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Viewing cable 06LIMA2997, PRESIDENT GARCIA'S FIRST MESSAGE TO THE NATION

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Reference ID Created Released Classification Origin
06LIMA2997 2006-08-02 18:26 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0000
PP RUEHWEB

DE RUEHPE #2997/01 2141826
ZNR UUUUU ZZH
P 021826Z AUG 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 1652
INFO RUEHBO/AMEMBASSY BOGOTA 3706
RUEHBR/AMEMBASSY BRASILIA 6914
RUEHCV/AMEMBASSY CARACAS 9694
RUEHLP/AMEMBASSY LA PAZ AUG QUITO 0575
RUEHSG/AMEMBASSY SANTIAGO 0762
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUEABND/DEA HQS WASHDC
RHEFDIA/DIA WASHDC
RHEHOND/DIRONDCP WASHDC
UNCLAS LIMA 002997 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV SNAR PREL ECON PE
SUBJECT: PRESIDENT GARCIA'S FIRST MESSAGE TO THE NATION 
 
 
Sensitive But Unclassified, Please Handle Accordingly. 
------- 
Summary 
------- 
 
1. (SBU) On 7/28 Alan Garcia Perez was sworn in as President 
and delivered his first message to the nation.  Running an 
hour and a half, the President put forward an overlong list 
of initiatives and specific policy recommendations.  Garcia 
focused on actions to help the 13 million Peruvians in 
poverty.  The five main themes of his plan were: 
reconstruction of the state; job creation; labor rights; 
policies that favor women, youth, and children; and citizen 
security.  He pushed government austerity, including measures 
to reduce officals' salaries and their international travel. 
These were coupled with proposals for significant 
infrastructure investments, including clean water, roads, and 
irrigation.  Garcia said he would decentralize decision 
making and project implementation.  He pledged to work for 
South American integration, arguing that regional trade blocs 
were needed to defend people against the "advance of 
globalization." 
 
2. (SBU) Garcia made some populist flourishes.  He stated 
that the "Washington consensus" had passed into history (even 
as his own rhetoric about austerity, state efficiency and 
promoting market-based investment paralleled its tenets).  He 
sometimes took seemingly tough poses on issues (asking for 
more money for local investment from mining companies, for 
example) that are, in fact, pre-cooked.  More importantly, it 
is far from clear that the austerity measures and redirected 
expenditures announced by Garcia can pay the bill for the tax 
exemptions and spending initiatives that he presented.  End 
Summary. 
 
---------------------------- 
The Latin American Consensus 
---------------------------- 
 
3. (U) Alan Garcia opened his speech by stating that "the 
Washington Consensus" had become exhausted, and had to be 
replaced by a "Latin American Consensus" that would emphasize 
effective, efficient state action to protect citizens and 
regional unity to head off the possible negative effects of 
globalization.  He then laid out a long list of initiatives 
and specific policies to promote change in essential areas: 
reconstruction of the state; job creation; labor rights; 
policies that favor women, youth, and children; and citizen 
security. 
 
------------ 
State Reform 
------------ 
 
4. (U) Garcia emphasized the need for government reform.  He 
organized his ideas around several key themes: 
 
--Austerity: Garcia announced that he would cut his 
Presidential budget and staff in half, reducing his 
presidential salary by 60 percent.  He asked Congress to 
reduce its expenses by a third.  He pledged to close six 
embassies as well as make other reductions. For every cut, 
Garcia identified specific projects (water, rural 
electrification, school improvements) in needy areas that 
would benefit from the redirected funds. 
 
--Administrative Reform: Garcia proposed a common electronic 
state purchasing program to economize on state services and 
eliminate corruption. 
 
--Decentralization: Garcia pledged to give more resources and 
decision-making authority to regional and municipal 
governments. 
 
--Moral Responsibility: The President proposed judicial 
reform and promised to appoint people outside his own APRA 
party as Anti-Corruption Czar and as Comptroller. 
 
------------ 
Job Creation 
------------ 
 
5. (U) Garcia proposed creating jobs through attracting 
investment and through opportunity-creating government 
programs. Among points he made: 
 
-- The President identified the following as critical 
job-creating initiatives: the Callao port project to open 
Pacific markets, a steel plant in Chimbote, and the 
Inter-Oceanic Highway which link Brazil to the Pacific Coast 
via southern Peru. 
 
