Ollanta Humala is sworn in as new Peru president

Peru's new President Ollanta Humala is sworn in to office in Congress in Lima on 28 July. Ollanta Humala takes over a richer Peru but deep problems remain

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Former army officer Ollanta Humala has been sworn in as Peru's new president, vowing to eradicate poverty and social exclusion.

His inauguration was being attended by regional leaders, although not by outgoing President Alan Garcia.

Mr Humala defeated right-wing candidate Keiko Fujimori in June's second round.

Once a fiery nationalist, Mr Humala says his approach is now of the moderate left, modelled on Brazil's ex-president Luiz Inacio Lula da Silva.

Mr Garcia left the presidential palace, handing over the sash for his successor.

Breaking with tradition, he did not travel to Congress to attend the inauguration.

Mr Garcia had previously indicated he would not be present in order to avoid a repeat of 1990 when he was loudly booed when handing over to President Alberto Fujimori.

Then Peru was mired in hyperinflation and beset by a bloody leftist insurgency.

Mr Humala, 49, inherits a more prosperous Peru but faces a range of challenges.

In his first address as president, he vowed to keep existing free-market economic and trade policies intact, to provide a minimum pension for all Peruvians over 65 and to raise the minimum wage.

Humala's baptism of fire

In a ceremony attended by a dozen Latin American heads of state, Mr Humala paraphrased Nelson Mandela saying there could be no true democracy without real equality.

But he will face a baptism of fire as he tries to calm scores of conflicts over natural resources while trying to meet the demands of the extractive industries which are driving Peru's heady growth rate.

He has already vaulted one hurdle in appointing an investment-friendly and liberal cabinet.

He has called Brazil's former leader, Luiz Inacio Lula da Silva, an inspiration and perhaps in a nod to him, has appointed Susana Baca, a renowned black Peruvian singer as culture minister.

She will be the country's first black minister in almost 200 years of history.

"We want the term 'social exclusion' to disappear from our language and lives forever," Mr Humala said.

"Economic growth and social inclusion will march together."

Mr Humala campaigned on a pledge to increase the state's role in the economy and redistribute wealth to Peru's poor majority.

Strong performance

Economists Luis Miguel Castilla and Julio Velarde will be the new finance minister and central bank head respectively.

Sociologist Rafael Roncagliolo is to be foreign minister, while Afro-Peruvian music star and Grammy award-winner Susana Baca will be minister of culture.

Mr Humala indicated that he would seek to impose a windfall tax on the key mining sector to help raise revenue for social spending.

But with his party lacking a majority in Congress, he will need the support of other blocs to pass bills, including the mining tax.

Peru has been one of the top economic performers in Latin America in recent years, averaging annual growth of 7% during Mr Garcia's second term and with inflation held at under 3% a year.

People from Cuzco protest in Lima against irrigation plans on 6 July, 2011. Tensions over the use of Peru's natural resources have increased

But there has also been an increase in social tension and conflicts, especially over the exploitation of natural resources.

Protests, at times violent, have erupted over mining, logging and oil and gas extraction.

Another key issue facing Mr Humala is increased illegal drug production and trafficking.

Peru sees the US as a "strategic partner" in tackling this, Mr Humala has said.

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