VZCZCXYZ0031
RR RUEHWEB

DE RUEHPE #1709/01 1311544
ZNR UUUUU ZZH
R 111544Z MAY 07
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 5408
INFO RUEHBO/AMEMBASSY BOGOTA 4642
RUEHBR/AMEMBASSY BRASILIA 7329
RUEHCV/AMEMBASSY CARACAS 0364
RUEHLP/AMEMBASSY LA PAZ MAY QUITO 1201
RUEHSG/AMEMBASSY SANTIAGO 1264
RUEHBS/USEU BRUSSELS
RUMIAAA/CDR USCINCSO MIAMI FL

UNCLAS LIMA 001709 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PINR PHUM VE PE
SUBJECT: GARCIA GOVERNMENT: HONEYMOON OVER, TIME FOR RESULTS 
 
REF: A. LIMA 1587 
 
     ¶B. LIMA 1413 
     ¶C. LIMA 1270 
     ¶D. LIMA 1053 
     ¶E. LIMA 909 
 
-------- 
Summary: 
-------- 
 
¶1.  (SBU) The Garcia governmen's extended honeymoon has 
ende.  In the wake of the Tocache Accords and the Pandolfi 
Affair (Refs A-E), the GOP finds itself beset by a series of 
protests from cocalero, labor and other groups.  At the same 
time, the APRA leadership faces increasing patronage 
pressures from within the party.  While President Garcia's 
popularity remains above 50 percent, and his government is 
stronger than that of his predecessor, he and his ministers 
will have to begin delivering on their promises in order to 
deflate rising social pressures.  End Summary. 
 
------------------ 
The Long Honeymoon 
------------------ 
 
¶2.  (SBU) The Garcia government enjoyed an extended 
honeymoon, which has now ended.  Its strong start resulted 
from a combination of factors.  These include the 
government's adept crisis management; the President's 
skillful packaging of policy proposals (State Austerity, 
"Water for All," the "Investment Shock," "the Highlands' 
Export Program," Decentralization); and the occasional 
pursuit of politically popular proposals (eg., the death 
penalty for child sex murderers) that have little concrete 
impact.  The opposition's fragmentation, particularly the 
post-election implosion of Ollanta Humala, and the continued 
buoyancy of Peru's economy, which delivered 8 percent annual 
growth for 2006, have also contributed to the government's 
felicitous beginning. 
 
-------------------------------- 
APRA Off Game/Protests Break Out 
-------------------------------- 
 
¶3.  (SBU) The APRA government's own missteps have taken some 
of the early bloom off the rose.  The ill-considered Tocache 
Accords, in which government negotiators agreed to a 
cessation of eradication in the Tocache area, and the brief 
appointment of former Fujimorista Pandolfi to a high-level 
government position constitute previously uncharacteristic 
examples of self-inflicted wounds (Refs A-E). 
 
¶4.  (SBU) More important, however, has been surging sectoral 
impatience in key areas.  While organized opposition to the 
government remains weak, outbursts of localized discontent 
have increased.  In the last several weeks, a series of 
protests exemplify this trend.  They include: 
 
--The National Federation of Mining, Metallurgy and Steel 
Workers called a national strike on April 30.  While the 
effort fizzled, its principal catalyst -- the presence of 
large numbers of "service workers" (subcontracted employees) 
in Peru's mining sector -- remains a challenge.  Candidate 
Garcia had pledged to reform rules for outsourcing during the 
2006 presidential campaign, and now the unions are calling 
him to account.  In response to the criticism and in an 
effort to preempt the planned strike, on April 26 the GOP 
issued a decree regulating subcontracting in the sector. 
(Details septel.) 
 
--Coca growers in Huanuco carried out a 72-hour strike May 
2-4.  Various labor and civil society groups joined them as 
schools and businesses in the region were closed.  The 
Regional President, who had originally offered to mediate 
between the growers and the GOP, publicly supported the 
strike.  After a May 8 meeting with Prime Minister Jorge del 
Castillo in Lima, cocalero representatives called off the 
strike.  Del Castillo promised to form a permanent 
negotiating roundtable to promote development in Huanuco. 
 
