Peru candidates say boom must be more inclusive

* Presidential candidates voice support for economic model

* Business leaders dismiss risk of a radical winning race

URUBAMBA, Peru, Nov 14 (Reuters) - Frontrunners in Peru’s presidential race told business leaders this weekend they would keep key economic policies intact if elected, but said development must be more inclusive to avoid social conflicts.

Industry leaders addressed by the candidates at an annual retreat known as Cade also dismissed concerns that a radical could win the election in April and undo policies that have made Peru one of the world’s fastest-growing economies.

“This was the fear in the last election. I don’t think this fear exists any longer,” said Ricardo Briceno, the head of Confiep, the country’s largest business chamber.

Four of the five main candidates clearly support mainstream economic policies. Candidate Ollanta Humala, who almost won the 2006 race but lags in polls, struck a more moderate tone to woo voters turned off by his brand of left-wing nationalism. [ID:nRISKSPE]

On Saturday he moved to distance himself from one of his longtime political allies: socialist Venezuelan President Hugo Chavez.

“We aren’t going to hand over the country to anybody. We aren’t going to be like the government of Chavez in Venezuela. We don’t believe in permanent re-election,” said Humala, 47.

A former military officer, Humala said he would not take over any companies, but said he believes in a “strong state” capable of being a tough regulator in the energy and telecommunications sectors.

Growth this year is expected to top 8 percent and the economy has surged for much of the past decade on policies that emphasize low inflation, free trade, foreign investment and fiscal discipline. In recent months, surging domestic demand has replaced mining as the engine of growth.

The poverty rate, while still high, has fallen from about 50 percent to around 34 percent. But President Alan Garcia’s administration has been by subjected to frequent protests over big mining and oil projects, with poor people in small towns demanding concrete benefits from large projects. Under term limits, Garcia cannot run for re-election.

“The challenge now is to balance growth with social objectives,” said Keiko Fujimori, 35, a popular conservative lawmaker. She has a narrow lead in the race over former Lima Mayor Luis Castaneda, but she may struggle to gain broader support because her father, former President Alberto Fujimori, is in jail for human rights crimes.

Castaneda, representing the tiny National Solidarity party, has been dogged by cost overruns on public works projects. But he is known as a pragmatist and has good relations with the local business community.

“I’m not content with ties or losses -- only triumphs. We have what it takes to confront Peru’s problems, we can’t fear adversity,” Castaneda, 65, said in a speech in which sought to cast himself as a statesman.

Two more candidates officially entered the race recently: former Finance Minister Mercedes Araoz, who plans to represent Garcia’s ruling APRA party; and former President Alejandro Toledo, who is running third in polls.

Araoz spoke at Cade as an economist, not a candidate. While in Garcia’s Cabinet, she worked to forge free-trade deals and keep the country’s fiscal house in order. She has spoken out in favor of gay marriage and has progressive views on abortion, stances that could hurt her in Peru, an overwhelmingly Roman Catholic country.

Toledo, who governed from 2001 to 2006, has said Garcia should have done a better job spreading the wealth from the country’s boom.

“I would offer stability and consolidate growth in the next five years,” said Toledo, 64. “(But) economic growth can’t be successful without social inclusion.” (Writing by Terry Wade, editing by Stacey Joyce)