Peru to vote in regional polls on Nov. 17

LIMA, Peru, March 15 (Reuters) - Peru's president has set elections on Nov. 17 for regional authorities, which will control their own budgets, in the country's most ambitious drive toward devolving power to its underdeveloped regions. 

"I have the enormous privilege of realizing one of my dreams, which I know is also that of the men and women of the provinces, to call elections for Nov. 17," President Alejandro Toledo told a ceremony in government palace late on Thursday. 

The measure, which became law on Friday when it was published in the official gazette, said elections in Peru's 24 departments and one constitutional province would be held every four years to elect regional presidents, vice-presidents and council members. 

Peru currently has non-elected regional bodies which will be replaced by the new elected councils. 

Toledo's government, which took office last July, has pledged to kick-start the struggling economy of this poor Andean nation, where more than half of whose people live on $1.25 a day or less. 

He has also promised to devolve power from the capital, Lima, the source of 53 percent of Peru's gross domestic product. 

Lima is also home to 46 percent of the working population and 62 percent of the country's business. According to official data, 86 percent of government income is collected in Lima, which also counts 83 percent of commercial bank loans and 82 percent of bank deposits. 

Peru's broad geography ranges from a desert running down the Pacific Ocean to Amazon jungles and Andean peaks. Some highland and jungle areas are almost totally isolated from the capital, and desperately poor. 

A smaller-scale decentralization plan was implemented in the late 1980s under President Alan Garcia, but his successor, Alberto Fujimori, tightened Lima's grip on the country. Fujimori is in self-exile in Japan being fired amid a corruption scandal in 2000. 

"This will no longer be a plan worked out just in Lima. It will include the specific features of each department, since each one will have its own development program," Toledo said. 

"I'm committing myself to decentralizing the budget for the regional governments," he added. 

Some analysts fear decentralization in Peru will lead regional authorities to speed up public works and rack up debt -- a factor that contributed to Argentina's economic downfall. 

Latin America's third largest economy crashed into the world's biggest debt default, sparking political crisis, sharp devaluation and widespread misery. 

But a senior legislator, Henry Pease, said that would not happen in Peru because regional authorities would still need the state's green light to seek outside funds. 

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