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 (see The Security Forces , ch. 5). 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 institu 2000 utions in Latin America. Both aspects of United StatesÍÍÍÍÍÍÍ 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 (see Narcotics Trafficking , ch. 5). 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 (see Threats to Internal Security , ch. 5).

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 (see Narcotics Trafficking , ch. 5). 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 (see Foreign Military Assistance in the 1980s , ch. 5).

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.

Data as of December 1989