One month on from a corruption scandal that forced the resignation of Peru's entire cabinet, the political crisis for President Alan Garcia continues unabated.
Peru has been convulsed by ongoing strikes and protests over the past year as the country's social movements and unions have mobilised against Garcia's pro-US and neoliberal policies.
In a bid to co-opt this growing radicalisation, Garcia appointed the governor of Lambayeque, Yehude Simon, prime minister on October 12.
Simon is a prominent leftist who spent nearly nine years in prison during the 1990s, charged with "apologising for terrorism" for being a member of the Patria Libre (Free Fatherland) organisation, which was alleged to be the political arm of the Tupac Amaru Revolutionary Movement (MRTA).
Polling firm Ipsos-Apoyo reported on October 28 that Garcia's popularity increased to 22%, up from 19% a month earlier.
"The key has been the sense of confidence that Simon receives from poorer sectors, as he transmits an image of integrity and concern for their problems", IA chief Alfredo Torres stated, according to the October 29 El Comercio.
Simon has shifted to right in more recent times, and as he continues to implement Garcia's neoliberal policies, any left credibility he has is likely to disappear.
La Republica reported on October 18 that in his first meeting with the General Confederation of Peruvian Workers (CGTP), Simon rejected the demands of the union federation. The CGTP, in the context of growing inflation and rising fuel and food costs, has been campaigning for a general wage increase and an end to the neoliberal model.
Simon argued that it is "too difficult to change the economic model" and that it was not possible to increase wages and pensions due to the "current political conjuncture".
Nearly 200 labour disputes were reported in Peru during October, including a three-week strike of health sector workers and an ongoing strike of university staff demanding increased wages and more funding for the education sector.
Discontent over the way Peru's mining taxes are distributed, simmering for months, reached boiling point in recent weeks as protests erupted in two major southern provinces, Moquegua and Tacna, over a new law to deal with the issue.
Thousands of protesters in Moquegua province took three police officers hostage and blocked a bridge on the Pan-American Highway on October 28 to demand that Congress give their province a bigger share of mining taxes.
Southern Copper operates the Cuajone mine and Ilo smelter in Moquegua and the Toquepala mine in Tacna.
Currently Moquegua, which has a population of 150,000, receives 20% of the taxes paid by Southern Copper to provinces, while 80% goes to Tacna with a population of 300,000.
Protests then broke out in Tacna on October 30 as Congress granted initial approval to a law granting Moqueqa 52% of Southern Copper's taxes. Thousands blockaded roads and cut water supplies.
Three people have been killed so far in clashes with police (including a baby who died of suspected asphyxiation as a result of teargas). More than 20 people were injured and 52 arrested over five days of protest as municipal buildings and the local office of Garcia's ruling APRA party were set on fire.
Peru's provinces have been calling for a greater share of mining taxes to fund basic services such as water, electricity and education. The unequal way taxes are distributed is felt hardest in the south, where poverty levels reach up to 75%.
This is compounded by the fact that under a series of contracts negotiated by the Alberto Fujimori regime in the late 1990s, and viewed as illegitimate by many Peruvians, 26 of the top 27 foreign mining companies pay no mining royalties whatsoever (although they pay other service taxes).
As part of his 2006 presidential election campaign, Garcia promised to renegotiate the contracts, but subsequently reneged — arguing it would damage Peru's attractiveness to foreign investors.
The response of Simon to the conflict was simply to declare a 60-day "state of emergency" in Tacna and send in the military to "restore public order" in the province on November 5.
On another front, indigenous communities in the south launched a five-day uprising on October 20, demanding the annulment of 38 decrees issued by Garcia that threaten their ancestral territorial rights and facilitate the privatisation of communal lands.
Two of the most controversial decrees had been overturned by Congress in August after nearly two weeks of mass mobilisations of indigenous communities in the Amazon.
Indigenous communities are also calling for the resignation of the government and for a constituent assembly to re-found the country and put an end to the neoliberal model.
In protests largely ignored by Peru's private media, indigenous communities blocked roads in 13 districts. On the fourth day, transport between the regional cities Cusco, Puno and Areqipa was completely paralysed and clashes between thousands of protesters and police left 75 injured.
Amid high tensions, negotiations between 32 indigenous representatives and the secretary of the Council of Ministers, Manuel Figueroa, Congressperson Oswaldo Luizer and representatives of the housing, agriculture, mines and energy ministries were initiated on October 25; however, no agreement was reached.
Left nationalist leader, Ollanta Humala (who was narrowly lost to Garcia in the 2006 presidential elections) has called for the implementation of nationalist economic measures to confront the country's crisis.
Humala told a meeting of diplomatic representatives of APEC member countries on October 27, that it is necessary to carry out tax reform (including increased taxes on the super-profits in the mining and energy sector), reintroduce the collection of tariffs and enforce environmental and labour regulations on companies.
Meanwhile, a national Peoples' Assembly convoked by the CGTP, together with other unions, political groups and social movements to unite grassroots opposition to Garcia's government, was scheduled to take place on November 8.
The CGPT has also called for mass mobilisations against outgoing US President George Bush, who is scheduled to visit Peru for the APEC Summit over November 21-23.
Simon in turn has attacked the plan, arguing that a protest against Bush would "embarrass" Peru.
As the country's political crisis escalates, Simon has called for a vote of confidence in the new cabinet, however as Green Left Weekly goes to press, only APRA and the Union for Peru (UPP) party have confirmed they will vote for the resolution.