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OPERATOR: I would now like to turn the conference over to Julia Sweig. Please begin, Ms. Sweig.

JULIA SWEIG: Thank you very much, and thanks, everybody, for calling in. We're here this afternoon with Eduardo Gamarra, who is the author of the Center for Preventive Action and Council on Foreign Relations report "Bolivia on the Brink." I think you all have his biographical information. And the purpose of this call is really to give you all an opportunity to talk with Eduardo about the arguments in this council special report and his perspective on Bolivia.

President Bush is on his way to Latin America in a couple of weeks. The Bolivian foreign minister is coming up here next week. So the report comes out at a time when there would be some discussion about the path forward for U.S. policy and U.S. bilateral relations toward Bolivia and more generally in the hemisphere and in the Andean region.

So let me just ask Eduardo one question. And Eduardo, take a few minutes to answer it, and then we'll open it up to questions.

Why, Eduardo, is this report called "Bolivia on the Brink"? On the brink of what? And why?

EDUARDO GAMARRA: Okay. Thank you, Julia, very much. Before I answer the question, I want to thank you, the council and the Center for Preventive Action for this initiative and for asking me to write this report.

Bolivia is on the brink of many things. In many ways, Bolivia is on the brink of re-founding itself in a moment that in fact is probably the most significant and most dynamic period of political transformation since probably the 1950s. And so in that sense, on the brink, certainly -- on the brink of major, major political transformation, but also, I think, in that same kind of dynamism, and every kind of change -- and particularly political change -- involves a whole series of very difficult moments. And so Bolivia could also be on the brink of serious political conflict, of a very serious political conflict that is both racial in nature and also regional in context.

And so I think it's important to look at Bolivia in two ways: on the brink of really re-founding itself politically and on the brink of perhaps facing major political conflict.

SWEIG: And what, Eduardo, is the -- what are the drivers of that political conflict?

GAMARRA: Well, in the main, the drivers are, of course, driven by this quest by the government of President Morales to transform a country that has been not only one of the most -- let's call it -- one of the countries with the greatest patterns of socioeconomic exclusion, but also a country that for the last 25 years has been attempting to construct a model of representative democracy that by and large transformed the country, but also, by the explanation of most political analysts, failed in fact to address the most important grievances of large sectors of Bolivia's predominantly indigenous population.

And so in that sense, you know, when you look at Bolivia and what Bolivia is trying to change, it's trying to change really everything. And it's trying to do so in a hurry, and in a hurry in which basically not only is it trying to redress grievances that have been built up over the last 40 or 50 years but, as President Morales and his followers would say, grievances that have accumulated over the last 500 years.

So in that sense, you know, this is a government that has an awful lot of expectations unleashed and very little time to carry out a reform agenda, which in and of itself is being contested. It's being contested not only by those groups that were comfortable with representative democracy but also with those groups who feel that President Morales in fact has an agenda that is not democratic at all.

SWEIG: How would you characterize the breadth and depth of his mandate? Because you talk about, you know, the Morales government going forward with this major transformative agenda, but he, after all, came in with a significant mandate. How has that -- you know, you characterize the mandate and talk about how -- you alluded at the end right now to sort of its -- you know, where it is beginning to fray, but talk a little bit about the mandate and how his base and those in the opposition are -- who may in fact have voted for him, are regarding his -- the MAS and the Bolivian government's project today.

GAMARRA: Well, President Morales on the elections on December 18th of 2005 with 54 percent of the vote, the most impressive vote of any candidate since 1982, when the transition occurred. And in that sense, you know, the only time that Bolivia ever elected a president during democracy that was above 35 percent -- well, in fact, you have to go back into the pre-democratic period to find a president who was elected with over 35 percent of the vote, and that was done in generally fraudulent elections.

So in that sense, you know, the president has a very significant mandate. This mandate was ratified on July 2nd in some measure with the election of the Constituent Assembly. Although the absolute numbers dropped somewhat, the fact of the matter is that President Morales has a significant mandate, which is, by the way, monthly ratified by public opinion polls which consistently give him above 50 percent, well into the 60s, and he started out almost up in the 80 percentile range. So he's a popular president with a popular electoral mandate.

