IN 1989 VÍCTOR PAZ ESTENSSORO stepped down as president of Bolivia and on August 6 handed over power to the third democratically elected leader of the 1980s. Paz Estenssoro presided over four years of economic and political stability following two decades of military rule and nearly six years of a tumultuous transition to democracy.

When Paz Estenssoro assumed office on August 6, 1985, he inherited a society besieged by the most profound political and economic crisis in its history. Years of military rule had destroyed the nation's political institutions and eroded democratic traditions. The economy, in turn, had experienced a catastrophic downturn owing to years of mismanagement, the exhaustion of a state-centered economic development strategy, and extreme dependence on a single export commodity--tin. By 1985 inflation had reached 24,000 percent, and growth rates were declining steadily by over 10 percent annually.

To revive an agonizing nation, Paz Estenssoro, the old politician who had led the 1952 Revolution, transcended electoral and party-based politics. To address the economic crisis, he commissioned a team of young technocrats. The resulting New Economic Policy imposed a severe austerity program that stabilized the economy and fundamentally transformed Bolivia's development strategy.

The political crisis, characterized by a recurrent conflict between the executive and legislative branches, required equally innovative answers. Soon after the announcement of the New Economic Policy, Paz Estenssoro and his Nationalist Revolutionary Movement signed the Pact for Democracy with former General Hugo Banzer Suárez's Nationalist Democratic Action party. With the Nationalist Democratic Action party's support in the National Congress, the New Economic Policy and related legislation were implemented successfully. The Pact for Democracy provided the needed support for implementation of the government's economic policy, as well as the basis for four years of political stability.

Although originally envisioned as a long-term agreement that could establish the foundations of Bolivian democracy, the Pact for Democracy proved to be a temporary marriage of convenience that the partners renounced owing to irreconcilable differences. By February 1989, the Pact for Democracy had collapsed, mainly because the campaign for the May elections had accentuated the differences between the two parties. Most Bolivian analysts hoped that the three years of the Pact for Democracy that enabled the New Economic Policy legislation to go forward were enough to establish the basis for positive growth in the 1990s. Each of the three leading presidential candidates in the May elections committed himself to the basic premises of the New Economic Policy.

Still, the most complex issue in Bolivian politics in 1989 remained the question of governability. The Pact for Democracy enabled Paz Estenssoro and the Nationalist Revolutionary Movement to govern for four years. With parties focused on the immediate task of getting elected, the more serious task of establishing the foundations of a stable political system was set aside. The key issue was whether or not political parties would be able to transcend the mundane worries about electoral politics to lay the groundwork for democratic rule. Their failure threatened to precipitate another round of military intervention.

The Constituent Assembly that founded Bolivia in 1825 wrote the nation's first constitution establishing a centralized government with executive, legislative, and judicial branches. Based on the United States Constitution and borrowing a few premises from the French Republic, the first charter adopted liberal and representative democracy granting the congress autonomy and policy-making prerogatives. This constitution, however, was never adopted.

On November 26, 1826, the Bolivarian constitution, written in Lima by the liberator Simón Bolívar Palacio, replaced the original document and instituted a fourfold separation of powers among a lifetime presidency, an independent judiciary, a tricameral congress, and an electoral body. The tricameral congress comprised the Senate and the Chamber of Tribunes, whose members had fixed terms, as well as a Chamber of Censors, whose members served for life. Theoretically, the Senate was responsible for codifying laws and reorienting church and court officials, the Chamber of Tribunes possessed general legislative powers, and the Chamber of Censors had oversight powers that included impeachment of members of the executive. In reality, the legislature's key functions were to name the president and to approve a list of successors submitted by the president. One of the long-lasting effects of the Bolivarian constitution was the establishment of an executive-based system. The Bolivarian constitution reflected the Spanish tradition of bureaucratic patrimonialism in which power rested in the executive branch. Historians have argued retrospectively that Bolívar's constitution suited the nation's political structure better than the liberal constitutions that followed.

In many ways, the Bolivarian constitution reflected Bolívar's uneasiness about mob rule. Like the founding fathers of the United States, Bolívar considered necessary the prevention of rule by the masses. As a result, the franchise was extended only to those literate in Spanish who either possessed property then worth 400 bolivianos or engaged in an art, in a science, or in some other remunerative position. Domestic and personal servants were also denied the franchise. In short, voting rights were limited to a very small and privileged elite. Voting qualifications and restrictions remained until universal suffrage was adopted during the 1952 Revolution.

Mostly, however, the Bolivarian constitution reflected Bolívar's distrust of the privileged elite that inherited Upper (Alto) Peru from Spain. Bolívar feared that rival elite factions would wage battle against each other for control over the new nation and became convinced that the best way to prevent instability and chaos was to institutionalize a strong, centralized, and lifetime presidency.

In spite of Bolívar's foresight, the Bolivarian constitution did not last long because of the great disparity that existed between the national aspirations of the state and its effective power over Bolivia's disparate regions and population. Between 1825 and 1880, Bolivian political life was dominated by a series of quasi- military leaders, known as caudillos, who had emerged with the collapse of the Spanish Empire. Within the context of economic crisis, warring caudillos, and a semifeudal social structure, constitutions and the national government became prizes to be captured by one or another caudillo.

Under the presidency of General Andrés de Santa Cruz y Calahumana, a new constitution was adopted on August 31, 1831. The new constitution introduced bicameralism, dividing the body between the Chamber of Senators (Senate) and the Chamber of Deputies elected by proportional representation. Annual sessions for the Nationsl Congress (hereafter, Congress) were to run between sixty and ninety days. Although the president was given the power to dissolve congress, the new constitution abolished the lifetime presidency and limited the president to renewable four-year terms. Despite these limitations, however, presidential power actually increased during the presidency of Santa Cruz, and the trend toward greater concentration of power in the executive continued throughout Bolivia's history.

Under the short-lived Peru-Bolivian Confederation of 1836-39, Santa Cruz promulgated a new constitution that basically applied the principles of the 1831 charter to the alliance. The end of the confederation motivated Santa Cruz to institutionalize the strong executive model embodied in the 1831 charter. Because the president was given the power to dissolve the legislature, Congress was condemned to a passive and submissive role.

For the next forty-two years, Bolivia was subjected to the whims of caudillos who dictated constitutional charters almost as regularly as changes of government occurred. Between 1839 and 1880, six constitutions were approved by the legislative power. Except for the constitution of 1839, which limited presidential power, the constitutions promulgated under José Ballivián y Segurola (1843), Manuel Isidoro Belzú Humérez (1851), José María Achá Valiente (1861), Mariano Melgarejo Valencia (1868), and Agustín Morales Hernández (1871) further concentrated power in the hands of the executive. As a rule, during this era Congress responded to the demands of whatever caudillo was in power.

Caudillo politics came to an end after the War of the Pacific (1879-80), in which the combined forces of Bolivia and Peru suffered a humiliating defeat against Chile's armed forces. The end of the war gave rise to a new mining elite oriented to laissez-faire capitalism. Aided by the failure of Bolivia's armed forces in the war effort, this new elite was able to design a new civilian regime of "order and progress."

In 1880 Bolivia's most durable constitution was approved; it was to remain in effect for the next fifty-eight years. Under this constitution, bicameralism was fully adopted, and the legislative power became an important arena for political debate. During this period, Bolivia achieved a functioning constitutional order complete with political parties, interest groups, and an active legislature. The country was also a prime example of a formal democracy with legally limited participation. Literacy and property requirements were still enforced to exclude the Indian population and the urban working class from politics. Political life was reserved for the privileged and a minuscule upper class.

The basic premises of representative democracy introduced in 1880 still prevailed in 1989. Specifically, congressional oversight prerogatives over executive behavior were introduced by law in 1884 when Bolivia emerged from the War of the Pacific. The Law Governing Trials of Responsibilities was to become an integral part of Bolivia's restricted democracy.

The era of political stability, which paralleled the integration of Bolivia into the world economy through the export of tin, ceased with the end of the tin-export boom and the overthrow of President Daniel Salamanca Urey (1931-34). One of the legacies of this period was an extremely stratified pattern of social relations that was to affect Bolivia's political structure. In particular, the middle class became dependent on the state for employment as the upper class monopolized hard sources of wealth. As the economy plummeted, competition for scarce jobs increased. The result was a discontented and jobless middle class. In this context, political conflict became a struggle between factions led by elite leaders and middle-class followers.

The economic crisis of the 1930s and the disastrous Chaco War (1932-35) exacerbated social tensions. The effects of the war would in turn have a dramatic effect on Bolivian political life and its institutions. Between 1935 and 1952, middle-class reformist efforts converged into populist movements led by both military officers and middle-class civilian intellectuals. Under Colonel Germán Busch Becerra (1937-39), a constituent assembly approved reforms in 1938 that were to have a lasting and profound impact on Bolivian society. Of greatest significance were changes that altered the pattern of relations between state and society. According to its provisions, human rights outweighed property rights, the national interest in the subsoil and its riches predominated, the state had a right to intervene in economic life and to regulate commerce, workers could organize and bargain collectively, and educational facilities for all children were mandated. The labor provision helped establish the basis for political parties by allowing the formation of miners' and peasants' unions that eventually played central roles in the 1952 Revolution.

Bolivia's constitution was again reformed in 1944 during the presidency of Colonel Gualberto Villarroel López (1943-46), another populist reformer. The principal changes included suffrage rights for women, but only in municipal elections, and the establishment of presidential and vice presidential terms of six years without immediate reelection. Reforms undertaken by military-populist governments, however, were partially rolled back following the overthrow and assassination of Villarroel in 1946. In 1947 a new constitution reduced the presidential term to four years and increased the powers of the Senate.

In retrospect, it is clear that the post-Chaco War reformist efforts increased the role of the state, especially in terms of redressing social and economic grievances. The constitutions of this period reflected the rise of movements and groups that were to dominate Bolivian politics for the next forty years. For example, the Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario--MNR) espoused a broad multiclass alliance of workers, peasants, and middle-class elements to do battle with the antinational forces of the mining oligarchy and its foreign allies. It went on to conduct the 1952 Revolution, and in 1988 the MNR was back in power with Paz Estenssoro, its founder and leader, as president. Although the 1952 Revolution fundamentally transformed Bolivian society, a new political order was never fully implemented. Between 1952 and 1956, factions of the MNR debated alternative and novel modes of political organization, including proposals to implement a worker's assembly. By 1956, however, the 1947 constitution had been ratified. Apart from a powerful labor movement, organized as the Bolivian Labor Federation (Central Obrera Boliviana--COB), the MNR failed to create new institutions capable of channeling and controlling the demands of the groups mobilized by the 1952 Revolution.

The 1961 constitution institutionalized the gains of the 1952 Revolution by adopting universal suffrage, the nationalization of the mines, and agrarian reform. Factional disputes within the MNR, rooted in demands for access to state employment, undermined the party's capacity to carry out further reforms. In fact, the 1961 constitution served mainly the interests of Paz Estenssoro's faction of the MNR by providing for his reelection in 1964.

The overthrow of the MNR by General René Barrientos Ortuño (president, 1964-65; copresident, May 1965-January 1966; and president, 1966-69) in 1964 initiated the contemporary era in Bolivian constitutional development. After calling elections in 1966 and invoking the 1947 constitution, Barrientos attempted to force through Congress a new corporatist charter. Because he sought democratic legitimacy, however, he was forced to give up his original project in favor of a constitution rooted firmly in the liberal democratic tradition that had inspired the authors of the 1880 charter.

Under the terms of the Constitution of 1967, Bolivia is a unitary republic that retains a democratic and representative democracy. Article 2 stipulates that sovereignty resides in the people, that it is inalienable, and that its exercise is delegated to the legislative, executive, and judicial powers. The functions of the public power--executive, legislative, and judicial--cannot be united in a single branch of government. Although the Constitution of 1967 recognizes Roman Catholicism as the official state religion, it also guarantees to all faiths the right to worship publicly. In theory, the people govern through their representatives and through other authorities established by law. The Constitution of 1967 became known to most Bolivians only in the 1980s because, for all practical purposes, it was in effect only until 1969 when a coup by General Alfredo Ovando Candia (copresident, May 1965-January 1966, and president, January-August 1966 and 1969-70) overthrew the civilian regime. Between then and 1979, the Constitution of 1967 was given only lip service by the military rulers who governed Bolivia.

Between 1978 and 1989, four general elections were held, and Bolivia enjoyed a stable, elected, civilian democratic government under the terms of the Constitution of 1967. Nevertheless, although the Constitution of 1967 had continued the strong executive tradition, the political system had not yet developed strong party organizations capable of establishing viable and long-term ruling coalitions.

Bolivia - GOVERNMENTAL STRUCTURE

Executive power resides in the president of the republic and his ministers of state. The ministers of state conduct the day-to-day business of public administration. In 1989 the Council of Ministers included sixteen ministries. In addition to the Council of Ministers, the president headed the National Economic and Planning Council (Consejo Nacional de Economía y Planificación--Coneplan), the National Council for Political and Social Affairs (Consejo Nacional Político y Social--Conapol), and the National Security Council (Consejo Nacional de Seguridad-- Conase).

