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BBC News

The Prime Minister of Peru, Yehude Simon, says he will not negotiate with authorities in the southern Tacna region while violent protests continue.

Mr Simon has declared a state of emergency after reports that three people have been killed and dozens injured in protests over the past week.

The demonstrations were sparked by a new legislation approved by Congress.

The bill cuts the amount of mining tax revenues given to Tacna, in favour of neighbouring region Moquegua.

President Alan Garcia is expected to sign the bill into law.

The law has been controversial in the south of Peru, where most of the mines are run by Southern Copper, one of the world’s largest mining companies.

Clashes

The violent protests started last Thursday when 4,000 demonstrators clashed with police and set fire to a government building leaving 39 people and 27 police injured.

The government has sent the army to rein in protests and police have arrested 52 protestors.

The protests extended to the border area with Chile where 400 demonstrators blocked the Pan-American Highway and Chilean police arrested seven people.

Peru’s mining sector is capitalising on high metals prices, driven by demand from China and India.

But the export-based economy largely benefits the main cities on the coast while in the Andean and Amazon interior many people still live in poverty.

Oct 16th 2008 | LIMA
From The Economist print edition

New cabinet, old problems

THE economy is heading for growth of 9% this year, the fastest rate in Latin America. Poverty, though widespread, is falling fast. Inflation reached 6.2% in September, but that is one of the lowest figures in the region. And yet for Peru’s president, Alan García, matters have just gone from bad to worse. Almost halfway through his five-year term the unpopular president has been forced to replace his cabinet over a corruption scandal. The new team may find it hard to restore confidence in politics.

The scandal concerns alleged kickbacks in the award of oil-exploration contracts. Taped conversations broadcast on a television programme appeared to show that officials in the ruling APRA party received bribes in return for granting five contracts to Discover Petroleum, a small Norwegian oil company which denies any wrongdoing. The energy minister and the head of Petroperú, the state oil company, resigned, although they were not directly implicated. But that did not placate the opposition, which has a majority in Congress. Rather than face censure Jorge del Castillo, the experienced prime minister, went too.

His replacement, Yehude Simon, has had an unusual political career. A leader of a far-left party in the 1980s, he spent much of the 1990s in jail for his links with the Tupac Amaru Revolutionary Movement (MRTA), a small guerrilla group. In prison, he became a born-again Christian and political moderate. He has since twice been elected as regional governor of Lambayeque, on the north coast, where he has acquired a reputation as an effective negotiator. That may be helpful, since the main job of the prime minister in Peru is to defuse social conflicts.

Mr García is dogged by memories of his disastrous first stint in power in the 1980s. He ruled as a reckless populist, presiding over economic collapse, hyperinflation, corruption and a murderous guerrilla insurgency by the Maoist Shining Path and the smaller MRTA. He narrowly won the presidency again in 2006, partly by convincing Peruvians that he was a reformed character who believed in market economics and free trade, and partly because his challengers were even less convincing.

But despite an economic boom, Mr García’s approval rating has fallen to around 20%. He is pursued by the ghosts of the past. Polls find that most Peruvians firmly believe that inflation is much higher than it in fact is. Many also believe that APRA is riddled with corruption. The involvement in the oil scandal of Rómulo León, who was accused of corruption when Mr García’s agriculture minister in the 1980s, has done nothing to dispel this.

To cap it all, the Shining Path, long ago reduced to a small rump in a couple of remote drug-producing valleys, chose this month to stage its deadliest attack in years. A roadside bomb in Huancavelica, east of Lima, killed 13 soldiers and two civilians on October 9th. It appeared to be a response to an army operation to shut down Shining Path camps.

The new cabinet involves only a few changes from the old. With Mr Simon have come a couple of other moderate leftists. The finance and trade ministers keep their jobs, and economic policy is unlikely to change. Indeed finance officials plan to issue a new bond (which would reopen the market for emerging economies) to lengthen the maturity of the public debt.

But the outlook has darkened. Peru has done well from high prices for its minerals. With commodity prices falling fast, one hope for continued growth is oil and gas exploration. Congress is now reviewing all contracts awarded since 2006, and investment may slow. Peruvians have not warmed to Mr García in the good times. Unless Mr Simon can spread goodwill, the second half of his presidency looks set to be a troubled, loveless affair.

By Maria Luisa Palomino
October 15, 2008

Boston Globe

LIMA (Reuters) - Peruvian President Alan Garcia swore in a new Cabinet led by a prominent leftist as prime minister on Tuesday, hoping to overcome a corruption scandal and regain popularity.

Garcia fired all 17 of his ministers last week after audiotapes surfaced linking two of them to a scheme to steer lucrative petroleum contracts to favored bidders in exchange for bribes.

