INTERVIEW WITH ALAN GARCIA :’I WILL RENEGOTIATE CONTRACTS WITH FOREIGN COMPANIES.”

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LIMA, Apr 30 2006 (IPS) - lan Garcia, who polls show is the favourite in Peru\’s presidential elections, scheduled for June 4, says that his government will not expropriate foreign companies doing business in Peru but rather will negotiate with them –as well as others that have no presence there yet– so that they will process copper, gold, fish, and food locally. \’\’In short, this is so they will invest more, but in order to spur our development, not so they can extract our raw materials and process them in another country.\’\’

Alan Garcia, who polls show is the favourite in Peru’s presidential elections, scheduled for June 4, says that his government will not expropriate foreign companies doing business in Peru but rather will negotiate with them –as well as others that have no presence there yet– so that they will process copper, gold, fish, and food locally. ”In short, this is so they will invest more, but in order to spur our development, not so they can extract our raw materials and process them in another country.”

This position does not prevent Garcia from defining himself as an anti-imperialist, making development of the South a priority, and condemning US president George Bush. But he also distances himself from Venezuelan president Hugo Chavez, betting on the strengthening of the Andean Community of Nations and pushing for a South American Union, ”with the goal of making Peru the leader of Latin America”. He states that he would form a government with figures from different political forces and that his cabinet would not contain a majority of members of his party, the APRA, American Popular Revolutionary Alliance.

In the South American Union, which you feel must be pushed more forcefully, is there room for Venezuela? Of course: no country should be left out, though it is terrible that there is no freedom of expression or assembly or investment in that country. The state takes 80 percent of income and administers is badly, with a dictatorship that suffers from the military syndrome. Chavez uses a form of doublespeak: he is a double-barrelled shotgun, on the one hand criticising the free-trade treaties of Colombia and Peru, and on the other benefitting from his own free-trade treaty for oil with the United States.

Do you think the free-trade treaty between your country and the US would be positive? Yes, we have to broaden our presence in the US market with exports of products and not exports of people, which is what we have today.

Going back to Chavez, how do you see his relation to new Bolivian president Evo Morales and to your rival in the elections, Ollanta Humala? Chavez is a major threat to South American Unity, financed as he is by the rise in oil prices. He made the Bolivian president commit serious errors, which I hope can be resolved, and he is acting as Humala’s chief of publicity and finance. It is an intrusion into our domestic politics that I categorically reject.

And other Latin American leaders, Brazilian president Lula and Chile’s Bachelet? Lula is carrying forward a programme of responsible and very positive change. And in Chile we have an example of a coherent, democratic government that brings together socialists and Christian Democrats. It provides a clear demonstration that it is possible to build solid governments with different parties.

Returning to the question of foreign companies, if you do not intend to carry out expropriations, what do you intend to negotiate with them? With companies already present in Peru, we will negotiate changes in the terms of their contracts. For example, there is a mining company that signed an agreement with our country when the price of gold was 240 dollars an ounce; today it is 700 dollars. The company must return more of its profits to the country. I am certain that were there a similar situation in Britain, Tony Blair wouldn’t hesitate to impose a tax. Here, it wasn’t done.

Your position on economic policy seems to have shifted with respect to that when you were president between 1985-1990. Do you think that you committed errors which you would now seek to correct? First, allow me to say that no one is immune from committing errors, and I certainly intend to correct those that I made. But this has nothing to do with changes in economic policy, which occur because the world has changed. For example, economic policy cannot remain the same in wartime and peacetime. At present the circumstances of the world have changed: from the end of the Cold War and the face-off between the two superpowers to the advent of the information society, which has transformed the world. Private investment is now greater than state investment. We are currently experiencing a phase of democracy and global normality, and it is against this backdrop that we must shape, and indeed are shaping, economic policy.

At the domestic level what are your most important goals? The first is increasing employment through a coordination of state action with private initiative. We must cut joblessness, remedy underemployment, support small and medium-size business, and provide a dramatic boost to the tourism sector, in which Peru has stunning riches and major potential for development. The second priority is increasing the supply of water, which is scandalously low at present. There are today eight million Peruvians who do not have running water in their homes, 1.2 million in Lima alone. The third priority is radically improving the health care system, which performs very poorly, in order to guarantee universal heath care, excluding no one.

You used to define yourself as ”anti-imperialist”. Do you still? Yes, as president of Peru I condemned the US invasion of Nicaragua and Panama, because it is my understanding that no country should invade another country, whatever motives it may cite.

Do you support reform of the United Nations, and do you think certain countries should continue to have veto power? I would maintain the position I took in 1986, when I said that I supported UN reform and felt that the veto now held by five countries should be abolished. The UN must be democratised; it has a very important role to play in this globalised world.

Wouldn’t this be an affront to the Bush administration? It shouldn’t affect Mr. Bush because it is a matter of all countries moving ahead towards the democratisation of the UN, a goal that though certainly difficult can be achieved with patience, persistence, and negotiations among all countries.

How do you see Peru’s relations with the European Union, and do you consider it a party to the association you are negotiating with the Andean Community? I support this association and think it should be more than a simple free-trade pact, because we are united with Europe by both culture and politics and should collaborate forcefully and decisively. (END/COPYRIGHT IPS)