BOLIVIAN LEADER'S OUSTER SEEN AS WARNING ON U.S. DRUG POLICY

LA PAZ, Bolivia -- On a visit to the White House last year, President
Gonzalo Sanchez de Lozada told President Bush that he would push ahead with
a plan to eradicate coca but that he needed more money to ease the impact
on farmers.

Otherwise, the Bolivian president's advisers recalled him as saying, "I may
be back here in a year, this time seeking political asylum."

Mr. Bush was amused, Bolivian officials recounted, told his visitor that
all heads of state had tough problems and wished him good luck.

Now Mr. Sanchez de Lozada, Washington's most stalwart ally in South
America, is living in exile in the United States after being toppled last
week by a popular uprising, a potentially crippling blow to Washington's
anti-drug policy in the Andean region.

United States officials interviewed here minimized the importance of the
drug issue in Mr. Sanchez de Lozada's downfall, blaming a "pent-up
frustration" over issues ranging from natural gas exports to corruption.
But to many Bolivians and analysts, the coca problem is intimately tied to
the broader issues of impoverishment and disenfranchisement that have
stoked explosive resentments here and fueled a month of often violent protests.

"The U.S. insistence on coca eradication was at the core of Sanchez de
Lozada's problem," said Eduardo Gamarra, a Bolivian scholar who is director
of the Latin American and Caribbean Center at Florida International
University in Miami.

Dr. Gamarra and others point to events in Bolivia as a warning that United
States drug policy may sow still wider instability in the region, where
anti-American sentiment is building with the failure of economic reforms
that Washington has helped encourage here.

In Bolivia the backlash has strengthened the hand of the political figure
regarded by Washington as its main enemy: Evo Morales, head of the coca
growers' federation, who finished second in presidential election last year.

American officials have considered Bolivia such a success in the anti-drug
campaign that they were looking to replicate their strategy in Peru. But
there, too, signs of discontent are appearing, beginning with the
re-emergence of the Shining Path, the guerrilla group that terrorized the
country throughout the 1980's. "Right now Shining Path is strongest in coca
growing areas," said Michael Shifter, who follows the Andean region for the
Washington-based policy group Inter-American Dialogue. "To the extent that
the U.S. pushes on eradication targets without any kind of flexibility, it
makes people there much more amenable to turning to violent protest or
insurgent groups like Shining Path."

In Colombia the eradication push has succeeded in substantially reducing
coca acreage and is helping the government in its fight against leftist
rebels. But such successes have often pushed cultivation farther south to
Bolivia and Peru.

The eradication campaign is supposed to be coupled with an "alternative
development" program to encourage farmers to grow crops like pineapples,
bananas, coffee, black pepper, oregano and passion fruit on land once
devoted to coca.

Though the United States has earmarked $211 million for such projects here
in the last decade and helped raise the incomes of a growing number of
peasant families, critics say the money is not nearly enough to compensate
all of those whose livelihoods have been destroyed by eradication campaigns.

During his Washington visit last year, Mr. Sanchez de Lozada asked for $150
million in added emergency aid, meant among other things to help reduce a
yawning government budget deficit that had severely limited spending on
social programs. He got $10 million, and that only after he was nearly
toppled in a round of protests in February.

"These are derisory sums that are incommensurate with what is needed," said
Jeffrey Sachs, an economist who is director of the Earth Institute at
Columbia University and a long-time adviser to Bolivian governments. "The
United States has constantly made demands on an impoverished country
without any sense of reality or an economic framework and strategy to help
them in development."

David N. Greenlee, the American ambassador here, in an interview on Monday,
disagreed with the notion that added assistance from Washington would make
much difference.

"It's too early to say whether we can provide additional resources," he
said. "I think we currently provide substantial resources, and it is
possible this new government can be more efficient."

He added, "A few million more from the U.S. isn't going to solve the
problems of Bolivia."

At a news conference on Saturday night, less than 24 hours after he was
sworn in, Bolivia's new president, Carlos Mesa, said coca eradication had
created "a complicated scenario" and hinted that some changes might be in
the works.

For Mr. Mesa, who heads a weak interim government, some moderation of the
effort may be inevitable if he is to avoid his predecessor's fate and hold
off the challenges of opposition figures like Mr. Morales, the leader of
the coca growers.

Mr. Morales's position has been enhanced by recent events, despite the
United States Embassy's efforts to isolate and discredit him.

In recent years American officials pushed to have Mr. Morales expelled from
Congress and indicted for the murder of four policemen in the Chapare
region, his political base and a center of coca cultivation. During last
year's presidential campaign, the embassy suggested that Mr. Morales's
election would be viewed by the United States as a hostile act and would
provoke an end to aid to Bolivia.

"That has merely inflated Evo Morales even more and catapulted him into the
position he is in now," Dr. Gamarra said, that of a power broker with the
capacity to bring down the government. "He has used the coca issue to
construct a national movement, with the coca growers as his praetorian guard."

The new government, political analysts and diplomats here said, is in a
bind. It may be difficult to keep Mr. Morales at bay if Mr. Mesa does not
declare a pause in the eradication effort, but such a move could jeopardize
Bolivia's international assistance.

In an interview here on Monday, Dionisio Nunez, a coca grower, member of
Congressional and key ally of Mr. Morales, said that their party, the
Movement Toward Socialism, intended to demand that the new government
modify the laws against coca cultivation, whether the United States likes
it or not.

For starters, he said, the opposition wants a recalculation of the areas in
which growing coca is legal, as well as an expansion of the places where it
is legal to sell coca leaves.

"A new president can't return to a policy of repression and militarization"
to combat drugs, Mr. Nunez warned. "There has to be a change, to a policy
that is truly Bolivian, not one that is imposed by foreigners with the
pretext that eradication will put an end to narcotics trafficking."

Despite Mr. Sanchez de Lozada's fall, the Bush administration seems
committed to continuing the policy, with a modest budget in Bolivia.

"We think on balance that our policies and our emphasis on alternative
development, together with Bolivian participation and their own policies
regarding drugs, have been positive things for Bolivia," Ambassador
Greenlee said. "We don't think it is a problem."