ANOTHER U.S. FOREIGN-POLICY FAILURE

The forced resignation of Bolivia's President Gonzalo Sanchez de Lozada,
following a month of violent demonstrations, marks a tragic milestone whose
significance extends far beyond his impoverished country. The breakdown of
civil and political order in Bolivia provides another vivid example of the
poverty of U.S. foreign policy.

Sanchez de Lozada is one of Latin America's true heroes, a leader who helped
usher in democracy and modest economic growth during the past 20 years,
including two terms as president. Yet now he has fled Bolivia in fear for
his safety. The arrogance and neglect of U.S. foreign policy played a large
part in this stunning reversal.

Virtually all of South America is in deep economic malaise, suffering high
unemployment, rising poverty and growing social unrest. As a landlocked
Andean country, Bolivia has faced its own special distress. Its
transportation costs are among the world's highest, reflecting the country's
mountainous terrain and international trade routes, which must cross
political boundaries and depend on foreign ports. This situation discourages
inward investment and strains relations with coastal neighbors.

Indeed, the precipitating factor in Bolivia's collapse was a plan to export
natural gas to the United States through archrival Chile. Sanchez de Lozada
spoke of the gas exports as a means for investing in health, education and
economic development. But Bolivia's impoverished population had been ripped
off too many times and feared, understandably, that the revenues would
accrue to foreigners or to Bolivia's own rich.

At the same time, more than an economic crisis, bad geography and an
unpopular gas deal caused the spark in Bolivia. Enter the war on drugs. When
the preceding Bolivian government faced U.S. demands to destroy the coca
crop, I advised it to insist on adequate aid to finance economic development
benefiting the hundreds of thousands of displaced peasant farmers and their
dependents. Desperate for any assistance at all, Bolivia's government
ultimately uprooted thousands of hectares of peasant crops -- and got almost
nothing in return but phony slogans about alternative development.

Not surprisingly, the 2002 elections turned on the explosive coca-
eradication issue. Sanchez de Lozada barely beat Evo Morales, the leader of
the coca growers' federation, and warned President Bush last year that
extreme poverty and widening ethnic divisions could lead to an insurrection.
Bush literally laughed in his face, saying that he, too, faced political
pressures. Sanchez de Lozada pressed for help -- $150 million -- but Bush
quickly ushered him from the Oval Office with a pat on the back.

Sanchez de Lozada returned to Bolivia empty-handed -- except for
instructions from the International Monetary Fund to implement austerity
measures in accordance with U.S. dictates. The measures led to a police
strike, followed by popular upheaval and an assassination attempt against
Sanchez de Lozada. IMF officials deny responsibility but have failed to
provide an honest public appraisal of Bolivia's urgent financial needs.

Now U.S. policy interests in Bolivia lie in a predictable shambles: The
country is seething with violence, and coca production is likely to soar. An
obsessive U.S. administration, led by a president who reportedly believes
that he is on a holy mission to fight terror in the Middle East, has lost
interest even in helping its friends.