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Memorandum to the Press
03.06
For Immediate Release
Monday, February 24, 2003
Washington Pressure on Drugs Jeopardizes Survival of Battered Bolivian President
1. President Sanchez de Lozada about to announce expansion of “legal” coca crop
2. Political stability sometimes comes before drug eradication
3. The heavy price of U.S. intervention
4. Bolivia’s civil society becoming increasingly potent
5. Viability of Sanchez de Lozada presidency at stake
The administration of Gonzalo Sanchez de Lozada is balanced on a knife’s edge, as after less than seven months into his
presidency, violent protests, calls for his resignation, and rumors of coup plots have been circling through the streets
of La Paz, Bolivia’s capital. Tension has been gathering in the country since the beginning of the year when a widening
throng of voices from all walks of life began calling on the Bolivian leader to reform or resign. But, in reality,
Sanchez de Lozada’s fate will be as much determined in Washington as La Paz, as the Bush administration decides whether
Bolivian national interests are as important to respect as its own.
Among those who have been challenging Sanchez de Lozada’s competency has been cocalero leader and congressman, Evo
Morales, who narrowly lost to him in the presidential runoff last August. That race took place against the backdrop of
the direct intervention of then-U.S. ambassador to Bolivia, Manuel Rocha, who threatened more than once, publicly as
well as privately, to cut off all U.S. aid to the impoverished nation if Morales won the election. The citizenry was so
deeply offended by Rocha’s ill-advised statements that it almost cost Sanchez de Lozada his victory. Morales leads the
Chapare-based union of coca-growers, and was calling upon the government to increase the amount of legal coca leaves
which can be grown in Bolivia, and which traditionally have been consumed for generations by many Bolivians through
being chewed as an appetite suppressant, a preventative for altitude sickness and a mild stimulant. In order to have
their demands met, the cocaleros (the cultivators of the folkloric coca plant), launched a war of economic sabotage
against the government, centering on closing down the main Santa Cruz–Cochabamba highway to all commercial traffic while
surrounding the government’s coca eradication camps.
Several days ago, Sanchez de Lozada suspended a tax program, which he had introduced on the advice of the IMF; that
program had resulted in a score of rioting Bolivians and security forces being gunned down by an army unit. Weeks
before, the Bolivian president also suspended the fumigation of drugs in the Chapare after several cocalero advocates
had been killed and others detained.
La Paz’s Many Enemies
Morales and the cocaleros have not been alone in their vilification of the government, however. Various other sectors of
society, such as Bolivia’s retired community, the peasant farmers union and the COB, the country’s largest labor union,
have not only been staging their own series of protests and work stoppages against the government, but increasingly, are
working collectively to meet their respective goals.
Can Sanchez de Lozada Hold On
As the weeks went by, the Sanchez de Lozada government added to the nation’s discontent with controversial tax
increases; as a result, a dangerously explosive level of confrontation increasingly appeared on the streets of La Paz.
Earlier this month, the capital hovered at the precipice of lawlessness when local police took arms against the
government to protest unpaid wages and a rescinded promise of a forty percent salary increase. This became a catalyst
for spirited demonstrations, protests, riots, acts of vandalism and violence throughout the nation’s capital. The
firestorm reached its climax when unidentified snipers positioned on several La Paz rooftops opened fire on protesters
who were throwing rocks at the presidential palace, reportedly killing 17 civilians, soldiers and police officers.
Sanchez de Lozada himself was smuggled out of the palace in a bullet-proof ambulance as chaos erupted on his doorstep.
Faced with these acts of civil disobedience, Sanchez de Lozada has been forced to mollify his opponents by rescinding
the taxation measures which he had only recently put into place, and agreeing to a temporary halt in the fumigation of
the nation’s coca crops. While he had shown some willingness to review the nation’s coca policy – which indeed he had
promised to do in his presidential campaign platform – the recent mass resignation of his cabinet put all negotiations
on hold.
Recently, Undersecretary of Social Defense, Ernesto Justiniano, has indicated that the present legal crop of coca, grown
on 30,000 acres, will now be expanded to 45,000. Each cocalero family will be permitted, during a six-month period, to
grow an additional catu (one fifth of an acre). Justiniano told Knight Ridder this past week that he believes that many
farmers will be content with growing a limited amount of legal coca and therefore will be less likely to grow larger
amounts of the crop for illicit purposes. The Bolivian minister also believes that the new initiative would give the
government greater control over what is currently an illicit industry. The U.S. is very much against this expanded
acreage being set aside for additional cultivation.
