BOLIVIAN LEADER SEEKS MORE MONEY TO QUELL UNREST

LA PAZ, Bolivia -- The U.S. hasn't fairly compensated Bolivia for the
economic loss suffered as a result of its coca-eradication program,
complained the country's new president, who issued an appeal for
stepped-up aid from the international community.

"Coca production has fallen, but Bolivia's income has fallen as well
and we haven't received the equivalent compensation," said President
Carlos Mesa, in an interview at his ornate office. Mr. Mesa assumed
the presidency of this poor, landlocked country last month after
violent protests, including demonstrations by angry coca growers,
forced the resignation of President Gonzalo Sanchez de Lozada.

Mr. Mesa emphasized that he doesn't plan "essentially" to change the
country's U.S.-backed program to limit the production of coca, the key
ingredient in cocaine. Between 1995 and 2002, the Bolivian government
eradicated nearly 50% of the country's coca crop and urged peasants to
plant alternative crops. The U.S., which has hailed the program as a
victory in the war on narcotics, last year gave $174 million in
foreign aid to Bolivia.

But Mr. Mesa, a one-time television newscaster who had served as Mr.
Lozada's vice president, appeared to signal some willingness to reach
a compromise with angry growers, saying he would try to deal
"rationally" with eradication. He didn't elaborate, but those comments
may raise hackles here. A U.S. official said Washington is sympathetic
to Mr. Mesa's internal political situation but adds that he believes
the Bolivian government understands the threat posed by coca production.

Bolivia is the world's third-largest producer of coca, which has been
used for thousands of years by Indians here for medicinal and
religious purposes. It is estimated that the trade in coca, most of
which goes into the making of cocaine, generates as much as $500
million a year of Bolivia's $8.5 billion economic output.

Bolivian law permits nearly 30,000 acres of coca to be cultivated for
domestic use, and coca growers say there are new, legal markets
opening up for such products as herbal teas and toothpaste that use
coca. But the U.S. believes that is just a cover for the cultivation
of coca for cocaine, and continues to press for further
eradication.

Mr. Mesa urged the international community and, in particular, the
U.S. to come up with the money it needs to keep the lid on rising
social demands and save its imperiled democracy. "I trust the U.S.
will be the country that frankly supports us and truly understands
that Bolivia is going through a difficult moment, and needs to
consolidate its democracy and institutions," he said.

Bolivia's turmoil has focused attention on Latin America's widespread
malaise. The region's economies have barely grown in the past few
years, and its legions of poor blame U.S.-style free-market policies
for their woes. The discontent comes at a bad time for Washington,
which next week meets with the hemisphere's trade ministers to hammer
out a blueprint for a regional free-trade pact.

Mr. Mesa says a helping hand for his country could bolster the U.S.'s
standing in the region. He said Bolivia is projecting a shortfall in
government finances equal to about 7.5% of the nation's total annual
economic output. That is higher than the 7% target it had agreed to
earlier in its standby agreement with the International Monetary Fund.
Last month, an IMF mission in Bolivia said its program with Bolivia
"has been adapted flexibly to changing circumstances" and said the
fund would work closely with Mr. Mesa.

Former Finance Minister Juan Cariaga says Bolivia needs from $300
million to $500 million a year in donations and low interest loans
from multilateral institutions like the World Bank to plug its trade
and fiscal deficits. Any military coup or takeover by disgruntled
peasants would cut off international funds, plunging the country into
"economic disarray," Mr. Cariaga warned.

Radical peasant, Indian and labor leaders have given Mr. Mesa's
cash-strapped government a few months' "truce" to satisfy a long list
of social and economic demands, which range from giving land to
landless peasants to blocking the proposed regional free-trade deal.

The president said he planned to convoke "soon" a binding referendum
on the issue of how to exploit the country's natural-gas reserves. The
protests that toppled Mr. Sanchez de Lozada's government last month
were originally aimed at a $6 billion project to export Bolivian
natural gas to the U.S. and Mexico through a Chilean pipeline, to be
built by a group led by Spain's Repsol YPF.

Mr. Mesa has repeatedly said he believes the future of the country
depends on exporting its gas. "The great problem we have had with the
gas theme has been insufficient information, half truths and lies,"
Mr. Mesa said. After a public-information campaign, Mr. Mesa said he
believes that "rationality will replace emotion" in dealing with the
natural-gas issue.