The president and vice president are chosen through direct elections to a four-year term. To win an election, a candidate must secure a majority of the popular vote. If a majority is not achieved, Congress selects the next president from among the top three candidates. This reliance on Congress, rather than on a second round of elections, has contributed greatly to the instability of democratically elected executives. Because of a recurring executive-legislative split, elections produced governments that had only formal power. Until 1985 real power, or the effective capacity to rule, had eluded democratically elected presidents.

Under the Constitution, reelection of the incumbent is not permitted; however, after four years the previous president may again run for office. Similarly, an incumbent vice president may not run for president until four years after the end of his term. In 1985, however, a pact between the major political parties allowed Vice President Jaime Paz Zamora to run for the presidency.

To become president, a person must be at least thirty-five years of age, literate, a registered voter, and the nominee of a political party. Members of the armed forces on active duty, Roman Catholic clergy, and ministers of other religions may not run for office. Blood relatives and relatives to the second degree by affinity of the incumbent president and vice president are ineligible to run for the presidency. Incumbent ministers of state who seek the executive office must resign at least six months before election day.

By tradition and constitutional law, the president is a strong executive. Conducting foreign relations, making economic policy, enforcing and regulating laws, negotiating treaties and ratifying them after prior approval by Congress, appointing officials, commanding the armed forces, and preserving and defending the public order are all prerogatives guaranteed the chief executive under the Constitution of 1967. In emergency situations, such as internal turmoil or international war, the president has the power to call a state of siege.

The power of appointment enables the president to exercise control over the large number of public servants at all levels of government. The president appoints the ministers of state, members of the bureaucracy, and prefectos (prefects) of departamentos (departments). From lists submitted by the Senate, the president appoints the comptroller general, the attorney general, the national superintendent of banks, and the heads of state enterprises. As captain general of the armed forces, the president has the power to appoint the commander in chief of the armed forces and the commanders of the navy, army, air force, and public safety.

The executive branch also included a number of decentralized institutions and autonomous enterprises, such as the Social Security Institute (Colegio Nacional de Seguridad Social--CNSS), the Mining Corporation of Bolivia (Corporación Minera de Bolivia -- Comibol), the Bolivian State Petroleum Enterprise (Yacimientos Petrolíferos Fiscales Bolivianos--YPFB), the National Railroad Enterprise (Empresa Nacional de Ferrocarriles--Enfe), and the National Telecommunications Enterprise (Empresa Nacional de Telecomunicaciones--Entel). The state also owned and operated Lloyd Bolivian Airline.

One of the largest state enterprises, the Bolivian Development Corporation (Corporación Boliviana de Fomento--CBF), grouped a number of smaller industries ranging from dairy products to matches. As a result of a decentralization program, control over the CBF was passed on to regional development corporations in 1985. These were in turn given the task of selling enterprises to the private sector.

The dependent nature of Bolivia's middle class and the lack of a broad economic base often resulted in state bureaucracies' being used for political gain. Because of the small size of private industry, the middle class coveted positions in the state bureaucracy. As a result, competition for a limited number of bureaucratic positions frequently engendered political conflict. Government remained a prized commodity struggled over by factions made up of leaders drawn from the elite and ambitious personal followers drawn from the middle class.

By the mid-1980s, the state had become a large but extremely weak apparatus. Approximately 220,000 public employees bloated the bureaucracy, and the prevalence of patronage prevented the dismissal of inefficient employees. This huge payroll seriously inflated the public deficit.

Reforms undertaken since 1985 under the guise of the New Economic Policy (Nueva Política Económica--NPE) reduced the size of the state sector by privatizing or decentralizing state enterprises. To reduce public spending, 20,000 miners from Comibol were laid off. Through the restructuring of state enterprises, the government also fired employees in YPFB and other bureaucracies. Critics of the reforms noted, however, that workers were dismissed instead of the government officials whose salaries were responsible for most of the increases in public spending.

In 1989 the Integrated System of Financial Administration and Governmental Control (Sistema Integrado de Administración Financiera y Control Gubernamentales--Safco), a program funded by the United States Agency for International Development (AID) and the World Bank, was introduced to monitor hiring and firing practices and to reduce corruption in the public sector. The program's central objective was to make government bureaucracies efficient administrative entities. Reforms undertaken by Safco also sought to reduce the number of ministries in order to make the state apparatus leaner and more manageable.

In early 1989, President Paz Estenssoro commanded a cabinet divided equally between politicians and technocrats. Old members of the MNR shared responsibilities with managers drawn from the private sector. Paz Estenssoro's cabinet was credited with enforcing the rigid austerity aims of the NPE. With the economy creeping toward reactivation, the attempt to reduce the size of the public sector appeared to have succeeded.

Bolivia - The Legislature

Although Congress generally played a passive policy-making role, it was a major actor in national politics. Indeed, Congress had elected every civilian ruler to take office from the late 1970s to 1985.

Historically, Congress had been subordinated to the executive; the intention of the Constitution of 1967 was to consolidate a strong presidential system. Nonetheless, within the context of a multiparty system, the Constitution of 1967 provides important mechanisms that allow for a more influential and active Congress. Congress has the right to pass, abrogate, interpret, and modify all laws. A bill must be passed by the legislature and must be signed by the president to become a law. Although the president may veto a bill, Congress may override the veto with a two-thirds majority vote.

The Constitution provides for a bicameral legislature: a Chamber of Deputies and a Senate. Every year, beginning on August 6 (Independence Day), Congress meets in La Paz for 90 sessions; the number of sessions may be expanded to 120 if requested by the executive or if favored by a majority of members. Congress may also meet for extraordinary sessions to debate specific bills if requested by the executive and if favored by a majority of its members.

Congress has twenty-two prerogatives, which can be divided broadly into its economic policy, foreign policy, and political powers. Congress's principal economic policy function is approval of the annual budget that the executive must submit to Congress before the thirtieth session. This constitutional requirement for approval has rarely been respected, however. In 1987 and 1988, Congress approved the budget for the first time since 1967, although not within the first thirty sessions. Because budgets often faced opposition in Congress, governments usually approved them through executive decree. Congress also has the power to establish the monetary system and is responsible, in theory, for approving all economic policy. Development programs, for example, must be submitted to Congress, and any loans contracted by the government must also be approved by the legislature.

Congress's foreign policy prerogatives primarily concerned its power to approve all treaties, accords, and international agreements. Although this practice was not always respected in the late 1980s, Congress must also decide whether or not to allow foreign troops to travel through or operate in Bolivian territory. Moreover, Congress decides when Bolivian troops may travel abroad.

Congress's political powers include the naming of justices of the Supreme Court of Justice and members of the National Electoral Court, as well as the right to create new provinces, cantones (cantons), and municipal districts. One of its most important prerogatives is to declare amnesty for political crimes. Its most significant power, however, is to resolve elections in which the winning candidate has not garnered a majority of the vote.

Congress possesses wide-ranging oversight powers over executive behavior. A single senator or deputy may call ministers and other members of the executive to testify through a procedure known as petición de informe oral (request for an oral report). If the report is unsatisfactory, the senator or deputy may convert a simple request into an interpellation, which may be resolved only through a vote of confidence or a vote for censure. In Bolivian parliamentary tradition, a censured minister must resign and be replaced by the executive. A petición de informe escrito (request for a written report) may also be sent to the executive regarding specific policies, events, and actions. The Senate or Chamber of Deputies may also call attention to problems and current issues through minutas de comunicación (minutes of communication).

Congress also has the power of specific indictment. For a juicio de responsabilidades (malfeasance trial) before the Supreme Court of Justice, a two-thirds majority vote is required to indict individuals accused of wrongdoing while in office. In 1986 Congress indicted former dictator General Luis García Meza Tejada (1980-81); in early 1989, he was being tried in absentia by the Supreme Court of Justice.

In addition to shared powers, each chamber has specific responsibilities. The Chamber of Deputies elects justices of the Supreme Court of Justice from a list submitted by the Senate, approves the executive's requests for the declaration of a state of siege, and transmits to the president of the republic a list of names from which the latter must select the heads of social and economic institutions in which the state participates. The Senate hears accusations against members of the Supreme Court of Justice raised by the Chamber of Deputies; submits to the president a list of candidates for comptroller general, attorney general, and superintendent of the national banking system; approves ambassadors; and approves rank promotions in the armed forces every year.

Elected deputies and senators enjoy immunity from prosecution for the duration of their term; however, a two-thirds majority may retract this privilege from a specific legislator. In 1969, for example, owing to pressure from President Barrientos, Congress lifted the immunity from two deputies who had initiated a "responsibilities trial" against the president. This clearly confirmed the primacy of presidential power.

Deputies are elected through universal suffrage based on a complex proportional representation system. A 1986 electoral law, used for the first time in 1989, calls for the election of 130 deputies. Bolivia has adopted the Spanish tradition of electing suplentes (alternates) as well. Hence, every elected deputy has an alternate in the event of his or her death, resignation, or disability. Based on population density in 1980, the Chamber's 130 seats were divided as follows among Bolivia's nine departments: La Paz, 28; Potosí, 19; Cochabamba, 18; Santa Cruz, 17; Chuquisaca, 13; Oruro, 10; Tarija, 9; Beni, 9; and Pando, 7.

Deputies are elected for four-year terms, with the entire membership facing election every fourth year. To become a deputy, a person must be at least twenty-five years of age, a Bolivian by birth, a registered voter, have no outstanding penal charges, and not be a government employee, a member of the clergy, or a contractor for public works.

Every legislative year the Chamber of Deputies elects a new leadership. Its leadership comprises a president, two vice presidents, and five secretaries. The day-to-day operations of the chamber are the responsibility of an oficial mayor, or high official. Since 1982 the leadership has reflected the chamber's party composition, although the political parties with the greatest number of seats control the top three positions.

Every new legislative year also carries with it the reordering of committee memberships. In 1989 the Chamber of Deputies had seventeen committees that reflected broadly the structure of the executive cabinet. Since 1982 the committees, which have five members each, also have reflected (with some exceptions) the political subdivisions of the chamber as a whole. Usually, committee chairs are reserved for members of the party in control of the chamber, but they may be used as bargaining tools. Because committee memberships are reorganized each year, seniority is a not a factor. Owing to the large number of political parties represented in the lower chamber, the process of approving bills in committee and in the house as a whole is a protracted exercise.

The vice president of the nation is president of the Senate, as well as president of Congress. The Senate is composed of twenty- seven senators, three per department. The winning party in each department secures two senators, and the runner-up controls the third. This arrangement ensures minority representation in the upper house. Like the deputies, senators are elected for four- year terms. To become a senator, one must be at least thirty-five years old, a Bolivian by birth, a registered voter, and must not be a government employee, a member of the clergy, or a contractor for public works. As in the lower chamber, alternates are also elected.

In August, at the beginning of a new legislative year, the Senate elects a president, two vice presidents, and four secretaries. Because fewer parties are represented in this chamber, electing the leadership is usually a rapid and smooth process.

Like the Chamber of Deputies, the Senate has seventeen committees, and every legislative year a complete membership turnover takes place. Each committee must have five members drawn from every party represented in the chamber. In general, bills spend less time in committee in the Senate (and they are also approved more rapidly by the whole chamber) than in the Chamber of Deputies. This is largely because fewer political parties are represented in the Senate.

Committees in both the Chamber of Deputies and the Senate are not specialized bodies, and attempts were not made to secure competent legislative support staff until the late 1980s. Advisers to the committees were selected more on the basis of political affiliation than on expertise. Committees were also plagued by the lack of an adequate library and reference service. The Senate library, which theoretically serves Congress, was woefully inadequate. Although every session was recorded on tape, an efficient congressional record service did not exist. The transcripts of the 1982-85 sessions, for example, did not become available until the late 1980s.

A recurring problem in both chambers was the prevalence of obsolete rules of procedure dating back to the 1904-05 legislative year. Procedural rules have slowed the approval of bills and have contributed in large measure to making Congress's legislative function obsolete.

During congressional recesses, the Constitution provides for a comisión de congreso (congressional commission) to be elected by the members of each chamber. Nine senators and eighteen deputies, including the president of each chamber and the vice president of the republic, are elected to this commission.

The congressional commission ensures that the Constitution and civil rights are respected while Congress is not in session. It is also provided with the same executive oversight capacity as Congress. Through a two-thirds majority vote, the commission may convoke an extraordinary session of Congress. Moreover, in the case of a national emergency, it may authorize the president, by a two-thirds vote, to issue decrees that carry the full force of law. Finally, the commission may design bills to be submitted to Congress during the regular legislative year.