For Sanchez de Lozada, the current crisis will be the ultimate test of his presidency. Except for the ill-reputed former
Bolivian President Jaime Paz Zamora, whom Clinton administration officials had accused of receiving drug payoffs, and
who had developed into an uninhibited deal-maker, Sanchez de Lozada is a completely isolated politician whose very
survival is now being openly discussed as unlikely.
The Coca Protests
One of the major stimulants of Sanchez de Lozada’s political troubles has been his chronic inability to form an
effective agreement with Evo Morales and the protesting cocalero movement. This group is vehemently opposed to the
forceful implementation of U.S.-imposed coca eradication programs, which they maintain is the cause of widespread
poverty, suffering and human rights abuses throughout Bolivia. Within the past six years, the U.S. has spent upwards of
$1.3 billion on a remarkably successful, if harshly applied, drug eradication program. This program has, however, gone
hand in hand with military aid programs providing for a significant role for the country’s armed forces, which has led
to violent clashes and unrest.
The cocaleros are not against limiting or temporarily halting coca production, provided that a study be undertaken to
establish the traditional level of production of the plant, which once again would become the norm if the experiment
spells out the need for augmented production.
Morales’s adamant support of the legalization of augmented coca leaf cultivation stems from the fact that the chief
cultivators of the crop are indigenous peasants, who have few other options available to sustain their livelihood and
preserve their communities. Also of importance is that the crop has been an integral part of their society and culture
for centuries. Although coca has been demonized and heavily affected by the fumigation and eradication practices of the
U.S.-backed local anti-narcotics unit – at whose hands more than 170,000 acres of coca have been destroyed since the
late 1990’s – U.S. aid policies and Andean free trade proposals have yet to provide viable alternative agricultural
crops that could provide an income for former cocaleroswho voluntarily decide to give up their coca plantings.
Alternative Crops: A Failure
Morales’ group maintains that alternative development projects aimed at offering disenfranchised former coca growers a
means of income through the cultivation of substitute crops such as pineapple, citrus and timber, are poorly
conceptualized and provide no real substitute means of income for peasant farmers forced to implement them. As a result,
much of the land diverted from coca production to alternative agricultural crops and products has since slipped back to
being used in the cultivation of the illicit crop, as campesinos found themselves unable to eke out a living from the
new regimen.
The demands of the cocalerosare simple: the demilitarization of the Chapare and an increase in the current limit of
30,000 acres of legal coca cultivation for medicinal and traditional purposes. This would satisfy what they say is an
underserved domestic market. The U.S., on the other hand, is on record opposing these measures, insisting that any
increase in Bolivian coca cultivation can only mean one thing – more cocaine on the streets of America. A vocal advocate
of reviving Bolivia's historically bountiful coca leaf industry, Morales has seen his agenda widen in recent months. He
wants to end two decades of free-market reforms in order to rid Bolivia of external influence, like that of the U.S.
embassy whose often raucous voice is regarded by many Bolivians as an intolerable infringement upon the country’s
sovereignty. The cocalerosmay be jeopardizing their chances of obtaining their primary concessions, by adding the
somewhat extraneous demands: that Bolivian authorities must agree not to sign the proposed Free Trade Area of the
Americas agreement with the U.S. and that Sanchez de Lozada must resign. While these latter demands may appear
legitimate to the cocaleros, they endanger their cause by spelling out priorities that no government could easily
accept.
Since 2001, the high level of internal militarization, the poverty inflicted by forced eradication efforts, and a lack
of viable alternative development projects have fostered growing despair in the Chapare, one of Bolivia’s predominant
coca-growing regions, where about half of the nation’s production takes place. Alienated, malnourished and
poverty-stricken former cocaleros began surrounding eradication camps, obstructing the work of officials fumigating
crops and periodically blockading the Santa Cruz–Cochabamba highway, one of the main economic arteries of the country.
Relatively peaceful protests soon turned violent; in one such incident on December 6, 2001, local cocaleroleader,
Casimiro Huanco was killed by security forces as he and his fellow protestors were peacefully stacking rotting, unsold
alternative fruits by the roadside. Security forces suffered their own casualties as well. Booby traps were discovered
in areas staked out for eradication, and unidentified snipers fired upon anti-drug personnel. Ironically, it appears
that strong-arm tactics being employed by Bolivian authorities on the advice of U.S. officials may well be precipitating
the very conditions that Washington wishes to avoid: armed and organized resistance to coca-eradication efforts on the
part of the cocaleros.