But the issue in Bolivia -- and it's a very significant one, Julia -- is that Bolivia is a plural country, and that while you might win 54 percent of the vote, there's also the remaining percentage which did not vote for him, which, although they may be different politically and they may even be different ethnically, are still Bolivians. And so what's at issue in Bolivia right now is defining nationhood on the one hand, defining relations between the central government and the regional governments, and looking particularly at how especially sectors in the Oriental part of Bolivia, in the eastern part of the country, believe now that -- curiously now believe that they are the ones being excluded and they are the ones that are being discriminated against by the central government.

And so this is a recipe which, in my view, has become a recipe for confrontation, especially because of the overt racial tones that the confrontation has taken. And so as race is an issue -- and it has been a very important issue in Africa and elsewhere -- whenever you have a very racially tinged environment and -- then significant sociopolitical conflict generally ensues.

SWEIG: Well, on that note, let me ask then if people in the call want to jump in and ask Eduardo any questions.

OPERATOR: At this time, we will open the floor for questions. If you would like to ask a question, please press the star key followed by the one key on your touch-tone phone now. Questions will be taken in the order in which they are received. If at any time you would like to remove yourself from the questioning queue, press star, zero. Again, it's star, one to ask a question.

(Pause.)

Okay, again, it's star, one to ask a question.

SWEIG: Well, I'll just keep going, then, and keep interviewing Eduardo until somebody else chimes in.

You know, I want to go to the region and go to the United States, but just to stay on one sort of internal domestic Bolivian question for a second, Eduardo, the newly -- those in the other 46 percent who may be of a different race, who might now be seeing themselves as substantially aggrieved, what is their approach to the Morales government? How are they attempting to mobilize themselves and to what end? What is it that they would like to accomplish?

GAMARRA: Well, I think there are several answers to your question.

On the one hand, it's an atomized opposition. There is no centralized leadership. On the one hand, it's been the old political leaders of the political parties, former presidents like Tuto Quiroga, former ministers of government and prominent businesspeople who founded a political party like Samuel Doria Medina.

But more importantly, Bolivia is also now facing a very interesting pattern of -- let's call it of opposition, and that is that the Prefect, the elected governors who were elected for the very first time with -- in fact on December 18th of 2005 --

SWEIG: Mm-hmm.

GAMARRA: -- those elected governors in fact probably are today the principal opposition. And the surveys that I have been conducting myself and others who are familiar with survey research in Bolivia -- it's almost -- it's very striking that the most viable opposition is directed by the Prefects of Departments like Santa Cruz, like Tarija and to a certain extent even the aggrieved Prefect of the city of Cochabamba, which, as you know, went up in arms last month.

So now this opposition, of course, is driven primarily not only be a defense of representative democracy and a plural model, but it's also driven by what Bolivia -- you know, but one of the sad parts about it is that it's also driven by what Bolivians in fact fear the most, and that is division, absolute division, not only in racial terms, but in geographic terms.

And of course one of the underlying issues there is the whole issue of autonomy and the relationship of these departments with the central government. And you know, it would be impossible to discuss autonomy without looking really at the economic base of each of those departments. And each of those departments, of course, is a hydrocarbons producing department. Bolivia's -- the principal source of Bolivia's GDP is now in those departments, especially in Tarija and Santa Cruz. And so more than just a political battle, it's also a battle over resources, and how the state will use the resources that are forthcoming from exports of hydrocarbons.

SWEIG: I can keep going, but is there anybody that would like to jump in?

OPERATOR: Yes. Our first question comes from Letta Tayler.

QUESTIONER: Hi, both of you. Thank you for taking my call.

To what degree, Professor Gamarra, is Hugo Chavez calling the shots when it comes to Evo Morales's harder-line policies? Or to what degree are these policies influenced by people or formed by people within his inner circle or because of his own leanings, such as of course his cocalero background?

And I guess my second question, if you have time, would be, why isn't the U.S. succeeding more thus far in courting Morales, given that Shannon went down during his inauguration and seemed to be holding out an olive branch?

GAMARRA: Right. Thank you, Letta, for your question. The first question, of course, is one that's, you know, that really allows one to speculate an awful lot. But let me just take two shots at it.

One, as the report says, I think it's a big mistake to explain the emergence of Evo as a result of some kind of conspiracy by Mr. Chavez and Mr. Castro. The emergence of Evo is really a result of Bolivia, of where Bolivia was headed. And if -- my sense if always that, you know, if Evo wasn't president now -- I think the real question is, why wasn't somebody like Evo president before? And that, I think, is the more important question.