Bolivia - The Judiciary

The judicial system is divided into upper and lower levels with effective power resting in the Supreme Court of Justice. The Supreme Court of Justice consists of a president and eleven ministros (justices) who serve in three chambers for civil, penal, and social and administrative matters. Justices are elected for ten-year terms by the Chamber of Deputies from a list proposed by the Senate, and they cannot be reelected. To become a justice, a person must be a Bolivian by birth, have been a judge for ten years, be a lawyer, and meet all the requirements to become a senator.

Under the Constitution of 1967, the Supreme Court of Justice has the power to determine the constitutionality of laws, decrees, and resolutions approved by the executive and legislative branches of government. Moreover, it serves as the arena for malfeasance trials of public officers, including the president, vice president, and ministers of state, for crimes committed while in office.

The Senate elects members of the superior district courts of justice from a list proposed by the Supreme Court of Justice. It also elects members of a complex set of national labor courts. Members of the superior district courts are elected for six years, whereas jueces de partido (lower-court, or sectional, judges) and instructores or jueces de instrucción (investigating judges) are elected to four-year terms but may be reelected. The nine superior district courts hear appeals in both civil and criminal matters from decisions rendered on the trial level by the courts in each department.

Juzgados de partido (civil and criminal trial courts) are established in departmental capitals and in towns and cities throughout Bolivia. The criminal sections have investigating judges who investigate and prepare criminal cases for trial when appropriate. These cases are tried by sectional judges. Commercial and civil matters on personal and property actions are heard by the civil sections of the trial courts.

A number of small claims courts are scattered throughout the country and are limited to actions involving personal and real property or personal actions. Larger claims may be submitted to the same court, but the parties have the right of appeal to the sectional judge.

At the bottom of the judicial system are the mayors' courts, which consist of local judgeships. The civil jurisdiction of these courts is limited to hearing small claims and, in the criminal field, chiefly to police and correctional matters.

Theoretically, the judiciary is an autonomous and independent institution with far-reaching powers. In reality, the judicial system remains highly politicized; its members often represent partisan viewpoints and agendas. Court membership still reflects political patronage. As a result, the administration of justice is held hostage to the whims of party politics. Because members often also represent departmental interests, a national legal culture has not been fully developed.

Owing to years of military rule, Bolivia's legal culture has stagnated. The closure of universities in the 1970s resulted in a declining system of legal education. Only in the late 1980s did the Bolivian legal system have access to developments in organization and theory that had taken place in other nations. In 1989 AID initiated a program to overhaul the system of the administration of justice. In the opinion of most observers, however, the near-term prospects for implementing any reforms appeared poor.

Of particular concern in the 1980s was the increasing influence exercised by the cocaine industry over judges and even justices of the Supreme Court of Justice. Because of their low salaries, members of the courts were susceptible to the offers of the large amounts of money by narcotics traffickers.

Bolivia - The Electoral System

The May 1989 elections marked the sixth time that Bolivians had gone to the polls since 1978. This proliferation of elections did not make up for the twelve-year electoral hiatus imposed on the country by successive military dictatorships. Following years of authoritarian rule, the Bolivian electorate faced elections without undergoing a process of institution-building and electoral practice. The result was a chaotic transition period that culminated in October 1982 with the election of Hernán Siles Zuazo (1982-85).

In 1978 the National Electoral Court annulled the first elections because of large-scale fraud; as a result, the military reintervened. The 1979 elections produced a congressionally mandated one-year interim government debilitated by military coups and countercoups. In 1980 a bloody military coup prevented Congress from assembling to elect a new president. In 1982 the Congress elected in 1980 was convoked to choose a president. Elections were held again in 1985, one year earlier than originally mandated by Congress. In May 1989, Bolivians cast their ballots for the third democratic and civilian president of the 1980s.

All Bolivian citizens at least twenty-one years of age, or eighteen if married, are guaranteed the right to vote through secret ballot in free and open elections. All voters must register with neighborhood electoral notaries established prior to an election. To register, voters must present a cédula de identidad (national identity card), a birth certificate, or a military service card. Because voting is considered a civic duty, failure to register or vote invokes several penalties. Only citizens over seventy may abstain voluntarily. Mental patients, traitors, convicts, and conscripted soldiers are ineligible to vote.

The electoral system comprises the National Electoral Court, electoral judges, electoral notaries, departmental electoral courts, and electoral juries. The most important of these bodies, the National Electoral Court, is an independent, autonomous, and impartial organization charged with conducting the electoral process. The court may recognize or deny inscription to political parties, fronts, or coalitions. Sixty days before elections, it approves a single multicolor ballot with symbols of parties or pictures of candidates running for office. The court also counts the ballots in public and investigates all charges of fraud. Once the electoral results have been certified by the National Electoral Court, it must provide credentials accrediting elected deputies and senators, as well as the president and vice president. The court must also present an annual report of its activities to Congress.

The National Electoral Court consists of six members elected by Congress, the Supreme Court of Justice, the president of the republic, and the political parties with the highest number of votes in the previous election. Members serve four years and are eligible for reelection.

Electoral judges are seated in the capitals of each department or province. They hear appeals by notaries regarding admission or exclusion of inscriptions in the registry, try electoral notaries and other persons for crimes committed during the electoral process, hear charges of fraud and other voting irregularities, and annul false electoral cards.

Electoral notaries must be present at every electoral station in the country. Their principal task is to organize and provide custody for the electoral registry. They are also empowered to register citizens to vote and to keep an accurate registry of voters.

The 1986 electoral law establishes ten departmental electoral courts, including one in each department capital and two in La Paz. Each court comprises six members, three of whom are named by Congress and three by the superior district courts, president of the republic, and political parties. The departmental electoral courts have the power to name all judges and notaries and to remove them if charges of corruption or inefficiency brought against them by parties are confirmed. They also are empowered to count ballots in public for the president, vice president, senators, and deputies. Each electoral jury is composed of five citizens who monitor voting at the polling place. They are chosen randomly from the lot of voters at each voting table; service is compulsory.

The Constitution establishes that only political parties that are duly registered with the National Electoral Court may present candidates for office. Although labor unions, entrepreneurial associations, and regional civic committees have a very large voice in policy making, by law they must work through political parties. The Constitution and the electoral law provide for a proportional representation system to ensure the representation of minority parties.

The proliferation of tiny parties, alliances, and electoral fronts in the late 1970s led to the enactment of Article 206 of the 1980 Electoral Law. This article states that parties, alliances, or coalitions that do not achieve 50,000 votes must repay to the national treasury the costs of printing the ballot. Repayment must be made three days after the final ballot has been counted; a jail term awaits party chiefs who fail to pay.

In 1986 amendments to the 1980 electoral law sought to establish further limits on the proliferation of parties by establishing restrictions for party registration. The specific objective of these reforms was to limit the access of minuscule parties to Congress in order to establish a viable two- to three-party system.

The most significant amendment to the electoral law governed registration requirements. Beginning in 1986, citizens had to present either a national identity card or a military service card to register to vote. Critics noted that this reform would legally exclude 60 percent of the peasantry that lacked either document. Indeed, fraud generally occurred in the countryside where the population lacked these documents. The law was amended in December 1988, however, to allow birth certificates as valid documents for registration. Universal suffrage was one of the principal gains of the 1952 Revolution; thus, attempts to restrict voting eligibility have been closely scrutinized.

Since elections returned to Bolivia in 1978, only two have been relatively honest. In 1978 the elections were annulled following massive fraud on the part of the military-sponsored candidate. The 1979 elections were much cleaner, but charges of fraud still surfaced. Most observers agreed that the 1980 elections were clean, but because of a military coup, the outcome was postponed until 1982. Owing to electoral reforms, the 1985 general elections were by far the fairest ever held in Bolivia. Nonetheless, because elections are inherently political, accusations of fraud are a permanent feature of the electoral system. Early in the campaign for the 1989 elections, charges of fraud were already being leveled against the ruling MNR.

Bolivia - Departmental and Local Government

In 1989 Bolivia was divided into nine departments, which were subdivided into ninety-four provinces. Provinces, in turn, were divided into sections and sections into cantons. Following the French system of governance, each department is governed by a prefect, who is appointed by the president for a four-year term. Prefects hold overall authority in military, fiscal, and administrative matters, working in each substantive area under the supervision of the appropriate minister. Centralized control is ensured by the president's appointment of subprefects, officials vested with the administration of the provinces. Cantons are administered by corregidores (administrative officials named after the Spanish colonial officials), who are appointed by the prefect of their department. Serving under the corregidores are agentes (agents) who have quasi-judicial and quasi-executive functions.

The president's power of appointment created a system of patronage that reached down into the smallest administrative unit. Especially under military governments, the office of the prefect was key to obtaining regional loyalty. Under democratic rule, local government reflected the pattern of job struggle present in the national bureaucracy.

In some areas, ayllus prevailed as the principal local government. Years of military rule did not disrupt these communal structures. Each community selected jilacatas or mallcus to head the ayllus, a practice that reflected the prevalence of a political system outside the structures of the Bolivian state. As a result, the Bolivian campesino was marginal to the political process.

The principal local structure was the municipal government system. Historically, municipal governments in Bolivia proved susceptible to political instability; democratic procedures at the local level were suspended from the time of the Chaco War to 1985, and municipal elections were not held after 1948. During the military period, mayors of cities were appointed by the president, a practice that prevented the development of local and autonomous governmental structures. Instead, municipal governments throughout Bolivia became part of the patronage distributed among retainers by de facto rulers.

For the first time since 1948, municipal elections were held in 1985. They were also held in December 1987 and were scheduled again for December 1989. In large measure, the reemergence of municipal elections has been very healthy for the development and consolidation of democracy in Bolivia. However, many of the same problems that plagued democracy at the national level have emerged in municipal elections.

Municipal governments are bound by the terms of the Constitution and the Organic Law of Municipalities, a 125-article law approved in January 1985. Theoretically, the municipal governments are autonomous. Autonomy refers primarily to the direct and free election of municipal authorities, the power to extract and invest resources, and the power to implement plans and projects.

Four types of municipal government exist in Bolivia. In the capitals of the departments, municipal governments function under the direction of an alcalde (mayor), who should be subject to a municipal council, which consists of twelve members. The capitals of the provinces also function under the direction of a mayor, as well as a six-member municipal junta, or board. Provincial sections are governed by a four-member municipal junta and a mayor. In the cantons, municipal governments function under the direction of municipal agents.

Municipal governments have executive, judicial, comptroller, and legislative functions that reside mainly in the municipal council. Theoretically, the council governs at the local level, and the mayor is subordinate to its mandates. Mayors are elected by the council and are accountable to its members, who may impeach them. But the mayor is a local executive who commands a great deal of influence and can direct the activities of the council.

Mayors and council members are elected in each department and province for two-year terms. To become a council member or mayor, a person must be a citizen in possession of all rights, be twenty-one years of age (or eighteen if married), have run on a party slate, and be a resident of the district that the candidate seeks to represent. Members of the clergy, state employees, and active-duty military service personnel may not run for office.

Because councils are elected on the basis of proportional representation, minority parties have a significant degree of influence. Specifically, if a candidate for mayor does not receive a majority of the vote, the councils must elect the next mayor from the top three contenders. The experience of the December 1987 elections in the La Paz mayoral race revealed that standoffs in the councils could cause a mayoral election to be held hostage to the whims of individual council members. Several proposals for reforming the electoral laws affecting municipal government have been debated in Congress; however, it appeared unlikely in early 1989 that they would be approved in the near future.

Bolivia - POLITICAL DYNAMICS

In 1989 Bolivia celebrated seven consecutive years of civilian rule. Considering the nation's history of political instability and turmoil, the longevity of the current democratic period marked a significant achievement. Clearly, democracy did not come easily to Bolivia; only when other alternatives were exhausted did the country's political leaders accept representative government.

Between 1978 and 1982, seven military and two weak civilian governments ruled the country. Coups and countercoups characterized one of the darkest and most unstable periods in Bolivian history. The unsolved dilemmas of the MNR-led revolution, worsened by decades of corrupt military dictatorships, accounted for Bolivia's convoluted transition to democracy.

The 1952 Revolution sparked the transformation of Bolivia and initiated a process of state-led development that envisioned a harmonious pattern of capitalism and populist redistribution. State capitalism, however, proved to be more compatible with exclusionary, military-based rule than with the populist politics of the MNR. In fact, the inability of the MNR to control the demands for greater redistribution by organized labor, led by the COB, culminated in the MNR's overthrow in 1964.

Conflict between labor and the state deepened under military rule. With the exception of the Juan José Torres González period (1970-71), military governments repressed organized labor to implement state capitalist development. As a result, over the next two decades class conflict was exacerbated. State capitalism had been incapable of improving the living standards of the majority of Bolivians, and the economy was still heavily dependent on a single export commodity. Under the government of General Hugo Banzer Suárez (1971-78), the health of the economy rested on excessive foreign borrowing.

