Deep economic crisis tests Bolivian leader

6-month-old presidency of Sanchez de Lozada is in clear danger of collapse

February 16, 2003|By NEW YORK TIMES NEWS SERVICE

BOGOTA, Colombia - Bolivian President Gonzalo Sanchez de Lozada had to be smuggled out of the bullet-riddled presidential palace in an ambulance last week as gunshots whizzed across the main square while looters rampaged through the historic heart of the administrative capital, La Paz.

By week's end, Sanchez de Lozada went on television to announce that "calm and peace have been restored throughout our national territory."

But as Bolivians took stock of the violence that gripped their nation - 29 people killed, with government ministries and downtown businesses looted and set on fire in the main city, whose name means peace - the fact is that Sanchez de Lozada's 6-month-old presidency is in clear danger of collapse.

The president's decision to withdraw plans for a tax increase, the ostensible spark for violent protests, only served to bring a tenuous peace. The roots of the problem, a deepening economic crisis and an energetic opposition, remain ever-present and signal more trouble for a leader who won the presidency with only 22.5 percent of the vote.

"He's got a big, serious problem," said Eduardo Gamarra, an expert on Bolivia at Miami's Florida International University who recently spoke with the president. "He has 4 1/2 years left in his term. How is he going to last 4 1/2 years?"

Indeed, Sanchez de Lozada, 72, a former filmmaker and wealthy businessman, is standing alone against an array of forces that make governing nearly impossible.

On the left, he is dealing with the increasingly influential Evo Morales, an Aymara Indian and leader of a coca workers federation, who rails against free-market reforms while pushing for an end to U.S.-backed eradication efforts of Bolivia's coca crops. To his right is the International Monetary Fund, which had called for belt-tightening measures that led Sanchez de Lozada's government to consider a tax that had little political support.

The president has had little room to maneuver, faced with trying to placate increasingly vocal and influential nationalists while trying to meet difficult requirements leveled on a poor country by international lenders. The situation was made even more combustible by an increasingly violent series of standoffs between the police and coca farmers in recent weeks that have led to several deaths.

Though Bolivia is isolated and poor, with just 8.3 million people, the ramifications are enormous if Sanchez de Lozada is forced out, because he is not the only president in Latin America facing politically destabilizing street protests.

"I think this sets a very disturbing precedent," said Michael Shifter, who tracks Latin American politics for the Washington-based Inter-American Dialogue. "It is disturbing that when you have this kind of protest and violence that people can call for a president to step down. I don't think that's very helpful for democracy."

In Bolivia, though, there seems to be little sympathy for Sanchez de Lozada, who was the architect of the free-market reforms in the 1980s and was president from 1993 to 1997. Many there feel that those reforms, dictated from Washington, brought poverty, not prosperity.

"There has been an accumulation of frustration with the economic model," said Gustavo Luna, a researcher with a labor analysis group in La Paz. "They were left with no choice but to protest."

Meanwhile, Sanchez de Lozada faced politically difficult decisions after the International Monetary Fund called for the government to lower the country's deficit to 5.5 percent of its $8 billion-a-year gross domestic product from 8.6 percent. After failing to obtain the political support for a gasoline tax, the president then opted for an income tax. That move infuriated Bolivians, particularly the middle class, which is Sanchez de Lozada's only bloc of solid support.

It remains unclear what led to the violence that began Wednesday and rocked the country for two straight days. The government maintains that a conspiracy was at work. Many in Bolivia say it was simply a spontaneous outburst.

What is clear is that the violence, the worst since Bolivia's return to democracy in 1982, could not be contained. That raises questions about how the government could survive another outburst, which could well be brewing.

The president's opponents, including Morales, are demanding his resignation while some street protesters have resorted to demanding, "resign or die, those are your options."

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