‘White Lady’ Draws Settlers : New Bolivian Road May Become Cocaine Turnpike

The biggest public works project being built in Bolivia today is a $90-million highway through the Chapare rain forest, which provides most of the coca leaf for cocaine produced here.

The highway is a key transportation link designed for economic development of a fertile region. But even before it has been officially opened to traffic, the highway is proving to be a help to cocaine smugglers.

“If coca-leaf production is not controlled in the lands being opened up by the highway,” said a U.S. aid official involved in rural development, “this is going to be the golden turnpike of cocaine.”

The Chapare region of Bolivia’s eastern Cochabamba department is a new agricultural frontier. Pioneer farmers have hacked and burned down the trees as they cleared more than 200,000 acres of land.

One thing has brought thousands of new settlers here, according to Alfredo Alfaro, the mayor of this town: “La Blanca --you know, the White Lady.”

He was referring to cocaine, which is processed from the coca leaves that grow around the town in scores of small plantations. Bolivia and Peru are the two main sources of coca; much of the cocaine is smuggled out to the United States.

Alfaro, whose office as mayor is a one-room board shack, is a farmer most of the time, a sinewy, copper-skinned native of Bolivia’s Andean highlands. He came here looking for free land 18 years ago when the only way in was on foot.

Now, there are 5,000 people here. Scores of buses, pounding down the potholed roads, make the trip between Ivirgarsama and the city of Cochabamba in eight hours.

This town is without water mains, sewers, paved streets or electric lights. But it seems to be here to stay. Surveyors are laying out orderly streets. There are a small hospital and a grade school.

Coca-leaf traders jam the marketplace in the center of town. In the back alleys, cocaine paste can be bought in amounts from ounces to pounds. There seems to be no police surveillance.

Little farms can be seen on both sides of the bed of the new highway, which is still being leveled and graveled in preparation for asphalting. At every farm, coca leaf is the main crop, and every palm-thatched dwelling has a patio where the leaves are spread to dry.

There are an estimated 40,000 such farms in the Chapare region, which even before the start of highway construction was the biggest coca-production region in Bolivia--perhaps in the world.

When the road is finished in 1987, it will connect Cochabamba and Santa Cruz, where Bolivia’s major cocaine dealers live in mansions hidden behind brick walls dotted by gun slits.

Santa Cruz and Beni, the two lowland departments of eastern Bolivia that border Brazil, are said to have more than 2,000 airstrips, most at isolated ranches. Bolivia has been able to exert no effective control over private flights.

The cocaine traffickers use their lowland ranches as air bases for exports to Colombia and other Latin American countries, and from there, the shipments go to the United States, Canada and Western Europe.

In September, the U.S. Drug Enforcement Administration conducted raids with a narcotics team from the Bolivian national police and knocked out seven cocaine laboratories at ranches situated within an hour’s flying time of Magdalena, in eastern Beni department.

The laboratories were producing highly refined white crystals of cocaine hydrochloride and were well stocked with chemicals for cocaine refining, such as acetone and ether. The chemicals had reportedly been smuggled in from Brazil.

“When you find so many labs in such a small radius, you begin to believe the estimate that Bolivia is pushing out 100 tons of cocaine a year,” a U.S. drug agent said.

Cottage Industry

The cocaine chain begins in the small coca farms of the Chapare region and of the Yungas Valley north of La Paz, the capital, areas in which the peasants have made production of cocaine paste from coca leaves a major cottage industry.

Airstrips opened legitimately to supply construction camps along the new highway have already been used by cocaine smugglers to ship out the paste.

“One evening, a watchman at the airstrip hangar called on his walkie-talkie to say that a pickup truck had arrived with some people carrying submachine guns,” an engineer working on the highway said.

“Shortly afterward, a single-engine airplane landed without clearance. The plane was loaded with sacks from the back of the pickup. Then it took off. It was all over in five minutes.”

This 60-mile stretch of what will be an all-weather paved highway is being financed by the Inter-American Development Bank; the builder is a big Brazilian construction firm--Andrade, Gutierrez, S.A.

Neither the bank nor the contractor has any responsibility for the illicit use already being made of the highway, or any connection with the drug trade. Policing the road is a Bolivian government responsibility.

But the lawlessness in the Chapare region illustrates the problem facing the United States and international development agencies over financing improved transportation and agricultural projects in Bolivia while coca-leaf production remains uncontrolled.

Consumption of coca leaf in Bolivia is legal, as is growing small amounts of the leaf in licensed areas. In predominantly indigenous Indian areas, peasants and miners chew the leaf with wood ash and calcium carbonate, which releases a mild narcotic.

But this traditional coca consumption requires an annual production of 5,000 tons at most, and Bolivia is now producing an estimated 120,000 tons a year--enough to refine 100 tons of cocaine.

Fiscal Persuasion

In an effort to persuade farmers here to switch from coca to other crops, the U.S. Agency for International Development signed a $17-million rural development agreement with the Bolivian government in 1983.

Grants and loans were to be extended to electrify towns, improve feeder roads, rebuild fallen bridges and install small industries to utilize local production of such commodities as citrus fruit, coffee, cacao and pork. Agricultural research and extension offices were expanded.