A second objective of the revolution had been to institutionalize a political model that could both incorporate the masses mobilized by the MNR and provide access to state jobs for the middle class. Although it attempted to emulate Mexico's Institutional Revolutionary Party (Partido Revolucionario Institucional--PRI), the MNR failed to subordinate labor, military, and peasant groups to the party structure. Instead, the party was held hostage to the interests of factional leaders who eventually conspired with the military to overthrow Paz Estenssoro and the MNR. The military made several attempts to institutionalize a new political order, including a Soviet-like Popular Assembly (Asamblea Popular) in June 1970 and a corporatist legislature in 1974. Like the MNR, however, the military also failed to create an alternative model of politics.

In short, the failure of the revolution and the subsequent military regimes to accomplish political and economic objectives led to the deepening of cleavages that sparked the revolution in the first place. By the late 1970s, Bolivia was a country torn apart by regional, ethnic, class, economic, and political divisions. This was the context in which the transition to democracy was to take place.

Bolivia - The Tortuous Transition to Democracy

The succession of elections and coups that followed the military's withdrawal from politics in 1978 revealed the deterioration of Bolivian institutional life. In the absence of military leadership for the process of transition, parties, factions, and other groups searched for a formula to carry them to the presidency. Nearly seventy political parties registered for the general elections in 1978, including at least thirty MNR factions.

In this context, it became evident that elections would not solve the structural problems facing Bolivia. In 1979, 1980, and 1985, the winning party could only muster a plurality of votes during the elections. As a result, the legislature became the focal point of political activity as parties and tiny factions maneuvered to influence the final outcome of the general elections. For example, in 1980 Congress elected as president Hernán Siles Zuazo, who had won a plurality of votes. Simultaneously, factions of the military linked to narcotics and other illicit activities were unwilling to surrender control of the state to civilian politicians who threatened to investigate charges of human rights violations and corruption during the Banzer years.

The July 17, 1980, coup by General Luis García Meza Tejada represented a two-year interruption of the transition to democracy. García Meza's military regime was one of the most corrupt in Bolivian history; García Meza and his collaborators maintained close links with cocaine traffickers and neofascist terrorists. Faced with international isolation and repudiation from nearly every political and social group, García Meza and the generals that succeeded him ruled with brute force. By 1982 disputes among rival officers and pressure from abroad, political parties, the private sector, and labor eventually led to the convocation of Congress that had been elected in 1980.

Siles Zuazo of the Democratic and Popular Unity (Unidad Democrática y Popular--UDP) coalition, was again elected president by Congress on October 10, 1982. The UDP was an amorphous entity that grouped Siles Zuazo's own Nationalist Revolutionary Movement of the Left (Movimiento Nacionalista Revolucionario de Izquierda--MNRI), the Bolivian Communist Party (Partido Comunista Boliviano--PCB), and the relatively young Movement of the Revolutionary Left (Movimiento de la Izquierda Revolucionaria--MIR). Having been denied the presidency in three consecutive elections, Siles Zuazo's rise to power was an auspicious occasion. He enjoyed overwhelming popular support and appeared to have a mandate to implement populist reforms. The military and its civilian allies were completely discredited and were no longer a threat or an alternative to rule Bolivia.

By 1982, however, Bolivia faced the most severe economic and political crisis of the preceding three decades. The economy was beset by chronic balance of payments and fiscal deficits. The most immediate manifestation of the crisis was an inability to service payments on its foreign debt of nearly US$3 billion. By 1982 the gross domestic product had dropped by nearly 10 percent. Siles Zuazo thus faced the dilemma of trying to democratize the country in the context of economic scarcity and crisis. The UDP promised to enact a more equitable development program that would address labor's demands for higher wages and other benefits. As the crisis deepened, however, labor became increasingly disaffected.

The economic plight exacerbated tensions between populist and antipopulist wings of the MNR and other political parties that had been latent since the revolution. Because the UDP controlled only the executive, political conflict was heightened. Congress remained firmly in control of a de facto alliance between Paz Estenssoro's MNR (the faction that retained the party's name) and Banzer's Nationalist Democratic Action (Acción Democrática Nacionalista--ADN).

Conflict between branches of government had been manifest since the beginning of the transition process. Legislators formed complex coalitional blocs to choose executives, whom they promptly turned on and sought to subvert. Congressionally sanctioned coups, labeled "constitutional coups," were only one example of the prevailing political instability.

Under Siles Zuazo, the full complexity of the crisis emerged. From the outset, the government was weakened by a serious confrontation between the legislature and the executive over alternative solutions to the economic predicament. Responsibility for resolving the crisis rested with the executive, whereas Congress exercised its oversight powers. Additionally, the presence of minuscule parties in Congress exacerbated the confrontation between the UDP and the parties in the legislature.

As a result of the government's inability to deal with Congress, Siles Zuazo relied on executive decrees. Congress, in turn, charged the president with unconstitutional behavior and threatened to impeach or overthrow him in a constitutional coup. During the three years of his presidency, Siles Zuazo was unable to put down the congressional threat, directed by opposition parties but bolstered by groups from his own UDP.

Between 1982 and 1985, the Siles Zuazo government attempted to address Bolivia's economic crisis by negotiating several tentative paquetes económicos (stabilization programs) with the International Monetary Fund. Each was the center of a recurring political battle that put Siles Zuazo in the middle of a class struggle between the powerful COB, which represented labor, peasants, and sectors of the middle class, and the relatively small but organized private sector led by the Confederation of Private Entrepreneurs of Bolivia (Confederación de Empresarios Privados de Bolivia -- CEPB). This conflict reflected a recurring debate in Bolivia between models of development and the question of what class should bear its costs. It also revealed the extent of Bolivia's reliance on foreign aid.

Between 1982 and 1985, the CEPB and COB attempted to pressure the government to enact policies favorable to their interests. Siles Zuazo would decree a stabilization program designed to satisfy the IMF and the United States internationally and the CEPB domestically. The COB would respond with strikes and demonstrations, often backed by peasants and regional civic associations. Lacking congressional support, the government would modify the program to the point of annulling its effectiveness through wage increases and subsidies, thereby provoking the wrath of the CEPB and IMF.

By 1984 the government was completely immobilized and incapable of defining effective economic policies. The result was the transformation of a severe economic crisis into a catastrophe of historic proportions. During the first half of 1985, inflation reached an annual rate of over 24,000 percent. In addition, Bolivia's debt-servicing payments reached 70 percent of export earnings. In December 1984, lacking any authority to govern because of the conflict with Congress, labor, the private sector, and regional groups, the Siles Zuazo government reached the point of collapse. As the crisis intensified, the opposition forced Siles Zuazo to give up power through a new round of elections held in July 1985.

The 1985 elections reflected the complex nature of the Bolivian political process. Banzer, who had stepped down in disgrace in 1978, won a slight plurality with 28.5 percent; the old titan of the MNR, Paz Estenssoro, finished a close second with 26.4 percent. A faction of the MIR, headed by Vice President Jaime Paz Zamora, took third. An indication of the left's fall from the grace of the electorate was the MNRI's showing of only 5 percent.

In Congress the MNR moved quickly to form a coalition that would enable Paz Estenssoro to gain the presidency. After luring the MIR with promises of state patronage, a coalition was formed, and Paz Estenssoro was elected president of Bolivia for the fourth time since 1952. Although enraged by the outcome of the congressional vote, Banzer and the ADN made the calculated decision to accept it. In so doing, the former dictator protected his long-term political interests.

Bolivia - Democracy and Economic Stabilization

In 1985 the entire nation was submerged in a state of tense anticipation as Paz Estenssoro unveiled his strategy to confront the economic and political crisis. Throughout August 1985, a team of economists worked to design the new government's economic initiatives. The private sector came to play a crucial role in the elaboration and implementation of the government's economic policy. The private sector's main organization, the CEPB, had shifted its traditional support for authoritarian military solutions and by 1985 had become clearly identified with freemarket models that called for reducing the state's role in the economy. When the economic reforms were announced, the impact on the private sector became evident.

On August 29, 1985, Paz Estenssoro signed Decree 21060, one of the most austere economic stabilization packages ever implemented in Latin America. Hailed as the NPE, the decree sought to address the structural weaknesses in the state capitalist development model that had been in place since 1952. Specifically, the decree aimed at ending Bolivia's record-setting hyperinflation and dismantling the large and inefficient state enterprises that had been created by the revolution. Hence, the NPE represented a shift from the longstanding primacy of the state in promoting development to a leading role by the private sector. The NPE also rejected the notion of compatibility between populist redistribution and capitalist development that had characterized previous MNR-led regimes.

After addressing the economic side, Paz Estenssoro moved to resolve the political dimensions of the crisis. In fact, shortly after the announcement of Decree 21060, the COB, as it had done so often under Siles Zuazo, headed a movement to resist the NPE. But the COB had been weakened by its struggles with Siles Zuazo. After allowing the COB to attempt a general strike, the government declared a state of siege and quickly suffocated the protest. Juan Lechín Oquendo and 174 other leaders were dispatched to a temporary exile in the Bolivian jungle. They were allowed to return within weeks. By then, the government had already delivered the COB a punishing blow that all but neutralized organized labor.

Even as he moved to contain the COB, Paz Estenssoro sought to overcome the potential impasse between the executive and legislature that had plagued Siles Zuazo for three years. The MNR did not have a majority in Congress, and therefore Paz Estenssoro had to contemplate a probable confrontation with the legislature; for this reason, among others, he decreed the NPE. In moving to overcome this political gap, Paz Estenssoro did not seek support from the center-left groups that elected him. Indeed, any move in that direction would have precluded the launching of the NPE in the first place. Paz Estenssoro had in fact seized on parts of the program pushed by Banzer and the ADN during the electoral campaign. As a result, Banzer was left with the choice of backing Paz Estenssoro or opposing a stronger version of his own policy program.

Discussions opened by Paz Estenssoro with Banzer ripened into a formal political agreement, the Pact for Democracy (Pacto por la Democracia--pacto), signed on October 16, 1985. The formulation of the pacto was a crucial political development. Under its terms, Banzer and the ADN agreed to support the NPE, a new tax law, the budget, and repression of labor. In return, the ADN received control of a number of municipal governments and state corporations from which patronage could be used to consolidate its organizational base. The MNR also agreed to support reforms to the electoral law aimed at eliminating the leftist groups that voted against Banzer in Congress. Most important, the pacto allowed ADN to position itself strategically for the 1989 elections.

In the most immediate sense, the pacto was effective because it guaranteed the Paz Estenssoro government a political base for implementing the NPE. For the first time in years, the executive was able to control both houses of Congress. Paz Estenssoro used this control to sanction the state of siege and defeat all attempts of the left to censure the NPE. In broader historical terms, the pacto was significant because it created a mechanism to overcome the structural impasse between the executive and the legislature.

The pacto served other purposes as well; for example, it gave Paz Estenssoro leverage over some of the more populist factions of the MNR who were unhappy with the NPE because they saw it as a political liability in future elections. For three years, Paz Estenssoro used the pacto to prevent any possible defections. Hence, party factions that could have harassed the president contemplated the immediate costs of being cut off from patronage even as they were forestalled in their larger political goal of altering the NPE.

As in Colombia and Venezuela, where pacts between the principal parties were responsible for the institutionalization of democracy, the pacto was deemed an important step toward consolidating a two-party system of governance. In contrast to the Colombian and Venezuelan cases, however, the pacto was based more on the actions of Banzer and Paz Estenssoro than on the will of their respective parties. Moreover, because the pacto was a reflection of patronage-based politics, its stability during electoral contests was tenuous at best. During the municipal elections in 1987, for example, party members, when confronted with patronage offers from opposition parties, faced enormous difficulties in adhering to it.

The campaign for the 1989 elections tested the pacto to the breaking point. At issue was the need to ensure that in the event neither candidate secured a majority, the losing party would support the victor in Congress. Polls conducted in December 1988 and January 1989 suggested that Banzer could emerge victorious. Under the terms of an addendum to the pacto signed in May 1988, the MNR would be obligated to support Banzer in Congress. This situation provoked a sense of despair in the MNR, which perceived itself as an extension of the ADN with no real likelihood of emerging victorious in May 1989.

In a surprising pre-electoral move, Banzer announced the formation of a "national unity wand convergence alliance" between the ADN and MIR. Congress deliberated fourteen hours on August 5 before electing Jaime Paz Zamora as president of Bolivia and Luis Ossio Sanjinés of the ADN Christian Democratic Party (Partido Demócrata Cristiano--PDC) alliance as vice president. On handing the presidential sash to his nephew, Paz Zamora, on August 6, Paz Estenssoro thereupon became the first president to complete a full term in office since his second presidency in 1960-64. The political maturity of the election was illustrated not only by Banzer's support for the MIR and the MIR's willingness to join with the ADN but also by the vows of both Banzer and Paz Zamora to continue with the policies of the NPE.

