Civilians Return

And old soldiers fade away

Despite the steady rain, thousands of people wrapped in gaily striped ponchos had packed into La Paz's Plaza Murillo, a large square flanked by the National Congress and the presidential palace. Finally, after a long ceremony, the crowd's wait was rewarded: Bolivia's old and new Presidents appeared side by side on the balcony of the Congress. Both acknowledged the cheers, but the enthusiasm was reserved for Hernan Siles Zuazo, 69, Bolivia's second civilian leader in 18 years of almost uninterrupted, often harsh and nearly always corrupt military rule.

Humbled by an out-of-control economy, a wave of protest strikes, and international condemnation of their quasi-official participation in the cocaine trade, Bolivia's generals were marching back to the barracks. They were not alone. During the past two years, Peru and Ecuador had already replaced uniformed leaders with civilian regimes. At the same time, Argentina's generals set a target of late 1983 for free elections, and in November Brazil's military government will allow the first free elections in two decades. Said Peru's civilian President, Fernando Belaunde Terry: "Times are good for democracy."

In La Paz last week, the generals surrendered power peacefully. Their decision was inspired by the fact that they were losing the ability to govern, even with out-and-out force. So the military limply gave up. Bolivia, with an annual per-capita income of only $550, the second lowest in the hemisphere after Haiti, s an economic mess. The output of wheat and cotton is running below the levels of he 1970s. Further, production of such minerals as tin, lead, gold, silver and zinc las been devastated by miners' strikes, and only one of the state-owned mining group's 14 largest mines makes a profit. The inflation rate of 157% is likely to rise, foreign currency reserves total only $83 million, and by year's end the central bank is expected to be nearly $800 million behind in payments on Bolivia's external debt of $3.8 billion.

Among the bright spots in the economy in the past few years have been the production of natural gas and increases in the crop of coca leaves, which after treatment are turned into cocaine. In 1981, when a state monopoly was established in coca-leaf trading, the value of the drug traffic was estimated at $1.6 billion a year. The military is still closely involved, arranging transportation for the valuable shipments and deals to smuggle the drug into its biggest market, the U.S. In New York City cocaine sells for up to $2,400 per oz.

Newly installed in the presidential palace, Siles Zuazo told TIME South America Bureau Chief Gavin Scott last week that he includes the sick economy and the cocaine trade among his highest priorities. "We must defend the cultivation of coca," he insists, "since from time immemorial it has been chewed by our people to relieve pain. But we must fight to the death for the repression of drug traffickers who take the leaves and make cocaine." This puts the new President in a delicate position: some military men have quietly warned they will resist any attempt to crush the profitable business. Still, Siles Zuazo believes the army will not rebel, at least for now. Said he: "They want to cooperate."

Siles Zuazo may face a continuing confrontation with the army, but his planned cocaine clampdown and the return to democracy have nonetheless won the new President a powerful ally. Following the inauguration, Reagan Administration officials indicated that they were considering freeing more than $42 million in aid to Bolivia that had previously been suspended.

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