) -- Peruvian nationalist candidate Ollanta Humala, a
former army colonel who vows to redistribute the country's mineral
wealth to the poor, won the most votes in a first round presidential
election, exit polls showed. 
Humala, 43, took 29.6 percent of the vote, followed by former President
Alan Garcia, 56, with 24.2 percent and Lourdes Flores, 46, a lawyer,
with 24.2 percent, according to the exit polls by Apoyo Opinion y
Mercado on America Television. Peru plans a runoff election with the top
two vote-getters in May. 
An ally of Venezuelan President Hugo Chavez, Humala won support among
13 million poor for pledging to fight the multinational companies he
says are looting the nation's natural resources. His rise in the polls
ahead of today's vote concerned investors including Jaime Valdivia at
Emerging Sovereign Group, who said he worries Humala may squander five
years of economic growth and stability that have lured investment to
`Humala is an independent who won't ally with the rich and powerful,''
said Fernando Ribero, 28, a beer distribution salesman who voted for
Humala, a member of the Union for Peru party. `Unlike the traditional
politicians, he's going to crack down on the multinational companies
that don't pay taxes.'' 
A Humala victory would put Peru in the camp of Venezuela's Chavez and
Bolivian President Evo Morales, who was elected in December, who both
advocate curbing company profits to help the poor benefit from the
region's oil and mineral wealth. 
'Serious Challenge' 
`The possibility we'll have another Chavez acolyte in Peru represents a
serious challenge to the economic model and a threat to democracy,''
said Michael Shifter, vice president for policy at Washington research
organization Inter-American Dialogue. 
Humala drew protests as he cast his ballot today at a university in
Lima, prompting President Alejandro Toledo to send riot police to escort
the candidate. About 100 police with riot shields protected Humala and
former Canadian Foreign Affairs Minister Lloyd Axworthy, head of an
Organization of American States delegation observing the election, after
protesters chanting `murderer'' threw stones and bottles at the
`Make use of the weapon of the ballot box, but don't attack the
electoral process itself,'' Toledo told Lima station Panamericana
Television. `The world is watching us -- this is democracy, not the
authoritarian past.'' 
Economic Growth 
Peru's $68 billion economy has expanded at an annual rate of 5 percent
since Toledo, 60, took office in 2001. His government trimmed Peru's
deficit to 
0.4 percent of gross domestic product from 2.5 percent in 2001. The
inflation rate is the lowest in the region at 2.5 percent in March. 
Annual exports are forecast to triple to $21 billion this year. Peru is
the world's fourth-largest producer of copper, the fifth in gold, the
third of zinc and the largest of fish meal. The country has Latin
America's fifth-largest reserves of natural gas. 
Humala's popularity prompted declines in Peru's markets the past three
months. In January, when he first led the polls, the nation's benchmark
stock index sank 6.3 percent between Jan. 4 and Jan. 13. The index
jumped 30 percent the following month as he was overtaken again by
Flores. The index fell again March 20 when a fresh poll showed him back
in the lead. 
Peru's stock index rose 2 percent to 6192.89 on April 7, after the
central bank raised the benchmark lending rate to a three-year high of 5
percent. The nation's currency climbed 0.6 percent to 3.3585 per dollar.
The yield on the government 9 7/8 percent bond due 2015 fell to 7.3
percent from 7.5 percent as the price rose 1.25 cents on the dollar to
Valdivia said he is concerned about Humala's pledges to boost corporate
taxes and increase health and education spending. 
`Investors are worried Humala will raise taxes on mining companies, take
them over or do something else equally radical,'' Valdivia, who manages
$230 million of emerging market assets at Emerging Sovereign Group, said
in a telephone interview from New York. `He's not been articulate on
what he plans to do.'' 
The exit polls corresponded with polling results published just before
the election from both Apoyo and Lima-based Datum, which showed Humala
winning and the second-place finisher too close to call. 
Garcia's support among voters has increased in the past several polls.
The former president served between 1985 and 1990 and ended his term
amid hyperinflation -- consumer prices doubled daily towards the end of
his presidency -- and an escalating guerrilla war that left at least
15,000 dead during that time. He returned to Peru in 2001 after nine
years in self- exile in Paris. 
Garcia lost a re-election bid against Toledo in a run-off in 2001 after
edging out Flores in the first round. 
`Garcia won't be as market-friendly as Flores, but he'll be less
unfriendly than Humala,'' said Franco Uccelli, an analyst at Bear
Stearns Cos. in Boca Raton, Florida. 
Flores, seeking to become the Andean nation's first woman president,
campaigned on pledges to grant greater access to credit and training for
farmers and small businesses, while promising to respect contracts
signed between the government and investors. 
Flores vowed to counter the influence of Chavez, who began an initiative
for a regional trade bloc to replace U.S. President George W. Bush's
Free Trade Agreement for the Americas. 
Toledo pulled Peru's ambassador from Venezuela in January after Chavez,
51, called Flores `the candidate of the oligarchy'' and publicly backed
Humala's candidacy. 

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