Siles Zuazo fails to gain support from any faction. The economic crisis worsens. Conflict with Congress, labor, and the private sector puts the government on the verge of collapse. The opposition forces Siles Zuazo to give up power through an election. General Banzer wins by a slim margin. In Congress, the MNR forms a coalition that elects Paz Estenssoro, the runner-up, for a fourth time.
Paz Estenssoro shifts away from the center left. He signs a Pact for Democracy under which Banzer and his Nationalist Democratic Action (ADN) party agree to support the drastic New Economic Policy (NPE), a new tax law, and repression of labor. In exchange, the ADN receives control of some municipal governments. This Pact holds up through 1988, when the two parties disagree on electoral law.
Political parties scramble to find new allies. The election results in a three-way tie between the MNR, the ADN, and the Movement of the Revolutionary Left (MIR). The ADN and MIR form a Patriotic Accord coalition. Congress elects Jaime Paz Zamora from MIR as president and a vice president from the ADN. The ADN also gains control of the principal policymaking bureaucracies.
Paz Zamora governs as a center-left moderate. He faces growing national security, social, and economic threats from cocaine trafficking and addiction, which he attempts to control. The 1993 elections are peaceful and relatively open. The MNR defeats the ADN/MIR coalition. Gonzalo Sánchez de Lozada, former planning minister and architect of 1985's shock therapy reform, assumes the presidency.
Sánchez de Lozada alienates traditional MNR factions when he attempts to reduce party patronage and focuses on administrative decentralization. The Law of Popular Participation transfers control over 70 percent of government funds to local municipalities. Banzer returns with a campaign that stigmatizes the government for increasing the gap between rich and poor. He wins the 1997 election.
Banzer claims to strive for stability in the financial system and reform in the social and political arenas, but social unrest and violent uprisings in 2000 disrupt his plans. He imposes a state of siege to control the unrest and removes ministers who criticize his handling of the crisis.
Illness forces Banzer to resign; Vice President Jorge Quiroga replaces him. Political conflicts deepen, and antigovernment feeling spreads. A radical leader of the Indian communities, Felipe Quispe, leads a popular protest movement. In 2002, coca grower Evo Morales places second in the presidential election, forcing a runoff with the eventual winner, former president Gonzalo Sánchez de Lozada.
Labor groups ally with indigenous leader Felipe Quispe, and Evo Morales, champion of the coca growers, to persuade many that free-trade policies serve only foreign interests and the rich. Deadly riots force the president to resign, yielding office to Carlos Mesa, who names a cabinet of former leftists, politically inexperienced intellectuals, and an Indian representative.
back to top