But having said that, it is very clear that in the last 12 months, Cuban and Venezuelan influence in Bolivia have grown significantly, not only in terms of the physical presence of Cuban and Venezuelan advisers on a number of issues -- which I think again, it's not a question of -- it's not a value judgment. It's just simply, they're there on, you know, as educational advisers, as health advisers, as military advisers, as security advisers, really as media advisers and so on. And therefore, it's not surprising that some of the reforms that the Morales government is carrying out -- for example, on the media side -- mirror some of the things that are going on in Venezuela. It's also not surprising -- or you know, and it's certainly in my view not coincidental -- that many of the political reforms that are being pushed in the constituent assembly are, for example, you know, very closely -- they closely resemble things that have gone on or are going on in Venezuela.

So it's -- I think it's -- you know, it's fairly, I think, accurate to say that there is a very close relationship of advice, and there is a very close relationship then that is translating into policy choices -- much like, I would say, you know, when the United States was the big adviser, it made then sense for successive Bolivian governments to also accept U.S. recommendations. So, is this good or bad, I think, is the main model. In my view, what I -- you know, what the argument of the report is, that, you know, my concern is primarily that degrees of pluralism in Bolivian democracy are being restricted. And that is not something that is positive, particularly in the context of a racially and regionally divided country today, with the government egging on one or both of those kinds of divisions.

So I -- you know, that, I think, is really the more important question. And whether Venezuela and Cuba are pushing the government in that direction I think is a big issue. I think, you know, the thrust of the report argues for conflict prevention, and it seems to me that both Cuba and Venezuela can be forces for conflict prevention, rather than for conflict.

In that same vein, then, I think, you know, the important role of the United States here is key to understand. The U.S. has largely been standing and watching this unfold with no real policy option. The wait-and-see option has been the option, and you know, they haven't reacted well to many things, but have reacted fairly well to a bunch of others. And I think Mr. Shannon's role has been particularly interesting. They haven't taken on Bolivia on every, every issue and have made very cautious statements about the Bolivian direction on coca reform, for example.

So again, the thrust of my argument is that the U.S. needs to be a conflict preventer, and I think the U.S. needs to remain engaged in this country for a variety of reasons, but mainly because I think that unless the U.S. and others around Bolivia are engaged in the conflict prevention mode, the internal situation could, in fact, exacerbate over the next few months and certainly over the next few years.

SWEIG: Do you have another question?

OPERATOR: Our next question comes from David Romanad (sp).

QUESTIONER: Yes. Can you hear me?

GAMARRA: Yes, I can.

QUESTIONER: Okay. I was wondering if -- (audio break) -- there's any solution within the framework of the new economic relations that the countries of Argentina, Venezuela, Brazil are trying to work -- and now Ecuador -- are promoting, and it just could help, or what do you think that -- how that could influence to resolve the conflict that you foresee?

I mean, these new economic relations they are trying to carry on are -- (inaudible) -- in contrast with the American common market that it seems to be already (dead ?), and on the other hand, there are some negotiations going on around the energy policy, (to be the ?) pipeline of the south and many others between Bolivia and Peru.

GAMARRA: I just -- I'm trying to decipher your question. Are you asking me whether those new agreements are -- conflicts -- are good to reduce conflict or that they are -- is that your question?

QUESTIONER: Well, my question is if those agreements could help in averting the conflict.

GAMARRA: Yeah, okay.

SWEIG: Yeah, that's his question, Eduardo.

GAMARRA: Yeah, okay. Yes, I understand, and I think, you know, that the answer is yes. I think that, you know, Bolivia's, I think, you know, been working very, very well in trying to increase its -- the price that Bolivia gets for natural gas from Argentina and Brazil. And in that sense, the government has done a very good job. And, you know, greater revenues coming into Bolivia to help Bolivia resolve some of its basic social problems, I think, is a very good thing over all.

The problem, however, is that that additional revenue that comes into Bolivia, the big debate is over how it should be spent; whether it should be spent all or decided upon by the central government or whether it should go or in some greater proportion to the department's that, in fact, produce these hydrocarbons.

So while on the surface it looks like a very good thing, even this can be -- even this can just simply fuel the flames of the kind of controversy that is being sparked by the issue over departmental autonomy, for example.

SWEIG: Next question.

OPERATOR: Our next question is from Pablo Bachelet (sp).

QUESTIONER: Yes. Hi, Eduardo.

GAMARRA: Hi, Pablo.