Forced Eradication Brings Abuses
Negotiations between concession-minded opposing factions were initiated in November 2001, but quickly collapsed as the
U.S. began increasing pressure on Bolivian authorities to continue their previous eradication efforts, if need be by
force. Washington and cooperating Bolivian authorities wanted to achieve dramatic eradication results by the January,
2002 drug certification date, upon which future U.S. aid would be based. At this point, the State Department seemed less
concerned with complying with its own Leahy Amendment, which links the release of U.S. military aid to human rights
certification, than in producing solid eradication results. Despite widespread and well-documented evidence of human
rights abuses occurring almost daily in the Chapare (including a number of violent deaths and the arbitrary detention of
scores of suspects), one international rights group noted that U.S. officials were inclined to “dismiss or downplay
abuses by U.S.-supported counternarcotics forces,” and almost always fell back to citing the Bolivian authorities’
version of controversial events, however tendentious, when challenged.
As a result of Washington’s pressure, the Bolivian government stepped up the eradication process in time to get the
sought-after enthusiastic rating in the annual release of the U.S. certification findings. But the price for this was
increased tensions in the Chapare. Thankfully, however, a truce followed at that time. On February 9, 2002, La Paz
signed an agreement with cocalero groups, rescinding its executive orders, which had criminalized the use of coca even
for traditional and medicinal purposes. Despite U.S. protests that the then-Quiroga administration was being overly
“sensitive” to its domestic troubles, a relatively peaceful period ensued, during which time the full extent of public
support for the struggle of the cocaleros became more evident.
The Heat is on Sanchez de Lozada
The new government of Gonzalo Sanchez de Lozada has come under renewed pressure from U.S. officials to meet ambitious
drug eradication goals. As a result, local authorities have reinvigorated their efforts and tensions once again
resurfaced in the Chapare. Blockades were again set up along major cross–country highways beginning on January 14 of
this year, once more shutting down the Santa Cruz–Cochabamba highway. The AP reported that this blockade alone cost the
nation $80 million in lost trade during the period that it was in effect. Subsequent clashes between protestors and
security forces continued to claim lives. This time, however, the cocaleros gained the influential support and
solidarity of peasant leader, Felipe Quispe. His group, as well as Bolivia’s Organization of Retired Personnel,
indigenous groups, and other sectors of society who see themselves as being deprived by the system, have been staging
their own series of independent protests and strikes.
The White House has remained steadfastly opposed to any concessions which Sanchez de Lozada might be inclined to make in
order to diffuse the recent unrest, as well as live up to his campaign promise of reviewing the nation’s coca policy.
Washington’s new ambassador to Bolivia, David Greenlee, recently stated that the U.S. strongly opposes any increase in
cultivation for any means, and reiterated the barely veiled threat of his predecessor, Rocha, that U.S. aid and also,
perhaps, Bolivia’s inclusion in the proposed Free Trade Area of the Americas, remains contingent on absolute cooperation
with the U.S. goal of “zero coca.” A U.S. official told the AP: “Any proposal that would legitimize or legalize any coca
in the Chapare – which is illegal – would be a violation of Bolivian law and a violation of international treaties to
which Bolivia is a signatory.” What Washington mainly fears is that any increase in production, legal or otherwise, will
do enormous damage to what has been its only successful South American drug eradication campaign, at least in terms of
statistics.
Meanwhile, cocalero leader Morales told Knight Ridder that he believes that the U.S. aim of “zero coca” is now dead.
Morales has also vociferously criticized the appointment of Greenlee, whom he accuses of being a tool of repression in
Bolivia in the 1980s. He has also accused Greenlee of having been involved in the Villa Tunari massacre in 1988 when 8
cocaleros were shot and killed. According to Morales, the ambassador’s questionable past does not bode well for the
future: “We cannot forget that Greenleeis a CIA agent and his mission is to lead the repression which President Gonzalo
Sanchez de Lozada's administration plans to carry out against those who take part in the mobilizations.”
It’s Economics, Stupid
The role of economics in the most recent period of volatility is certainly a standout. Landlocked and isolated, Bolivia
is one of the most impoverished nations in the Americas. USAID estimates that over 60 percent of the population is mired
in poverty. What income is earned in Bolivia is concentrated in the hands of the most affluent members of society; close
to 58 percent of national wealth is already claimed by the richest 20 percent of the population, whereas a paltry 3.1
percent is held by the poorest quintile.
