Humala leads Peru vote, rivals battle for run-off spot

Last Updated: Monday, April 11, 2011 - 12:33

Lima: Left-wing nationalist Ollanta Humala led the first round of Peru`s presidential election early on Monday, with two pro-business rivals battling for second place and the chance to challenge him in a June 5 run-off, according to official results.

With 50 percent of ballots tallied after Sunday`s vote, officials said Humala had 27.62 percent of the votes, followed by former Wall Street banker Pedro Pablo Kuczynski at 23.11 percent and rightist lawmaker Keiko Fujimori at 21.95 percent.

Three earlier unofficial samplings of ballots, however, showed Humala with a wider lead and Fujimori advancing to the run-off with a lead of 2 to 4 percentage points over Kuczynski.

Despite a decade-long economic boom, a third of Peruvians live in poverty and many rallied behind Humala, a former army officer who has positioned himself as a man of the people facing rivals backed by big business.

"We want the wealth of Peru to be well distributed," said Juan Urteaga, 18, from the Andean city of Cajamarca. "How is it that my city is close to one of the world`s biggest gold mines, Yanacocha, but my city has one of Peru`s highest poverty rates?"

Polls suggest both Fujimori and Kuczynski would have trouble defeating Humala in a second round vote and economic analysts said Sunday`s results might hit Peruvian asset prices.

Fujimori, 35, supports existing free-market policies, but is shunned by many Peruvians because her father, former president Alberto Fujimori, is in prison for corruption and human rights crimes stemming from his crackdown on guerrillas in the 1990s.

Kuczynski, 72, a former prime minister known as "El Gringo" because of his European parents, would have trouble gaining traction outside of Lima, where he is strongly backed by wealthy voters.

Humala, a former army officer who led a short-lived military revolt in 2000, has softened his anti-capitalist tone since narrowly losing the 2006 elections.

"We are willing to make many concessions to unite Peru, we are going to talk with all political forces," Humala told cheering supporters. "Social problems must be resolved through dialogue."

WAKE-UP CALL

Former President Alejandro Toledo, the early frontrunner in the campaign but now running fourth in the vote, said Humala`s lead was a sign that complacent elites and an inept civil service had not done enough to fight social inequality.

"This is a wake-up call," Toledo said. "The economic growth model is not reaching the majority of Peruvians and they have expressed their discontent at the ballot box today."

Humala, 48, has surged in the race by recasting himself as a moderate in the vein of former Brazilian President Luiz Inacio Lula da Silva and distancing himself from his former political mentor, Venezuelan President Hugo Chavez.

His rivals have sought to hurt his chances by saying he would step up state control over the economy, rolling back reforms and jeopardizing some $40 billion of foreign investment lined up for the next decade in mining and energy exploration.

Such warnings have spooked better-off Peruvians who enjoyed surging growth of up to 9 percent a year. They remain haunted by the hyperinflation and guerrilla wars of the 1980s and 1990s.

Humala has taken to wearing ties, carrying rosary beads to show he is a devout Roman Catholic and promising to be fiscally prudent while respecting the independence of the central bank and honoring the country`s many free-trade pacts.

Those tactics have persuaded some on Wall Street and in Peru`s vast mining sector that he has matured and is no longer like his brother and father, two well-known Peruvian radicals.

Moody`s ratings agency said Peru`s investment-grade credit rating would not be threatened by an eventual Humala victory.

Still, Peru`s sol currency and the country`s main stock index have dipped over the past two weeks on worries Humala could raise mining taxes, hike state subsidies or tighten control of "strategic" sectors like electricity.

Market analysts said Toledo would have had the best chance of beating Humala in the second-round.

"We probably will have a negative reaction by the Peruvian market. Most surveys had Toledo as the candidate most likely to beat Humala in the second round," said Eduardo Suarez, senior emerging market strategist at RBC Capital Markets in Toronto.

Bureau Report

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First Published: Monday, April 11, 2011 - 12:33

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