With Humala presidency, fears of Brazilian commercial hegemony threatening Peru

By Associated Press
LIMA, Peru -- The towering statue of Jesus on a cliff overlooking the Pacific looks, at first glance, eerily like Rio de Janeiro's majestic Christ the Redeemer, a famed icon of Brazil on the Atlantic side of the continent. The resemblance is not accidental.

To many Peruvians, the new statue that rises 118 feet (36 meters) has become a potent symbol of Brazil's growing commercial and political influence in this Andean nation and across South America.

It was sculpted and assembled in Brazil and its $1 million cost footed almost entirely by the Brazilian construction conglomerate Odebrecht.

Outgoing President Alan Garcia had the "Christ of the Pacific" erected without any public consultation, and its appearance coincides with rapidly accelerating Brazilian investment in Peru, though the U.S. and Spain still invest far more.

"I have nightmares in which I see that Peru's president is Odebrecht and all we do every five years is elect its representative," tweeted Peruvian playwright Cesar de Maria.

The statue's inauguration on June 29 came a month before the scheduled swearing-in of President-elect Ollanta Humala, who also has built close ties with the behemoth on Peru's eastern border.

Humala had two Brazilian campaign advisors who were affiliated with that nation's governing Workers Party. His first trip abroad after his June 5 election was to visit Brazilian President Dilma Rousseff and her predecessor, Luiz Inacio Lula da Silva.

Humala went to Brazil four times during his campaign and expressed deep admiration for Silva, calling his model of fighting poverty while defending free markets "the only one with wind filling its sails."

While many Peruvians, including Lima Mayor Susana Villaran, deemed the donated Christ statute a tasteless and unwelcome imposition, Humala tactfully said "it would improve the Lima panorama."

Odebrecht said in response to an Associated Press query that it funded the statue because it "contributes to the diffusion of artistic expression" wherever it does business and because the statue should boost tourism earnings for the poor who live in its vicinity.

Humala has told fellow Peruvians to prepare themselves for more Brazilian investment because the Portuguese-speaking neighbor is "a strategic partner that wants an outlet to the Pacific" for its Asian trade so it can rely less on the Panama Canal and the Strait of Magellan at South America's southern tip.

That has heightened local concerns that Brazilian interests could trump Peruvian priorities, particularly because of Brazil's prodigious demand for hydroelectric power.

"Nothing comes free in business and I hope Humala doesn't let his government be influenced by the Brazilians, who are the true giants in Latin American business," said Santiago Brito, a business student at Lima's Catholic University.

Peru has already seen many of its top corporations bought up by its commercially muscular neighbor. Chilean companies have been involved as well, buying Peru's biggest airline as well as leading supermarket and department store chains over the past decade.

Last year, Brazilian direct investment in Peru was $1 billion, more than double the previous year's figure. The Peru-Brazil Chamber of Commerce estimates it will reach $32 billion in 2016.

Brazil's commercial might has expanded greatly under Garcia and his predecessor, Alejandro Toledo.

Major Brazilian projects in Peru include Odebrecht's nearly complete Interoceanic Highway, which will help ship Brazilian exports to China via Peruvian ports, as well as an irrigation canal system it is building in Peru's north and the elevated rail concrete trestle for Lima's first electric train line.

Brazil's Votorantim Metais has purchased zinc mines and related metals refineries, including Peru's largest, Cajamarquilla, and it produces indium, which is used in flatscreen TVs and computer monitors. Its Vale do Rio Doce mines phosphates in South America's largest deposits. They are used in fertilizer sold around the globe .

Another Brazilian company, Gerdau, bought Peru's biggest steel plant in 2006 and announced plans to sink $120 million into it over the next three years. Its owner, Jorge Gerdau, is a friend of Silva and adviser to Rousseff.

Brazil's push into neighboring nations has been led by its flagship companies: the state-run Petrobras oil company; Vale, the world's top producer of iron ore; steel maker Gerdau, and Odebrecht. Analysts say the companies' aggressiveness is part of a government effort, often financed by Brazil's National Development Bank via below-market loans, to create strong Brazilian multinationals.

The president of the Brazil-Peru Chamber of Commerce, Miguel Vega, says key investments during Humala's term are expected to go into digital television, railways and energy, led by a proposed 1,000-kilometer natural gas pipeline that is to connect the Camisea field with a pair of southern copper mines and a petrochemical plant proposed by Petrobras and Odebrecht.

Brazil's commercial counselor at the country's Lima embassy, Cesar Bonamigo, said increased Brazilian investments in Peru "will depend on the success of certain specific projects like the Southern Andean Gas Pipeline or the petrochemical complex."

Brazil had 91 blackouts last year, due largely to the power grid's inability to meet demand, so it is especially keen on five proposed hydroelectric projects in Peru. That might allow Brazil to stop importing diesel fuel to produce electrical power.

One project in particular has generated major local opposition, and concern that Humala might unduly favor the Brazilians, because 80 percent of its 2,000 megawatt output would go to Brazil.

The dam on Peru's Inambari river would flood 158 square miles (410 square kilometers) of rain forest, including a 60-mile (100-kilometer) stretch of the Interoceanic highway, and would displace some 7,000 people, many of them artisanal gold miners.

Humala has told locals he will respect their wishes in deciding whether to proceed with the project, and the current government put a hold on the $4 billion effort by two Brazilian companies, including the utility Electrobras, effectively punting a final decision to its successor.

Brazil can be expected to heap on pressure for Inambari. Rousseff's top foreign policy adviser, Marco Aurelio Garcia, told reporters during Humala's visit that it is "a very important project" for Brazil.

Outgoing Brazilian ambassador Jorge Taunay has discouraged fears that Brazil has neocolonial ambitions, telling Caretas newsmagazine "there is not the least risk of Peru becoming a satellite. It's not in Brazil's nature."

One Peruvian alarmed by the potential implications of Brazil's commercial designs is Guillermo Vasquez, a retired professor at Peru's Center for Advanced National Studies, the country's top defense university.

"Brazil is looking to convert itself into a great world power and it's going to get there. To do that it needs to get to the Pacific, the ocean that has replaced the Atlantic's former influence," he said. Peru is Brazil's most direct land route to that sea.

"Brazil is coming," Vasquez added. "What are we going to do about it?"
AP Writers Frank Bajak in Lima and Bradley Brooks in Sao Paulo, Brazil, contributed to this report.