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Saturday, July 30, 2011

Peru's Humala faces critical test to boost economy

LIMA, July 28 (Xinhua) -- Former military commander Ollanta Humala was inaugurated Thursday as Peru's new president amid concerns of whether he will stick to his election promises to enhance social inclusion through economic growth.

Analysts said Humala would have to move swiftly to start implementing profound social reforms and show Peruvians his resolution to fulfil election promises.

"Humala faces a critical test. What reality will he embrace?" said Carlos Ponce, a regular Latin American columnist and the general coordinator of the Latin American and Caribbean Network for Democracy.

Humala has made it clear during his election campaign that he plans to follow a moderate centrist path with strict economic discipline like Brazil's popular former president Luiz Inacio Lula da Silva.

Much is at stake for Peru and "time will tell if the new president can continue to grow Peru's economy while also providing for 'a social face'," Ponce said.

A few days after his victory in the June 5 presidential election, Humala set out on a travel agenda to visit most of the continent's leaders and top U.S. policymakers to strengthen ties. He also had an unscheduled meeting with U.S. President Barack Obama.

Humala's tour was seen to have accomplished important diplomatic progress, despite a lack of significant policy discussions, said political analysts with the Council on Hemispheric Affairs (COHA), a Washington-based non-profit research organization.

Broad international cooperation was the best way to remove skepticism about the new president, said Jorge Dominguez, a renowned scholar and chairman of the Harvard Academy for International and Area Studies, adding that democratic policies were easier to build within a supportive international community.

The country's poverty rate was reduced to about 34 percent during Alan Garcia's presidency from 2006 to 2011. This lifted some three million people out of poverty. But about 10 million Peruvians are still living on less than one to two dollars per day, official figures indicate.

"This is about how to deal with the deteriorating effect on living conditions of the people and the rise in inequality and poverty," Humala said, adding: "We are going to build a cabinet of national reconciliation, national unity, in order to provide economic stability for the country."

Humala's new development plan for Peru calls for a transformation through a "National Market Economy", which will focus on expanding domestic markets in order to promote industrialization, strengthening social policies, nationalizing "strategic activities" and modernizing the agricultural and production sectors.

The plan seeks to maintain an economy open to foreign investment and trade, but at the same time build a national economy that creates viable alternatives to ensure rural areas will be developed through a strong local market with dignified jobs and competitive national companies.

"Humala has a historic opportunity now to implement the social policies that Peru has long needed and for which it finally has the economic resources," Dominguez said.

Source: http://news.xinhuanet.com

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