QUESTIONER: I have a question, really, on -- if you could elaborate a little bit more on the coca question, which seems to be kind of the big overhanging issue on U.S. relations with Bolivia. I believe Bolivia wants sort of the go-ahead to produce more coca for legal purposes and that they would aggressively pursue cocaine trafficking.

My question to you, really, do you think this is a viable option? Do you think they have a good case to make that, you know, they should be allowed to produce more coca, it's a traditional sort of element used by the indigenous population, or is this a no-ender and this is just going to lead to sort of inevitable confrontation with the Bush administration?

GAMARRA: Yeah, that's a very good question, Pablo. Look. For many years -- in fact, you know, the report argues that if we're going to look for culprits in having created the Evo Morales phenomenon, one of those culprits is certainly U.S. coca policy, which, you know, in many ways contributed to the growth of the Cocalero movement and into this terribly well-organized political instrument that President Morales has rode upon.

The question now is, you know, that what the government has been pushing is an anti-drug policy that I think has some positive elements and some very controversial elements. The positive ones are that, you know, they have actually agreed to community-based eradication programs. And this is an old idea, and it's an old idea that in some instances is largely driven by the need to prevent conflict and to prevent confrontation between government forces and coca growers. So from a conflict prevention perspective, I think that that's -- you know, that's something that needs to be looked at and needs to be studied. And the results in the first year in terms of eradication, by the way, were actually better than some of the results achieved under the old-style interdiction strategies.

So I think again, you know, you need to be balanced. Yes, it's good, but. The international community, however, is not looking with very positive eyes, except for President Chavez.

And on Bolivia's dual approach, on the one hand of industrializing coca and on the other of basically taking the coca leaf off of the -- you know, the dangerous substances list of the U.N. Vienna convention, both 1961 and 1988, I think that's going to be a very difficult struggle. It's going to be a very difficult struggle because, for example, of the international implications. Legalizing coca and, you know, basically taking it off of that list, for example, would have some tremendous repercussions for President Uribe in Colombia, where coca is illegal and where, obviously, coca is primarily or predominantly, if not wholly, used for the production of cocaine. That, on the one hand.

In Bolivia as well, I think, you know, you have a problem there, and I think it's not incorrect to say what the U.S. ambassador has said and what many in the State Department have said: You know, the larger the production of coca, the more coca that ends up in the production of cocaine.

Bolivian cocaine no longer reaches the United States, according to Ambassador Shannon and according to at least two previous ambassadors to Bolivia. The problem is that Bolivian cocaine is now going to Europe, it's going into Brazil, and Brazil has a very, very serious problem. You might know, Pablo, that one of the main political leaders of the insurrection -- of the prison insurrections in Sao Paulo was a gentleman from Cochabamba, a Bolivian, okay? So, looked at regionally, I think Bolivia's coca production, in the end that coca production -- not all, certainly, but some will go into cocaine production, and that becomes a problem for others.

It is, of course, a moment -- and this is why the report argues for a U.S. approach that basically de-cocainizes the approach to Bolivia. I think we can get far or farther on drug control efforts by not stressing drug control but in fact by working on issues related to development, related, in fact, to conflict prevention, as I've noted.

But if we're going to continue to pursue the approach of confrontation, I think it's going to be very difficult for us to really move forward. And I think the international community, by the way, is also going to have a very hard time dealing with Bolivia.

QUESTIONER: Thank you.

OPERATOR: Okay. Our next question comes from Patricia Vasquez.

QUESTIONER: Yes, my question is with regards to Morales' nationalization of the hydrocarbons industry. It's a two-part question. The first part is, it seems that President Morales started out saying that he was going to take away the oil and gas fields, and he even said to companies take it or leave it, basically.

GAMARRA: Right.

QUESTIONER: But then, what we saw at the end was a more -- he ended up negotiating contracts that actually some of the companies now say are not that bad. Took away some of the -- (word inaudible) -- but they're not that bad. Same thing with the gas price with Brazil. He wanted to get 7 dollars per million Btu, then 5, and now he reached an agreement by which he got --

GAMARRA: Four.

QUESTIONER: -- a little bit from one contract, a little bit from another contract. I was wondering if you could comment on that in terms of it seems that there's been a bit of a change in his initial policies for some reason.

And then the second part of this question is if you could comment on what your expectations are or what you think will happen with foreign direct investments directed to the hydrocarbons industry in Bolivia in the upcoming years in this scenario.