--In Piura on May 3, cotton and rice farmers blocked highways 
and battled with the police, demanding more money for their 
crops.  Close to fifty protesters were injured.  The strike 
ended when the GOP agreed to a number of concessions, 
including greater access to loans from the state-run Agrarian 
Bank, the purchase of 1,000 tons of rice for the National 
Food Aid Program and the installation of new machinery to 
improve local cotton production. 
 
--The Loreto Regional Government called a 48-hour strike May 
3-4 to pressure the central government to hire an additional 
1,000 school teachers in the region.  Local civil society 
groups backed the measure and the city of Iquitos closed 
down.  Regional President Ivan Vasquez said that local 
organizations are considering calling an indefinite strike if 
the central government does not carry out the requested 
hirings. 
 
--In Lima, the city government has been trying to close down 
a market of informal produce vendors in Santa Anita since 
¶2003.  The vendors apparently rented spaces from someone who 
falsely represented himself as the owner of the area.  When 
the city moved to close the market, the vendors occupied the 
market and have refused to budge.  The protesters have 
brought their own children into the protest and into a 
possible confrontation with the police.  While the city 
government is the main actor in this protest, its location in 
Lima gives it a high profile. 
 
----------------------------------- 
Patronage Pressure From Within APRA 
----------------------------------- 
 
¶5.  (SBU) Miners, cocaleros, farmers, teachers and vendors 
are not the only special interest groups looking for 
government attention.  Ruling APRA party militants are 
another, potentially more destabilizing one.  At the May 7 
celebration of the APRA's 83rd anniversary celebration in 
Lima, party militants heckled APRA Secretary Mauricio Mulder 
for not providing enough government jobs to party loyalists. 
To voice their discontent about the lack of jobs, militants 
chanted, "APRA is a party of the people, not of the right" 
and called for a new party leadership and a return to the 
1979 constitution.  Many observers have noted that President 
Garcia has so far held the line on pressure for patronage 
from party loyalists while acknowledging it is likely to rise 
over time. 
 
-------------------------- 
Blaming the Humala Phantom 
-------------------------- 
 
¶6.  (SBU) The initial reaction to this latest series of 
protests was to attribute them to a broader political 
conspiracy.  Opposition legislator (Unidad Nacional) Javier 
Bedoya spoke of a "plot" to destabilize the government.  His 
charges were echoed by APRA Congressman Javier Velasquez, who 
claimed that opposition leader and former Nationalist Party 
presidential candidate Ollanta Humala was orchestrating these 
protests.  Subsequent news reports highlighted these claims 
by airing debates about the plausibility of Humala's role in 
fomenting instability.  President Garcia and Prime Minister 
del Castillo discounted this possibility, emphasizing that 
Humala does not have the organizational capacity to put 
together coordinated protests on such a scale.  Many analysts 
noted that imputing these scattered conflicts to Humala 
risked reviving him from the oblivion into which he has 
fallen after his failed bid for the presidency.  One local 
political cartoon portrayed an embarrassed Humala as thrilled 
that he might even be considered capable of launching such a 
wide range of actions. 
 
------------------------------- 
Comment: Delivering on Promises 
------------------------------- 
 
¶7.  (SBU) The recent protests reveal how pent-up social 
pressures are building.  The GOP has promoted a number of 
program initiatives, but both the central government and the 
regional governments lack the capacity to execute.  As 
execution lags, frustrated sectoral leaders take matters into 
their own hands.  While Peru is no where near the chronic 
political fragility that plagued the Toledo Administration -- 
President Garcia's popularity remains above 50 percent, he 
dominates the headlines, and the growing economy has blessed 
the GOP with financial resources  -- the onset of multiple 
protests, following the blunder at Tocache and the Pandolfi 
Affair, signals the end of Garcia's long honeymoon.  The GOP 
increasingly will have to deliver on its promises of change 
if it is to stay comfortably ahead of popular discontent. 
STRUBLE