-- He called for the creation of a working group that would 
negotiate additional contributions from mining companies for 
local infrastructure. 
 
-- He pledged to promote agriculture through the Agrarian 
Bank and via increased technical assistance from the Ministry 
of Agriculture. 
 
-- Garcia proposed establishing a tax-free industrial, 
tourist, and commercial zone in Puno, a key area in the south 
where Humala had strong support. 
 
----------------------- 
Labor and Social Rights 
----------------------- 
 
6. (U) Garcia put forward a number of proposals to protect 
workers and citizens. 
 
-- The Labor Ministry will increase the number of inspectors 
and enforce the eight-hour work day and requirements for paid 
overtime.  The President criticized companies that misuse 
temporary service contracts (temporary workers) and pledged 
to enforce laws against abuses in this area. 
 
-- Garcia identified access to water as a social right.  He 
said that his "Water for All" ("Agua para Todos") program 
would provide water and sewerage in the next five years to 
half of the estimated 5 million Peruvians who lack these 
basic services. 
 
--------------------------------------------- ------ 
A Protective State: Women's Issues, Youth and Crime 
--------------------------------------------- ------ 
 
7. (U) Garcia put forward a vision of a state that would 
protect the vulnerable, including measures to promote gender 
equality, enhance youth opportunities and protect citizens 
from sexual predators and criminals. 
 
-- Garcia highlighted the number of women in his cabinet and 
mentioned gender equity issues, including equal pay, 
mother-friendly work places, and actions to eliminate 
domestic violence. 
 
-- The President pledged to end sex tourism and to amend the 
constitution to increase drastically the punishments for 
repeat child molesters. 
 
-- Garcia pledged to enhance opportunities for youth 
participation in municipal government and proposed special 
credit opportunities for young business people. 
 
-- The President called for 20,000 new Police Officers. 
 
---------------- 
Counternarcotics 
---------------- 
 
8. (SBU) Garcia did not present a comprehensive 
counter-narcotics plan, but he did touch on CN issues.  He 
acknowledged that drug trafficking has increased and that the 
government must be firm ("like Colombia") with international 
cartels, including accelerating extraditions.  As a test of 
decentralization, Garcia pledged to hand over the management 
of ENACO, the para-statal company that buys and sells licit 
coca, to Cusco's Regional Government.  (Note: Most licit coca 
is grown in Cuzco, though the majority of leaf grown in that 
department goes to narcotrafficking.  End Note.) Finally, the 
President identified narcotrafficking, along with delinquency 
and kidnapping, as threats to citizens' security. 
 
------- 
Comment 
------- 
 
8. (SBU) Garcia's speech was not bad, but in our view he 
missed an opportunity to hit one out of the ball park. 
Instead of focusing on big themes -- where he is at his 
rhetorical best -- the President ran through a laundry list 
of detailed initiatives, at times providing program-specific 
information one would expect from a Vice Minister rather than 
a President. 
 
9. (SBU) Garcia's comment about the "exhaustion" of the 
Washington Consensus contained more than a dose of irony. 
His own proposals, with their emphasis on investment, state 
efficiency and austerity, incorporated many elements that 
international financial institutions have been pushing for 
years.  If these are pillars of his new Latin American 
Consensus, then we are all for them. 
 
10. (SBU) In a similar vein, the President sometimes struck 
populist poses (calling for increased spending by mining 
companies in local communities or re-negotiating gas prices 
with Camisea) on issues that have been quietly pre-cooked. 
(The mining companies are already pulling together resources 
for a social fund and Camisea's operators have let us know 
their willingness to be flexible on domestic gas prices.) 
 
11. (SBU) Garcia's call to austerity is admirable. 
Nonetheless, we are dubious that austerity and redirected 
spending can pay for the big ticket infrastructure items the 
President put forward.  Garcia has appointed a reliable 
Finance Minster in Luis Carranza, but the new administration 
still needs to do the math on some of its proposals. 
 
12. (SBU) Garcia might also have been more graceful in 
reference to the Toledo Administration.  For example, he 
attributed the drop in poverty during his predecessor's term 
entirely to out-migration, which he said was impelled by 
economic hardship. 
STRUBLE