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Bolivians worry spat with US could kill jobs

Secretary of State Condoleezza Rice suspended a trade deal with Bolivia last week for failure to rein in coca growing. Some 50,000 jobs could be lost.

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Coca growers forced the US Agency for International Development (USAID) out of two provinces where it was trying to help locals find alternatives to coca. Morales, a union leader who rode a wave of support from his coca-grower base to the presidency, also barred the Drug Enforcement Administration from surveying coca fields by air, claiming he knew how to control drugs better.

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But a top Bolivian official Friday accused the US of backing armed antigovernment groups in a violent jungle clash that left 15 people dead last month, including 13 of Morales's supporters.

Unreasonable US demands?

Some analysts in La Paz feel that the US has made unreasonable demands on Bolivia and that Bolivia must look for new markets for its products.

"The American market and relationship has become very politicized and demands too many conditions," says Elizabeth Peredo Beltrán, director of the Solon Foundation, a La Paz non-governmental organization focused on social issues and human rights. "We can't depend on North America and will have to look for other markets."

But businessmen say the US market cannot easily be replaced.

The United States is Bolivia's largest single investor and its main trading partner not including natural gas exports, followed by Brazil, Argentina, Colombia, Peru and Venezuela. The United States imported goods worth $362.6 million in 2007.

"The US market for us is imperative," says Makitesa CEO Rene Meier. "We have been trying to open other markets in South America but there is high interference from governments and we don't have the working capital to hold us while we wait for Venezuela to pay us."

Business leaders say that the Morales government has relied too heavily on exceptionally high natural gas and mineral prices and demand to generate revenue, while the national manufacturing sector has been ignored. But the global financial crisis has caused gas prices to fall, and the urban private sector in Bolivia says Morales has largely ignored it in favor of its poor rural base.

"If we want to really fight against drug trafficking, we need to create wealth and more jobs in other industries to keep people away from it," says Meier. "At the moment I think we're going the other way and sending more and more people towards the drug sector."