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Challenges Grow for Peruvian President

Peru's freely elected President Alejandro Toledo is ending his first year in office very differently than he started out. After being perceived by many impoverished Peruvians as a possible savior, Mr. Toledo recently had to change much of his cabinet following violent protests over privatization plans. Challenges for his second year in power seem greater than when he started out.

President Toledo was acclaimed at his inauguration in July last year when he promised to work for the country's poor. Peru's first president of Andean Indian descent took power after 10 years of authoritarian rule and more than a decade without any real economic progress. He promised to lift impoverished masses from a cycle of underdevelopment.

Sounds from Peru have since taken a different tone. Demonstrators took to the streets of the city of Arequipa last month to protest against privatization plans of state electricity companies. Mr. Toledo's domestic approval rating sank to below 20 percent.

Last week, he fired his two main market-friendly cabinet ministers, replacing them with political veterans. Several other ministers were also let go. The new cabinet team said it was putting on hold further privatization plans.

Mr. Toledo called the cabinet overhaul "the first step" in a new phase of democracy to mark his second year in power.

Peruvian analyst John Crabtree is skeptical. "It's not clear what it's a first step towards," he said. "I think it's a first step towards broadening the base of the cabinet and I think in that sense it's a move to be welcome but at the same time it doesn't resolve some of the internal and basic contradictions which face the government. On the one hand it needs to attract support internationally; on the other hand it needs to build support domestically. So I don't think it will really resolve the basic sort of schizophrenia which the government suffered during its first year."

Another analyst Gerardo Le Chevallier from the National Democratic Institute for International Affairs says he will be watching closely when Peru's political class and civil society comes together next week to sign a so-called national accord.

The document known as the "Acuerdo Nacional" is a broad blueprint for Peru's future democratic and economic reform.

"I think the signature of the "Acuerdo Nacional" the national agreement this next Monday is a very positive sign. Let's hope that this can bring a political truce among the political actors and that this can contribute with long term planning,", said Mr. Le Chevallier. "It is key for democracy in the continent and generally in the world to produce some results and I hope for the sake of the Peruvians that Mr. Toledo with the support of the opposition can achieve some of these results."

One constitutional change some Peruvian activists would like to see is a return to a bicameral parliament. Meanwhile, residents in the country's second largest city of Arequipa who fought running street battles with police last month don't want to pay more for electricity. On another economic front, a poll released this week says job prospects are worse than last year when Mr. Toledo took office.

A recent editorial in a Lima newspaper says Peruvians don't perceive leadership on Mr. Toledo's part. The editorial says that behind the promises, there may no genuine will to go anywhere, but to keep things as they are.