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DE RUEHPE #1229/01 0881941
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P 291941Z MAR 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 9475
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 3170
RUEHBR/AMEMBASSY BRASILIA PRIORITY 6613
RUEHCV/AMEMBASSY CARACAS PRIORITY 9234
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RUEHQT/AMEMBASSY QUITO PRIORITY 0169
RUEHSG/AMEMBASSY SANTIAGO PRIORITY 0342
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 4168
RHMFISS/CDR USSOUTHCOM MIAMI FL PRIORITY

C O N F I D E N T I A L LIMA 001229 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/29/2016 
TAGS: PGOV PINR PE
SUBJECT: LIMA MAYOR CASTENEDA,S UNUSUAL AND SUCCESSFUL 
APPROACH TO POLITICS 
 
Classified By: Ambassador Curt Struble for Reason 1.4 (B/D...

id: 58639
date: 3/29/2006 19:41
refid: 06LIMA1229
origin: Embassy Lima
classification: CONFIDENTIAL
destination: 
header:
VZCZCXYZ0019
PP RUEHWEB

DE RUEHPE #1229/01 0881941
ZNY CCCCC ZZH
P 291941Z MAR 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 9475
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 3170
RUEHBR/AMEMBASSY BRASILIA PRIORITY 6613
RUEHCV/AMEMBASSY CARACAS PRIORITY 9234
RUEHLP/AMEMBASSY LA PAZ MAR 3159
RUEHQT/AMEMBASSY QUITO PRIORITY 0169
RUEHSG/AMEMBASSY SANTIAGO PRIORITY 0342
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 4168
RHMFISS/CDR USSOUTHCOM MIAMI FL PRIORITY


----------------- header ends ----------------

C O N F I D E N T I A L LIMA 001229 

SIPDIS 

SIPDIS 

E.O. 12958: DECL: 03/29/2016 
TAGS: PGOV PINR PE
SUBJECT: LIMA MAYOR CASTENEDA,S UNUSUAL AND SUCCESSFUL 
APPROACH TO POLITICS 

Classified By: Ambassador Curt Struble for Reason 1.4 (B/D) 


¶1. (C) SUMMARY:  Lima Mayor Luis Casteneda has a unique 
political style that has built him political support among 
the lower middle class and poor.  He eschews vocal populism, 
letting his deeds speak for him, and approaches municipal 
governance in a manner more common to business than the 
public sector.  Castaneda won the affection of Lima's poor 
through public works (building nearly 1000 cement stairways 
up to marginal suburban settlements, erecting clinics, 
rehabilitating parks) and prioritizing transportation 
projects that help the poor.  Casteneda,s administration 
charges user,s fees for most of these programs.  This, 
coupled with more efficient tax collection, has balanced 
Lima's books after many years of deficits.  Although he 
bypassed the Presidential race this time, Castaneda is a 
driven man who aspires to the top office.  He expects to be 
the rallying point for the opposition if ultra-nationalist 
candidate Ollanta Humala wins the Presidency.  END SUMMARY. 

¶2. (SBU) On March 23 Lima Mayor Luis Casteneda Lossio invited 
Chiefs of Mission accredited to Peru to join him for a six 
hour tour of his public works initiatives.  The fact that 
nearly 30 of the 49 resident Ambassadors attended speaks to 
Casteneda,s standing as Peru,s most popular political 
leader.  (He regularly polls approval ratings in the 70 
percent range.)  Casteneda has a unique political style. 
Though a coalition ally of center-right Presidential 
candidate Lourdes Flores, Casteneda has built his political 
support at the opposite end of the social/economic spectrum 
-- among the lower middle class and poor.  He eschews the 
populist formula that so often characterizes candidates who 
pitch themselves to the poor; Casteneda seldom has much to 
say to the public, letting his deeds speak rather than words. 
 He has approached municipal governance in a manner more 
common to business than the public sector. 

¶3. (U) Casteneda, who will seek reelection in November 2006, 
has been in office for three years.  He ran a 
come-from-behind campaign based in Lima,s poor "conos" to 
defeat Alberto Andrade, who looked unbeatable at the onset of 
the 2002 race.  Casteneda is a native of Chiclayo in northern 
Peru where his father was a highly regarded mayor three 
decades ago.  He continues to have strong ties to the north 
coast, where two of his Solidaridad Nacional Congressional 
candidates won election in 2001.  Casteneda,s political 
success in Lima has been personal rather than institutional; 
Lourdes Flores Popular Christian Party (PPC), rather than 
Casteneda,s National Solidarity (SN) party, is still the 
more important element in the capital of their Unidad 
Nacional alliance. 

