Analysis: Peru voters shying away from adventure

LIMA (Reuters) - Peruvians will likely elect a centrist to the presidency in April rather than leftist ultranationalist Ollanta Humala as soaring economic growth turns more Latin American voters into political moderates.

In so doing, Peru would follow Brazil, Chile and Colombia, where voters this year picked presidents with long track records of being committed to orthodox policies that have lured billions of dollars in foreign investment.

As the political climate in Peru changes, voters have been abandoning Humala, long seen as a radical, even as he tries reinventing himself as a more moderate leftist to survive.

The former army officer won 47 percent of the vote in the 2006 election, narrowly losing to President Alan Garcia, who cannot run for a second straight term. Humala's popularity has plummeted since then, in some polls to single digits.

Four months before election day, Humala is languishing far behind three front-runners who favor free trade, foreign investment, low inflation and fiscal restraint.

"Peruvians don't want adventures, they don't want to put the economic path at risk. There is no space for a candidate opposed to the current model," said pollster Manuel Saavedra of survey firm CPI.

Leading the race are former Lima Mayor Luis Castaneda, former President Alejandro Toledo and Keiko Fujimori, the daughter of jailed former President Alberto Fujimori. Each of them is at 20 percent or higher in polls.

"The person who appears to be moving farther behind the front-runners is Ollanta Humala," said Fernando Tuesta, a political scientist at Lima's Catholic University.

Humala has also lost ground in the country's restive south, his traditional stronghold, where contrarian politicians have long drawn support.

Still, Erasto Almeida, a political analyst at the Eurasia Group, says it is too early to say Humala will lose in a country where the poverty rate is about 35 percent and many voters feel left behind by a booming economy forecast to grow nearly 9 percent this year.

"The odds are 30 to 40 percent that Humala will make it to the second round, and though that is unlikely, depending on who he faces in the runoff, it could be a toss up," he said.

If no candidate wins more than half of all votes on April 10, a runoff election will be held June 5.

TRYING TO BE LULA, SHUNNING CHAVEZ

Humala's recent tactics to strike a moderate tone mirror what Luiz Inacio Lula da Silva did to win Brazil's presidency in 2002 after losing three times as a strident leftist.

In that race, Lula's promises to keep orthodox economic policies in place were so persuasive that he got a crucial endorsement from Roberto Setubal, chief executive of Itau Unibanco, one of Brazil's biggest banks.

Lula, whose center-left politics during eight years in office turned him into the most popular president in Brazilian history and a favorite of investors, will hand over power in January to his handpicked successor, Dilma Rousseff.

Though some Latin American countries may swing from center-left to center-right like in Chile's January election of Sebastian Pinera, politicians are increasingly courting moderates in a region that suffered decades of military coups and leftist rebellions in the 20th century.

Last month, in a speech to business leaders, Humala made a point of criticizing his former guru, Venezuela's socialist President Hugo Chavez, who leads a bloc of leftist leaders in Bolivia, Ecuador and Nicaragua.

But Humala's overtures to the business community have largely fallen on deaf ears.

He is widely distrusted by executives. To many, Humala's plans to vigorously regulate strategic sectors like mining and energy sound similar to the interventionist policies of Argentine President Cristina Fernandez.

Despite promises that his government would not be radical, Humala's rivals depict him as a boogeyman, playing on voters' memories of years of instability caused by economic turmoil and a long civil war that officially ended only a decade ago.

Garcia, who became a fervent supporter of free markets after his first term in the 1980s was marred by hyperinflation, has said electing an "anti-system" candidate would be a mistake.

"If a candidate wins who wants to try to unravel everything we have done ... then there would be immense chaos," Garcia said this week in a veiled reference to Humala.

(Reporting by Terry Wade; Editing by Eric Beech)