Humala wins Peru 1st round, eyes Fujimori in run-off

LIMA Sun Apr 10, 2011 7:47pm EDT

1 of 7. Peru's presidential candidates Ollanta Humala (L) and Keiko Fujimori pose for photographers after voting in Lima, in this combination photograph, April 10, 2011.

Credit: Reuters/Pilar Olivares and Mariana Bazo

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LIMA (Reuters) - Left-wing nationalist Ollanta Humala won the first round of Peru's presidential election on Sunday and looked set to face rightist Keiko Fujimori in what could be a bruising run-off in June, an unofficial quick count of ballots showed.

However, Fujimori's lead over third-place candidate -- former finance minister Pedro Pablo Kuczynski -- was narrow, so the eventual run-off pairing could change. Officials said it may take days to count all the votes.

Despite a decade-long boom, a third of Peruvians live in poverty and many rallied behind Humala, a former army officer who has positioned himself as a man of the people opposite three rivals who are backed by big business.

Polling firm Ipsos said its review of a sample of ballots showed Humala with 31.8 percent, Fujimori with 22.8 percent and Kuczynski at 19.6 percent. Further back was former President Alejandro Toledo.

Fujimori favors free market policies, but is shunned by many Peruvians because her father, former president Alberto Fujimori, is in prison for corruption and human rights crimes stemming from his crackdown on guerrillas in the 1990s.

A Humala-Fujimori run-off is seen polarizing Peru.

"This wasn't the result I wanted. It's going to divide the country," said advertising agency employee Renaldo Arroz, 40. "I'll have to vote for Humala in the second round. Many forget what Fujimori did, but not me. They were terrifying times."

A Datum exit poll gave Humala 33.8 percent of the vote, followed by Fujimori with 21.3 percent. Former prime minister Pedro Pablo Kuczynski had 19.5 percent and former President Alejandro Toledo, 15.2 percent.

The results were similar in an Ipsos exit poll that showed Humala with 31.6 percent, Fujimori with 21.4 percent, Kuczynski on 19.2 percent and Toledo, 16.1 percent. A CPI poll gave a similar reading.

Humala, 48, has surged in the race by shedding his hardline image and recasting himself as a soft-left leader in the vein of former Brazilian President Luiz Inacio Lula da Silva. He says he has mellowed and distanced himself from his former political mentor, Venezuelan President Hugo Chavez.

Humala's rivals have sought to hurt his chances by saying he would step up state control over the economy, rolling back reforms and jeopardizing some $40 billion of foreign investment lined up for the next decade in mining and energy exploration.

Such warnings have spooked better-off Peruvians, who are enjoying relative wealth and stability after years of hyperinflation and guerrilla wars during the 1980s and 1990s.

WARMING TO WALL STREET

Humala, who led a short-lived military revolt in 2000, has moderated his tone since narrowly losing the 2006 elections.

He has taken to wearing ties, carrying rosary beads to show he is a devout Roman Catholic and promising to be fiscally prudent while respecting the independence of the central bank and honoring the country's many free-trade pacts.

Those tactics have persuaded some on Wall Street and in Peru's vast mining sector that he has matured and is no longer like his brother and father, two well-known Peruvian radicals.

Moody's ratings agency said Peru's investment-grade credit rating would not be threatened by an eventual Humala victory.

Still, Peru's sol currency and the country's main stock index have dipped over the past two weeks on worries Humala could raise mining taxes, hike state subsidies or tighten control of "strategic" sectors like electricity.

Humala got 30 percent of the vote in the first round in 2006 before losing the runoff by 5 percentage points to President Alan Garcia, who cannot run again this year but has said he wants to make a bid in 2016.

This year's second round could be just as tight.

Polls show Humala would nearly tie Fujimori or Kuczynski in a run-off.

Kuczynski, 72, a former Wall Street banker who is known as "El Gringo" because of his European parents, could have trouble gaining traction outside of Lima, where he is strongly backed by wealthy voters.

Both Humala and Fujimori have disapproval ratings of about 50 percent, the worst in the race, leading some to describe a runoff between them as "the nightmare scenario."

Neither of their parties is expected to win a majority in Congress, which would put make it difficult for them to pass legislation. Still, Humala's party would have the largest bloc, Ipsos said.

Some voters liked Fujimori's strong-arm approach to crime.

"When her father was president, everything was calmer, there is more crime now," said Luis Alejandro, 50, a minibus driver who gave up driving for fear of being mugged. "Ollanta will want a military government. Social conflicts will grow."

(Additional reporting by Patricia Velez, Caroline Stauffer, Marco Aquino and Teresa Cespedes; Writing by Terry Wade)

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