GAMARRA: Okay, great. Well, two very good questions. And clearly, they're outside of the realm of the report per se, but let me tackle them anyway with my limited knowledge on hydrocarbons.

First, I think what you -- one of the things that you have to understand about President Morales and the movement that brought him to power is that the movement and the man are consummate media specialists in many ways. And they were phenomenal campaigners, and they have managed to handle a single message that transcends everything and that basically serve to mobilize this movement. They've been using nationalization freely for a long, long time. And, you know, there are very few Bolivians -- even in the eastern most parts of Bolivia, during the electoral period, for example, surveys showed that 80 percent of people in Santa Cruz wanted nationalization. So nationalization is a very popular thing.

What President Morales has done in Bolivia, however, in my view is not nationalization. We've really returned to, you know, joint ventures. We've really returned to the old-style kinds of relationships where you sign special contracts with foreign private investors. And, you know -- and the results so far seem to be fairly good. In fact, one always wonders -- and of course politics often is just about timing -- why previous governments didn't do this; why the terms of the contracts weren't changed before. More importantly, I think it's also important to ask why companies were, you know, so adamant about resisting this when previous governments made some noise about changing the terms of contracts, or changing the terms at least of the tax rate.

Overall, this isn't -- as I said, there really hasn't been nationalization, but it's been sold as nationalization, and the average Bolivian still thinks that the hydrodcarbons have been nationalized. We've returned to joint ventures. But, you know, explaining joint ventures is complicated. What the average Bolivian believes is that President Morales gave them back their natural resources, and that has sold terribly well, and that, in large measure, is responsible for his popularity.

Would you remind me very quickly what your second question was?

QUESTIONER: Yes. If you could comment what you expectations are for investments, private investments in this area in coming years.

GAMARRA: Well again, you know, we had expected that with President Morales in office, and with the nationalization of hydrocarbons, and with, you know, the cry for greater state control over the economy, and so on, that foreign investment would be driven away.

Bolivian foreign investment in 2005 reached its lowest level; in fact, it was negative foreign investment. The figures for 2006 and '07 are going to be fairly good. Bolivia will probably receive about $500 million in foreign investment. And Petrobras just announced yesterday, as a matter of fact, that it is renewing investment in the hydrocarbons area.

So, you know, again, perhaps, as some oil and gas analysts argue, you know, investment in the hydrocarbons industry is probably not driven as much by politics as it is by geology. And so, you know, Bolivia may benefit from this, and in the end, obviously it's the Morales government that will benefit as well.

QUESTIONER: Okay, thank you.

GAMARRA: Thank you.

OPERATOR: Okay. The next question comes from Michael Schumacher (sp).

QUESTIONER: No, this is Edward Schumacher (sp). And it actually follows up on the previous question. Considering that most of that investment comes from Brazil, I wonder what you feel the future looks like for Bolivian relations or Evo's relations with Brazil and Argentina, and should the United States be trying to corroborate more with those countries? Are those countries influencing the United States?

GAMARRA: Yeah, yeah. Very good question, Ed. I think, you know, Bolivian relations with Argentina and with Brazil are excellent, and the relationship -- the personal relationships that President Morales has with Kirchner and Lula are very, very good. You know, Brazil has had one of Lula's principal advisers, Marco Auerlio Garcia, in Bolivia on several occasions. And this gentleman has very close relations with many of Evo's advisers as well. So there's a very close relationship there that in some measure is also -- you know, it's driven by some kind of ideological solidarity, and so on. It's not driven by an affinity with Evo's anti-Americanism, at least on the Brazilian side. The Brazilians have been very cautious, and the Brazilians are very cautious with the United States. And in some measure, the Brazilians have demonstrated that they can have very good and close relationships with -- even with the Bush administration. In fact, I think both the Brazilian and the U.S. ambassadors would tell you that relations between the U.S. and Brazil are very, very good.

So, you know, in the tenor of the report, I think, you know, it makes a lot of sense for the United States to work closely with Brazil and with Argentina in trying to forge, you know, in trying -- I won't -- perhaps I shouldn't use the word "nudge" -- but in trying to assist Bolivia in forming some kind of national consensus that is conflict-preventing.

SWEIG: Can I jump in -- this is Julia -- on that point?

GAMARRA: Sure.

