Peru recall vote casts shadow beyond Lima's reformist mayor
* Poor voters feel ignored by Villaran
* Parties jockey for edge in next presidential vote
* Potential comeback for "El Mudo"
By Marco Aquino and Mitra Taj
LIMA, March 14 (Reuters) - The reformist mayor of Peru's capital may be ousted in a recall vote on Sunday as traditional power brokers try to paint her as inept, an effort her supporters say could paralyze public works and affect the next presidential race.
Susana Villaran, 63, the only popularly elected woman to have governed Lima in its 500-year history and the first leftist to hold the job in three decades, has hit stiff opposition to her drive to root out corruption and instill order in the chaotic city of 8 million.
Polls show Villaran, a longtime human rights activist before taking office two years ago, will likely lose by 6 to 10 percentage points in the capital's first recall election.
Conservative politicians, evangelical leaders, food venders, and bus and taxi drivers have joined forces to remove her.
They say she has bungled desperately needed public works projects and spent too much time promoting gay rights while cracking down on the millions of residents who earn a living in the informal economy - the street vendors, merchants, drivers and maids who often work off the books.
While applauded by Peruvian artists and celebrities for stances that appeal to wealthy progressives, Villaran has been unpopular among Lima's poorer residents.
Villaran late last year started to offer investors $4 billion worth of concessions for Lima, which has a third of Peru's population and generates half of all economic activity. But engineering troubles have delayed a slew of big projects she inherited and others have not started.
"She's incapable," said Marco Tulio Gutierrez, the leader of the recall effort, echoing slogans on posters across the city.
The campaign has exposed racial and class tensions in Peru, with Villaran, who is white, being depicted as rich and out of touch from voters of mostly mixed indigenous and European descent on the city's periphery.
Former Mayor Luis Castaneda is widely viewed as the driving force behind the recall effort, which he denies. A new mayor will be elected later this year.
Castaneda governed as a kind of right-wing populist - nurturing ties to the business community while building thousands of stairways in hillside shantytowns and paving roads during eight years in office.
He ran for the presidency in 2011, but struggled to make inroads in the provinces and develop a compelling message. Peru's media nicknamed him "El Mudo" ("The Mute") because he shunned the press for most of the campaign.
President Ollanta Humala, a former military officer, won with promises to keep the country's economic surge alive while spreading wealth to the one third of voters mired in poverty.
Since then, Castaneda has been out of a job.
JOCKEYING FOR PRESIDENCY
Villaran has said the poor have been used in a recall campaign driven by entrenched interests and parties jockeying for sway in the 2016 presidential election, when Humala cannot run for a second-straight term.
The APRA party of Humala's predecessor, Alan Garcia, who is expected to seek another term, has endorsed the recall. It has aligned with Castaneda's tiny Nationali Solidarity party in previous elections.
Villaran, once a rising star of Peru's left, is well-liked by a segment of voters who backed Humala in the presidential election and have been dismayed by his drift to the right.
But she has provoked the ire of people who toil in Lima's vast and unregulated informal economy.
"The municipal government takes our carts away and doesn't give them back until two weeks later," said Carlos Miguel, a 42-year-old ice cream peddler who plans to vote against Villaran.
Evangelical pastor Raul Vasquez has railed against Villaran's position on gay rights.
"Lima might end up like Sodom and Gomorrah," Vasquez said. "We should be a moral city."
Gay rights activists in the mostly Roman Catholic country say their efforts will be hurt if Villaran is ousted.
"There is a lot of backwardness behind the recall effort: homophobia, misogyny, racism. This election has brought out the worst in Lima," said Veronica Ferrari, the director of the Homosexual Movement of Lima.
CONCERNS ABOUT STABILITY
The image of local politics in Peru as vulnerable to abrupt change could unsettle investors who have bid for lucrative infrastructure concessions in Lima.
Peruvian law since 1994 has allowed mayors and regional leaders to face recall votes, but not the president.
So far, some 279 mayors and 1,100 city council members have been voted out of office, snarling public administration at a time when the central government is trying to decentralize management of public investments to the local level.
Lima, which was the base of the Spanish empire in the Americas and has hundreds of pre-Columbian ruins, needs infrastructure investments of about $37 billion, according to some estimates.
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