This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 LIMA 005487 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/AND 
 
E.O. 12958: N/A 
TAGS: ECON PGOV PREL PE
SUBJECT: AMBASSADOR DISCUSSES HUMAL, DEVELOPMENT ISSUES IN 
AREQUIPA 
 
REF: LIMA 4661 
 
 ¶1.  (SBU) Summary.  On the fringes of the Third Annual 
Regional Agricultural Conference in Arequipa, November 27-28, 
the Ambassador met with local dignitaries to discuss a 
variety of issues, including regional development, the visit 
of presidential candidate Ollanta Humala to Arequipa, the 
recent regionalization vote and APRA party politics.  During 
the course of the meetings, local officials emphasized the 
lack of regional support for Humala but noted that he was 
succeeding in polarizing the country's political scene.  End 
Summary. 
 
Development Issues 
------------------ 
 
¶2.  (U) Arequipa, a prosperous agricultural area located in 
Peru's Southern highlands, is one of the most developed areas 
in Peru, with 8.5 percent economic growth this year.  Both 
the Regional President and the Mayor lamented that one of 
Arequipa's most pressing problems is lack of potable water. 
Arequipa, like most of Peru, suffers from regular droughts. 
According to Regional President Daniel Ballon, more than 
400,000 people in the Arequipa Department )- approximately 
one-third of the population )- lack access to potable water. 
 Limited water supplies can often have a crippling effect on 
the local economy, he noted, as farmers may be unable to 
produce for profit. 
 
¶3.  (U) Mayor Yamel Romero explained that Arequipa could 
improve its water supply by building several dams and 
developing technology to improve the efficiency of water use. 
 Cerro Verde Mine, a Phelps Dodge company and one of the 
largest firms in Arequipa, is currently working with the 
regional government to build two new dams in the region. 
These dams will not only improve the region's water 
collection capabilities but will also be used to feed 
irrigation systems. 
 
¶4.  (SBU) Regional President Ballon, who previously worked at 
Cerro Verde as an engineer and prides himself on his good 
relations with the mine, highlighted that Cerro Verde has 
contributed to the development of the surrounding area.  In 
addition to the dam project, Cerro Verde recently partially 
funded a cancer research hospital in the city.  The further 
expansion of Cerro Verde operations will also benefit the 
region economically, as the mine should seek to employ 
several hundred new workers.  Regional President Ballon noted 
he is committed to working with Cerro Verde to further 
improve the mine's relations with the region. 
 
¶5.  (U) Both Ballon and Romero emphasized the need to 
diversify Arequipa's economy by improving tourism links 
between Arequipa and the rest of Peru.  The Ambassador 
pointed out that cities in northern Peru, such as Cajamarca, 
Piura and Chiclayo, are developing a tourism circuit that 
could be a model for Arequipa.  Ballon agreed, remarking that 
the government has participated in several international 
tourism trade shows in an effort to attract foreign tourists. 
 Both the regional and local governments plan to further 
improve the region's already sound infrastructure.  Regional 
President Ballon said that his government, with assistance 
from the Japanese, is in the process of paving new roads to 
connect tourist areas. 
 
Discussing Ollanta Humala 
------------------------- 
 
¶6.  (SBU) Ollanta Humala, the ultra-nationalist Presidential 
candidate, visited Arequipa for several days prior to the 
Ambassador's visit to the region.  During his meetings, the 
Ambassador seized the opportunity to inquire about Humala's 
recent campaigning and perceived support in Arequipa.  Both 
the Regional President and Mayor asserted that Humala has 
very little support in the region.  Regional President Ballon 
pointed out that Humala attracted less than 3,000 supporters 
at his rallies on November 26.  Ballon opined that many of 
the attendees were merely curious about Humala and his ideas, 
rather than supporters of his presidential bid. 
 
¶7.  (SBU) Mayor Romero noted that Humala might succeed in the 
long run at capturing the votes of the poor and 
disenfranchised but underscored his doubts.  While Humala has 
yet to establish a political platform, the Mayor commented 
that Humala has succeeded in polarizing the country, as the 
other presidential candidates have begun to focus less on 
their political agendas and more on his candidacy, shifting 
the emphasis away from the true political picture.  Romero 
also felt that Humala committed a serious tactical error by 
allying himself in Arequipa with the Caceres Velasquez 
family, discredited former Fujimorista political bosses. 
(Note: Despite the contrary views of the two APRA leaders, 
polls consistently show the Southern Sierra area that 
includes Arequipa is Humala's strongest base.  End Note.) 
APRA Politics and the Macroregion 
--------------------------------- 
 
¶8. (SBU) APRA dominates both the municipal and regional 
governments in Arequipa but local party leaders do not have 
harmonious relations.  The Regional President campaigned 
against the formation of a macroregion prior to the October 
referendum on that issue (which was consistent with APRA's 
nationwide position). Arequipa 's mayor, however, broke with 
party orthodoxy to campaign in favor of a "yes" vote. 
Arequipa was the only province in Peru in which a majority 
voted for formation of a macroregion, suggesting that the 
mayor's influence is unusually strong.  A number of local 
business leaders dismissed that interpretation in 
conversations with the Ambassador, claiming that it was their 
efforts that carried the day for yes votes. Be that as it 
may, there is no question but that mayor Yamel Romero is a 
maverick within APRA. Just prior to the Ambassador's visit, 
Romero publicly called upon party leader Alan Garcia to step 
down if he does not win election as President in 2006. While 
Romero downplayed this statement to the Ambassador, he 
admitted his frustration with the party, noting that many of 
its younger members have a vision of the future that differs 
from the current leadership. It was equally clear that Romero 
and Ballon (and apparently their staffs) do not talk to one 
another. The mayor requested that the Ambassador help 
Arequipa establish contacts with organizers of foreign 
tourism fairs and was surprised to learn that the regional 
government had already launched a serious effort to market 
Arequipa as a destination with foreign tour package operators. 
STRUBLE