Unsettled by Disruption in Peru, Bolivians Back Away From Conflict

SHAKEN by events in neighboring Peru, Bolivian teachers, students, campe-sinos, and workers in nationalized industries have ceased the violent protests that had paralyzed the capital La Paz for 10 weeks.

Concerned that the escalating conflict could lead to a similar suspension of democratic freedoms in Bolivia, the teachers voted Tuesday to end a three-week, union leaders said.

The widespread unrest had led the Cabinet to discuss the possibility of declaring a state of siege, a senior government source says.

But the government is still facing major economic and political challenges. Negotiations over the funding of universities are still under way.

The biggest demonstration of recent days was led by housewives. Called the "March of the Empty Pots," it symbolized the basic problem facing the coalition government of President Jaime Paz Zamora, and indeed much of Latin America.

The teachers, who accepted the government's offer of a 20 percent pay raise, said the decision by Peruvian President Alberto Fujimori to dissolve Congress and send troops into the streets had weighed heavily on their vote to return to work, Reuters reported.

The teachers' earlier demands for more money were resisted by the government as potentially inflationary. "It would be irresponsible to cut deals which we cannot fulfill," Finance Minister Jorge Quiroga said. "We do not want to be in a situation in which we would have to resort to printing more money."

Indeed, Bolivia's government has stuck to its agreements with the International Monetary Fund and Paris Club of creditor nations. Inflation this year is projected at a Latin American low of 10 percent; growth at 3.5 to 4 percent. These are remarkable figures for a country which seven years ago broke the world record with annual inflation of 24,000 percent.

But economic restructuring has yet to pay off politically, and is not filling the "empty pots" of Bolivian housewives.

As in Venezuela and Peru, unrest has also spread to the military. Defense expenditure has been cut by a third since 1980, and a number of middle-ranking and senior officers are grumbling, loud and clear enough to be heard outside their own private circles.

"The coup rumours have been confirmed," says Roy Glover, assistant press secretary at the United States Embassy here. "But our latest information is that it is not a strong movement. We have made it clear to the people involved within the military that they would get no support, and that all US assistance to Bolivia would be cut off immediately if a coup took place."

Hugo Banzer Suarez, Bolivia's military dictator from 1971 to 1978, is the obvious rallying point for the armed forces. He and his Nationalist Democratic Action (ADN) party hold half the Cabinet seats. General Banzer himself heads the National Political Council which determines much of governmental policy.

But Banzer's coalition with President Paz is one of genuine powersharing. Banzer is firmly fixed in his present incarnation as embattled politician, rather that behind-the-scenes military puppetmaster, observers say.

Perhaps a greater threat to the democracy here is the tide of disenchantement and cynicism sweeping over Bolivian voters. Corruption and factionalism in the main political parties have taken their toll. A number of prominent ADN members have resigned recently, for example, citing a lack of democratic decision making within the party.

In a recent survey, only 13 to 18 percent of Bolivians expressed any faith in the political parties, trade unions, and military. The Roman Catholic Church led the poll with 60 percent; the media were second with 50 percent.

Another development with sinister implications is the emergence of an alliance between Bolivian guerrilla outfits and drug runners.

The government, apparently to reassure foreign investors, claims that no proof exists of such a connection. But diplomats confirm the connection.

On the political front, Paz recently unveiled a new-look Cabinet with eight ministerial changes. While the present coalition seems determined to grit its teeth and continue with painful economic reform, it is also keeping in mind the general elections due in August next year.

"The electorate is estranged from the political parties and their leaders." Professor Lazarte says. "They do not see them as mechanisms of representation."

Instead, Bolivians are turning to populist politicians, such as beer magnate and millionaire Max Fernandez. A serious contender for the 1993 presidential elections, Max is said by a number of well-placed sources to be in contact with the discontented groups within the military.

That could well spell instability for a country which, just 10 years ago, was still under military rule.