¶4. (U) Castaneda won the affection of Lima's poor in 2002 by 
building several hundred cement stairways up the sand dunes 
where the capital,s squatters live without access to roads, 
water, sewage or police services.  Since his election, 
Casteneda has pressed forward with the stairways, which he 
calls "the expressways of the poor," bringing their 
cumulative number to nearly 1000.  The positive impact of 
these routes, where thousands previously hauled water and 
fuel up several hundred vertical feet of loose sand, is hard 
to overstate.  The stairways are almost the only public 
works, however, for which Casteneda,s administration does 
not charge a user,s fee.  The mayor has: 

-- built 14 "solidarity hospitals" in marginal neighborhoods 
of Lima, converting shipping containers and retired buses 
into examination rooms.  These "hospitals" (they are actually 
more like clinics) are all self-financing though the basic 
charge for a non-specialized consultation is only USD 1.20. 
The Ambassadors visited the first solidarity hospital, which 
was opened just 5 months after Casteneda assumed office. 
That facility is staffed by private doctors and sees an 
average of 2500 patients per day.  Casteneda noted that most 
of the clientele could seek free treatment from the Social 
Security hospital system, but find that the transportation 
costs (not to mention lost time) in reaching those 
centralized facilities are as much as the fee for the service 
he provides. 

-- expanded and rehabilitated several parks.  The parks 
charge a basic admission of US 50 cents per person and 
additional fees for use of pools or other special facilities. 
 Most are built in C sector neighborhoods and offer the only 
recreation around.  As a result, they are well-used despite 
the cost.  Casteneda prides himself on the quality these 
facilities, saying that he aims to give the poor something 
that only members of private clubs previously could access. 
The Ambassadors visited two such parks and saw that the boast 
isn,t much of an overstatement. 

-- given priority to transportation projects that help the 
poor.  By July 2006 the city will have completed the first 
expressway (the Avenida Grau project) for the exclusive use 
of public transportation.  It will allow users of the city,s 
electric train, which has been extended by Casteneda, to 
reach center of Lima more quickly and cheaply.  One year 
later, the city expects to complete an underground bus 
station at Plaza Grau that will for the first time connect 
public transportation along expressways that run from the 
city,s extreme north to its extreme south.  The municipal 
government is working with bus owners to establish fixed 
routes and timetables so that commuters of modest means will 
know when they can get service.  (Buses presently operate in 
a completely haphazard way.)  By removing thousands of buses 
from crowded city streets, Casteneda hopes to ease traffic 
flow in Lima,s central district and attract new investment 
there. 

¶5. (U) Reversing more than a decade of persistent deficits in 
the city budget, Casteneda has both balanced Lima,s books 
and more than doubled its infrastructure expenditures.  He 
did this first by a relentless crackdown on property owners 
who were either evading or badly in arrears on taxes.  His 
first large investments were in toll road expressways. 
Having shown that the income stream on those projects more 
than covered costs, Casteneda was able to earn a local AAA 
rating for bond issues to reprofile high-interest debt and 
build more projects. 

¶6. (C) COMMENT:  Casteneda has broken the political mold in 
Peru.  While now well regarded by Lima,s privileged (who 
supported his opponent in 2002), his political base is among 
the C/D/E sectors.  Yet he does not approach these voters as 
his competitors do -- he rarely gives speeches and is averse 
to offering handouts.  Though greater Lima holds more than 
one-third of Peru,s voters, the mayor,s office has a lousy 
record of launching even its popular incumbents into the 
Presidency.  Casteneda decided this time around to stay out 
of the national race, reportedly because of a health problem 
(a painful bum leg) and because too many of his public works 
projects were still just holes in the ground.  He is a driven 
man, though, who certainly aspires for the top office.  In 
the meantime, he told the Ambassador that he expects to be 
the rallying point for the opposition if Humala wins the 
Presidency.  His credibility among the classes that also form 
Humala,s political base will favor him in that role, but a 
hostile national administration can also dull Casteneda,s 
record.  While Unidad Nacional has wavered between loyal and 
fierce opposition to Toledo, Casteneda has had a good 
relationship with the President, who has provided a lot of 
financial backing to the mayor,s grander public 
transportation projects.  END COMMENT. 
STRUBLE 

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