The "national unity and convergence alliance," however, revealed that old ways of doing politics had survived. Although the ADN and MIR each received nine ministries, the ADN controlled the principal policy-making bureaucracies, such as foreign affairs, defense, information, finance, mining and metallurgy, and agriculture and peasant affairs. The ADN's share of the cabinet posts went to many of the same individuals who had ruled with Banzer in the 1970s. The MIR's principal portfolios were energy and planning. Following a traditional spoils system based on patronage, the new ruling partners divided among themselves regional development corporations, prefectures, and decentralized government agencies, as well as foreign embassy and consular posts.

Bolivia - The 1989 Elections

In the initial months of 1989, the MNR tried in vain to postpone the election date, arguing that the deadline for electoral registration restricted citizen participation. In December 1988, the party's delegation in Congress had managed to amend the electoral law of 1986. Arguing that the new registration requirements, which limited registration to citizens who possessed cédulas de identidad (national identity cards), constituted a violation of universal suffrage, the MNR pushed through legislation that added birth certificates and military service cards as valid registration documents. The ADN refused to go along with its ally and eventually charged the MNR with conducting fraudulent registrations. By mid-February this issue had triggered the rupture of the pacto.

The end of the pacto revealed an old reality about Bolivian politics. To achieve power, broad electoral alliances must be established; yet, electoral alliances have never translated into stable or effective ruling coalitions. On the contrary, electoral alliances have exacerbated the tensions built into a complex system. Thus, once in power, whoever controls the executive must search for mechanisms or coalitions such as the pacto to be able to govern. This search was the single most important challenge facing Bolivian politicians into the 1980s.

As expected, every political party was forced to scramble for new allies. The ADN joined forces with the now minuscule Christian Democrats by naming Ossio Sanjinés as Banzer's running mate in an effort to attract other political elements. Banzer led every major poll, and the ADN repeatedly called for Congress to respect the first majority to emerge from the May 7 election.

The situation was more complex in the MNR where, after a bitter internal struggle, Gonzalo Sánchez de Lozada, a pragmatic former minister of planning and coordination and prominent entrepreneur, captured the party's nomination. The MNR's strategy was to develop Sánchez de Lozada's image as a veteran movimientista (movement leader) to capture populist support. At the same time, party strategists intended to attract support from outside the party by building on the candidate's entrepreneurial background. The task of converting the candidate into an old party member apparently succeeded: old-line populist politicians dominated the first slots on the party's legislative lists. The naming of former President Walter Guevara Arze as the vice presidential candidate was perceived as further evidence of the party's success in influencing the candidate.

Following a similar electoral logic, the MIR sought to broaden its base of support by establishing ties with several parties, including Carlos Serrate Reich's 9th of April Revolutionary Vanguard (Vanguardia Revolucionaria 9 de Abril--VR-9 de Abril), the Revolutionary Front of the Left (Frente Revolucionario de Izquierda), and a number of dissidents from the MNRI. Paz Zamora, the MIR's candidate, led in some polls, and most analysts agreed that he would pose a significant threat to the MNR and ADN.

The left attempted a comeback following the disastrous experience of the UDP years. Headed by Antonio Aranibar's Free Bolivia Movement (Movimiento Bolivia Libre--MBL), the left grouped into a broad front labeled the United Left (Izquierda Unida--IU). The IU brought together splinter factions of the MIR, the Socialist Party (PS-1), and the PCB, and it counted on the support of organized labor, especially the COB. Given the historical divisions within the Bolivian left, however, the IU was not perceived to be a serious contender. If it could maintain unity beyond the 1989 elections, observers believed that its impact might be greater than anticipated.

The main newcomer to national electoral politics, although no stranger to La Paz politics, was Carlos Palenque. Popularly known as el compadre (the comrade), Palenque was a former folksinger turned radio and televison owner and talk show host. His "popular" style of broadcasting had always enjoyed widespread appeal in the working-class and marginal neighborhoods surrounding La Paz. For at least a decade, Palenque had been regarded as a possible candidate for mayor of La Paz; during the 1987 municipal elections, his name was under consideration by the MNR.

Palenque's move into national politics was prompted by the closing down of his television station for airing accusations made by an infamous drug trafficker, Roberto Suárez Gómez, against the Bolivian government. To promote his candidacy, Palenque founded Conscience of the Fatherland (Conciencia de la Patria--Condepa), which grouped together a bizarre strain of disaffected leftists, populists, and nationalists who had defected from several other parties.

Ten parties and fronts contested the election, which was held as scheduled on May 7, 1989. The results, a virtual three-way tie among the MNR, ADN, and MIR, were not surprising. As expected, Congress once again was given the task of electing the next president from the top three contenders. But the slight majority (a mere 5,815 votes) obtained by the MNR's candidate, Sánchez de Lozada, was surprising to observers, as was the unexpected victory by Palenque in La Paz Department. His showing was significant in a number of ways. First, it demonstrated that none of the major political parties had been able to attract lower middle-class and proletarian urban groups, who had flocked to el compadre; Palenque had wisely targeted marginal and displaced sectors of La Paz. Second, Condepa's showing reflected the growth of racial and ethnic tension in Bolivian electoral politics. For the first time in the history of the Bolivian Congress, for example, a woman dressed in native garb would serve as a deputy for La Paz Department.

Claims of fraud from every contender, especially in the recounting of the votes, clouded the legitimacy of the process. At one stage, fearing an agreement between the ADN and MIR, the MNR called for the annulment of the elections. Indeed, negotiations were well advanced between the MIR and ADN to upstage the relative victory obtained by the MNR. Between May and early August, the top three finishers bargained and manipulated in an attempt to secure control of the executive branch.

The composition of Congress exacerbated the tensions between the parties in contention. Because seventy-nine seats are needed to elect a president, compromise was indispensable. In mid-1989, however, it was unclear whether the political system in Bolivia had matured enough to allow for compromise.

Bolivia - Political Forces and Interest Groups

Political Parties

Bolivian political parties do not perform the classic functions of aggregating and articulating the interests of social classes, regions, or individuals. Historically, political parties have been divorced from pressure groups such as labor, the private sector, and regional civic committees. Instead, parties have been vehicles through which politicians can lay a claim to state patronage. As in other Latin American nations, the dependent nature of the middle class, which does not own hard sources of wealth and therefore relies on the state for employment, accounts partially for this role.

Since the 1950s, the MNR has been the major party in Bolivia. Because the MNR was the party of the 1952 Revolution, every major contemporary party in Bolivia is rooted in one way or another in the original MNR. The rhetoric of revolutionary nationalism introduced by the MNR has dominated all political discourse since the 1950s. Owing to the fact that the MNR was a coalition of political forces with different agendas and aspirations, however, the subsequent splits in the party determined the course of Bolivian politics.

The major splits in the MNR occurred among Guevara Arze, Paz Estenssoro, Siles Zuazo, and Lechín, the principal founders of the party. Each led a faction of the party that sought to control the direction and outcome of the revolution. As MNR leaders tried to subvert each other, factional strife culminated in the overthrow of the MNR and the exile of the four titans of the revolution.

Although years of military rule did not erode the MNR's appeal, factional disputes within the party resulted in a proliferation of parties that surfaced in the late 1970s when the military opted for elections. Indeed, political party lines were very fluid; party boundaries were not the product of ideological distinctions and shifted at any moment.

In the late 1970s, Paz Estenssoro, Lechín, Siles Zuazo, and Guevara Arze reemerged as the principal political actors. Siles Zuazo's MNRI joined forces with the PCB and the MIR to finally gain control of the presidency in 1982. Paz Estenssoro orchestrated a congressional vote that catapulted him to power in 1985. Until 1986 Lechín remained at the helm of the COB. Guevara Arze served as interim president in 1979 and was the MNR's vice presidential candidate in 1989.

Founded in 1979 by Banzer, the ADN was the most important political party to have emerged in the 1980s. The ADN was significant in that it grouped the supporters of Banzer into a relatively modern party structure. Simultaneously, however, the ADN was a classic caudillo-based party, with Banzer sitting at the top as the undisputed leader.

The ADN's ideology of democratic nationalism was not significantly contrary to the revolutionary nationalism of the MNR; in fact, several of the principal ADN leaders were dissidents of the MNR. In large part, however, democratic nationalism was rooted in a nostalgia for the stability experienced under Banzer's dictatorship in the 1970s.

Since the 1979 elections, the ADN's share of the electorate has grown considerably. Especially in the urban areas, the party has attracted the upper sectors of the middle class. Its call for order, peace, and progress following the turmoil of the Siles Zuaro years resulted in its outpolling other parties in the 1985 election. Banzer claimed to have the backing of 500,000 Bolivians, a figure that would make the ADN the largest party in Bolivia.

The other significant political party to emerge after 1970 was the MIR. Founded in 1971 by a group of young Christian Democrats educated at Louvain College in Belgium, the MIR was linked to the student movement that swept across the world in the latter part of the 1960s. Initially, the MIR expressed solidarity with urban guerrilla groups such as the National Liberation Army (Ejército de Liberación Nacional--ELN) and had close ties to its namesake, Chile's more radical Movement of the Revolutionary Left (Movimiento de la Izquierda Revolucionaria--MIR).

The Bolivian MIR achieved political maturity during Siles Zuazo's government. As a part of the cabinet, it was responsible in large measure for enacting important economic decrees. Paz Zamora, the MIR's chief, served as the UDP's vice president. Like other Bolivian political groups, however, the MIR went from a party of idealistic youth to an organization that was captured by a cadre of job-hungry politicians.

By 1985 the MIR had split into at least three broad factions that represented the ideological tensions within the original party. Paz Zamora's faction was the most successful, mainly because it retained the party's name while avoiding responsibility for the UDP period. By the late 1980s, Paz Zamora's MIR had become the third largest political party in Bolivia; indeed, some observers believed that after the May 1989 elections it would eclipse the MNR. The new MIR portrayed itself as a Social Democratic party that could work within the parameters of the NPE implemented in 1985.

The MBL, which reflected one of the more orthodox Marxist strains within Bolivia's original MIR, remained an important MIR faction in the late 1980s. For the 1989 elections, the MBL managed to put together the IU. The IU included the remnants of a deeply divided Bolivian left, including the PCB, which was still feeling the effects of its role in the infamous UDP coalition.

Bolivia - The Military

In 1952 the MNR downgraded the military as an institution and attempted to create new armed forces imbued with revolutionary zeal. This event initiated a long and complex relationship between the armed forces and politicians. The 1964 coup by General Barrientos began a cycle of military intervention that culminated only in 1982, with the withdrawal of the military from the political arena.

By then the military as an institution had been reduced to a collection of factions vying for control over the institution and the government. A process of disintegration within the armed forces reached its extreme form under General García Meza, who took power in 1980 after overthrowing Lidia Gueiler Tejada (1979- 80), a civilian constitutional president. By that juncture, however, the military was plagued by deep internal cleavages along ideological, generational, and rank lines. The connection of García Meza and his followers to the burgeoning cocaine industry further divided the armed forces.

Officers such as Banzer and García Meza represented the last vestiges of the prerevolutionary armed forces that sought unsuccessfully to eradicate populism in Bolivia. In the process, however, they discredited the military and, at least in the short run, eliminated the institution as a power option in Bolivian politics. The older generation retired in disgrace, accused of narcotics trafficking, corruption, and violations of human rights.

Since 1982 the military has undergone a major reconstruction process. The old guard of "coupist" officers was replaced as the generation of officers who had graduated from the new military academy in the 1950s reached the upper echelons of the armed forces. The younger generation appeared committed to the rebuilding of the military and manifested its support for civilian rule. It also accepted end-of-year promotions authorized by the Senate.

After 1982 key officers rejected overtures from a few adventuresome civilians and soldiers who were dismayed by the "chaos and disorder" of democratic rule. The military command was even involved in aborting a coup attempt in June 1984 that included Siles Zuazo's brief kidnapping. Officers realized that a coup against Siles Zuazo or any other civilian would disturb the military's efforts to rebuild.

The military's unwillingness to launch another coup was even more significant given the economic and political situation in Bolivia between 1982 and 1985. The COB and business, regional, and peasant groups exerted untenable demands on the Siles Zuazo government. All of these groups tried to coerce the regime by using tactics such as strikes, roadblocks, and work stoppages.

The military remained in its barracks despite the social turmoil that enveloped the country. Indeed, the only military action during this period occurred in response to a presidential directive. In March 1985, Siles Zuazo called upon the military to restore order after miners occupied La Paz. Once this had been accomplished, the armed forces retreated obediently. Their mission then became one of ensuring the peaceful transfer of power to the victor of the 1985 elections. The military's role in support of democracy in the late 1980s was in large measure dependent on the success of Paz Estenssoro's reforms under the NPE. In early 1989, Bolivia's armed forces had no reason or excuse to intervene.

Because of the military's willingness to engage in joint exercises with United States troops and in drug interdiction programs in the late 1980s, the military once again became the recipient of aid that had been drastically reduced since 1980. The joint antinarcotics operation with the United States, dubbed "Operation Blast Furnace," also provided the military with important equipment and training. In fact, a close partnership developed between Bolivia's armed forces and the United States Southern Command.

