Pubdate: Thu, 13 Nov 2003 Source: Wall Street Journal (US) Copyright: 2003 Dow Jones & Company, Inc. Contact: http://www.wsj.com/ Details: http://www.mapinc.org/media/487 Author: Jose De Cordoba Bookmark: http://www.mapinc.org/areas/Bolivia Bookmark: http://www.mapinc.org/coke.htm (Cocaine) BOLIVIAN LEADER SEEKS MORE MONEY TO QUELL UNREST LA PAZ, Bolivia -- The U.S. hasn't fairly compensated Bolivia for the economic loss suffered as a result of its coca-eradication program, complained the country's new president, who issued an appeal for stepped-up aid from the international community. "Coca production has fallen, but Bolivia's income has fallen as well and we haven't received the equivalent compensation," said President Carlos Mesa, in an interview at his ornate office. Mr. Mesa assumed the presidency of this poor, landlocked country last month after violent protests, including demonstrations by angry coca growers, forced the resignation of President Gonzalo Sanchez de Lozada. Mr. Mesa emphasized that he doesn't plan "essentially" to change the country's U.S.-backed program to limit the production of coca, the key ingredient in cocaine. Between 1995 and 2002, the Bolivian government eradicated nearly 50% of the country's coca crop and urged peasants to plant alternative crops. The U.S., which has hailed the program as a victory in the war on narcotics, last year gave $174 million in foreign aid to Bolivia. But Mr. Mesa, a one-time television newscaster who had served as Mr. Lozada's vice president, appeared to signal some willingness to reach a compromise with angry growers, saying he would try to deal "rationally" with eradication. He didn't elaborate, but those comments may raise hackles here. A U.S. official said Washington is sympathetic to Mr. Mesa's internal political situation but adds that he believes the Bolivian government understands the threat posed by coca production. Bolivia is the world's third-largest producer of coca, which has been used for thousands of years by Indians here for medicinal and religious purposes. It is estimated that the trade in coca, most of which goes into the making of cocaine, generates as much as $500 million a year of Bolivia's $8.5 billion economic output. Bolivian law permits nearly 30,000 acres of coca to be cultivated for domestic use, and coca growers say there are new, legal markets opening up for such products as herbal teas and toothpaste that use coca. But the U.S. believes that is just a cover for the cultivation of coca for cocaine, and continues to press for further eradication. Mr. Mesa urged the international community and, in particular, the U.S. to come up with the money it needs to keep the lid on rising social demands and save its imperiled democracy. "I trust the U.S. will be the country that frankly supports us and truly understands that Bolivia is going through a difficult moment, and needs to consolidate its democracy and institutions," he said. Bolivia's turmoil has focused attention on Latin America's widespread malaise. The region's economies have barely grown in the past few years, and its legions of poor blame U.S.-style free-market policies for their woes. The discontent comes at a bad time for Washington, which next week meets with the hemisphere's trade ministers to hammer out a blueprint for a regional free-trade pact. Mr. Mesa says a helping hand for his country could bolster the U.S.'s standing in the region. He said Bolivia is projecting a shortfall in government finances equal to about 7.5% of the nation's total annual economic output. That is higher than the 7% target it had agreed to earlier in its standby agreement with the International Monetary Fund. Last month, an IMF mission in Bolivia said its program with Bolivia "has been adapted flexibly to changing circumstances" and said the fund would work closely with Mr. Mesa. Former Finance Minister Juan Cariaga says Bolivia needs from $300 million to $500 million a year in donations and low interest loans from multilateral institutions like the World Bank to plug its trade and fiscal deficits. Any military coup or takeover by disgruntled peasants would cut off international funds, plunging the country into "economic disarray," Mr. Cariaga warned. Radical peasant, Indian and labor leaders have given Mr. Mesa's cash-strapped government a few months' "truce" to satisfy a long list of social and economic demands, which range from giving land to landless peasants to blocking the proposed regional free-trade deal. The president said he planned to convoke "soon" a binding referendum on the issue of how to exploit the country's natural-gas reserves. The protests that toppled Mr. Sanchez de Lozada's government last month were originally aimed at a $6 billion project to export Bolivian natural gas to the U.S. and Mexico through a Chilean pipeline, to be built by a group led by Spain's Repsol YPF. Mr. Mesa has repeatedly said he believes the future of the country depends on exporting its gas. "The great problem we have had with the gas theme has been insufficient information, half truths and lies," Mr. Mesa said. After a public-information campaign, Mr. Mesa said he believes that "rationality will replace emotion" in dealing with the natural-gas issue. - --- MAP posted-by: Larry Seguin