Peruvians riot against privatisation

Peruvians rioted in Peru's second city of Arequipa last week in protest 
against the intention of the Government to privatise two regional 
electricity generating plants.

The Government planned to sell the units to a Belgian company claiming that 
this would benefit the people of the city.

The plan was met with strong resistance from the Peruvian people who no 
longer believe the promises of the Government and the companies which will 
profit from privatisation. Citizens know that privatisation leads to higher 
prices and sackings.

The Government declared a state of emergency, banned protest actions and 
suspended Constitutional guarantees. Hundreds of troops took control of the 
city.

The police used tear gas to disperse crowds and one canister killed a 25-
year-old university student. The Peruvian Air Force flew up to 17 Americans 
out of Arequipa to Lima.

Less than 12 months ago Alejandro Toledo was elected President following 
the disgrace of former President Alberto Fujimora who is now skulking in 
Japan rather than return to Peru to face corruption charges.

The people of Arequipa are particularly angry because, they say that 
President Toledo campaigned on a promise not to auction off utilities and 
is now going back on his commitment.

The Peruvian riots are a sign of the frustration across Latin America with 
the attempts of governments to privatise state industries. All that the 
people see is rising poverty and stagnant economies.

"The response from Latin America, the grass-roots response, has been 
growing rage over the privatisation thrust", said Larry Birns, director of 
the Council on Hemispheric Affairs in Washington, which has studied 
privatisations.

President Toledo claimed in a nationally televised address that 
privatisation would benefit the people of Arequipa. Few believed him.

Protestors continued to defy the state of emergency by congregating in 
Arequipa's main square, while others blocked roads in southern Peru. 
Fearing the spread of protests, the Government ordered tanks and troops 
into the streets of Peru's capital city, Lima.

Late reports indicate that the Toledo Government has been forced to put the 
sale on hold while a court rules on the privatisation.

With his popularity at a record low, President Toledo has been forced to 
give a written guarantee to local leaders that the electricity generating 
plants will not be sold and that the state of emergency will be lifted 
within 48 hours.

Several thousand cheering residents, who had feared higher prices, 
celebrated in Arequipa's main square.

"This is the first time a government has had to admit it was wrong and has 
apologised ... to Arequipa", said the city's Mayor to a flag-waving crowd. 
"We've got the government to change its position on the privatisation of 
these companies," he said.

A sympathy strike across southern Peru from the border with Chile to the 
border with Bolivia halted public transport for one day.

Polls show only one in five Peruvians approve of Toledo, amid widespread 
frustration that he has failed to deliver promised new jobs. Slogans daubed 
on walls in Arequipa read "Toledo traitor".