A new generation of officers were to assume command of the armed forces in the 1990s. Most were young cadets during the 1970s and were given special treatment and protection by General Banzer. Some observers had suggested that these officers might have intervened if Banzer had been denied the presidency in 1989 by a congressional coalition.

Bolivia - Organized Labor

Historically, organized labor in Bolivia had been one of the most politically active and powerful in Latin America. Owing to the importance of mining in the economy, the Trade Union Federation of Bolivian Mineworkers (Federacíon Sindical de Trabajadores Mineros de Bolivia -- FSTMB) has been the backbone of organized labor since the mid-1940s. Before the 1952 Revolution, the FSTMB orchestrated opposition to the three dominant tin barons and led protests against worker massacres.

During the first few days of the revolution, the MNR founded the COB in order to group the FSTMB and the other labor unions under an umbrella organization that would be subordinate to the party. In creating the COB, the MNR was following the example of Mexico's PRI, which effectvely controlled labor through the party's structures. In Bolivia the COB and especially the FSTMB, which controlled labor in the nationalized mining sector, pushed for worker comanagement and cogovernment. Moreover, worker militias were allowed to form freely when the military as an institution was downgraded.

As a result, the COB became an autonomous institution that challenged the primacy of the MNR. Relations between the MNR and the COB were more state to state than party to subordinate labor union. In fact, the COB came to perceive the state as an apparatus that had been appropriated by the MNR politicians and that had to be captured in order to further the interests of the working class. This relationship was to characterize the relations between the COB and the Bolivian state until the mid1980s .

As the COB grew in power, the MNR relied on the reconstructed military to control labor and its militias. With the adoption of a state capitalist model of development that postponed the aspirations of organized labor, the conflict between the state and labor deepened. This conflict climaxed in the mid-1960s under the military government that overthrew the MNR. With the exception of the 1969-71 period, the military initiated a long period of repression that sent the COB into clandestine existence.

When the military called for elections in 1978, the COB, despite being outlawed between 1971 and 1978, reemerged as the only institution able to represent the interests of the working class. Moreover, the COB directed the workers to demand economic, political, and social rights that had been denied to them throughout the military period.

Labor's strength climaxed during Siles Zuazo's second term (1982-85). However, the economic crisis had reached such extremes that in surrendering to the demands of the workers the UDP government only exacerbated the economic situation. Although this period demonstrated the power of the COB to coerce governments, it also led to the downfall of organized labor. As the COB staged hundreds of strikes and stoppages, the economy faltered and public opinion turned against labor.

The MNR government headed by Paz Estenssoro thus was able to impose the NPE on the workers. The COB attempted to stage a strike, but three years of confrontation with the Siles Zuazo government had seriously weakened its ability to mobilize labor. With the support of the pacto, Paz Estenssoro imposed a state of siege that effectively debilitated organized labor. Indeed, the COB's power was undermined so effectively that in the late 1980s it was incapable of staging a general strike.

After 1985 labor's efforts centered on preventing the decentralization and restructuring of Comibol. The restructuring of the nationalized mining sector, especially the mass layoffs, had decimated the FSTMB. As a result, the COB demanded the rehabilitation of Comibol and respect for the rights of labor unions. In September 1986, the FSTMB sponsored a workers' march, dubbed "March for Life," to fend off plans to restructure Comibol, to halt mass firings, and to raise miners' salaries. In response, the government declared a congressionally sanctioned state of siege and immediately imposed Decree 21337, which called for the restructuring of Comibol along the lines originally prescribed in Decree 21060.

The "March for Life" forced government and labor to enter into negotiations, mediated by the Bolivian Bishops Conference (Conferencia Episcopal Boliviano--CEB), that postponed the implementation of Decree 21337. The result was an accord whereby the government agreed that all production and service units targeted for elimination by the decree would remain intact. Moreover, the government agreed that all management decisions in Comibol would be made only after consulting with labor unions. Finally, the MNR government promised to end massive layoffs and agreed that employment would be capped at 17,000 in Comibol.

Because the accord was opposed by radical labor leaders grouped under the so-called Convergence Axis, the agreement fell through, and Decree 21337 was imposed. Labor had suffered its worst defeat. In July 1987, radical labor leaders were ousted at the COB's convention. COB strategies in 1988 proved more effective. In May 1988, for example, it helped defeat proposals to decentralize health care and education. For the moment, labor had been reduced to defensive actions that sought to protect its few remaining benefits. Nonetheless, the COB was still a formidable force that would have to be faced in the future. For democracy to survive in Bolivia, it was clear that the demands and aspirations of labor would have to be taken into account.

Bolivia - The Peasantry

The peasantry became politically active only after the 1952 Revolution. Previously, much of the Indian peasant population had been subjected to a form of indentured service called pongaje and had been denied voting rights through a series of legal restrictions. Pongaje ended with the Agrarian Reform Law enacted in 1953. Universal suffrage, in turn, incorporated the Indian masses into Bolivian political life.

The MNR established a new type of servitude, however, by using the Indian peasant masses as pawns to further the political interests of the party. Party bosses paraded peasants around at election rallies and manipulated peasant leaders to achieve particularistic gain. Some authors have labeled this system of political servitude pongaje político, a term that evokes images of the prerevolutionary exploitation of the peasantry.

As the MNR surrendered control of the countryside to the military, the peasantry came to rely extensively on military protection. This reliance enabled the military to forge the socalled Peasant-Military Pact, through which they promised to defend the newly acquired lands of the peasantry in return for help in defeating any new attempts to dismantle the military as an institution.

With the overthrow of the MNR in 1964, General Barrientos buttressed his grip on power by manipulating the Peasant-Military Pact. The pact became a mechanism through which the military coopted and controlled the peasantry. Autonomous peasant organizations, as a result, failed to emerge.

During Banzer's presidency, the military attempted to continue the manipulation of the peasantry. In January 1974, peasant demonstrations against price increases culminated in a bloody incident known as the "Massacre of Tolata," in which more than 100 peasants were either killed or wounded. The Tolata incident put an end to the Peasant-Military Pact; paradoxically, it led to the emergence of a number of autonomous peasant and Indian organizations that remained active in politics in the late 1980s.

The most significant was the Katarista movement, or Katarismo, which embraced political parties and a campesino union. The political parties, such as the Túpac Katari Indian Movement (Movimiento Indio Túpac Katari--MITKA), were based on an ideology rooted in the Indian rebellion that Julián Apaza (Túpac Catari, also spelled Katari) led against the Spaniards in 1781. After 1978 the MITKA succeeded in electing several deputies to Congress.

The union-oriented branch of Katarismo founded the Túpac Katari Revolutionary Movement (Movimiento Revolucionario Túpac Katari-- MRTK). In 1979 the MRTK established the first peasant union linked to the COB, known as the General Trade Union Confederation of Peasant Workers of Bolivia (Confederación Sindical Ünica de Trabajadores Campesinos de Bolivia -- CSUTCB). The establishment of this union was a significant development. For the first time, an autonomous peasant organization recognized a commonality of interests with labor. Many observers noted, however, that the campesino movement had never really been accepted by the COB. Moreover, the fortunes of the MRTK were tied to those of its ally, the UDP.

In the 1980s, Bolivian peasant organizations fared poorly. MITKA and MRTK parties performed worse than anticipated in elections and were forced to seek alliances with larger parties. Electoral reforms in 1980 and 1986 further undermined the capacity of peasant political parties to compete in national elections. The greatest challenge confronting these movements was the need to break the monopoly over the peasantry held in the countryside by the traditional political parties.

Bolivia - Regional Civic Committees

In the late 1980s, Bolivia was one of the least integrated nations of Latin America. Because Bolivia's geographic diversity generated deep regional cleavages, Bolivian governments had been challenged to incorporate vast sectors of the country into the nation's political and economic systems. The most profound of these regional splits separated the eastern lowlands region known as the Oriente (Santa Cruz, Beni, and Pando departments and part of Cochabamba Department) from the Altiplano. Natives of the Oriente, called Cambas, often looked with disdain at highlanders, referred to as Kollas. Over the years, Cambas contended that the central government, located in La Paz, had financed the development of the Altiplano by extracting resources from Santa Cruz Department. This became a self-fulfilling prophecy in the mid-1980s because of the primacy of natural gas and the collapse of the mining industry. For most of Bolivia's history, however, the Altiplano had supported the development of the Oriente.

In this context of regional disputes, comités cívicos (civic committees) emerged to articulate and aggregate the interests of cities and departments. The most significant was the Pro-Santa Cruz Civic Committee, founded in the early 1950s by prominent members of that department's elite. In the late 1950s, this committee effectively challenged the authority of the MNR in Santa Cruz. Some observers argued that between 1957 and 1959 the civic committee in effect ruled Santa Cruz Department. As was the case with other sectors of society, the MNR was unable to subordinate regional interests to the interests of the party.

During the period of military rule, leaders of the civic committees received prominent government posts. During the Banzer period, for example, members of the Santa Cruz committee were named mayor and prefect. The military was among the first to discover that civic committees were better mechanisms for regional control than political parties.

Civic committees also proved to be more effective representatives of departmental interests. Under democratic rule, the civic committee movement bypassed parties as valid intermediaries for regional interests. This situation was attributable to the political parties' failure to develop significant ties to regions. Regional disputes often took precedence over ideology and party programs. Nevertheless, although civic committees often presented the demands of their respective regions directly to the executive branch, the Constitution of 1967 states that only political parties can represent the interests of civil society. Civic committees thus forged contacts within political parties, and political parties, in turn, actively sought out members of civic committees to run on their slates. These efforts by political parties to incorporate the demands of the civic committees as their own could be perceived as healthy for the institutionalization of an effective party system in Bolivia. Moreover, civic committees helped to relieve partially the regional tensions that, under authoritarian regimes, were mediated only by the military.

Bolivia - The Private Sector

Although historically Bolivia had a very small private sector, it wielded considerable political influence. Before the 1952 Revolution, three large enterprises accounted for the bulk of the nation's mining production and were the only other major source of employment besides the state. With the advent of the revolution and the nationalization of the mines, the private sector suffered a severe setback. The ideology of the revolutionaries was to establish a model of development in which the state would take the lead role. But the MNR's intention was also to create a nationally conscious bourgeoisie that would reinvest in Bolivia and play a positive role in the country's development.

As the revolution changed course in the 1950s, the private sector recovered under the tutelage of the state. Joint ventures with private, foreign, and domestic capital were initiated during the late 1950s, and Bolivia moved firmly in a state capitalist direction in the 1960s. This pattern of development had a negative effect on the private sector. Private entrepreneurs became dependent on the state for contracts and projects. This dependence eliminated entrepreneurial risk for some individuals in the private sector while simultaneously increasing the risks for others who lacked governmental access. As a result, the private sector divided into two broad camps: those who depended on the state and prospered and those who relied on their entrepreneurial skills and fared poorly.

In 1961 the CEPB was founded as a pressure group to represent the interests of the private sector before the state. Fearing the impact of populist and reformist governments, the private sector sought protection from the military; in fact, individual members of the CEPB often funded coups. Beginning with the Barrientos government, the CEPB exerted pressure on military regimes and extracted significant concessions from the state. The private sector came to play a protagonist role during the dictatorship of Banzer; many members of the CEPB staffed key ministries and were responsible for designing policies.

During this period, however, the CEPB did not speak for the private sector as a whole. In fact, many private entrepreneurs became disenchanted with the economic model and opposed the Banzer regime. State capitalism actually hindered the development of a modern and efficient private sector because a few individuals benefited at the expense of the majority. Moreover, private entrepreneurs realized that the state was a competitor that had an unfair advantage in the marketplace.

By the end of the tumultuous transition period in 1982, CEPB members generally believed that a liberalized economy and a democratic system would serve its class interests better than any authoritarian dictatorship. The CEPB became one of the principal groups that forced the military out of politics in 1982. It then pressured the weak UDP government to liberalize the economy and to eliminate state controls over market forces, opposing attempts to regulate the activity of the private sector. Ironically, although generally hostile to the private sector, several UDP policies, such as the "dedollarization" decree, were highly favorable to that sector.

During the UDP period, the CEPB emerged as a class-based organization that articulated the interests of the private sector and countered those of COB-led labor. In a very real sense, a well-structured class conflict developed as two class-based organizations battled each other within the framework of liberal representative democracy.

The introduction of the NPE in 1985 represented the culmination of years of efforts by the private sector to liberalize the economy. Prominent members in the private sector, such as Gonzalo Sánchez de Lozada, Fernando Romero, Fernando Illanes, and Juan Cariaga, played a key role in the elaboration of the NPE. They expected the NPE to end the devastating economic crisis of the mid-1980s and to create a safe environment for private investment and savings. As stabilization measures brought a spiraling inflation rate to a halt, the NPE was lauded as the "Bolivian miracle."

