Peruvian workers, farmers march against Garcia

By Jean Luis Arce

LIMA (Reuters) - Thousands of Peruvians protested on Wednesday to denounce President Alan Garcia's free-market policies, which they say have failed to benefit the poor during six years of booming economic growth.

Protesters waving red banners put up road blocks on highways in regions including Ica, Puno and Cuzco, snarling traffic and closing rail service to the Inca ruins at Machu Picchu, Peru's top tourist destination, police and radio said.

Marchers in the capital Lima carried signs urging Garcia to quit and calling him "right-wing" and a "traitor."

The rallies, which coincided with a two-day farmers' strike that started on Tuesday, were the latest in a series of protests held to demand the government do more to spread the Andean country's new wealth to workers and the poor. Investors worry a high national poverty rate of 40 percent could pave the way for a leftist leader to win the presidency in 2011 and reverse the pro-business programs of Garcia.

"This is a government of the rich and of multinational corporations," said Mario Huaman, the leader of Peru's largest labor confederation. "The economic model must change."

Unions called the one-day general strike that included transportation, textile and energy workers in cities across Peru. Employees of public hospitals, teachers at public universities, and students also joined rallies.

The unions said the strike was a success, but the Labor Ministry said it was a failure as 98 percent of employees reported for work nationwide.

Peru has seen dozens of protests recently, and more are likely unless the government can calm voters' concerns.

"There are going to be more protests, which will be a problem, but not so great as to threaten political stability," said Fernando Rospigliosi, a former interior minister and critic of Garcia.

'NOT ENOUGH TO LIVE ON'

Left-wing parties supported the walkout, backed in part by ultranationalist leader Ollanta Humala, who nearly won the presidency in 2006 and is planning to run again.

Garcia, whose approval rating is 30 percent, has said free trade will help lift incomes. The poverty rate has fallen since he took office two years ago, but it remains stubbornly high in rural areas at 65 percent, three times the rate in Lima.

The president has also said protests could scare foreign investors, who he believes have helped transform Peru, which grew 9 percent last year, one of the world's fastest paces.

He blamed high international food and fuel prices for causing frustration among Peruvians, and said the government was doing everything it could to keep inflation under control.

"Protesting and strikes won't improve the economic situation or growth," Garcia told reporters.