The United States’ Central Intelligence Agency (CIA) had been active in providing finances and training to the Bolivian military dictatorship in the 1960s. The revolutionary leader Che Guevara was killed by a team of CIA officers and members of the Bolivian Army on 9 October 1967, in Bolivia. Félix Rodríguez was a CIA officer on the team with the Bolivian Army that captured and shot Guevara. Rodriguez said that after he received a Bolivian presidential execution order, he told “the soldier who pulled the trigger to aim carefully, to remain consistent with the Bolivian government’s story that Che had been killed in action during a clash with the Bolivian army.” Rodriguez said the US government had wanted Che in Panama, and “I could have tried to falsify the command to the troops, and got Che to Panama as the US government said they had wanted”, but that he had chosen to “let history run its course” as desired by Bolivia.
Elections in 1979 and 1981 were inconclusive and marked by fraud. There were coups d’état, counter-coups, and caretaker governments. In 1980, General Luis García Meza Tejada carried out a ruthless and violent coup d’état that did not have popular support. He pacified the people by promising to remain in power only for one year. At the end of the year, he staged a televised rally to claim popular support.” After a military rebellion forced out Meza in 1981, three other military governments in 14 months struggled with Bolivia’s growing problems. Unrest forced the military to convoke the Congress, elected in 1980, and allow it to choose a new chief executive. In October 1982, Hernán Siles Zuazo again became president, 22 years after the end of his first term of office (1956–60).
Democratic Transition:
Gonzalo Sánchez de Lozada pursued an aggressive economic and social reform agenda. The most dramatic reform was privatization under the “capitalization” program, under which investors, typically foreign, acquired 50% ownership and management control of public enterprises in return for agreed upon capital investments.
In 1993, Gonzalo Sánchez de Lozada ran for president in alliance with the Tupac Katari Revolutionary Liberation Movement, which inspired indigenous-sensitive and multicultural-aware policies. In 1993, Sanchez de Lozada introduced the Plan de Todos, which led to the decentralization of government, introduction of intercultural bilingual education, implementation of agrarian legislation, and privatization of state owned businesses. The plan explicitly stated that Bolivian citizens would own a minimum of 51% of enterprises; under the plan, most state-owned enterprises (SOEs), though not mines, were sold.
The Law of Popular Participation dumped upon municipalities the responsibility of maintaining various infrastructures (and offering services): health, education, systems of irrigation, without support from the state. The reforms and economic restructuring were strongly opposed by certain segments of society, which instigated frequent and sometimes violent protests, particularly in La Paz and the Chapare coca-growing region, from 1994 through 1996. The indigenous population of the Andean region was not able to benefit from government reforms. During this time, the umbrella labor-organization of Bolivia, the Central Obrera Boliviana (COB), became increasingly unable to effectively challenge government policy. A teachers’ strike in 1995 was defeated because the COB could not marshal the support of many of its members, including construction and factory workers.
1997-2002 General Banzer Presidency:
In the 1997 elections, General Hugo Banzer, leader of the Nationalist Democratic Action party (ADN) and former dictator (1971–78), won 22% of the vote, while the MNR candidate won 18%. At the outset of his government, President Banzer launched a policy of using special police-units to eradicate physically the illegal coca of the Chapare region. The MIR of Jaime Paz Zamora remained a coalition-partner throughout the Banzer government, supporting this policy (called the Dignity Plan). The Banzer government basically continued the free-market and privatization-policies of its predecessor. The relatively robust economic growth of the mid-1990s continued until about the third year of its term in office. After that, regional, global and domestic factors contributed to a decline in economic growth. Financial crises in Argentina and Brazil, lower world prices for export commodities, and reduced employment in the coca sector depressed the Bolivian economy. The public also perceived a significant amount of public sector corruption. These factors contributed to increasing social protests during the second half of Banzer’s term.