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### Viewing cable 08LIMA1107, OLLANTA HUMALA CLAIMS HE CAN SAVE PERU FROM

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08LIMA1107 | 2008-06-26 21:09 | 2011-02-20 12:12 | CONFIDENTIAL | Embassy Lima
Appears in these articles: http://elcomercio.pe/

`

    VZCZCXYZ0000
    PP RUEHWEB

    DE RUEHPE #1107/01 1782133
    ZNY CCCCC ZZH
    P 262133Z JUN 08
    FM AMEMBASSY LIMA
    TO RUEHC/SECSTATE WASHDC PRIORITY 8906
    INFO RUEHAC/AMEMBASSY ASUNCION PRIORITY 1998
    RUEHBO/AMEMBASSY BOGOTA PRIORITY 5825
    RUEHBR/AMEMBASSY BRASILIA PRIORITY 7889
    RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 3412
    RUEHCV/AMEMBASSY CARACAS PRIORITY 1184
    RUEHLP/AMEMBASSY LA PAZ JUN 4903
    RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 9538
    RUEHQT/AMEMBASSY QUITO PRIORITY 1955
    RUEHSG/AMEMBASSY SANTIAGO PRIORITY 1933
    RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
    RUMIAAA/USCINCSO MIAMI FL PRIORITY

` `

    C O N F I D E N T I A L LIMA 001107

    SIPDIS

    E.O. 12958: DECL: 06/27/2018
    TAGS:PGOV, PREL, PINR, PE
    SUBJECT: OLLANTA HUMALA CLAIMS HE CAN SAVE PERU FROM
    EXTREMISTS

    REF: LIMA 1081

    Classified By: Amb. P Michael McKinley for reasons 1.b an...
    id: 159839
    date: 6/26/2008 21:33
    refid: 08LIMA1107
    origin: Embassy Lima
    classification: CONFIDENTIAL
    destination: 08LIMA1081
    header:
    VZCZCXYZ0000
    PP RUEHWEB

    DE RUEHPE #1107/01 1782133
    ZNY CCCCC ZZH
    P 262133Z JUN 08
    FM AMEMBASSY LIMA
    TO RUEHC/SECSTATE WASHDC PRIORITY 8906
    INFO RUEHAC/AMEMBASSY ASUNCION PRIORITY 1998
    RUEHBO/AMEMBASSY BOGOTA PRIORITY 5825
    RUEHBR/AMEMBASSY BRASILIA PRIORITY 7889
    RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 3412
    RUEHCV/AMEMBASSY CARACAS PRIORITY 1184
    RUEHLP/AMEMBASSY LA PAZ JUN 4903
    RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 9538
    RUEHQT/AMEMBASSY QUITO PRIORITY 1955
    RUEHSG/AMEMBASSY SANTIAGO PRIORITY 1933
    RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
    RUMIAAA/USCINCSO MIAMI FL PRIORITY

    ----------------- header ends ----------------

    C O N F I D E N T I A L LIMA 001107

    SIPDIS

    E.O. 12958: DECL: 06/27/2018
    TAGS:PGOV, PREL, PINR, PE
    SUBJECT: OLLANTA HUMALA CLAIMS HE CAN SAVE PERU FROM
    EXTREMISTS

    REF: LIMA 1081

    Classified By: Amb. P Michael McKinley for reasons 1.b and d.

    ¶1. (C) Summary: Ambassador McKinley met with opposition
    Peruvian Nationalist Party (PNP) leader Ollanta Humala and
    his wife (and advisor) Nadine Heredia June 18 for a cordial
    two-hour discussion.  Humala argued that the Garcia
    government is neglecting Peru's mounting social concerns and
    needs to find pragmatic solutions to prevent the spread of
    conflict.  He said the recent protests in Moquegua over the
    allocation of mining royalties (canon) broke out after the
    government first ignored the problem and then lost control.
    Humala called for "pragmatic" solutions to mounting social
    conflicts in the mining sector and proposed to increase taxes
    on mining profits and to improve mining canon distribution
    among regions.  Asked about the possible impact on juridical
    security and investment, Ollanta said companies have no
    security if social conflicts can shut down production.
    Humala claimed to favor free trade but lamented the irony
    that the US Congress had done more to protect Peru's labor
    and environmental norms in the FTA framework than had Peru's
    own Congress.  Turning to constitutional reform, Ollanta said
    the 1993 Constitution was illegitimate and called for the
    return of the 1979 Constitution.  Ambassador McKinley closed
    the conversation by addressing Humala's concerns about the
    New Horizons military-humanitarian mission currently in
    progress in Ayacucho.  On June 25th, the Ambassador saw
    Humala again at a diplomatic function, and Humala endorsed
    the Ambassador's upcoming trip to Ayacucho to explain New
    Horizons to a skeptical audience, although he made clear that
    he stuck to his concerns.  End Summary.