Although he ended up reappointing much of his Cabinet, Garcia made one drastic change. He named Yehude Simon, governor of the northern province of Lambayeque, who is not a member of Garcia’s APRA party, as prime minister.

“It’s a balanced Cabinet, representing the business sector, which is crucial, and social movements,” Simon said.

Garcia told Simon to work to boost investments by foreign and domestic firms during a time of international turbulence and to fight corruption.

By picking Simon, who was jailed a decade ago for ties to a guerrilla group, Garcia has shown he will try to place greater emphasis on social programs, neutralize critics on the left and win back support in the provinces.

The new job will give national exposure to Simon, a pragmatist who now supports private enterprise and who may run for president in 2011, when Garcia is constitutionally barred from re-election.

Simon’s appointment could hurt the chances of Ollanta Humala, the ultra-nationalist who worried investors when he nearly beat Garcia in the 2006 presidential race and who plans to run again.

Garcia’s approval rating has fallen to 19 percent, a new low for his current term as president, despite surging economic growth of 9 percent a year that unions and the poor say has yet to trickle down to the poor.

Garcia, a former leftist whose first term in the 1980s ended in economic chaos, now firmly believes in free markets and mainstream policies.

He named seven new ministers and reappointed Finance Minister Luis Valdivieso, a former IMF executive who says inflation must be kept under control.

Pedro Sanchez, an energy specialist with the World Bank, was named energy and mines minister.

Sanchez will oversee concessions for mining, petroleum and gas. The job includes luring investments for electricity generation and the development of natural gas fields that the country’s mining industry, one of the world’s most productive, says are crucial for Latin America’s fastest-growing economy.

(Additional reporting by Teresa Cespedes; Writing by Terry Wade; Editing by Peter Cooney)

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New Statesman
Enrique Mendizabal
Published 14 October 2008

A bribery scandal and escalating inequality has rocked Peruvian hopes for a new political era argues Enrique Mendizabal of the Overseas Development Institute

Alan García, Peru’s President, is facing one of the most difficult moments of his long political career.

Last week, reports two senior members of his government and political party (APRA) had accepted bribes to award oil drilling concessions were made public; his cabinet has resigned; and the Lima Stock Exchange has plummeted as a result of the global economic crisis and national political uncertainty.

The recording of the conversation between the two has enjoyed a tour on radio shows and television programmes on a scale that has not been seen since the release of the first vladi-video in 2000.

That showed Vladimiro Montesinos - adviser to now ex-president Fujimori’s - bribing a congressman.

How ironic that García’s worst blow on his presidency mimics the fall of his former political enemy.

But the irony does not end here. García won a second presidential term despite being responsible for a government that brought the country to its knees in the late 1980s.

He must have thought that a government of managed inflation, peace and international integration would revise his place in history.

Indeed, his second government has experienced nothing but constant economic growth. Poverty levels have dropped since he came to power. Peru signed a highly publicised Free Trade Agreement (FTA) with the United States; it has maintained a stable development process amidst political chaos in the Andean region -in Bolivia, Venezuela and Ecuador; and has celebrated the achievement of investment grade rating earlier this year (before the financial crisis reached its current dramatic state).

All along, however, Mr. García has been a highly unpopular President – with approval ratings hovering around 20 per cent (and now standing at 19 per cent). The very same sources of his pride fuelled the opposition to his government: his support for a FTA that grates with popular movements; highly unequal growth; his unwillingness to explore alternative and more inclusive development models; and his cosiness with the corporate sector.

García’s predecessor, Alejandro Toledo, received the same treatment: unpopular despite economic growth.

But where Toledo faced disapproval largely based on racism, García’s unpopularity is entirely based on policies.

Corruption has changed the rules of the game for García. It is now also about the values that he represents. Association with him and his party, despite the economy, is becoming a liability for anyone with a reputation to protect.

García’s cabinet members have resigned and opposition is mounting. He is finding Peruvians had, after all, not entirely forgotten about his first government.

Across the board, what he is portraying as an isolated act of corruption, has been interpreted as the return to the mafia that ruled the country in the late 1980s when corruption was endemic; and that he had promised to keep at bay.

Few are willing to give his party another chance. García will have to be swift and Machiavellian in his next steps. Fortunately for him this is his second nature.

This crisis comes at a time when, ironically, the Peruvian government was showing signs of taking inequality seriously.

Specifically, the ministry of trade has been actively engaging with local researchers on how to implement the FTA in ways that would benefit the most exploited and vulnerable.

The Economic and Social Research Council (CIES) in Peru, supported by the Overseas Development Institute (ODI) in the UK, have been working closely with various policy actors on this issue.

