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Bolivia: New President Inherits Struggling Economy - 2002-08-07

Boliva's 63rd president has been sworn in. Gonzalo Sanchez de Lozada has inherited a struggling economy and difficult political environment. He faces the task of finding a permanent solution to issues that have driven widespread protests over the last two years.

The new president-elect's swearing-in ceremony was attended by Spain's Prince Philip of Asturias, Venezuela's president Hugo Chavez and Peruvian president Alejandro Toledo.

Gonzalo Sanchez de Lozada, who is known locally as Goni, narrowly defeated left-wing rival Evo Morales in the June general election. Despite the gray and windy day, large crowds lined the city of La Paz's principal square which holds its Congress building and presidential palace.

The celebrating is likely to be shortlived. The new president's inaugural address to congress was delayed by wolf-whistles and chanting, while opposition politicians loyal to Mr. Morales held up anti-government banners. Mr. Morales is the radical anti-U.S. leader of Bolivia's coca growers. For a decade he has led sometimes-violent protests against U.S.-backed government efforts to wipe out Bolivia's coca crop and thereby its cocaine industry.

Mr. Morales could also prove to be a troublesome opposition. As a result of his rising popularity, for the first time, many of the country's legislators are of indigenous Indian descent. They are expected to redouble their protests against the policy of "zero tolerance" for coca, implemented by the outgoing government.

They have already won a small victory. A U.S.-funded mobile army unit set up last year to clear coca farmers' roadblocks in the main-coca growing area is being disbanded.

Another bone of contention is a plan to export natural gas to Mexico and the U.S. via a pipeline to the Pacific coast. This is Bolivia's main economic hope, but the cheapest route is to a port in Chile. This idea arouses passionate opposition among Bolivians who haven't forgotten their defeat by Chile in a war 123 years ago.

As president from 1993-1997 Mr. Sanchez de Lozada was able to push through highly unpopular liberal reforms. But the country's troubled economy has since been battered by its neighbors' recessions.

A loss of confidence in government and a hostile opposition will undoubtedly test the government's negotiating abilities to the limit in the days ahead.