Saturday, July 21, 2007

Peruvian President Alan Garcia has won over skeptical business leaders and investors during his first year in office, but angry street protests show he has failed to meet the demands of the poor. Teachers, peasant farmers and trade unionists have all taken to the streets of the South American country in recent weeks in sometimes violent protests to press demands ranging from more roads, better education and cheaper fertilizers.

"He's not governing for poor people, he's governing for the rich. We want him to implement the responsible change he's promised, and if he can't do it, he should go," teacher Elma Suarez, 35, said during a protest in the capital, Lima.

A center-leftist, Garcia began his second term as president last July by vowing to grow the economy and fight poverty. But his approval rating has slumped from 63 percent in August to 42 percent in June, a poll by Ipsos Apoyo showed. Although teachers ended a two-week strike and returned to work on Friday, three people have been killed and dozens injured in this month's protests, showing clearly that his honeymoon period has come to an end.

Garcia's first term as president in 1985-90 was dismal. His government defaulted on its debts, and hyperinflation and price controls wrecked the economy. That record had many businesses and foreign investors fearing another crisis when he was elected this time. But he has promised "responsible change," soothing financial markets by backing a free trade deal with the United States, waxing lyrical about foreign investment and warning of the evils of inflation.

Peru's economy is booming. It expanded by 8 percent last year, driven by strong mining exports, and similar growth is expected for 2007. In sharp contrast with Garcia's first presidency, the country's foreign reserves are at record levels.

Still, nearly half of Peru's 27 million people live in poverty and many lack basic services such as clean drinking water and electricity. Ollanta Humala, the left-wing candidate beaten by Garcia in last year's run-off election, has joined the protests and warned on Thursday that they could turn more radical. "The people are showing their massive disapproval of Alan Garcia's government," he said.

In an effort to cool the protests, Garcia announced measures this week to keep down the price of basic foods such as bread by scrapping duties on wheat and fertilizer imports. However, Economy Minister Luis Carranza admits that millions of poor Peruvians want quicker progress.

"There is an issue with expectations, impatience, of longing for very quick results, which are happening little by little, but they want them to be faster," he told a local radio station last week. "It's a politically complicated situation in the short term but ... social and political pressures will tend to ease in the medium term due to the good progress of the economy," he said.

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