Bolivia launched a new effort at democratic government today as veteran populist leader Hernan Siles Zuazo was inaugurated president, marking the beginning of the first popularly elected government here in 18 years.
In a three-hour ceremony at the National Congress this afternoon, Siles accepted the presidency he had almost won in a 1980 election and vowed to build a "broad-based and fertile" democracy that would end the cycle of coups that have repeatedly prevented democratic government in this poor, land-locked Andean nation.
Tonight, Siles announced a Cabinet that appeared to be carefully weighted among the factions in his multiparty Popular Democratic Unity coalition. Although moderates predominated, Siles named Communist ministers of labor and mines, reflecting the Communist Party's strong ties to Bolivia's labor movement.
The presidents of Peru, Ecuador and Colombia and a host of foreign delegations attended the inauguration, which made Bolivia the third South American country to return to democratic government during the past three years after military domination in the 1970s.
In his inauguration speech, Siles declared that "we have much to detain us in the analysis of past pains and guilt. What is important is that we defeated the dictatorship."
He added, "We are extending the frontiers of democracy toward the south in an uncontainable advance."
The new president was greeted with cheers in the cramped, marble Congress chambers and in the plaza outside, where many supporters waited through a rainstorm holding banners or wrapped in traditional rainbow-striped alpaca ponchos.
As the country approached democracy, tens of thousands of students, miners and party militants spent the past week happily parading through the mountain-encircled capital and unfurling flags and banners from its small cluster of skyscrapers.
This widespread political euphoria has been matched, however, by a series of crises awaiting the new government. Siles and his coalition of mostly moderate reformist leadership stands to inherit a national government bankrupted by mismanagement and corruption since the military coup that prevented Siles from taking office after winning a plurality in the 1980 election. The country is now beset by creditors and plagued by narcotics traffickers.
The depth of the country's crisis made Siles reluctant to accept the military's hasty three-week transition to civilian government, launched after a series of strikes paralyzed the country in mid-September. Bolivia's democratic leadership, raggedly resurfacing after two years of military rule, has had little time to prepare for government, and Siles' alliance remains deeply divided.
Even as Siles took office today, 10 days after the Congress elected in 1980 was called into session, the new democracy was being viewed with some skepticism by the country's military and the foreign bankers and governments whose support is critical to Bolivia's economic survival.
After decades of coups and failed elections, many here appear unwilling to bet on the success of Bolivia's latest democratic revival.
"Siles faces an undamaged military establishment, an undamaged paramilitary establishment, an undamaged narcotics network and hungry and angry peasants who aren't necessarily averse to the military," said one pessimistic diplomat here. "If he lasts, it will be a minor miracle."
It is the political solvency of the new government that has most worried its potential allies in Latin America and the Reagan administration, which is expected to renew part of the more than $100 million in aid frozen after the 1980 military coup.
Though Siles was backed by a large majority of the newly reconstituted congress, his unwieldy three-party government coalition holds only a minority in the congress.
Diplomatic sources in La Paz said the Communist ministers in Siles' Cabinet would cause the Reagan administration "certain preoccupation" but their inclusion would not necessarily prevent the resumption of U.S. aid, Reuter reported.
Most diplomats and politicians here agree that the minor miracle has to occur if Bolivia's 5.5 million people are to avoid political and economic chaos. Dependent on mining and agriculture and marked by a disenfranchised majority of rural peasants and native Indians with the lowest levels of income and literacy in South America, Bolivia was chosen by guerrilla leader Ernesto "Che" Guevara 15 years ago as the most likely place for a Cuban-style revolution.
Siles is not unfamiliar with these imposing challenges. A leader of the populist movement against the military 30 years ago and president between 1956 and 1960, the 69-year-old leader will take office again after winning pluralities in the elections of 1978, 1979 and 1980 only to see the results annulled by fraud, political infighting and military intervention.
Despite his alliance with Communists and other leftists, Siles and his closest associates have emphasized that the new government plans no radical social or economic restructuring. Siles joined with leftist elements to solidify his ties with Bolivia's powerful and radical labor movement, but these sectors have dropped major political demands in favor of "deepening democracy," a Communist spokesman said.
The current economic and financial crisis has largely narrowed the new government's options, political leaders said this week.
"We are not going to have any nationalization, because you don't socialize losses," said Mario Velarde, the general secretary of Siles' party, the Nationalist Revolutionary Movement of the Left. Velarde was named foreign minister in the new Cabinet.
The military government is leaving Siles with an effectively bankrupt treasury, about $40 million in overdue payments on a foreign debt of $3.8 billion, and an inflation rate that reached 126 percent in the first eight months of this year.
To prevent a payments default and a complete economic collapse, Siles will have little choice but to negotiate with the International Monetary Fund and international banks for rescheduling of debts and new emergency loans, his supporters say.
In addition to this immediate crisis, Bolivia's new rulers will have to try to undo a staggering system of government-backed smuggling and corruption in the illegal cocaine trade estimated at $1.5 billion, which is believed to provide half of the illegal U.S. supply. Now Bolivia's biggest business, the cocaine traffic is backed by a powerful network of paramilitary forces and some military officers, and its leaders have clearly warned the government in recent days not to interfere.