May 3, 2006

Two leftists to compete in Peru runoff: official

By Robin Emmott

LIMA, Peru (Reuters) - Two leftist candidates will face off
in Peru's run-off presidential election on June 4, highlighting
the backlash against free market policies and foreign investors
in an unstable Andean region.

Center-left former President Alan Garcia will face
nationalist Ollanta Humala, a former army lieutenant colonel,
Peru's National Election Board announced on Wednesday.

Conservative lawmaker Lourdes Flores, who was in a tight
race with Garcia for a runoff place, conceded defeat.

Almost all the ballots -- 99.98 percent -- have been
tallied from the April 9 vote and there are too few left to
narrow the 64,434-vote gap between Garcia and Flores, Enrique
Mendoza head of Peru's electoral board, told reporters.

"The remaining ballots will not produce any variation in
the final results," he said.

Humala, who led a failed coup in 2000, won the first round
with 30.62 percent, or 3.75 million votes, but failed to
achieve the majority needed to avoid a runoff between the top
two finishers. Garcia followed with 24.32 percent, or 2.98
million votes.

Flores, whom investors saw as the best candidate for Peru's
$75 billion economy, was third with 23.80 percent, or 2.92

"Exit polls and quick counts of the vote gave us a runoff
place ... but in the end it was not to be," Flores said.

Flores, who was seeking to become Peru's first woman
president, also a narrowly lost a race for a second-round place
to Garcia in the last election five years ago. That runoff was
won by current President Alejandro Toledo.

A recent poll showed Garcia, whose 1985-90 presidency led
Peru to economic collapse, food shortages and hyperinflation,
was likely to beat Humala in the second round.

Garcia would take 54 percent of votes in a runoff versus 46
percent for Humala, the Datum poll published on April 25 said.

"We want to overcome any errors of the past ... My main aim
is to strengthen our nation internationally ... to rise above
our South American neighbors and be a bridge over the Pacific,"
Garcia told reporters. "This is true nationalism," he added in
reference to Humala's nationalist platform, which aims to put
more of the economy under state hands.


Humala, who has the backing of anti-U.S. Venezuelan
President Hugo Chavez, pledges to rewrite contracts with Peru's
mining companies and "put Peru's natural resources to the
service of its people."

He denies he has plans to expropriate businesses and says
he is not anti-U.S., but promises a revolution for the half of
Peruvians who are poor.

"The problem is not Humala but the polarization of voters
that could create a radical opposition if Humala wins and which
won't be good for investors," said independent political
analyst Alberto Andriazen.

Many destitute Peruvians see Humala and Garcia as a heroic
figures who will end their poverty, but the second-round runoff
is a worst-case scenario for foreign investors and middle class
Peruvians who saw their livelihoods ruined during Garcia's
presidency, but view Humala as a dangerous radical.

Both candidates promise to service Peru's $30 billion debt,
but Garcia is considered a better option by many U.S.
investment banks and foreign companies. Still, like Humala, he
promises to renegotiate contracts with companies such as
Spain's Telefonica to bring down telephone prices.

"We are being asked to choose between two people that no
one with any kind of high school education would vote for,"
said Miguel Reyes, a French teacher out shopping in Lima.

Garcia and Humala garnered most of their first-round
support from Peru's poor provinces, where many villagers lack
drinking water, electricity and schools and say they have seen
no benefit from Peru's red hot economic growth since 2002.

Some middle-class voters say they will deface their voting
cards rather than opt for either Garcia or Humala on June 4,
but others say they prefer Garcia because they see him as more

Humala led a failed coup against former President Alberto
Fujimori in 2000, months before Fujimori's government fell amid
corruption allegations and violent street protests.