Peru faces impending strikes 

Peru's ultranationalist opposition leader is backing a general strike this week to reject President Alan Garcia's free-market policies and is preparing to run for the presidency.

Ollanta Humala, who nearly won the presidency in 2006 and is a ideological ally of Venezuela's Hugo Chavez, said Peruvians are demanding change because Garcia's economic model is broken and a six-year boom has failed to trickle down to the poor.

"People haven't seen the benefits reach their pockets," he told the foreign press club in Lima on Monday. "If there's no willingness to change, the social tensions and political instability in Peru will continue."

Since taking office two years ago, Garcia has forged free trade deals, lured foreign investment and slashed tariffs - deepening a commitment to orthodox economic policies Peru started adopting in the 1990s by privatised state companies.

Garcia's reforms, along with record high prices for minerals Peru exports, have turned Peru into one of world's top performing economies, with annual growth of 9%.

But the poverty rate still hovers near 40%, and while it has fallen under Garcia, the poor are demanding a piece of the economic surge. Investors are worried that high rates of poverty could pave the way for a leftist leader like Humala to win the presidency in 2011.

In the latest sign of tension, mine workers went on nationwide strike last week to demand a bigger share of mining profits, denting production at some of the world's largest mines. A mining blockade also hit the Moquegua province in June, when 60 police were taken hostage after bloody clashes.

Humala, a free-trade skeptic, said abrupt changes are needed and that a one-day general strike on Wednesday will put pressure on Garcia to pay more attention to social problems.

"We want a nationalist market economy. The neoliberal model is prehistoric," he said. "We aren't out to mistreat foreign capital, we just we want to favor domestic capital."

Humala wants a windfall profits tax imposed on mining companies - the backbone of the economy - and said contracts of foreign corporations should be renegotiated so poor communities receive direct benefits from mining.

Peru, the world's No. 2 producer of copper and zinc and a leading supplier of gold and silver, is home to mines of global giants such as Xstrata, BHP Billiton and Newmont.

"We must find an equilibrium so that both sides benefit. Doing so would consolidate legal stability and social peace," Humala said.

Trial

The government has mobilized the military to help police control crowds and dissuade would be protesters from taking to the streets on Wednesday.

Groups ranging from farmers to workers to provincial governors plan to hold rallies.

Supporters of Garcia, whose approval rating hovers near 30%, have put up signs in Lima, the capital, saying "No to the strike, No to terror."

Though Humala is supported by many poor Peruvians and his father was a prominent Communist, he grew up in comfort and attended elite private schools paid for by his wealthy family.

His father has said he told Ollanta and his brother, Antauro, to join the army to eventually take power by force.

Antauro is currently on trial over an insurrection in 2005, in which he allegedly led a group of troops that shot up a police station and demanded the resignation of then President Alejandro Toledo.

Ollanta has been charged as the "intellectual author" of the attack. He denies the allegations, which he says have been trumped up to derail any hopes he has of running for president and unifying a fragmented left.

"We've committed errors. Sometimes, internally, the opposition lacks ideological cohesion," he said.