Peruvian President Alan Garcia apologized to poor Peruvians for failing to improve their lives during his first year in office, and vowed renewed efforts against poverty.
Garcia, one of Washington's closest allies in Latin America, has presided over an economic boom driven by high world metal prices, but his popularity has slipped as the poor grow frustrated at being left out of the bonanza.
"I would have loved to do a lot more," Garcia said in his nationally broadcast state of the nation address to Congress, acknowledging that his government had not worked fast enough to help the poorest Peruvians.
"We apologize for this," Garcia said to thunderous applause.
He said increased public investment will "change the social face of Peru" by slashing the poverty rate to 30 percent from 44 percent now, and said the government would build housing for 1.2 million Peruvians by the time his term ends in 2011.
Garcia took office eager to redeem himself after a disastrous first government in the 1980s -- marked by radical populist rhetoric -- that left Peru mired in hyperinflation and nearly bankrupt.
Peru's economy grew 8 percent last year, the eighth consecutive year of expansion for the Andean nation of 27 million people, and Garcia has pushed forward with his market-friendly agenda.
But this month, peasant farmers, unionists and teachers took to the streets in sometimes violent demonstrations, blocking roads and closing airports to press for better distribution of wealth.
"In our situation of growth in the midst of great poverty, deep inequality and terrible distribution of wealth, a certain level of tension, protest and conflict is unavoidable," political analyst Gustavo Gorriti noted recently.
Resentment toward Garcia, 58, is most visible in rural highland regions such as Huancavelica, where nearly 90 percent are poor.
"They're not making us a priority," said Jorge Quinto Palomares, a regional government official. "The Huancavelica hospital is the only one in the region. The equipment is more than 50 years old."
The Indian and mestizo voters in the long-neglected highlands voted overwhelmingly for Garcia's populist opponent, Ollanta Humala, in a runoff in June last year.
Humala had promised radical redistribution of wealth, but Garcia deftly exploited voter fears about his opponent's ties with the current Venezuelan President Hugo Chavez while casting himself as the region's market-friendly alternative to Chavez.
Peruvians cheered when Garcia slashed the salaries of officials, including his own. His predecessor Alejandro Toledo was often criticized for his extravagant lifestyle.
But Garcia's honeymoon is clearly over.
A recent poll by Apoyo, Peru's top pollster, showed Garcia's popularity had dropped to just 32 percent this month from 63 percent last August.
"Economic growth is necessary, but not enough [by itself] to reduce poverty and inequality," Peruvian economist Humberto Campodonico said. "That is what the protests of Peru's poor, above all in the southern highlands, remind us of every day."