Peru: Morning News Roundup – Monday February 4

Peru Miners Vote to Strike in May Over Pensions

Peru’s mine workers voted for a national strike in May to push for legislation on better pensions, profit-sharing and rights for subcontracted labor, a union official said. The unions, which held two national strikes last year, called a strike for May 19 to pressure Congress to pass new labor laws, Luis Castillo, general secretary of the Mining Federation, said in a telephone interview from Lima. The group represents about 28,000 miners and 70 unions. “We’re giving the government a lot of advance notice so they can produce this legislation once and for all,” Castillo said. “We’ve been pushing for these laws for over a year and haven’t seen any progress.” Last year, strikes cut copper output in Peru, Chile and Mexico, while workers at Southern Copper Corp.’s largest mine in Mexico ended a five-month stoppage Jan. 11. The price of the metal has doubled in the past three years, partly because of labor disputes and supply disruptions. (Bloomberg – click here to read complete article by Alex Emery)

Peru: Free trade deal an Andean tragedy

On December 4, US President George Bush was delighted to announce that the US-Peru Trade Promotion Agreement (dubbed “PeruFTA”) had finally cleared the Congress. Since late 2005, when PeruFTA was approved by Peru, the Bush administration has campaigned relentlessly to secure the free trade deal’s endorsement by the Democrat-controlled House of Representatives. The Democrats negotiated a few cosmetic changes to some aspects of PeruFTA, but have now washed their hands of the matter. Throughout the negotiating process, the Democrats framed their objections almost exclusively in terms of the US job losses that might result from the trade deal. Concern for the millions of Peruvian workers and peasants who would be adversely affected by such a deal was virtually non-existent. (Green Left – click here to read complete article by David T. Rowlands)

Peru’s dirty war preceded Fujimori: trial witness

Peru’s "dirty war" against leftist insurgents dated to before Alberto Fujimori’s 1990-2000 presidency, a defense witness and former death squad member said Friday at the trial of the former leader on charges of human rights abuses. "Many (military) officers are now human rights defenders, but earlier they kept quiet. There were abuses before" Fujimori, former intelligence agent Angel Sauni told the court. Sauni, a self confessed member of the Colina Group, a team of select army intelligence operatives accused of killing 25 people in two massacres in 1991 and 1992, said the strategy used against the leftist Shining Path and Tupac Amaru Revolutionary Movement came directly from teachings and manuals of the "School of the Americas." (AFP – click here to read complete article)

Andes glaciers gone in 20 years

Scientists in Peru have issued a dire warning, claiming that glaciers high in the Andes will all but disappear within two decades. At Pastoruri glacier, water from the melting ice is forming lakes which threaten to flood the villages below. Seventy per cent of Peru’s population relies on the annual glacial melt for drinking water. When the glaciers go, their water will go too. Peru’s economic development, too, is driven by water, with 70 per cent of Peru’s electricity coming from hyro-power. Without investment in new, sustainable infrastructure, when the glaciers are gone, the lights will go out. The Pacific coast of Peru is dry, arid and home to a growing population. Ironically, as climate change bites and the glaciers melt, water supplies will initially increase. The government’s campaign ‘Agua para Todos’ (water for all) promises widespread water connections, but that will inevitably increase demand. (Channel 4 News – click here to read complete article by Julian Rush)

BCP Takeover Talk Gets Specific

Lima-based bankers continue to chatter about a sale of Banco de Credito del Peru to Santander, which the alleged target continues to deny. A $1.3bn price is rumored for a 60% stake in the bank and Santander president Emilio Botin is said to be making his way over to Lima next week. "There is absolutely nothing to date on any sale of the bank," says Aida Kleffmann, investor relations officer at Credicorp, BCP’s holding company. She adds that there had been rumors about a transaction swirling for several weeks, but denied a sale was being planned, or that there had been meetings with Santander, either in the past or scheduled for next week. "There’s a lot circling around out there, but nothing going on," says Carlos Munoz, COO said earlier this week. He added that the bank has no interest in selling itself. However, Credicorp is controlled by the Romero family, and everything has its price. But BCP remains Peru’s dominant bank in terms of assets and will likely only trade at a very full price. (Latin Finance)

Peru Seen Holding on Rates

Last Friday’s lower than expected inflation reading leads analysts to predict no change at Peru’s Thursday monetary policy meeting. "The central bank will most likely keep the reference interest rate unchanged (at 5.25%) in its next monthly monetary policy meeting," says Goldman. Peru has already increased rates by 75bp since July 2007 and raised bank reserve requirements last month, so it may want to take time to assess the effects of those tightening moves before moving again, it adds. The government also wants to avoid further sol appreciation. (Latin Finance)