Cocaine Trade Cut but Bolivia’s Economy Suffers, Officials Say

U.S. and Bolivian officials say U.S.-sponsored drug raids have halted 90% of this country’s cocaine trade, but the resulting dearth of contraband dollars seriously threatens South America’s poorest economy.

Six U.S. Army helicopters began transporting Bolivian narcotics police to suspected drug laboratories in the tropical Beni flatlands a month ago. Since then, seven labs that once turned coca leaves into cocaine have been destroyed.

The market for coca leaves has been virtually destroyed, depriving tens of thousands of peasant farmers of their main source of income.

A U.S. official said the raided labs accounted for 90% of the estimated 240 tons of cocaine Bolivia normally exported to the United States and Western Europe each year.

The official, who spoke on condition of anonymity, said U.S. intelligence reports from transshipment points in Brazil, Colombia and Peru indicated that Bolivia’s cocaine exports are down to one-tenth of traditional levels.

With virtually no market for their crop, tens of thousands of peasants have abandoned coca leaf farms in eastern Bolivia.

Bolivian drug officials and farmers say the price of coca leaves dropped from $1 per pound a month ago to 20 cents per pound today. They say it costs about 40 cents per pound to produce the leaves.

“Most cocaine labs have been shut down and traffickers have taken a forced vacation,” said the U.S. official.

But they have left President Victor Paz Estenssoro’s year-old civilian administration in a bind.

The cocaine industry provided the economy an estimated $600 million, more than all legitimate exports combined. An estimated 400,000 of Bolivia’s 6.4 million people depended on cocaine income.

Finance Minister Juan Carriaga Osorio said the scarcity of “coca-dollars” has more than quadrupled demand for legitimate dollars from the Central Bank, which is running low on reserves.

Planning Minister Gonzalo Sanchez de Lozada Bustamente is in Washington to ask the Reagan Administration for emergency economic aid. He will also seek an extension of the mission--originally planned for 60 days--that brought 170 U.S. soldiers here to fly and maintain the helicopters.

“The raids could not have come at a worse time,” Sanchez said in an interview before traveling to Washington. “First, a drop in tin and natural gas prices has seriously cut our export earnings. Now the lack of coca-dollars is devastating us.”

He said Bolivia has a moral commitment to wipe out the cocaine business but needs long-term police support as well as quick economic aid. If U.S. troops and helicopters leave Bolivia in another month, he said, the Bolivian government will face “a wounded and very dangerous tiger.”