And at the regional level, CIES has been working to more effectively improve policies by embedding evidence-based policy-making processes. In general, even the private sector is showing clear signs of concern regarding the increasing levels of inequality across the county.

With an optimistic mind, I see this as a sign of maturity. For the first time in ages, the source of unpopularity to a political leader in Peru is legitimate: it is based on disagreements over policies, and not politics; and on a newly-found zero tolerance for corruption.

If García is as good a politician as he is thought to be, he will address these issues openly and humbly.

He will recognise that the country is experiencing the beginnings of an eagerly awaited institutional change.

The appointment of Yehude Simons, president of the Lambayeque region in the northern coast and well known for his links to social movement and human rights organisations, has already been seen by political analysts as a move in the right direction.

If the new cabinet reflects a serious commitment to addressing raising inequality and corruption, he might very well survive and deliver us into the third consecutive democratically elected government in a decade. If he doesn’t, we will have missed yet another chance to grow up.

BBC News

The Peruvian government has stepped down over a continuing scandal about the allocation of oil concessions.

President Alan Garcia said he was accepting the resignation of the full cabinet offered on Thursday by Prime Minister Jorge del Castillo.

The country’s Energy Minister Juan Valdivia and the president of the state oil company stepped down on Sunday.

A day later, President Garcia put five oil contracts with Discover Petroleum, a Norwegian firm, on hold.

The scandal emerged last Sunday when a TV station broadcast a tape which it claimed was a recording of an executive in the state oil company, Petroperu, and a prominent lobbyist discussing payments to help norwegian Discover Petroleum win contracts.

The company denies any wrong-doing, as does Petroperu’s president, Cesar Gutierrez.

Mr Garcia has ordered an investigation and insisted that the government must be purged of corruption.

This week, thousands of people protested in several Peruvian cities, calling for the government to step down.

They accused the governing party Apra of “stealing” while the people were struggling.

2008-10-01 01:49:26 GMT
2008-10-01 09:49:26 (Beijing Time) Xinhua English

SINA English

LIMA, Sept. 30 (Xinhua) — Peruvian Prime Minister Jorge del Castillo said on Tuesday that his country is well prepared to cope with the fallout of the international financial crisis.

The Peruvian government has long tasked the Economy and Finance Ministry (MEF) to take preventive measures against potential economic risks, Castillo said.

“Peru has prepared itself in a good way,” Castillo said, adding the financial crisis may be a “hurricane” for other countries, but it would only be a “cold wind” for Peru.

The government has adopted such measures as “improving the country’s international reserves and diversifying its income sources, which are no longer limited to the mining sector,” he said.

“The domestic market is a strong engine for Peru’s economic growth,” he said.

However, Castillo said the Peruvian government is still concerned about the U.S. Congress’s failure to approve a 700-billion-dollar financial rescue plan.

Nasdaq

LIMA -(Dow Jones)- Peru’s Finance Minister Luis Valdivieso brushed off criticism from opposition lawmakers that the central government’s 2009 budget proposal is seeking to cut social spending.

Speaking before Congress late Thursday, Valdivieso said the budget - worth 72.36 billion soles ($24.34 billion) - aims to shield Peru from global volatility with increased savings.

Analysts and government officials say that Peru cannot maintain its breakneck economic growth amid the international market downturn.

Peru’s economy expanded 9% last year and similar growth is expected for 2008.

“This change in the external conditions put serious limitations on our ability to react with greater public spending,” Valdivieso said. “It means a potential reduction in our fiscal income.”

President Alan Garcia’s Cabinet chief Jorge del Castillo announced in the hearing that the budget includes PEN700 million in social spending.

However, opposition Congressman Washington Zeballos of the southern Moquegua region complained that the budget does not give enough funding to local governments.

Tensions have historically been high between Peru’s central government in the coastal capital, Lima, and the interior provinces, many of which suffer from deficits in infrastructure.

In a statement, Zeballos said that “local governments won’t be able to attend to the needs of their populations.”

But Valdivieso said the backbone of the “austere” 2009 budget is to protect Peru from international volatility and rising inflation, particularly by a forecast fiscal surplus next year of 2.3% of gross domestic product.

The consumer price index for Lima rose 0.59% in August from the previous month, bringing the annual inflation rate to 6.27%. The inflation rate was well above the 1.0%-3.0% range targeted by the central bank.

Peru’s Finance Ministry forecasts inflation will reach 5.8% this year and 3.5% in 2009.

Congress must approve the budget by Nov. 30.

-By Leslie Josephs, Dow Jones Newswires; 511-211-2689; peru@dowjones.com

(END) Dow Jones Newswires
09-12-081209ET
Copyright (c) 2008 Dow Jones & Company, Inc.