Yet, the NPE did not please the entire private sector, mainly because stabilization had not produced economic reactivation. Some entrepreneurs, long accustomed to the protective arm of the state, realized that the free market was a difficult place to survive and sought to alter the model. Others also suggested that the state should reestablish controls to protect local industry from what they considered to be unfair competition from neighboring countries.

Still, privatization of state enterprises and other measures helped raise the level of private sector confidence in the NPE. Because private enterprise was by definition the motor of the new economic model, a positive and supportive outlook developed in the CEPB. Whether or not this attitude would continue rested on the ability of the government to reactivate the economy.

Bolivia - The Media

Bolivian governments historically recognized the political significance of the media and attempted to censor communication channels employed by the opposition. In the 1940s, the MNR utilized the daily La Calle to mobilize support for its cause. During the revolution, the MNR purged unfavorable news media and established La Nación as the official news organization. Military governments, in particular, subjected journalists to harassment, jail terms, and exile. The Banzer government, for example, expelled many journalists from the country. In the early part of the 1980s, General García Meza closed down several radio stations and ordered the creation of a state-run network binding all private stations. Many Bolivian and foreign journalists were imprisoned and their reports censored.

After 1982 freedom of the press developed as an important byproduct of the democratization of Bolivian politics. Siles Zuazo's government was perhaps the first to honor its pledge to respect freedom of expression. Radio and newspapers were guaranteed freedoms that Bolivians had never enjoyed previously.

In the early years of democratic rule, the monopoly enjoyed by Channel 7, the state-run television station, represented the greatest obstacle to freedom of the press. Until 1984 Channel 7 was part of the patronage distributed to partisan supporters. Although the Siles Zuazo administration respected freedom of the press in other media, it used the station to further its political agenda and barred the establishment of privately owned stations. The Ministry of Information argued that television was a strategic industry that had to be kept under state control. After several rounds with the opposition in Congress, the minister of information refused to issue permits for the opening of private television stations.

Despite government restrictions, the media experienced a tremendous boom in the mid-1980s. The growth and proliferation of party politics generated a concomitant expansion in the communications industry. Newspapers, television, and radio stations mushroomed during the 1984-85 electoral season. Some forty-seven public and private television stations were in operation by 1989. One of the great surprises was the presence of six channels in the city of Trinidad, Beni Department, which had a population of fewer than 50,000. In short, democracy had magnified the importance of the media in Bolivian politics.

In 1989 daily newspapers reflected the general pattern of ties between party politics and the media. Five daily newspapers enjoyed national circulation: Presencia, Última Hora, Hoy, El Diario (La Paz), and El Mundo (Santa Cruz). Of these, Presencia was the only publication that did not reflect partisan interests. Founded in 1962 under Roman Catholic auspices, Presencia was the largest and most widely read newspaper, with a circulation of 90,000. In large measure, Presencia reflected the opinions of socially conscious Roman Catholic clergy, who often used its pages to advocate reform.

The oldest newspaper in Bolivia was El Diario, with a circulation of 45,000. Founded in 1904, this daily belonged to the Carrasco family, one of the most prominent in La Paz. Historically, El Diario reflected the very conservative philosophy of the founding family. In 1971, during the populist fervor of the Torres period, its offices were taken over by workers and converted into a cooperative. The Banzer government returned the newspaper to the Carrasco family. Hence, El Diario was generally perceived as partisan to the views of Banzer and his ADN party. The death of Jorge Carrasco, the paper's director, however, apparently changed the philosophy of the daily. Jorge Escobari Cusicanqui, the new director, was linked to Condepa.

El Mundo, with a circulation of 20,000, emerged as one of the most influential daily newspapers in Bolivia. It was owned by Osvaldo Monasterios, a prominent Santa Cruz businessman. This newspaper was commonly identified as the voice of the ADN. A similar observation could be made about Última Hora, formerly an afternoon paper that had been circulating in the mornings since 1986. Mario Mercado Vaca Guzmán, one of Bolivia's wealthiest entrepreneurs and a well-known ADN militant, owned Última Hora. This newspaper had hired outstanding academics to write its editorials.

Perhaps the most politicized of all newspapers in Bolivia was Hoy, owned by Carlos Reich Serrate, an eccentric politician who also owned Radio Méndez. Serrate demonstrated how the media could be utilized to achieve electoral advantage. Through Hoy, which had a circulation of 25,000, and Radio Méndez, Serrate made huge inroads into the rural areas of La Paz Department for the VR-9 de Abril, his political party. The only other newspaper of significance in Bolivia was Los Tiempos, a Cochabamba daily with a circulation of 18,000. In the 1970s, Los Tiempos had been the leading newspaper in the interior, but it was bypassed by El Mundo in the 1980s.

Like the printed media, private television stations reflected the positions of the major political parties in Bolivia. By the same token, the political line of the owners was often reflected in the news broadcasts of each channel. This situation was particularly true in La Paz, where the city's eight channels, including Channel 7 and Channel 13 (the university station), were tied directly to political parties.

Bolivia - FOREIGN RELATIONS

Bolivia's foreign relations have been determined by its geographical location and its position in the world economy. Located in the heart of South America, the country has lost border confrontations with every neighboring nation. Along with Paraguay, Bolivia is a landlocked nation that must rely on the goodwill of neighboring countries for access to ports. Bolivia's highly dependent economy has exacerbated the nation's already weak negotiating position in the international arena. Economic dependency has established the parameters within which Bolivia could operate in the world.

Bolivia's history is replete with examples of a recurring tragicomedy in the course of international affairs. Modern Bolivia is about one-half of the size that it claimed at independence. Three wars accounted for the greatest losses. Of these, the War of the Pacific, in which Bolivia lost the Littoral Department to Chile, was clearly the most significant; it still accounted for a large part of Bolivia's foreign policy agenda in the late 1980s. Territorial losses to Brazil during the War of Acre (1900-1903) were less well known but accounted for the loss of a sizable area. The bloody Chaco War with Paraguay (1932-35) culminated in the loss of 90 percent of the Chaco region.

Relations with the United States fluctuated considerably from the 1950s to the 1980s. United States economic aid to Bolivia during the 1950s and 1960s, the highest rate in Latin America, was responsible for altering the course of the 1952 Revolution. Subsequent United States support for military regimes of the right, however, left a legacy of distrust among sectors of the Bolivian population. The lowest point in bilateral relations was reached during the military populist governments of General Ovando (1965-66 and 1969-70) and General Torres (1970-71). Student protesters burned the binational center in 1971, and the military government expelled the Peace Corps. In the late 1970s, then-President Jimmy Carter's human rights program began Bolivia's transition to democracy by suspending United States military assistance to Bolivia. Washington's nonrecognition of Bolivia's military right-wing governments in the early 1980s because of their ties to the narcotics industry established a new pattern in United States-Bolivian relations.

The democratic era that began in 1983 also ushered in a more cordial phase in Bolivian regional relations. Bolivia's relations with Brazil and Argentina improved significantly, owing in part to a common bond that appeared to exist between these weak democratic governments emerging from military rule and facing the challenges of economic chaos. In early 1989, relations with Brazil were at their highest level in decades, as evidenced by new trade agreements. Relations with Argentina were rather strained, however, because of Argentina's inability to pay for Bolivian natural gas purchases. Bolivian-Chilean relations remained contentious because Bolivia's principal foreign policy goal revolved around its demand for an access to the Pacific Ocean.

In the 1980s, Bolivia became more active in world affairs. Adhering to a nonaligned policy, it established relations with the Soviet Union, Cuba, East European countries, and the Palestine Liberation Organization (PLO). In some cases, such as with Hungary, relations matured into trade agreements. Bolivia also maintained an important presence in the Organization of American States (OAS) and the United Nations (UN).

Bolivia - The United States

In the 1980s, the growth of Bolivia's narcotics industry dominated United States-Bolivia relations. Drug enforcement programs in Bolivia were begun in the mid-1970s and gathered strength in the early part of the 1980s. Concern over military officers' growing ties to cocaine trafficking led to a tense relationship that culminated in June 1980 in the military's expulsion of the ambassador of the United States, Marvin Weisman, as a persona non grata. The "cocaine coup" of July 1980 led to a total breakdown of relations; the Carter administration refused to recognize General García Meza's government because of its clear ties to the drug trade. President Ronald Reagan continued the nonrecognition policy of his predecessor. Between July 1980 and November 1981, United States-Bolivian relations were suspended.

In November 1981, Edwin Corr was named as the new ambassador, thus certifying Bolivian progress in narcotics control. Ambassador Corr played a key role in forcing the military to step down. In the subsequent democratic period, Corr helped shape the drug enforcement efforts of the weak UDP government. In 1983 President Siles Zuazo signed an agreement through which Bolivia promised to eradicate 4,000 hectares of coca over a three-year period in return for a US$14.2 million aid package. Siles Zuazo also promised to push through legislation to combat the booming drug industry.

With United States funding and training, an elite antinarcotics force known as the Rural Area Police Patrol Unit (Unidad Móvil Policial para Áreas Rurales--Umopar) was created. Siles Zuazo's government, however, was incapable of carrying out an effective antinarcotics program. Opposition from social groups, the significance of traditional coca use in Bolivia, and the absence of a major drug law were the most commonly cited explanations for this failure. Between 1982 and 1985, the total number of hectares under cultivation doubled, and the flow of cocaine out of Bolivia increased accordingly. In May 1985, in a final effort to save face with Washington, the Siles Zuazo government approved a decree calling for extensive drug enforcement programs; the United States perceived this effort as too little and too late, however.

Under Paz Estenssoro's government (1985-89), which made sincere efforts to combat the drug trade, relations with the United States improved significantly. As a result, aid to support economic reforms increased dramatically. In 1989 Bolivia received the greatest amount of United States aid in South America and the third highest total in Latin America, behind El Salvador and Honduras. The major obstacle to harmonious relations, however, remained the prevalence of drug trafficking.

During the Paz Estenssoro government, United States policy toward Bolivia was split between congressional efforts to enforce the 1985 Foreign Assistance Act, limiting aid to countries that engaged in drug trafficking, and the Reagan administration's stated objective of helping consolidate and strengthen democratic institutions in Latin America. Both aspects of United States policy were responsible for setting the course of relations with Bolivia.

In August 1985, Corr was replaced by Edward Rowell, who worked closely with the new Paz Estenssoro government to combat Bolivia's economic crisis and the flourishing drug trade. Rowell arrived in La Paz shortly after a visit of members of the Select Committee on Narcotics Abuse and Control of the United States House of Representatives. The committee's report revealed a deep distrust for Paz Estenssoro's stated intention to carry on with the drug battle and to implement fully the provisions of the May 1985 decree. In June 1986, owing to pressures from the United States Congress, Washington announced the suspension of US$7.1 million in aid because Bolivia had not satisfied the coca eradication requirements of the 1983 agreement.

Simultaneously, however, the Bolivian government secretly entered into Operation Blast Furnace, a joint Bolivian-United States effort aimed at destroying cocaine laboratories in Beni Department and arresting drug traffickers. Despite the outcry from political party leaders on the left, who argued that the operation required Bolivian congressional approval because it involved foreign troop movements through the nation's territory, Operation Blast Furnace began in July 1986 with the presence of over 150 United States troops. Paz Estenssoro's government survived the tide of opposition because of the support forthcoming from the ADN-MNR pacto.

Despite Bolivia's evident willingness to fight the drug war, the United States Congress remained reluctant to certify the country's compliance with the Foreign Assistance Act. In October 1986, the Bolivian envoy to Washington, Fernando Illanes, appeared before the United States Senate to report on the progress made under Operation Blast Furnace and on the intention of the Bolivian government to approve an effective drug law to both eradicate the coca leaf and control the proliferation of cocaine production. Revelations of continued involvement in the drug trade by Bolivian government officials, however, undermined the efforts of Paz Estenssoro's administration to satisfy the demands of the United States Congress.

Congressional efforts in the United States to sanction Bolivia contributed to the degree of frustration felt by the Paz Estenssoro government. Ambassador Rowell, however, was able to convince the Reagan administration that the Bolivian government was a trustworthy partner in the drug war. In spite of another reduction in United States aid in late 1987, the Reagan administration certified that Bolivia had met the requirements of Section 481(h) of the Foreign Assistance Act. Still, the United States Congress was dissatisfied and, in early 1988, decertified Bolivia's progress.

Bolivia's efforts met with some encouragement from the Reagan administration. The United States supported Bolivia's negotiations with international banks for debt reduction and provided substantial aid increases in terms of both drug assistance and development programs. United States aid to Bolivia, which totaled US$65 million in 1987, reached US$90 million in 1988. Although the Reagan administration requested almost US$100 million for fiscal year 1989, disbursement was contingent on the congressional certification of Bolivian progress on eradication programs. Despite this increase in assistance, it paled in comparison with total cocaine production revenues, conservatively estimated at US$600 million. Bolivian opponents to the drug enforcement focus therefore argued that although the United States advocated drug enforcement and interdiction programs, it was unwilling to fund them.