Pervasive poverty and unequal distribution of wealth remain a fact of life despite the efforts of Bolivian governments
since 1985 to produce a stable macroeconomic environment by means of neo-liberal reforms. Many of the most notable
polices implemented during this period can be attributed to the embattled Sanchez de Lozada. During his first stint as
president, he relied heavily on a free-market orientation to spearhead his schemes, including the controversial
“capitalization program,” whereby the government sold 50 percent stakes in state telecommunications, railroads, and oil
companies to foreign investors, and funneled the proceeds into pension funds.
In some respects, Sanchez de Lozada’s efforts as planning minister in the 1980’s and president in the early 1990’s could
be deemed a success; inflation, running at an annualized rate of 24,000 percent in 1985, was reduced to less than 5
percent in 2001 and GDP growth was solid in the mid-1990’s.
Nonetheless, several profound economic problems continue to plague Bolivian policy-makers. Foremost is the inextricable
link between coca and the well being of the economy. This oft-demonized commodity accounts for nearly 10 percent of GDP
registered in the official figures and generates otherwise unavailable income for large segments of the informal
economy. Since the implementation of a concerted coca eradication program in 1998, some economists estimate that rural
communities have been deprived of as much as $200m annually by the anti-drug war. In turn, this disruption of
traditional agrarian practices has precipitated the influx of rural dwellers into the urban centers, swelling the ranks
of the unemployed and those in the already teeming informal economy. Only a trifling sum of money has been earmarked by
the U.S. and the Bolivian government to facilitate agricultural diversification schemes, while Washington is adamant in
its demands for the destruction of Bolivia’s most valuable export, coca leaves.
Financial Fealty
In a bizarre economic scenario, the Bolivian government has been coerced into ceasing production of its most valuable
commodity in order to sustain its finances by internal bailouts. Burdened by an external debt eclipsing $4.5 billion,
the country finds itself at the mercy of its lenders, most of which are sovereign states or multilateral lending
institutions. Bolivia’s utter dependency on the benevolence of its creditors necessitates the imposition of orthodox
economic prescriptions and nearly forecloses upon any experimentation.
Nowhere is the foregoing observation better underscored than in Bolivia’s relations with the U.S. Washington has
explicitly made continued assistance contingent on Bolivian compliance to U.S. directives, particularly when it comes to
drug policy. The former U.S. ambassador to Bolivia, Manuel Rocha, articulated this sentiment during the run up to last
summer’s presidential elections when he said, “I want to remind the Bolivian electorate that if they vote for those who
want Bolivia to return to exporting cocaine, that will seriously jeopardize any future aid to Bolivia from the U.S.”
This sentiment has been forcefully reiterated in recent weeks by his successor, David Greenlee.
The economic dilemma that confronts Bolivia recently again reared its head. At the behest of the IMF, President Sanchez
de Lozada began to draw up plans to pare the country’s burgeoning deficit from 8.6 percent to 5.5 percent of GDP. After
floating a gasoline tax proposal, the president struck upon the idea of instituting a reconfigured income tax in
conjunction with a 10 percent reduction in spending. The Confederation of Private Businessmen and the Bolivian Workers
Union immediately balked at the proposal, claiming it would stunt economic growth and fall disproportionately on the
poor. Some economic estimates show that close to 61 percent of the new revenue generated by the proposed income tax
would be paid by people earning less than $530/month.
Already riled by the government’s dismissal of its demands for a 40 percent pay increase and for unpaid wages, police
joined throngs of protesters in the administrative capital of La Paz to voice their dissent. Violent clashes ensued as
the demonstrators engaged soldiers on the city’s streets. Due to the widespread opposition and mounting chaos, the
president scrapped his income tax proposal. In its stead, he abolished five ministries and reshuffled eight ministerial
portfolios in the wake of mass cabinet resignations in the preceding days.
President Sanchez de Lozada hopes these cost-cutting measures coupled with leniency from the IMF will secure the
monetary assistance his country desperately needs. Even if the IMF does make the desired disbursements, the payoffs will
be but a passing reprieve. If Bolivia is to extricate itself from its fealty to Western governments, it must either
revert to enhanced illicit or legitimate coca production or embrace a new export like natural gas. Without a doubt, the
country has several contentious economic choices to make if it is to prevent the reoccurrence of chaos in La Paz.
The Doomed Presidency of Gonzalo Sanchez de Lozada?
