January 5, 2006

Peru recalls Venezuela envoy over Chavez “meddling”

By Robin Emmott

LIMA (Reuters) - Peru has recalled its ambassador from
Venezuela and accused the country of meddling in its affairs
after President Hugo Chavez praised an ex-army nationalist
candidate running for president in Peru's April elections.

Peru held an all-day meeting with its ambassador to
Venezuela to find out how Peruvian presidential candidate,
Ollanta Humala, was invited to a ceremony in which Chavez
praised him for his platform that seeks to end 15 years of
pro-market policies.

"There are concerns of political meddling in Peru's
electoral affairs and comments by President Chavez were out of
place," a spokeswoman for Peru's foreign ministry said.
Ambassador Carlos Urrutia's recall would not be permanent, she

The Lima stock index tumbled 1.85 percent to 4820.78 points
on the diplomatic friction, traders said.

Chavez had said Humala's plans for a "Second Republic" --
in which Humala says he would he renegotiate contracts with
foreign companies to benefit Peru's poor -- would be a "second
independence" for the Andean nation.

Chavez said Peru would be part of a "battle that joins
together nationalism" in Latin America. His comments, made at
ceremony with visiting Bolivian President-elect Evo Morales,
were broadcast from Caracas on Peruvian television on Tuesday.

Humala, who is leading in some polls before April's vote,
told a news conference on Thursday that the meeting with Chavez
was his first and he planned more trips to Venezuela.

"Next month I'll be going again to Venezuela to participate
in an international forum and there's nothing wrong with that.
What is wrong with meeting Hugo Chavez? He is the leader of a
nation, not a criminal," Humala said.

The diplomatic spat with Peru comes just two months after
Chavez stirred anger in Mexico that led to both countries
recalling their envoys when Chavez called Mexican President
Vicente Fox a "lap dog" of U.S. imperialism for backing
Washington's campaign for a Free Trade Area for the Americas.


Venezuela's foreign ministry said in a statement that
Humala's visit was not official as he was invited by Venezuelan
political parties and said it expected ties to remain normal.

"Just as we have rejected any interference in our internal
affairs, we are deeply respectful of the sovereignty of other
nations," the statement said.

Venezuela's ambassador to Peru, Cruz Manuel Martinez, said
bilateral relations were unaffected and that Caracas was not
guilty of any political interference.

Humala's gradual rise in the polls to rival leading
candidate Lourdes Flores of the center-right has frightened
investors and Peru's political elite.

In late December, the Lima stock index saw its biggest
one-day fall since 2000 because of Humala's increasing
popularity and some international investors have pulled out of
Peru's sol currency and its bonds.

But Humala said his policies would not be a repeat of
Peru's military government of the 1970s, which confiscated land
from wealthy farmers and nationalized foreign companies.

"You have to apply your policies to the period you're
living in ... I'm not talking about nationalization ... but the
sovereign participation of the state," he said as supporters
chanted "Humala for president!"

(Additional reporting by Marco Aquino)