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In-Depth Information
squads and funded by his government's direct involvement in the emerging international co-
caine trade. But, despite its repressive measures, the extent of popular hatred against the mil-
itary government, together with growing economic chaos and international disapproval, was
such that it could not survive long.
The return to democracy
Garcia Meza was deposed in an army revolt in 1981 and two years later the last military junta
was forced to resign following massive protests. The recalled congress elected
Hernán Siles
as president, marking a return to
democratic rule
that has lasted ever since. Siles, however,
was unable to control the economy, which had entered a sharp decline after years of misman-
agement. With
hyperinflation
rampant, he stepped down in 1985. The largest share of the
vote in the subsequent election was won by
Hugo Banzer
, standing as head of a new right-
wing party, the ADN (Alianza Democratic Nacional). This wasn't enough to secure him the
presidency, however: instead, 77-year-old
Víctor Paz Estenssoro
, the central figure of the
National Revolution 33 years before, was elected for his fourth presidential term.
To great surprise, Paz Estenssoro turned his back on the traditional MNR approach and ad-
opted the
New Economic Plan
- a raft of orthodox liberal shock policies designed to combat
hyperinflation. The currency was devalued, price and wage controls scrapped, and govern-
ment expenditure slashed, while steps were taken to dismantle the state mining corporation
COMIBOL
. Strikes and protests by the miners' union followed, until in 1985 the interna-
tional price of tin crashed completely and the state-run industry effectively collapsed. The
government sacked most of the miners and the power of their union was broken irrevocably.
The New Economic Policy was maintained by subsequent governments. Although it suc-
ceeded in ending hyperinflation, its immediate effect was to plunge Bolivia into a recession
that was eased only by a growing trade in the production and export of
cocaine
. The huge
wealth generated by the cocaine industry created enormous corruption at every level of
Bolivian society, with all the major political parties forging links with drug traffickers.
Elections in 1989 saw the MNR win a majority of votes, but horse trading in the congress
led to the third-placed candidate, MIR leader
Jaime Paz Zamora
, becoming president with
the backing of the ADN. Dubbed the Patriotic Accord, this cynical alliance between two
former enemies shocked many Bolivians, although it also highlighted the growing consensus
between the main parties. In 1993 the MNR returned to power under
Gonzalo Sánchez de
Lozada
, known popularly as Goni. He oversaw a programme of privatization, which saw
oil, gas, mining, railways and utilities sold to foreign companies - a direct reversal of the
MNR's revolution in the 1950s. Goni was followed as president in 1997 by
Hugo Banzer
-
the former military dictator returning to power through electoral means - who pursued the
same neo-liberal agenda. But while the leaders of Bolivia's main political parties were agreed