SWEIG: Do you think that Bolivia -- the Morales government would be amendable to having outside countries such as Argentina and Brazil participate in that kind of internal domestic consensus-building process?

GAMARRA: At this stage, Julia, I think not. But, you know -- because I think both Bolivia and Brazil would say -- you know, I think they would say this is an internal domestic matter, we don't interfere in domestic matters.

But, you know, my concern about Bolivia today is that there appears to be no domestic force capable of mediating conflict between the government and this rather atomized opposition. And that's where I think it's important for, you know, external actors to play a positive role in trying to forge mediating structures in the event that conflict, in fact, you know, runs out of the boundaries, as it appeared to have reached, you know, that situation in Cochabamba when two people were killed and, as I've noted, you when two people were killed largely because racial -- of racial ire on both sides.

SWEIG: Thank you.

OPERATOR: Okay, again if you'd like to ask a question, press star-zero now.

SWEIG: Well, if nobody -- is anybody in the queue? Because I do have a question.

OPERATOR: No, ma'am, at this time there are no further questions.

SWEIG: So, Eduardo, next week the foreign minister -- the Bolivian foreign minister will come here. He's coming here to have a number of meetings with the executive branch and with some members of Congress. On his agenda, as I have a sense, is the issue of extending the ATPDEA trade preferences beyond their current June expiration, also some new numbers of coca cultivation will be released in March. And I'm wondering whether a third issue may or may not be reinvigorating Bolivia's access to that $600 million --

GAMARRA: Millennium Challenge.

SWEIG: -- from the Millennium Challenge Account. So I'm wondering if you could speak to those three issues on the bilateral agenda maybe as we wrap up.

GAMARRA: Right. Well, on ATPDEA, when the report was first being written I was pretty pessimistic that anything would occur, that it would be extended to June. Then we speculated that the Democrats were not going to be too, you know, inclined to extending it. And then, of course, now what we have is some very important declarations by members of Congress that in fact they may consider extending ATPDEA beyond June. So in that sense, perhaps the -- you know, it's too early to call that off.

What I do think, and there are also members of congress who are increasingly upset when remarks are made and, you know, with the anti-American rhetoric that often comes out of different functionaries in different places in Bolivia and in the region.

So I think, you know, it's probably right now a fairly good opportunity for the Bolivian minister to come to Washington, explain the position of the Bolivian government and to take a more pragmatic approach to U.S.-Bolivian economic relations.

But I think, you know, you can have a very difficult time if he comes to Washington and makes the case for coca, makes the case for the legalization of coca and makes the case for industrialization of coca and makes, you know, any kind of statements that are in that line, because after all, the ATPDEA was part of the U.S. major counternarcotics effort.

So I think, you know, there's a very fine line there, and I think, you know, it could go -- it still could go either way.

On Millennium Challenge, again, I think there, you know, remember the conditions upon which the Millennium Challenge was established. One, very strong anti-corruption policies. And one might argue that that, in fact, is the strength of the Morales government, although many would say that, you know, the corruption in Bolivia is just as bad under Morales as it was under the previous governments, but that's arguable.

But the most important dimension was, you know, the notion of the correct policies. And the correct policies from the perspective of the Bolivian government would be to follow market-based policies or neoliberalism. And, you know, Bolivia has basically attempted to dismantle neoliberalism and has made a big case about it.

I think the argument can be made, however, that -- and President Morales has made this case several times -- that Bolivia, in fact, is respecting foreign investment, that Bolivia is not targeting even domestic private investors and that it wants to work with the private sector.

But I think it's going to have to be actions on the part of the Bolivian government rather than the rhetoric that are going to eventually convince anyone in Washington to release what was a proposal written by the Rodriguez administration, the president who is now, you know, unfortunately -- and this is where things, you know, get very complicated domestically, because President Rodriguez, whose principal task was to open up the electoral process that enabled Evo Morales to be elected, is now being tried for treason, and largely for the dismantling of some Chinese missiles at the behest, at the request of the U.S. Department of Defense.

And so, you know, the issue here is that I think there are so many important, very problematic political issues that are restricting pluralism and political democracy and at the same time -- you know, which I think needs to be an issue to be considered in Washington, and it's one that the Morales administration, I think, is going to have to do some serious explaining, you know, on how it wants to pursue a single-party system and dismantle basic habeas corpus kinds of issues and at the same time request, you know, large, large, massive doses of U.S. foreign assistance.

