June 5, 2006

Look out Chavez, Peru’s Garcia may buck leftist wave

By Alistair Scrutton

LIMA, Peru (Reuters) - If Alan Garcia's pledges are to be
believed, his victory in Peru may signal that pragmatic social
democracy is making more inroads in Latin America than
headline-grabbing anti-U.S. populism in Venezuela and Bolivia.

The election of Bolivian President Evo Morales and his
backing from anti-U.S. Venezuelan leader Hugo Chavez have
sparked worries in Washington about the influence in the region
of leftists ready to befriend Iran or nationalize the
operations of U.S. firms.

But the victory of former President Garcia -- a
self-proclaimed moderate -- over the Chavez-backed leftist army
nationalist Ollanta Humala in Sunday's presidential election
may have put a stop to that trend.

"Garcia's victory may be a defining moment for Latin
America. The kind of leftist drift feared in Washington may
have stopped in Peru," said Riordan Roett, director of Latin
America studies at the Johns Hopkins University.

Garcia and Chavez were openly hostile to each other during
the campaign after the Venezuelan leader accused Garcia of
being corrupt -- something not lost to the Bush administration,
which has welcomed Peru's criticism of Venezuela for meddling
in its affairs.

"This (Garcia victory) is a setback for Chavez's project,"
said Patricio Navia, a political scientist at New York

Garcia's record is dismal. His first 1985-1990 government
tried to nationalize the banks and his government defaulted on
its debts. Hyperinflation and prices controls ruled. Critics
say Garcia II will be the same plot with the same dire end.

But Garcia made his comeback by promising voters he had
learned from his mistakes. He now favors a U.S. free trade
deal, waxes lyrical about foreign investment and warns of the
evils of inflation.


Analysts point to Brazilian President Luiz Inacio Lula da
Silva and Chilean President Michelle Bachelet as examples of
governments led by former radicals who may challenge Washington
on issues from free trade to the Iraq War -- but are far more
moderate than Chavez-style populists.

"With all the talk of Latin America's turn to the left, few
have noticed that there are really two lefts in the region. One
has radical roots but is now open-minded and modern; the other
is close-minded and stridently populist," Jorge Castaneda wrote
in the June issue of the journal Foreign Affairs.


Garcia puts himself in the first camp.

"I see myself between Chile and Brazil -- both have been
successful. Lula is a realist. And the Chilean governments have
had good technical teams," Garcia said in a interview with the
Inter-American Dialogue think-tank.

Other countries are no longer looking like they will join
the leftward shift. Mexico's Andres Manuel Lopez Obrador, once
a clear favorite to win July's election, has lost support and
now faces a close battle with his conservative opponent.

In May, rightist Washington ally Alvaro Uribe was elected
to a second term in Colombia by a landslide.

"Garcia is so anxious to rewrite history and change his
legacy from total failure to success. He believes the road will
take him to the U.S. (free market) tradition," said Larry
Birns, director of the Council on Hemispheric Affairs, a
liberal think tank in Washington.

But some say Peruvians have been fooled by Garcia's
dazzling oratory and power will soon corrupt him.

Others fear the government will soon fill with Garcia's
hard-core APRA supporters. APRA is one of Latin America's
oldest parties with a cult-like following from militants with
an ideology of anti-US imperialism.

"The proof will be in the pudding," said Roett. "We will
have to wait and see what he does."

(Additional reporting by Adriana Garcia in Washington)