Transportation | 29 August, 2008 [ 12:02 ]

Living in Peru
Israel J. Ruiz

Congressional representatives unanimously approved on Thursday evening laws to change the punishment for motorists in Peru who are caught driving under the influence of alcohol or illegal drugs.

It was established that anyone caught driving under the influence of these substances would receive between 2 and 4 years in prison.

The passed law modifies several articles in the country’s current penal code that have to do with public safety, said state news agency Andina, explaining that motorists caught with blood alcohol levels at or above 0.5 grams/liter would be facing up to 4 years in prison.

This is only if the driver is in the vehicle alone, however.

Modifications to laws now establish that if it is someone providing transportation for one or more passengers, jail time is to be from 4 to 6 years.

In the case of involuntary manslaughter, if the person responsible for killing someone else was not complying with traffic rules, they will be incarcerated for 5 years.

If it is someone that is under the influence of alcohol or an illegal drug, they will be sentenced up to 8 years in prison.

<---end of quote--->

Time for the Party Bus or something like that. Don’t Drink and Drive.

Be careful Guys !

Mon 18 Aug 2008, 22:40 GMT

LIMA, Aug 18 (Reuters) - Peru’s government on Monday threatened to send in the army to break up protests at energy installations that indigenous groups surrounded a week ago to denounce laws they say will strip tribes of their land.

The government issued a decree for the provinces of Cusco, Loreto and Amazonas, allowing it to order the armed forces to disperse protesters.

Talks held last week between the government and indigenous rights groups faltered. Tribes are upset with a law President Alan Garcia passed earlier this year that makes it easier for big companies to buy land owned collectively by communities.

The law was passed as part of Peru’s free-trade deal with the United States, and indigenous groups fear it will be used by mining and energy companies to snap up their land.

“Indigenous people are defending themselves against government aggression,” Alberto Pizango, president of AIDESEP, a rights organization, told reporters.

Police in the area said at least two of their officers did not return after being sent to a protest site over the weekend, prompting local media to say they were taken hostage. AIDESEP denied protesters had taken hostages but insisted the officers were being treated well.

Tribal groups are asking Congress to revoke the land law and Pizango said the protests would end once the government shows a willingness to renegotiate.

The protests have involved some 500 people who surrounded two energy installations: an oil pipeline in northern Peru owned by state-run company Petroperu, and a lot of Argentine company Pluspetrol that sits in the Camisea natural gas field in southern Peru.

Pluspetrol said gas output in Peru has not been affected.

The protests started just as Peru’s energy supplies entered a period of tightness.

In the last few weeks, Peru has experienced two blackouts as spiking demand, a shortage of rains and poor infrastructure have combined to crimp power supplies.

Peru has huge natural gas reserves, but there is just one pipeline that moves it from the Camisea field to the capital Lima, and it is already operating at full capacity.

Fewer rains this year have forced Peru to rely less on hydroelectric power and more on power generated by natural gas or other energy sources like diesel. (Reporting by Maria Luisa Palomino, Dana Ford and Teresa Cespedes; Writing by Terry Wade; Editing by Christian Wiessner)

© Reuters 2008. All Rights Reserved. | Learn more about Reuters

Al Jazeera English

UPDATED ON: Saturday, August 16, 2008
01:29 Mecca time, 22:29 GMT

Hundreds of Peruvians have protested against what they say is a poor response to a massive earthquake that killed more than 500 people a year ago.

Residents of Pisco, Ica and Chincha, the three cities hit hardest by the earthquake, held strikes and demonstrations on Friday to demand faster and more efficient reconstruction.

The quake destroyed more than 40,000 homes on the southern coast and many residents are are still living in temporary shelters.

Alan Garcia, the Peruvian president, said his government invested $382 million in reconstruction, but only 850 homes have been rebuilt, according to Romulo Triveno, president of Ica province.

“Alan is a liar!” protesters shouted while banging pots and pans in Pisco, the hardest-hit city, 250km south of Lima.

They have complained that millions of dollars in reconstruction funds have never reached them, saying they have been diverted or gone missing.

‘Unfair’ criticism

Jose Navarro, 29, brought flowers to the graves of his daughter and wife, who was eight months pregnant when the quake struck.

“What can you do? You have to face reality.” he said. “It’s hard, but with the support of everyone, I have to move forward.”

Garcia, whose free market policies have left him unpopular with the electorate, said on Tuesday Peruvians were being “unfair” in their criticisms of his response to the earthquake.

He also said people were being too demanding.”It’s okay to ask for help, but don’t exaggerate.”

Garcia also challenged anyone to provide evidence to back up allegations of corruption in the earthquake budget.