LIMA Peru's President Ollanta Humala said on Sunday he thinks Vice President Omar Chehade should consider resigning over corruption allegations, but that he would wait for inquiries to conclude before deciding his fate.
The allegations against Chehade, one of Peru's two vice presidents, have caused the first political scandal of Humala's administration and threatened his high approval ratings.
Humala, a leftist former military officer who spoke on state television about the first 100 days of his term, campaigned on promises to spread the wealth from the country's decade-long economic boom to the poor, respect private investors, and fight corruption.
The attorney general and Congress are investigating allegations that Chehade asked a police general to help his brother evict workers from a cooperative sugar plantation to help a company that wants to take it over.
"We'll let the ethics commission in Congress resolve this," Humala said. "Personally, I think it would do good for him to step down, but this should come from him. I think doing so would better allow him to defend himself, not just in front of Congress but also the attorney general."
Asked if he had directly asked Chehade to quit, Humala said: "No, I'm not asking for him to resign. I think it would be convenient for him to do so and it's a decision he should arrive at on his own."
Chehade, a lawyer, has denied any wrongdoing.
Humala, who has pleased investors by governing from the center and keeping pro-market economic policies intact, has an approval rating higher than 60 percent, making him the most popular Peruvian leader in two decades.
He is trying to make sure the country's growing wealth benefits the one third of Peruvians still mired in poverty by expanding social programs, introducing a minimum monthly pension for poor senior citizens, and charging higher taxes and royalties on companies in the vast mining sector.
INVESTMENTS, CONGA MINE
Humala, who has never held elected office before, also said he would work to make sure U.S.-based Newmont Mining Corp can move ahead with its $4.8 billion Conga gold mine, which community groups have protested against because they fear it would displace a string of alpine lakes.
The mine would be the biggest investment in Peruvian mining history and the government has been trying to mediate the dispute for the last week so that the project can be built.
Community groups denounced the project last week even though its environmental impact study was approved by the government a year ago.
"We are going to respect what was agreed to. If there's some misunderstanding we'll have to resolve it," Humala said.
He said the economy was being managed prudently, with low inflation and a fiscal surplus. The government was ready to respond with a stimulus package and extra financing if the global economy worsened or commodities prices for Peru's mineral exports were to fall, he said.
"We are taking all necessary measures so that in case the crisis hits here we'll come out healthy," he said.
Peru's economy is forecast to grow around 6.5 percent this year after expanding nearly 9 percent last year.
"We are also promoting private investment. The idea is that investors who are looking for markets and don't know where to put their money see Peru as a land of opportunity."
(Reporting by Marco Aquino and Terry Wade; editing by Christopher Wilson)