New Bolivia Leader Offers Conservative Fiscal Plan

Jaime Paz Zamora, a longtime crusader for leftist causes, took office Sunday as president of Bolivia and promised a distinctly conservative economic policy for this impoverished South American country.

Paz Zamora, 50, pledged in his inauguration speech to preserve monetary and financial stability, promote private industry, respect the laws of supply and demand and reduce the size of the government.

He called for a “new period in republican life in which easy populism and sterile radicalism of any brand no longer have a place.”

Vows to Fight Drug Trade

He also vowed to “fight against the threat of drug traffic.” Bolivia is a major producer of coca leaves, the raw material of cocaine.

The economic policy outlined by the new president closely resembles that of his predecessor, Victor Paz Estenssoro, who left office Sunday after four years of government austerity and conservative fiscal measures.

Paz Zamora and Paz Estenssoro are relatives but belong to rival political parties. Paz Zamora’s Revolutionary Left Movement has gradually shifted from a Marxist to a democratic-socialist ideology since the early 1970s.

The movement will share power with the conservative Nationalist Democratic Alliance of former military dictator Hugo Banzer under an agreement that gave Paz Zamora a presidential runoff victory Saturday in Congress. Paz Estenssoro’s centrist National Revolutionary Movement will be the main opposition force.

‘Immense Social Sacrifice’

Paz Zamora recognized Paz Estenssoro’s “important contribution” to economic stability but added: “That stability, attained at the cost of an immense social sacrifice, will have meaning only if it is projected into the dimension of economic growth and social development. That will be our task.”

He said his policies will attack Bolivia’s “unsupportable condition of poverty,” high unemployment and infant mortality.

The national income averages less than $700 a year for each Bolivian. Two out of every 10 workers are unemployed, and more than 100 of every 1,000 babies die before they are a year old.

Paz Zamora said the modernization of the Bolivian society and economy must be based on “clear monetary and fiscal discipline.” He said his government will not impose controls on foreign currency exchange or on interest rates.

“Prices will be defined by supply and demand,” he said.

Risks of Making Changes

Those are among the basic elements of outgoing President Paz Estenssoro’s economic policy. In his farewell speech Sunday, Paz Estenssoro said major changes in the policy could result in serious risks.

“The adoption of mistaken positions in the field of economic policy . . . could seriously affect the democratic process,” he said.

Paz Estenssoro, 81, is widely respected as Bolivia’s most important democratic leader of the century.

As president from 1952 to 1956, he led what is called the “national revolution,” making deep changes in the country’s political and economic structures.

The revolution began with a bloody popular uprising, led by Paz Estenssoro’s Nationalist Revolutionary Movement, which seized power from a military junta. Paz Estenssoro returned from exile to assume the presidency by virtue of his victory in a 1951 election that the armed forces had nullified.

Purging of Military

The new government purged and reorganized the armed forces, which had long served the interests of the country’s wealthy elite. Paz Estenssoro also decreed the nationalization of 163 mines controlled by powerful “tin barons.”

In 1953, Paz Estenssoro decreed an agrarian reform law that resulted in one of South America’s most sweeping redistributions of large landholdings to peasant farmers.

Although the land reform has been criticized for creating tiny farms that are not economically viable, it broke down a feudal system in which hundreds of thousands of landless peons had been exploited by a small number of landowners.