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Weekly Report - 23 June 2011 (WR-11-25)

PERU: Humala's biggest challenge

All the media focus at the moment is on who President-elect Ollanta Humala will appoint to his cabinet. This is important. At stake is a majority in congress through an unofficial alliance with former president Alejandro Toledo's (2001-2006) Perú Posible (PP), which would keep investors and business groups happy. Humala knows, however, that the real issue, on which his future success will hinge, is his ability to satisfy the demands of rural Peru, which was instrumental in bringing him to power. Expectations are high here: reform is not possible without a congressional majority, unless Humala opts to govern by decree, as President Alan García (2001-2006) regularly did. A report released by the Ombudsman's office this week showed that Humala would inherit 227 social conflicts when he takes office on 28 July, the bulk of them linked to mining, one of the main drivers of Peru's rapid growth.

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