    Cordial Atmospherics
    --------------------
    ¶2. (C) Ambassador McKinley received opposition Peruvian
    Nationalist Party (PNP) leader Ollanta Humala and his wife
    Nadine Heredia at his residence on June 18th for a cordial
    and broad-ranging two-hour conversation.  Ollanta sat relaxed
    and attentive throughout, making his points in a calm,
    non-confrontational tone.  Nadine -- the PNP's Secretary for
    International Relations and effectively Ollanta's "Chief of
    Staff" and principal political advisor -- sat on the edge of
    her seat with a serious and guarded facial expression at
    first, intermittently joining the discussion to clarify
    Ollanta's comments.  She let down her guard and warmed as the
    discussion drew to a close.

    Humala: I Can Save Peru From Radicalism
    ---------------------------------------
    ¶3. (C) Humala argued throughout the conversation that Alan
    Garcia's government is neglecting Peru's mounting social
    concerns and that, absent pragmatic solutions, regional
    conflicts like the recent violent protests in Moquegua region
    would spread.  Ollanta expressed concern about this prospect
    and warned that dangerous, anti-systemic radicals could
    ultimately threaten the stability of the state.  Declaring
    himself "a nationalist, not a leftist", Humala said that he
    represents the pragmatic change that Peru needs.  (Comment:
    Humala did not mention credible reports that he often seeks
    to stir up, for political gain, the very social conflict he
    told us he wants to prevent.  End Comment.)

    Conflict in Moquegua Region
    ---------------------------
    ¶4. (C) Humala cited the recent conflict in Moquegua over
    regional mining canon allocations to underscore his general
    thesis on the government's neglect of social problems.
    Moquegua's leadership, he said, had repeatedly presented
    their complaints to the government during the previous year
    but received no response.  The government finally paid
    attention after the first week of protests when roadblocks
    began to cause shortages in neighboring Tacna region.  He
    warned that Moquegua's elected leaders had lost credibility
    with the local populace because of their inability to win
    concessions from Lima, leading to the emergence of more
    radical "informal" leaders.  This complicated negotiating a
    definitive end to the conflict because it was unclear with
    whom the GOP could successfully negotiate, creating a messy
    situation that could replicate itself in other regions.
    (Note: The GOP eventually resolved the Moquegua conflict by

    offering concessions to the protestors.  End Note)

    Raise Mining Profit Taxes
    -------------------------
    ¶5. (C) Humala said the best way to avert conflict was to
    increase mandatory profit sharing (utilidades) by mining
    companies that are making bundles right now with mineral
    prices sky high and to spread the benefits of the windfall
    widely -- to workers, communities, the regions and the whole
    country.  Recent congressional negotiations on a bill that
    would raise the cap on mining profits taken by mine workers
    did not resolve the underlying structural problem, he said.
    It rewarded only a narrow band of full-time formal mining
    workers, not the majority subcontracted workers and others,
    and therefore exacerbated the differences between them.
    Moreover, in rewarding full-time mining employees, it took
    money away from the regions.  Mining companies agreed with
    this solution because they care narrowly about their own
    workers, he said, but the government needed to concern itself
    with the broader interests of all.  In this sense, the
    government would need to mediate among the competing
    interests of the workers, the mining regions, and the
    Peruvian people, which he repeated would require raising the
    profit taxes on these companies.  (Comment: In this and other
    instances, Humala cast himself in the role of impartial
    statesman rather than rabble-rousing opposition leader.  End
    Comment.)

    Juridical Security, Foreign Investment, Free Trade
    --------------------------------------------- -----
    ¶6. (C) The Ambassador responded to Ollanta's mining sector
    proposals by emphasizing the importance of juridical security
    to attract foreign investment.  Humala acknowledged the
    importance of juridical security and foreign investment, and
    raised the example of the Melia Hotel chain in Cuba.  He said
    he once asked the chain's Cuba manager why they had so many
    hotels on the island, and the manager responded that they
    felt safe because they knew that Cuba's laws never change.
    (Note: We shared a laugh at the irony.  End Note.)  Humala
    then argued that companies in Peru today only enjoy juridical
    security on paper.  What good are legal norms if social
    conflicts halt production?  He insisted that if the
    government followed his model, juridical security would in
    fact be more sustainable.

