Peru declares state of emergency over strikes

UNPOPULAR President Alejandro Toledo has declared a state of emergency across Peru, promising to send out the armed forces to help rein in a wave of violent strikes that has crippled transit and public services in a new challenge to a stormy presidency.

"We have decided to declare a national state of emergency for 30 days so that people can exercise their personal liberties and travel freely," Toledo said in a televised address.

"The country cannot be shut down. Democracy with order and without authority is not democracy," said Toledo, elected in 2001 on promises he would restore transparency and true democracy to Peru following the corrupt, authoritarian regime of ex-president Alberto Fujimori.

But the US-educated leader's presidency has been far from rosy as social unrest mounts from poor Peruvians who complain he has not delivered on campaign promises.

Toledo's approval rating is now standing at an all-time low of just 14%.

This week, thousands of farmers and health workers joined teachers who have taken to the streets, marching angrily through the capital, occupying state buildings in provincial cities, stranding passenger buses and trucks loaded with food as they block key highways with rocks and burning tyres.

Millions of children have been barred from classrooms for more than two weeks, while patients stayed away from state hospitals as the strikes, which seek a raft of demands such as salary hikes and tax cuts for farm goods, drag on.

Toledo also said he would send out armed forces and police to resume order and would reopen schools shut by striking teachers, who are asking for a raise of $60 to their average monthly wage of $200.

But the government, which hails headline growth that has made Peru the fastest growing economy in Latin America, says it does not have the cash to meet that and other demands without endangering International Monetary Fund-endorsed pledges of fiscal discipline. It has offered teachers 100 soles ($29).

"If the government doesn't change its policy of kneeling down before the IMF if it does not look the Peruvian people in the face it's going to have to go," said Jorge Vargas, a high school teacher from the northern city of Chimbote, part of a crowd of hundreds of teachers protesting outside congress.

Following Toledo's address, legislator Luis Iberico, part of the Toledo-friendly party FIM, said that the teachers' strike would be declared illegal.

Mauricio Mulder, a leading lawmaker for top opposition party APRA, said: "I don't understand why the government is now throwing in the towel."

This is the second time Toledo has declared a state of emergency. He made the same decree in June 2002, but that measure was limited to the southern city of Arequipa amid fatal protests against the privatisation of two power firms.

Peru's biggest umbrella union, CGTP, said this week it was considering calling a massive general strike in July against market-friendly economic policy.

Some analysts have warned that Peru, which is seen as wedded to an IMF-endorsed fiscal plan, must tread carefully if it is to avoid scaring off desperately needed foreign investment with strikes and protests.

But others say that Peru is a safe haven among Latin American countries, like Colombia, Argentina and Venezuela, which face more serious violence and economic woes.

Even officials admit that despite a strong economy, people have yet to feel growth where it counts in their wallets.