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Bolivia tax riot shows Latin American discontent with free-market policies
By KEVIN GRAY
LA PAZ, Bolivia (AP) -- Word of the new tax spread quickly.
Enraged police officers passed the word from precinct to precinct.
Laborers and peasants expressed outrage. Shop owners simmered with
anger.
Soon, students in school uniforms and taxi drivers took to the
streets of South America's poorest nation. The furious policemen
then walked off their jobs to join hundreds of demonstrators
shouting down a government austerity plan in the central Plaza
Murillo.
"We had to send a message we would not stand for this," said
protester Elena Balderrama, who fled a barrage of rubber bullets
and tear gas after Wednesday's demonstration turned into a riot.
"The government should seek out other ways to save -- but don't do
it on our backs."
Across Latin America, millions of people have balked at
belt-tightening programs prescribed by the International Monetary
Fund to aid the region's troubled economies. The sentiment has only
added to a growing discontent over the region's decade-old
experiment with free-market policies.
Striking police officers clashed with soldiers on Wednesday, as
the groundswell of anger in Bolivia's capital, La Paz, sparked
demonstrations, roadblocks and widespread looting. It was the
latest outpouring of frustration by many in a region plagued by
stagnating economies and rising unemployment.
By the time the protests had subsided, at least 22 people were
dead and nearly a dozen Bolivian government buildings were in
flames.
After escaping from the besieged presidential palace in an
ambulance, President Gonzalo Sanchez de Lozada gave a nationally
televised speech appealing for calm and announcing he would suspend
the tax increases.
"I plead with all Bolivians to put an end to the violence and
to begin honest negotiations," Sanchez de Lozada said. "I ask one
more thing from our father above -- God save Bolivia."
The predicament of the Bolivian president mirrors that of many
of his regional colleagues: how to reduce his country's rapidly
expanding deficit and win new badly-needed loans from the
international financial community.
Bolivia was the first in the region to fully embrace the U.S.
backed-economic reforms.
But while many admit the results have curbed inflation and
reduced poverty, more than 80 percent of the country still lives
below the poverty line.
"These programs are not lifting the bulk of society," said
Balderrama.
Michael Shifter, a Latin American analyst at the Inter-American
Dialogue in Washington, said politicians need to do a better job of
preparing their people for such plans.
"If you plan to apply this tough medicine you need to prepare
the groundwork and work with the communities," he said.
It was not the first time an economic plan put forth by the
Bolivian government provoked condemnation and ended in violence.
In April 2000, an effort to privatize the water supply in the
central city of Cochabamba triggered violent protests that ended
with the plan being rolled back.
Two years later, Peruvian President Alejandro Toledo suspended
the sale of two state-owned electric companies after huge street
protests in his country -- a move some analysts said significantly
cooled support for the free-market reforms there.
In Paraguay, protests erupted last year over tax reforms
proposed by the IMF, and a plan to sell the state telephone company
met stiff resistance on the street and in Congress.
The backlash has also prompted anti-IMF protests similar to
those seen during the turbulent 80s, when hyperinflation enveloped
many South American countries.
At least one Latin American leader seized on the Bolivian unrest
to highlight a growing feeling in the region that the IMF is
failing to grasp the economic reality for those in the region.
Argentine President Eduardo Duhalde, who took office last
January after bloody street riots and looting ousted then president
Fernando De la Rua, has emerged as an ardent IMF critic. He charged
that the Washington-based lender is partly to blame for his
country's crisis-- a sentiment shared by many Argentines.
"What happened in Bolivia? The International Monetary Fund
arrived and did what they did in Argentina," he told reporters in
Buenos Aires. "What was the result? The people went to the
streets."
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