The omens do not seem to bode well for the embattled Sanchez de Lozada. With his presidency in tatters (with still four
and a half possible years of tenure ahead of him) his fate could emulate that of several Ecuadorian presidents whose
terms were aborted by popular protests. Moreover, he has more or less been forced to face this crisis alone, with his
entire cabinet having resigned on February 11. Meanwhile, he must be ready to respond to increased protests from a
profoundly alienated indigenous-led opposition, which has proclaimed its intention to reclaim the country’s patrimony
that it accuses previous administrations of having sold out to foreign interests.
Part of Sanchez de Lozada’s problem has been due to his shallow support in most of Bolivia’s national sectors and the
relative strength and numbers of his enemies. The nation recently experienced a disturbing presidential electoral
process, which culminated in the selection of him by the Bolivian congress on August 4. The winning margin for the
mining mogul and former president (1993-1997) was by a vote of 84-43. Several months before, in the general elections,
Bolivian voters had gone to the polls to choose among four main candidates: the victorious Gonzalo Sánchez de Lozada of
the National Revolutionary Movement (MNR), Evo Morales of the Movement Towards Socialism (MAS), Manfred Reyes Villa of
the New Revolutionary Force (NFR) and Jaime Paz Zamora of the Revolutionary Leftist Movement (MIR). The result was a
virtual tie in the general election between U.S.-backed Lozada, with 22.46 percent of the vote, and Morales, with 20.94
percent, with the winning margin only being 43,000 votes. Because neither presidential candidate mustered more than the
required 51 percent of the total votes cast, the Bolivian constitution mandated that the nation’s congress select the
new president between the two leading vote-getters.
The elections took on another unexpected twist when Sanchez de Lozada forged a surprising coalition with his old rival
Jaime Paz Zamora (with his spreading reputation for political opportunism and cynical deal-making), an arrangement which
the former hoped would return him to the executive office in La Paz after a five-year hiatus. Many critics argued that
this coalition was hastily formed once it was clear that Evo Morales presented a formidable threat to Sánchez de
Lozada’s eventual confirmation as president by a congressional vote. A unique division of executive power between
Sánchez de Lozada and Paz Zamora was worked out that gave the latter’s confederates seven out of the cabinet’s 18
positions. Now, after the recent uprisings, Paz Zamora’s followers were awarded even more cabinet seats.
Indigenous Political Surge
These electoral events occurred amid an unprecedented spike of political activism on the part of the indigenous
community. The end of Spanish colonial rule in the early 19thcentury merely saw a continuation of the tradition in which
Bolivia’s white and mestizo minority controlled the government despite the fact that the country’s population of 8.3
million is mainly composed of Aymara and Quechua-speaking populations. As a result, a virtual racial and socio-economic
pyramid remains in Bolivia, in which the nation’s indigenous groups have traditionally been found at the bottom where
they have suffered greatly, and been afforded very little political representation. However, these indigenous groups are
now filled with rising expectations as they exhibit a growing involvement and sensitivity to public issues, under the
leadership of Morales, more now than perhaps at any period before in Bolivia’s modern history. The effectiveness of his
leadership of the cocaleros is reflected in the fact that his movement now controls a third of the seats in congress.
Sanchez de Lozada, meanwhile, represents an older and more conservative style of governance, which is very much at odds
with the new wave of populist presidencies currently being voted into office throughout Latin America. During the new
president’s earlier term in office (1993-1997), he pursued an aggressive economic and social reform agenda, which
produced mixed results. On the one hand, Bolivia, under Sánchez de Lozada, was one the region’s first nations to be
successful in stopping hyperinflation in relative social peace. During this period, Bolivia’s economy experienced a
steady annual growth rate of four percent. Nevertheless, he was under constant criticism for the neo-liberal reforms
that he introduced while in office. This opposition mainly came from indigenous peasants whose leadership argued that
the president’s highly touted reforms kept them in poverty, while catering to foreign corporations and investors.
With the forces arrayed against him being so strong, and all of his support bases collapsing around him, it seems
unlikely that Sanchez de Lozada can survive for long in such a hostile political climate. Aside from the pivotal role to
be played by the U.S., what remains to be seen in Bolivia is what form his downfall will take and who will fill the
vacuum left in his wake.
This analysis was prepared by Matthew Ward, Research Fellow, and Grant M. Nulle, Research Associate at the Council on
Hemispheric Affairs. Issued Monday, February 24, 2003.
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and information organization. It has been described on the Senate floor as being “one of the nation’s most respected
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