MEDIA REACTION PERUVIAN PRESIDENT-ELECT ALAN

UNCLAS BUENOS AIRES 001283

SIPDIS

STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC,
WHA/EPSC
CDR USSOCOM FOR J-2 IAD/LAMA

SIPDIS

E.O. 12958: N/A
TAGS: KPAO OPRC KMDR PREL MEDIA REACTION
SUBJECT: MEDIA REACTION PERUVIAN PRESIDENT-ELECT ALAN
GARCIA; US PROPOSAL TO IRAN; WORLD BANK AND ARGENTINA;
BRAZIL'S GEOPOLITICAL CONCERNS 06/07/06


1. SUMMARY STATEMENT

Today's key international stories include the
implications of Peruvian elections; the USG proposal
to Iran; the World Bank granting new loans to
Argentina; Brazilian military's geopolitical concerns;
and hundreds of landless farm workers invading
Brazilian Congress to demand agrarian reform.


2. OPINION PIECES AND KEY STORIES

- "Further from Bush, closer to Chavez"

Left-of-center "Pagina 12's" Lima-based correspondent
Carlos Noriega writes (06/07) "Without any need to
fuel his confrontation with Venezuelan President Hugo
Chavez in order to win votes, Alan Garcia showed a
conciliatory attitude.

"Yesterday, the brand-new president of Peru bluntly
rejected the possibility of leading an anti-Chavez
regional front, as some predicted, based on his bitter
spat with Chavez. Garcia asserted that, as president,
he expects to have a 'good relationship' with his
Venezuelan counterpart.

"In his first statements to the foreign media, Garcia
distanced himself from the US and states conditions
for the implementation of an FTA with the US.

"During his election campaign, Garcia sought to seduce
the right-wing electorate by presenting himself as a
reliable candidate for the US and had a harsh
confrontation with Venezuelan president. As president-
elect, Garcia radically changed the aggressive tone he
had used to speak of Chavez and marked his points of
disagreement with the current Peruvian president,
Alejandro Toledo, a strong US ally."

- "Alan Garcia gives stipulations for an FTA with the
US"

Business-financial "El Cronista" reports (06/07) "The
Toledo administration submitted the projected FTA
negotiated with the US to the Peruvian Congress for
its ratification... Social-Democrat Alan Garcia said
he would analyze the trade deal before supporting its
Congressional ratification (the political party he
belongs to is currently the majority opposition
force).

"... During a press conference, Alan Garcia said
yesterday that he would not appoint a 'pro-
nationalization' member in his economic team, and he
promised to take care of the country's financial
stability.

"Garcia also said Chile will be the model to be
followed by Peru and he pleaded for resolute policies
in South America in order to obtain the region's
definitive insertion in the international scenario."

- "The first challenges of a government without a
'honeymoon'"

Dolores Tereso, on special assignment in Lima for
daily-of-record "La Nacion," comments (06/07) "Alan
Garcia knows that his governmental task will not be
easy. With a past that generates mistrust, without a
majority in Congress... and having won runoff
elections with a big number of 'burrowed' votes, he is
aware that the 'honeymoon' will be anywhere from short
to non-existent. This is why from now and throughout
the first days of his government, the president-elect
will attempt to satisfy everyone he can.

"To put an end to the mistrust he generates within the
business community and in the US, Garcia will
reportedly authorize his party to pass the FTA with
the US in Congress, which will be discussed next
week...

"Another decision Garcia will have to make within the
next days... will be the appointment of the members in
his cabinet...


"On the other hand, in order to mitigate eventual
social pressures in a country that shows it is
increasingly fed up with all political leaders, Garcia
has prepared a series of austerity measures, among
them the reduction of high governmental salaries by
50%...

"Perhaps, the biggest challenge to be met by Garcia
will be mitigating poverty, which affects half of the
inhabitants of the country."

- "The US makes an unusual proposal to Iran related to
its nuclear program"

Daily-of-record "La Nacion" reports (06/07) "In an
unprecedented gesture, the US offered to join European
countries in providing Iran with nuclear technology in
return for Iran's suspension of its polemic uranium
enrichment program.