An AID report this year said that the development program “can only succeed if the Bolivian government adopts effective measures to control illegal coca production.”

The reason for this, an AID official explained, is that while coca leaf is selling in the Chapare region for about $150 per 100-pound bale, wrapped in banana leaves, there is nothing else that can be produced in the region that will give farmers an equivalent income.

“These farmers can harvest coca four times a year, taking off up to 2,000 pounds an acre. With a hectare (2.47 acres) of coca, they make over $7,000 a year. In Bolivia, that is a lot of money,” a U.S. official said.

The Reagan Administration put heavy pressure on the former Bolivian government of President Hernan Siles Zuazo to adopt an eradication program. An agreement signed in 1983, along with the development loan, called for elimination of 2,000 hectares (4,940 acres) of illegal coca plantations a year through 1987.

In August, 1984, Siles ordered the army to occupy Sinahota, a town about 40 miles west of here that was then being run by drug traffickers as a center for production of cocaine paste, the first step toward fully refined cocaine.

The operation cost the United States $360,000 in payments to the army. But after two months, the troops were pulled out. Also, as the frontier advanced, new lands were planted in coca. The Drug Enforcement Administration believes that there are now 40 large cocaine-paste production points hidden in the eastern Chapare.

And, instead of 4,000 hectares of coca farms having been eliminated by now, as stipulated in the agreement, the area of Bolivia planted in coca has increased by 20,000 hectares, according to American estimates.

Penalties in Aid

The U.S. Congress, angry over Bolivia’s performance, earlier this year voted to cut military and development aid until President Reagan certifies that the government in La Paz is meeting cocaine-eradication targets.

The frustration of U.S. officials over what they consider the slack performance of Siles on narcotics was muted only by the fact that previous Bolivian military regimes had not only tolerated the cocaine traffic but allegedly accepted part of the profits in protection money.

Col. Luis Arce Gomez, who was interior minister in 1981, has been indicted by a federal grand jury in Miami for participating in cocaine smuggling to the United States. He has been in hiding since civilian government was restored in Bolivia in 1982 and was last reported to be in Argentina.

There is no evidence that the 69-year-old Siles, a onetime social revolutionary and respected political figure, ever received any personal gain from the Bolivian drug mafia, according to Bolivian and foreign diplomatic sources.

But Siles did not impose tough measures to confront the drug problem, which has explosive political implications. An elected civilian president in Bolivia risks serious peasant protests and military overthrow if he attacks the coca and cocaine trade.

When Siles tried to impose controls earlier this year on highway transportation of coca leaves in the Chapare region, thousands of peasants blocked the roads for nine days. Construction on the new highway was halted. Siles finally gave in, and the coca trade remained wide open.

In August, Siles handed over the government to a veteran Bolivian political figure newly elected as president, Victor Paz Estenssoro. During his first three months in office, Paz has been absorbed in dramatic efforts to halt Bolivia’s runaway inflation, the highest in the world. In September, he confronted a general strike by national unions by imposing a state of emergency and arresting union leaders. The strike collapsed and inflation has been halted.

With economic stabilization as his first priority, Paz is said to have privately told U.S. officials that he will hit the Bolivian narcotics problem hard only when he can neutralize the big traffickers by force and push through an eradication agreement, even against peasant resistance.

U.S. Demanding Action

The U.S. Embassy in La Paz, led since August by Ambassador Edward Rowell, a career diplomat, is under constant pressure from Washington for action by the Bolivian authorities to fulfill the pledge to eradicate coca plantations.

Optimists in the U.S. anti-drug establishment believe that Paz’s decisive moves against inflation will be matched by similarly tough measures on drugs.

“Paz knows that Bolivia’s hopes for development financing will be vastly improved if he adopts a tough line on drugs,” one diplomat said. But the president is known as a tough bargainer, and it is likely that he will seek assurances of substantial development aid before embarking on the hazardous crackdown that the United States wants.

Interior Minister Fernando Barthelmy, a former police officer and national legislator, and a new national police chief, Gen. Julio Vargas, have been trying to persuade peasant associations in the Chapare region to “voluntarily” reduce coca acreage.

The U.S. Embassy has promised farmers who destroy coca plots that they will be paid $350 for each hectare of coca they tear out. This is supposed to cover “labor costs.”

But with a hectare of coca providing an annual income of $7,000, it is unlikely that this offer will seem attractive to many small farmers unless it is backed by credible threats of forced eradication if they do not cooperate.

In recent years, cocaine production has been the only growth sector of the Bolivian economy, the poorest in South America. But the government has not captured even a small fraction of the millions of dollars generated by the cocaine trade. This money stayed abroad or financed contraband imports and other clandestine activities.

Paz’s economic reforms, by removing exchange controls, have tapped some of the coca millions. Bankers here say the country’s foreign currency reserves have grown by more than $100 million since Paz ended exchange controls Aug. 29. They admit that part of this came from cocaine dollars being bought by the central bank, with no questions asked.

With this mosaic of political, economic and social problems surrounding the cocaine traffic in Bolivia, many U.S. officials involved in the worldwide narcotics control campaign believe that closing down the cocaine flow here remains the single most challenging problem in American drug diplomacy.