    ¶7. (C) Ambassador McKinley raised the importance of free
    trade to Peru's future.  Countries throughout the world are
    competing for investment and markets in a process that cannot
    be stopped and that far transcends commercial relations
    between Peru and the U.S., he said.  Peru can either stand
    aside and watch or jump in and benefit.  Arguing that he is
    not a leftist, Humala accepted the importance of trade but
    said it more important that it be "equitable" than free.  As
    far as the bilateral free trade agreement went, he said that
    Peru would never be able compete with the U.S. in a host of
    areas and feared that Peru's potential to develop critical
    national industries would be undermined as a result.  Both
    agreed to disagree on this issue.  Humala continued by
    pointing out that FTA conventions on labor and the
    environment, which were generally positive, had been inserted
    thanks to pressure by the US Congress.  It was ironic, he
    noted, that the U.S. congress had done more to represent the
    interests of Peruvian workers and the environment in this
    case than had Peru's own congress or government.

    Constitutional Reform
    ---------------------
    ¶8. (C) Turning to constitutional reform -- a topic recently
    debated in Congress (Ref A) -- Ollanta claimed that the 1993
    Constitution lacked legitimacy because it was written by
    Fujimori-era criminals and approved in a referendum marked by
    fraud.  Humala said the piecemeal reforms proposed and
    rejected in Congress last week will not suffice and that his
    party proposed returning to the 1979 Constitution.  He said
    he was calling for a referendum on the 1979 Constitution
    because the public supports such a change, and observed that
    the debate over the constitution had caused serious fractures
    in Congress and within the ruling APRA party itself.  Humala
    said he will continue pushing the issue and accused the
    President of reneging on his campaign promise to return to
    the 1979 document.  (Note: According the recent polls, fewer

    than 20% of Peruvians favor a return to the 1979
    Constitution.  End Note.)

    New Horizons
    ------------
    ¶9. (C) The Ambassador and Humala closed with an in depth
    discussion of the New Horizons bilateral
    military-humanitarian mission currently underway in Ayacucho
    region.  (Note: The Humala-funded La Primera newpaper and
    several PNP Congresspeople have been harshly critical of the
    project and have accused the USG of planning to establish a
    military base to replace the Manta FOL.  End Note)  The
    Ambassador explained that the three-month mission would has
    primarily humanitarian goals -- performing surgeries,
    building schools, digging wells -- and that at the end, US
    troops will all return home.  He emphasized that it was a
    bilateral exercise, that everything had been closely
    coordinated with and vetted by the GOP, and that the Peruvian
    military and police had lead responsibility for force
    protection and security.  Contrary to some inflammatory media
    reports, he said, US weapons were being warehoused under lock
    and key.

    ¶10. (C) Humala then asked a series of pointed questions about
    the exercise: Why did participating doctors and engineers
    have to be uniformed military rather than civilians?  The
    Ambassador responded that the mission was also intended to
    support the training of Peruvian and U.S. military personnel
    to deal with natural and other disasters, a capability which
    other organizations lacked.  Why was the mission located on
    the edge of a narcotics-producing region in a sensitive zone
    of historical conflict -- and what would the US do if an
    American soldier or a Peruvian civilian was accidentally
    injured or killed?  The Ambassador responded that we believed
    in the Peruvian government's ability to provide security and
    were working carefully to ensure the safety of Americans and
    Peruvians alike.  Humala then noted the imminent closing of
    the Manta FOL in Ecuador (claiming that President Correa had
    told him the decision was definitive), and asked about U.S.
    intentions to establish a successor to Manta somewhere in
    Peru.  Citing historical examples, the Ambassador noted that
    the potential closing of the Manta FOL does not mean we
    necessarily must open a new base in some other country, and
    reiterated that the U.S. has no intention to establish a base
    in Peru.

    Comment: A Positive Meeting
    ---------------------------
    ¶11. (C) Although we probably did not change Humala's opinions
    on the key issues, the dialogue was cordial and a level of
    trust was built.  In comments to the press while traveling in
    Ayacucho later that week that faithfully reflected the spirit
    and content of the exchange, Humala stated that, although
    there was reason for concern about New Horizons, the U.S.
    Ambassador had promised him that US troops were in Ayacucho
    temporarily and would return to the U.S. when the exercise
    ended.  Ambassador McKinley saw Humala again at a diplomatic
    function on June 25th, and in a friendly conversation Humala
    endorsed the Ambassador's upcoming trip to Ayacucho to
    explain New Horizons to a skeptical public.  Humala also
    mentioned that he had met and posed for photographs with an
    independent American missionary/medical team in the area.
    Humala added that one focus of protests in Ayacucho on July
    8th - 9th --part of a broader national strike -- would be the
    presence of US troops.  (Note: We have asked New Horizons to
    stand down on July 8-9 as a precaution.  End Note.)
    MCKINLEY

    =======================CABLE ENDS============================

`