Milagros Salazar/IPS - Although analysts say the initiative will spark social conflict, the president argued that the small farmers have neither the training nor the economic resources needed to add value to their property.

The draft law states that only 50 percent plus one of the members of the communities would be needed to approve a sale or lease of land to private investors.

Currently, article 11 of the Private Investment Law states that the consent of two-thirds of the general assembly in indigenous villages is needed to sell or lease land owned by the community.

Defending his plans to foment investment in Peru, García dubbed those who criticise his initiative as "dogs in the manger", saying they are moved by the feeling that "if I can’t do it, nobody should."

"That means there are many resources going unused that cannot be sold, that are not receiving investment, and that are not generating work. And all of this because of the taboo of obsolete ways of thinking, and because of idleness and laziness," wrote the president, in one of two articles published on the issue in the Lima newspaper El Comercio.

Community owned land in the villages is "idle land, because the owner has neither the training nor the economic resources, which means it is owned merely in name. That same land sold in large plots would bring in technology," he argued.

"What García is trying to do is strengthen the capitalist model by making the legal framework for investors even more flexible," economist José de Echave of CooperAcción, a local non-governmental social development organisation, told IPS.

Until the administration of Alberto Fujimori (1990-2000), communally owned land in indigenous villages could not be sold or embargoed. But in the 1990s, the mechanism of the general assembly vote was created, to allow communities to sell or lease land to third parties, if approved by two-thirds of the members.

García’s announcement forms part of a strategy established by his government several months ago, when it set out the aim of drawing in 10 billion dollars in investment by the mining industry by the end of the president’s term in 2011.

But it is one thing for campesinos or peasants to sell off their land voluntarily, as the legitimate owners, and another for the president to call those who decide not to do so "dogs in the manger" who are seeking to block development, say critics.

"This will undoubtedly generate resistance and conflicts in the communities," said sociology Professor Sinesio López at the Pontificia Catholic University of Peru.

The highest profile case of conflict over land involves highlands communities in the northern region of Piura, which are fighting plans by the Minera Majaz mining company, owned by China’s Xiamen Zijin Tongguan Investment Development Co.

Local campesinos accuse the company, which was a subsidiary of the London-based Monterrico Metals until early this year, of usurping their land when it began to explore for copper and molybdenum in 2003 without obtaining approval from a two-thirds majority in the community general assembly.

On Nov. 23, criminal court Judge Rafael Romero in the province of Ayabaca launched a legal inquiry over the issue against the Majaz board of directors.

De Echave says that no development proposal is possible without the participation of local campesinos, who occupy 80 percent of the land in some regions.

According to recent estimates, indigenous people account for 45 percent of Peru’s 28 million people, with most of the rest of the population being of mixed-race (mestizo) heritage, and around 15 percent of European descent.

"The error is to design development projects from desks in Lima, without taking into account the complex reality of the rural areas, where the campesinos must be included," he said.

The president of the Confederation of Private Business Institutions, Jaime Cáceres, praised García for his El Comercio article.

"I believe it is a compelling article," he said, adding that "we have to applaud it because it lays out an agenda of specific issues and concrete proposals that involve not only action by the executive branch, but also by Congress" to bolster productivity.

The president defended his proposal to reduce the majority needed to obtain a green light for these operations in village assemblies, from two-thirds to fifty percent plus one vote.

He pointed out that in trade unions, when a vote is taken to go on strike, only a simple majority is needed, and asked "Why is that ok for them, but not for campesino communities?"

López, however, said the comparison is "absurd." In the case of indigenous villages, "not only collective rights must be considered, but also their cultural roots and traditional forms of organisation. The property rights of the poor must be respected, just as the rights of large corporations are," he said.

De Echave noted that while trade unions are associated with different productive sectors, there are deeper historical aspects linking campesino communities to the land that they have lived on for centuries.

Among the statements made by President García is that environmentalists have invented the existence of "uncontacted" indigenous peoples to block drilling for oil in the Amazon jungle.

They believe it is better, he argued, for the oil to remain "underground while the price has soared to 90 dollars per barrel. For them, it is preferable for Peru to continue importing oil, while it gets poorer and poorer."

García said the anti-capitalist communist of the 19th century, who took on the guise of "protectionist" in the 20th century, "is once again switching labels in the 21st century, and is now an ‘environmentalist.’ But still anti-capitalist, and opposed to investment."

In Peru’s Andean highlands, the area for which mining companies were granted permits by the government for mining operations grew 77 percent between 2002 and May 2007: from seven million to 13.2 million hectares, according to CooperAcción.

"Now it’s all about profit, while social questions are completely ignored," said López. "The president has forgotten about the environment. We hope that he will take up that issue in another article."

Economist Javier Zuñiga at the University of Lima said García’s analysis is "honest." He proposed, however, the creation of a new agency to oversee investment, in order to prevent conflicts with private firms, especially mining and oil companies.

"This agency would ensure that investors would not end up ‘eating up’ the land of farmers in the Andes or native communities in the jungle, because the state would be able to protect them. That way, the entry of companies would be controlled, based on respect for certain cultural, social and economic conditions," he told IPS.

García also questioned the model of small-scale agriculture, saying it only generates "a circle of poverty" and arguing for the promotion of medium-sized farms and middle-class farmers, who he said know how to obtain resources and search out markets.

But Jürgen Shuldt, an economist at the University of the Pacific, said the government has failed to adopt public policies that would help indigenous villages and native communities in the jungle to develop in their own ways.

"They are simply labelled as incapable," he complained. "And they are treated as they were during the colonial era, like a kind of small child, who they are trying to push farther and farther aside until they practically end up living at the top of the mountains."