SWEIG: Well, we'll see whether they're up to the task next week on the visit, then, won't we.

GAMARRA: I hope so.

SWEIG: Well, do we have any other questions?

OPERATOR: We have another question, from Edward Schumaker (sp).

SWEIG: Okay.

GAMARRA: Okay.

QUESTIONER: Yes, one last question. Bolivia and Chile and the pipeline. Where do you see that going?

GAMARRA: Well, I don't -- let me start out again. You know, in the contradictory world of Bolivian politics, let's remember that President Sanchez de Lozada was basically forced to resign by virtue of the fact that he was about to reach a deal with Chile and with then-President Lagos. Today, you know -- and largely that opposition was headed by Evo Morales, whose rallying cry was, you know, no gas for Chile until we get an ocean -- access to the ocean.

Today the curious thing, of course, is that, you know, with President Bachelet in office and with President Morales, Morales is now talking about, you know, in some measure looking at what -- he's very seriously looking at restoring relations with Chile and, you know, opening up their respective embassies and so on. And that, in some -- you know, I think, you know, from my point of view, at least is, I think, a very good thing.

There's also talk about the sale of Bolivian gas to Chile, and the Chileans certainly are interested about -- in it.

But I think, you know, we always have to remember how, let me say, difficult this issue is in Bolivia. You know, the resolving the access to the sea issue is always on the minds of many in Bolivia. And you know, if Morales can achieve this, then, you know, I think we could in fact be facing a very popular -- more popular than he is now -- president for many years to come.

SWEIG: More questions?

OPERATOR: We have one more question, from David Romanez (sp).

QUESTIONER: Yes. (Three tier ?) -- the major conflict you see is that the -- actually, the country couldn't -- there could be an actual division of the country into two countries. What would you think the consequence will be, not only within Bolivia but if that would amount to an actual civil war, but within the region as a whole?

GAMARRA: Yeah. Well, that, again, is one of the major concerns that I have had in writing this report. I think, you know, what I said -- Bolivia on -- you know, "Bolivia on the Brink" -- is Bolivia on the brink of dividing? Is Bolivia on the brink of a civil war?

I think the term "civil war" is perhaps too strong, but I do think that Bolivia has in the past year reached moments in which major violent political conflict was averted. And there were moments in which violent political conflict erupted but was restricted.

And what concerned me the most was that the government was not in a conflict-preventive mode but that the government was in fact behind one of the -- one of these -- at least one of the mobilizations. In the case of the Cochabamba prefect, for example, the government was clearly attempting to force the governor of Cochabamba to resign by putting thousands of coca growers into the city of Cochabamba.

What that particular moment taught, I think, is that Bolivia is capable of two things. One, it's capable of really going into a very violent mode that could transcend, you know, the capacity of anybody to prevent conflict. And that is one that I think I fear the most, because we saw it in Cochabamba, we saw it in San Julian, in Santa Cruz months earlier. And I think, you know, that if the government continues to play a role like that, then the government is certainly not interested in preventing conflict, but it's interested in actually exacerbating conflict, because it believes that it can in fact bring the easternmost departments under central control. And I think that's going to be a very difficult task if it believes that it can carry that out.

On the other hand, we also have another characteristic of Bolivia, which is this ability to go right to edge and not quite fall off, you know, to have many dead, in fact, but not quite fall off, and to always find some kind of Solomonic decision or Solomonic solution to very serious problems.

We are in a lull in Bolivian political conflict right now, and probably because of Carnival. And you know, there's even been an agreement on the Constituent Assembly.

But I think, you know, if you look at patterns of conflict in Bolivia -- and in fact, this is something that, you know, just for you and for your information, if you look at the pattern of conflict under President Morales, of social conflict, and you compare it with the pattern of social conflict of the three or four previous governments, there has been more social conflict under Evo Morales, who was in theory the response to social conflict in Bolivia, than any of the previous three.

So you know, the difference here is that the previous governments in some measure were trying to avert conflict; this government seems to in some measure thrive from social conflict, to push ahead an agenda.

SWEIG: Well, this is a complicated set of issues, and one that you, I think, have done a great job at elucidating, Eduardo. And this report, I hope, will provide some guidance to those in the international community and in Bolivia that might want to actually prevent that walk right up to the brink.

GAMARRA: Thank you so much, Julia, for everything. I really appreciate it.

SWEIG: Thank you, Eduardo, and thank you, all, for joining us this afternoon.

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