BOLIVIA PLANTS COCA, AND COCAINE FOLLOWS

U.S. Says Drug Trade Is Booming as Morales's Plan to Encourage Legal
Products From Leaves Backfires

When Evo Morales, a former coca farmer, became president of Bolivia
in 2006, he promised to restore the thumb-shaped green leaf to the
place of respect it enjoyed in Inca times. Farmers could legally grow
more of it, and his government would build factories to churn out
coca shampoo and toothpaste. He would fight drugs under a policy of
"zero cocaine, but not zero coca."

Now Bolivia's coca production is up, according to the United Nations
- -- but so is its cocaine trade. Cocaine production is potentially up
as much as 65%, U.S. law-enforcement officials say, as Colombian and
Mexican traffickers have set up shop in the country. Bolivia's
neighbors complain they are being hammered by the cocaine flooding
across its borders.

"Bolivia has become the point of least resistance to the drug trade,"
says Eduardo Gamarra, a political scientist at Florida International
University.

Bolivia is no Colombia or Mexico, where drugs have led to open armed
conflict and gruesome killings. But there are signs the drug trade is
expanding rapidly. Bolivian police this year discovered one cocaine
lab they estimate was capable of producing 220 pounds of cocaine a
day, with a street value of more than $5 million.

"Everyone in the country is getting rich off drug production. ...
It's starting to eat at the fabric of the country, and it's not going
to be long before these trafficking organizations can hold the
government hostage," says Nicholas Kolen, Caribbean and Latin America
section chief of the U.S. Drug Enforcement Administration's Office of
Global Enforcement.

Mr. Morales, an Aymara Indian, came to prominence as the head of a
militant coca-growers union that fought unpopular U.S.-financed
coca-eradication programs. With roadblocks and protests, he helped to
bring down two presidents. By 2006, he himself had been elected in a landslide.

Bolivia's new constitution, passed under Mr. Morales, hails the coca
leaf as "cultural patrimony." For a recent photo op, Mr. Morales
chewed it with Hollywood director Oliver Stone. In March, Mr. Morales
flew to Vienna and lobbied the United Nations to remove the leaf from
its 1961 convention against narcotics, which makes chewing it illegal.

Last year, his socialist government expelled the U.S. ambassador and
the U.S. DEA from the country. Both deny Mr. Morales's charge they
were plotting against him.

Bolivia's accommodation of coca contrasts with the attitude in
Colombia, where coca is illegal and production fell 18% in 2008 from
a year earlier amid crop spraying and a U.S.-supported clampdown
known as "Plan Colombia." The U.S. and Colombia are negotiating an
expansion in military cooperation.

Colombia still grows most of the world's coca leaf, so the increase
in Bolivia's plantings could be a temporary side effect of
eradication there. But Bo Mathiasen, the representative of the United
Nations Organization on Drugs and Crime in Brasilia, says he thinks
the cause is "the ambiguity" of Mr. Morales's policies toward coca.

Mr. Morales has sought to allow farmers to regulate their own
production, instead of sending security forces on raids to destroy
crops. "The Bolivians don't have a perfect system, but farmers aren't
getting shot," says Kathryn Ledebur, director of the Andean
Information Network, a Bolivia-based think tank that specializes in
the drug issue.

According to U.N. figures, both legal and illegal coca-leaf
production are growing. The latest figures put the harvest in 2008 at
about 75,000 acres, far above the limit of 30,000 acres set out in a
1988 Bolivian law.

Mr. Morales's government says the law underestimates the amount of
coca leaf needed for licit purposes such as chewing and tea, and has
established a de facto ceiling of 49,000 acres.

Bolivia's coca trade is a growing sore point for other countries.
British Ambassador to Bolivia Nigel Baker cited "a real threat" from
growing drug traffic. President Barack Obama, in a June decision to
leave trade sanctions against Bolivia in place, complained about the
"explicit acceptance and encouragement of coca production at the
highest levels of the Bolivian government."

U.S. efforts to wipe out drug crops in countries like Bolivia and
Afghanistan haven't been home runs, and often angered locals.

Neighboring countries, however, report that more cocaine is being
smuggled from Bolivia. "We have [a] substantial increase in the
seizures of cocaine," says Cairo Costa Duarte, director of the
intelligence arm of Brazil's federal police.

Felipe Caceres, Bolivia's antidrug czar, says the drug fight is "more
transparent and effective" under Mr. Morales than ever before. Police
actions are up sharply since the DEA left, he says, which explains
the seizure of more cocaine labs. Mr. Caceres says about 40% of
cocaine seized in the country is from Peru, and only smuggled through Bolivia.

Mr. Morales's administration acknowledged recently that more cocaine
is being produced in the country. In July, the government threatened
to eradicate as many as 22,000 acres of coca by year-end, saying
growers hadn't abided by limits.

Following the government threats to eradicate fields, the Chapare
coca federation, of which Mr. Morales is still president, said last
month that it planned to donate 40,000 pounds of coca leaf -- valued
at about $84,000 -- to his campaign for re-election in December.