"The proposal (which is considered an important US
concession bearing in mind that the US has not
dismissed the use of force against Iran),is part of a
series of potential rewards, which were submitted
yesterday to Tehran by Javier Solana, High
Representative for the Common Foreign and Security
Policy of the European Union.

"... While Iran has not accepted the proposal yet, it
has left a door open to dialogue. Iranian nuclear
negotiator Ali Larikhani said that the initiative
includes some 'positive steps,' but also 'some
ambiguities that should be removed.'

"For his part, US President George W. Bush termed
Iran's initial reaction as 'positive.'"

- "The World Bank renews criticism but approves loans"

Ana Baron, Washington-based correspondent for leading
"Clarin," writes (06/07) "Biaggio Bossone, the Italian
WB head, asked for the rights of 'holdout'
bondholders. Pierre Dusquenes, the French WB head,
asked the WB to take into account the review of the
Argentine economic status currently being performed by
an IMF delegation in Buenos Aires. Yoshio Okubo, the
Japanese WB head, warned on the risk of inflation, and
other directors warned on the investment climate and
asked to improve governance, and speed up the
renegotiation of agreements with privatized
corporations.

"These were the main demands related to Argentina
which came up yesterday in Washington during a WB
Board meeting, in which loans for a total amount of
180 million dollars were approved.

"It was an agitated meeting, but the WB Board approved
the strategy of assistance for Argentina, which is the
WB plan of action for the next three years and
involves a total amount of 3.3 billion dollars in
loans."

- "Brazil reviews its geopolitical concerns"

Leading "Clarin" carries an op-ed piece by Fabian
Calle, political analyst, who opines (06/07) "The US
military presence in Paraguay, the political, social
and legal changes in Bolivia, Chavez' political and
economic activism, and tensions between Argentina and
Uruguay have led Brazilian military spokespersons to
emphasize the need for moving the Brazilian focus from
the Amazon area and its border with Colombia, to
threats like narcotrafficking, armed groups,
contraband and the trafficking of weapons. The same
sources underscored the need for increasing Defense-
related expenditures.

"... According to the military, the new regional
reality should also lead one to place more emphasis on
the deployment of troops and equipment on (Brazil's)
borders with Paraguay, Bolivia and Uruguay... Another
element to be considered is the US' increasing
influence on Paraguay and Uruguay.

"Brazilian military are also mistrustful over Chavez's



influential ideological and economic role in the
region, particularly in Bolivia..."


3. EDITORIALS

- "The Peru of Alan Garcia"

Daily-of-record "La Nacion" carries an editorial that
reads (06/07) "With the arrival of Alan Garcia to the
Peruvian presidency for a second time, a new stage has
begun, which can be termed as hopeful.

"In principle, Garcia's victory over Humala has
returned confidence to international investors as well
as balance markets...

"... While it is true that Garcia pleaded for a
government of unity, analysts believe he would not
include Union por el Peru, Humala's political party...

"First and foremost, Garcia will have to struggle
against the ghost of polarization in a country where
millions are socially excluded...

"Garcia will also have another challenge - the
achievement of some balance with his Latin American
neighbors... Garcia has hurried to speak of 'good ties
with, and respect for' Venezuela, and he has also said
he is not interested in leading an 'anti-Chavez'
hemispheric movement as long as there is no
interference in Peru's domestic affairs...

"While challenges are harsh, on the one hand, Alan
Garcia has impressive economic growth in his favor,
which was obtained by the Toledo administration,
however, on the other hand, he will have to remove the
bad memories left by his first presidency..."

- "The return of Alan Garcia"

An editorial in leading "Clarin" reads (06/07) "The
return of Alan Garcia to the Peruvian presidency can
be contributed to the learning process of societies...
and the lack of more attractive options and the fear
raised by Ollanta Humala's background.

"... Garcia made a proposal of 'responsible change,'
which gathered a broad spectrum of support... In this
respect, Peruvians voted last Sunday in a way that
reaffirmed their democratic convictions and will renew
their expectations of change."

To see more Buenos Aires reporting, visit our
classified website at:
http://www.state.sqov.gov/p/wha/buenosaires

GUTIERREZ