United States satisfaction with Bolivian efforts in terms of stabilizing the economy, consolidating democracy, and fighting the drug war, however, was evidenced in 1987-88 with the announcement of several AID programs. Specifically, assistance was targeted to rural development projects in the Chapare region of Cochabamba Department, the center of the cocaine industry. Other AID programs in health, education, and privatization of state enterprises were also initiated. More ambitious projects aimed at strengthening democratic institutions, such as legislative assistance and administration of justice, were scheduled for initiation in 1989. AID also proposed the creation of an independent center for democracy. Future AID disbursements, however, were contingent on Bolivia's meeting of the terms of the Foreign Assistance Act and agreements signed with the United States government for the eradication of 5,000 to 8,000 hectares of coca plantations between January and December 1989.

In 1988 Bolivia moved closer toward satisfying United State demands for more stringent drug laws. In July the Bolivian Congress passed, and Paz Estenssoro signed, a controversial bill known as the Law of Regulations for Coca and Controlled Substances.

The bombing incident during Secretary of State George P. Shultz's visit to Bolivia in early August 1988, attributed to narcoterrorists, raised concern that a wave of Colombian-style terrorism would follow. Shultz's visit was intended to praise Bolivia's effort in the drug trade; however, in certain Bolivian political circles it was perceived as a direct message about pressing ahead with coca eradication efforts.

Nevertheless, with the approval of the 1988 antinarcotics law and a new mood in Washington about Bolivia, Ambassador Robert S. Gelbard's arrival in La Paz in early October 1988 was an auspicious event. The ambassador headed efforts to confer "special case" status for Bolivia in order to allow for a more rapid disbursement of aid. In return, Bolivian government officials pointed out that United States-Bolivian relations were at their highest level ever.

Gelbard's honeymoon, however, was short lived. On October 26, Umopar troops killed one person and injured several others in the town of Guayaramerín in Beni. As was the case with another violent incident in Villa Tunari in June 1988, the left and the COB perceived Umopar's actions as the byproduct of a zealous and misguided antidrug policy. The presence of United States Drug Enforcement Administration (DEA) agents in Guayaramerín also renewed questions about the role of United States drug enforcement agents. As 1988 ended, controversy also surrounded the announcement that, under United States Army civic-action programs, United States technicians would help remodel and expand the airports in the cities of Potosí and Sucre.

United States support for the Bolivian government was expected to continue. In large measure, however, United States policy depended on the perception in the United States Congress of Bolivia's progress in controlling the drug trade. Operation Blast Furnace, the 1988 antinarcotics law, and the arrest of several drug lords demonstrated that Bolivia had become a loyal and useful partner in the United States war on drugs. Washington expected Bolivian cooperation to continue after the May 1989 elections.

Bolivia - The Soviet Union

During the military populist governments of General Ovando and General Torres in the late 1960s, Bolivia initiated relations with the Soviet Union and East European countries. The first formal exchange of ambassadors with the Soviet Union took place in 1969 and continued into the late 1980s. Political relations with the Soviet Union were strained somewhat during the first years of the Banzer regime, but they improved quickly when the Kremlin promised aid for the construction of huge metallurgical plants, such as La Palca and Karachipampa. A paradoxical situation thus developed as the Soviet Union established extremely good relations with the right-wing military government.

With the advent of democracy in the early 1980s, relations with the Soviet Union continued to improve. The UDP government established greater commercial ties, and political relations reached their highest level since 1969. But the situation deteriorated somewhat following the discovery of anomalies in the construction of the huge metallurgical complexes of the 1970s. La Palca and Karachipampa became useless white elephants, but the Bolivian government still owed for the cost of their construction. In 1985 Bolivia requested that the plants be made functional and that the Soviet Union take responsibility for their poor construction. One of the major points in contention was the use of obsolete technology that rendered the plants too expensive to operate. The Soviet Union refused to take responsibility for any defects in the construction of the plants. Simultaneously, the Soviet Union was quite stringent in applying conditions for the repayment of Bolivia's debt. Bolivia requested that its debt with the Soviet Union be renegotiated along the lines of Paris Club agreements, but Moscow refused.

Cool relations with the Soviet Union were also attributed to Bolivia's continued refusal to grant landing rights to Aeroflot, the Soviet Union's national airline. Landing rights had been negotiated during the Siles Zuazo presidency. In 1985 the new Bolivian government had promised Moscow that Aeroflot would be allowed to land on Bolivian territory. In return, the Soviet Union agreed to grant 200 scholarships and 200 round-trip tickets for Bolivian students and US$200 million in aid. Nonetheless, the conservative daily El Diario led a campaign to deny landing rights to Aeroflot, and other airlines, including United Statesbased Eastern Airlines, joined in this effort. A report from the military's National Security Council claiming that Soviet spies and arms, rather than travel agents, would be sent to La Paz served to shelve a decision on this issue.

Bolivia - The Third World

Following the onset of democracy, Bolivia pursued a nonaligned foreign policy. In 1989 Bolivia held relations with every communist nation, including Albania. Relations with China were established in 1985, and diplomatic relations with Taiwan suspended. In 1983 Bolivia had established relations with Cuba. Relations with Cuba improved steadily in the mid-to-late 1980s. Cuba donated medical equipment to hospitals and supported Bolivia's quest for nonaligned status. Bolivian leaders, including the foreign minister, met with Fidel Castro Ruz and praised the achievements of the Cuban Revolution.

Bolivia's foreign policy strategy in the early part of the 1980s was labeled "independent neutrality," which was an external manifestation of domestic populism rooted in the 1952 Revolution. In fact, neutrality in foreign affairs was historically associated with populist regimes, such as those of the MNR (especially 1952-56) and Ovando and Torres (1969-71).

The guiding principle of independent neutrality was that diplomatic relations should be maintained with all nations of the world, regardless of political ideology. Respect for the principles of nonintervention and self-determination was a second underlying theme. Independent neutrality reflected a nonaligned thrust with deep roots in Bolivian history. The first Paz Estenssoro government (1952-56), for example, was the first to adopt a policy of neutrality that reflected the revolutionary reality of the country in the 1950s. Subsequently, General Ovando's government established relations with the Soviet Union, and in 1970 General Torres became the first Bolivian leader to attend a conference of the Nonaligned Movement.

The Siles Zuazo regime criticized several United States efforts in Latin America and the Caribbean. In 1981 the Nicaraguan delegation to the UN allowed Siles Zuazo's "government in exile" to denounce human rights violations in Bolivia by the García Meza-led junta that was in power in La Paz. After assuming the presidency, Siles Zuazo criticized the Nicaraguan opposition force, the contras, and spoke in favor of the Contadora process, the diplomatic effort initiated by Mexico, Venezuela, Colombia, and Panama in 1983 to achieve peace in Central America. In 1983 Bolivia voted with the majority in the UN to censure the joint United States-Caribbean intervention in Grenada. Siles Zuazo's government also joined a region-wide movement to reform the OAS.

Critics of the 1985-89 Paz Estenssoro administration contended that his more conservative domestic political agenda was reflected in Bolivia's foreign policy. In their view, foreign policy had become increasingly tied to the interests of the United States, affecting Bolivia's relations with other Latin American democracies. Critics pointed out that Bolivia had refused to participate in regional forums on the foreign debt issue since 1985, pursuing instead direct negotiations with international banks. Additionally, they charged that Bolivia's lack of interest had excluded it from regional integration projects such as the Andean Common Market (ANCOM, also known as the Andean Pact). Others pointed out that Bolivia limited its participation in regional organizations to persuading its Andean neighbors to eliminate the controversial Decision 24 from the ANCOM charter that restricted foreign investment in the region.

The loss of autonomy in foreign policy, however, was not as obvious as critics claimed. The Bolivian government, in fact, had actively pursued regional ties; for example, it participated in ANCOM's Cartagena Agreement and the Río de la Plata Basin commercial and development agreement, and it sponsored a meeting of the Amazonian Pact. In terms of economic integration, the Bolivian government stressed its participation in the Latin American Economic System (Sistema Económico Latinoamericano-- SELA) and the Latin American Integration Association (Asociación Latinoamericana de Integración--ALADI).

A discernible change had occurred, however, with respect to Bolivia's policy toward the Central American conflict. In contrast to Siles Zuazo, Paz Estenssoro maintained a distance from the conflict, limiting himself to endorsing Costa Rican president Oscar Arias Sánchez's initiatives. Paz Estenssoro did not challenge the United States on this issue, which remained outside regional peace efforts, such as the Contadora support group. Most significantly, Bolivia was conspicuously absent from the Group of Eight Latin American democracies that demanded hemispheric autonomy, sought support for Cuba's return to the OAS, and put forth an agenda for reforming the OAS.

Bolivia continued to maintain good relations with the Nonaligned Movement in the late 1980s, although they were not as close as during the Siles Zuazo administration. According to Guillermo Gutiérrez Bedregal, Paz Estenssoro's foreign affairs and worship minister, relations were established with seventeen Nonaligned Movement nations, including Ethiopia, Mozambique, and Vietnam. In addition, the Paz Estenssoro regime pointed out that Bolivia occupied the vice presidency of the movement's Ministerial Conference in 1986 and had been actively involved in the organization of the Ministerial Conference for 1988.

Bolivia - Neighboring Countries

Bolivia's major foreign policy position in the twentieth century concerned its demands for a Pacific Ocean coastline on territory lost to Chile during the War of the Pacific (1879-80). In the early 1980s, the Siles Zuazo administration sought the support of the Nonaligned Movement at its conference in Managua. Although Bolivia secured multilateral support for its claim, international pressure produced few results. In fact, Chile refused to deal with Bolivia unless multilateral organizations such as the Nonaligned Movement and the OAS were excluded from the negotiations.

Relations with Chile changed following the election of Paz Estenssoro. Bedregal met on a regular basis with his Chilean counterpart to negotiate an outlet for Bolivia. Bedregal proposed the creation of a sovereign strip sixteen kilometers wide that would run north of the city of Arica and parallel to the Peruvian border. The tone of the negotiations suggested that an agreement was imminent.

On June 10, 1987, however, Chile rejected Bedregal's proposal, sending shock waves through the Bolivian government. The confidence of the Paz Estenssoro government was seriously shaken by this foreign policy defeat, especially after so much emphasis had been placed on its success. Bolivians were, however, swept by another wave of anti-Chilean nationalism in support of the government. Members of Bolivia's civic organizations spontaneously imposed a symbolic boycott of Chilean products. Relations with Chile were again suspended, and little hope for any improvement in the near future remained.

Relations with Argentina and Brazil, in contrast, showed improvement. A bond of solidarity developed among the three nations owing to their common dilemma of trying to democratize in the midst of deep economic recessions. Tensions arose, however, over Argentina's inability to pay for its purchases of Bolivian natural gas. United States intervention on Bolivia's behalf provided some relief to the Bolivian economy. Although by early 1989 Argentina still owed over US$100 million, a joint accord reached in November 1988 reduced tension. Revenue from natural gas sales was crucial for the success of the new economic model adopted in 1985. Hence, Argentina's discontinuance of purchases of Bolivian natural gas in 1992 when the sales agreement was due to expire could prove to be catastrophic.

Fortunately, Bolivia signed important trade agreements with Brazil in 1988 and 1989. Brazil agreed to purchase approximately 3 million cubic meters of Bolivian natural gas per day beginning in the early to mid-1990s. The sales were projected to yield approximately US$373 million annually to the Bolivian economy. Brazil also agreed to help Bolivia build a thermoelectric plant and produce fertilizers and polymers. Finally, Bolivia and Brazil signed an agreement for the suppression of drug traffickers, the rehabilitation of addicts, and control over chemicals used in the manufacturing of drugs.

Bolivia - Membership in International Organizations

Latin American integration was a major tenet of Bolivian foreign policy largely because Bolivia recognized its severe geographic limitations. As mentioned earlier, Bolivia participated actively in the Amazonian Pact, ANCOM, and the Río de Plata Basin commercial and development agreement in the late 1980s. In fact, Bolivia was the only country in Latin America that could boast membership in all three of these organizations. Bolivia was also a charter member of the OAS and, as noted previously, was active in SELA and ALADI.

Bolivia was a founding member of the UN. In the 1980s, the UN served as a forum for several of Bolivia's demands, including its claims against Chile for access to the Pacific Ocean. In the late 1980s, the UN also provided cooperation on debt-relief programs and advice on coca-eradication programs.

Like those of other nations in Latin America, Bolivia's economy was closely scrutinized by the IMF, the World Bank, and the Inter-American Development Bank (IDB). Although its credit rating had been adversely affected by nonpayment of loans to private banks since 1985, Bolivia managed to restore its credibility, and the IMF and other lending agencies reopened credit lines.