Peru President Garcia sees run for a third term

LIMA, Nov 20 (Reuters) - Peruvian President Alan Garcia, a former leftist who has become a champion of free markets, said he wants to run for a third term.

Garcia, who led the country from 1985-1990 and then won the presidency for a second time in 2006 by narrowly defeating the ultranationalist Ollanta Humala, could run in 2016. The constitution bars him from running in the next race in 2011.

"Sure, I would like to be president of Peru for a third time," he told the El Comercio newspaper in an interview published on Thursday.

Garcia hosts a meeting in Lima this weekend of leaders of the 21-member Asia Pacific Economic Cooperation forum, or APEC, which includes the United States, China, Russia and Japan.

Peru hopes to attract foreign investment through its participation in APEC.

Garcia's first term, in the 1980s, was stained by hyperinflation, the spread of the Maoist Shining Path insurgency, and corruption.

After leaving Peru as a pariah, he returned from years in self-imposed exile to narrowly win the last presidential election, winning the support of the business community in a run-off against Humala, who spooked investors and who plans to run again in 2011.

"Peru is the battleground for two competing models," that pit mainstream economics and free markets against state-led development, populism and protectionism, he said.

Since taking office, Garcia has signed a free trade pact with the United States, lured billions of dollars in foreign investment to the country's vast mining sector, and supported the central bank's efforts to keep inflation under control.

But his popularity has fallen to 20 percent as critics say a seven-year economic boom has failed to trickle down to the poor in a country where 40 percent of the population lives in poverty. (Reporting by Terry Wade; Editing by Fiona Ortiz and Eric Beech)