April 6, 2006

Nationalist Humala rattles Peru’s elite

By Patricia Zengerle

LIMA, Peru (Reuters) - There have been disturbances during
Peru's closely contested presidential election campaign, but
not in the streets. This year, the unrest is within the towers
of Lima's business districts and the walls surrounding its
upscale homes.

Promising to wrestle Peru's wealth away from the country's
upper class, former army commander Ollanta Humala has risen to
first place in most polls before the April 9 vote, tapping into
the anger of the half of Peruvians who are poor and who have
not seen the benefits of economic growth.

Not since the 1970s, when a military government introduced
a radical land reform and kicked out foreign companies, has
Peru's coastal, European-descended elite been threatened with
huge wealth distribution for the benefit of the Andean poor.

"How can it be that five percent of the population enjoys
the wealth of this country and the rest are exploited?" asked
Humala while campaigning in the southern city of Tacna. "How
much longer must so much of Peru's people live in misery?

The prospect of a President Humala is rattling financial
markets and spreading fear among business leaders who could
face drastic contract revisions and new taxes.

The candidate has been compared to Venezuela's anti-U.S.
President Hugo Chavez, who has voiced support for Humala.

Prominent businessmen are throwing their support behind
market favorite conservative candidate Lourdes Flores, who is
second in most polls.

"Many people are very worried," Gerald Wolfe, president of
huge multinational copper miner Antamina in central Peru, said.
"(Humala) has very nationalist visions. He is more inclined
toward Venezuela than toward other countries."

The celebrated Peruvian novelist Mario Vargas Llosa has
decried Humala's rise in polls, and said his supporters were
suffering from political, moral and cultural "blindness."

"How can it happen that after we so recently ended 10 years
of shame... there can be one third of the population that wants
to return to dictatorship, authoritarianism, to the subjugation
of the press?" he asked, referring to the 10-year autocratic
rule of Alberto Fujimori, which collapsed in scandal in 2000
after he won a third term in a violent, flawed election.

But poor Peruvians see Humala as their savior after years
of pro-business policies that have developed a prosperous stock
and bond market and attracted foreign investment but failed to
provide basic services such as drinking water, hospitals,
schools and roads.


Peru's mainstream media has attempted to stunt Humala's
rise by accusing him of corruption, planning a coup and failing
to stand up to accusations of human rights when he was a
soldier in the 1990s.

One newspaper ran a map of countries Humala visited on what
the daily called his $10,000 honeymoon, with the headline,
"Tell us, Mr. Humala, How did you pay for your honeymoon?"

The respected daily El Comercio accused Humala, who led a
failed coup against Fujimori in 2000 of making "veiled
anti-democratic threats" against Flores.

But that appears to play into Humala's hands because he
paints himself as an outsider going up against traditional
politicians and the elite.

"Humala is the only real option for change. He's not part
of the rich, the political class that has oppressed us for so
long," said 33-year-old mechanic Simon Paredes.

Flores had been in first place in opinion polls, but the
Lima-born lawyer has had difficulty connecting with Peru's
poor, indigenous and mixed-raced voters and dropped to second.

That has prompted some commentators to claim a racial
element in the election race, as Humala himself is mixed race
and hails from Peru's southern Andes.

Peru's current president, Alejandro Toledo, won the last
election in 2001 partly because he was the first visibly
mixed-race president in a country where more than 80 percent of
the population is Aymara and Quechua Indians or of mixed race.

"I am cholo," Toledo would say, using a street phrase for
Peruvians of Indian origin.

"Humala's attempting that," said Russell Crandall, a
professor of political science at Davidson College in North
Carolina and former director for the western hemisphere on the
U.S. National Security Council.

"Race plays such a big role in Peruvian elections," he

(Additional reporting by Patricia Velez in Santiago, Chile,
and Robin Emmott in Tacna, Peru)