BOLIVIA: President Gonzalo Sanchez de Lozada struggled to regain control of the country yesterday after two days of civil unrest left 27 people dead and over 100 injured and the government's economic programme in tatters, writes Michael McCaughan.
The violence began when thousands of striking police officers and civilian protesters clashed with government troops on Wednesday over an attempt by Mr Sanchez de Lozada to introduce a new income tax.
The national police, demanding a 40 per cent wage rise, occupied a central plaza on Wednesday where they were fired upon by army snipers posted on nearby rooftops.
The army shot protesters dead as Mr Sanchez de Lozada was smuggled out of the presidential palace in an ambulance, an appropriate metaphor for the fragile health of the continent's second- poorest nation.
On Thursday, a sniper shot dead a 21-year-old nurse in the city centre as she helped load an ambulance with wounded people and four other people were killed in the Alto area, which adjoins La Paz.
"The government has lost all its authority and rules solely by force," complained Mr Antonio Peredo, an opposition deputy.
Thousands of citizens joined the striking police who seized the foreign ministry and fired tear gas in support of demonstrators who then besieged the presidential palace.
A dozen government buildings were torched, including the Ministry of Sustainable Development, along with banks and party offices belonging to the governing conservative coalition.
Militarised rural police in charge of coca eradication efforts downed weapons around the country, putting a temporary halt to the nation's anti-drug efforts.
Teachers, farmers, and union workers all demonstrated in the city's streets on Thursday, with a march of 5,000 trade unionists nearly reaching the presidential palace again.
Army tanks patrolled city streets yesterday while troops clubbed knots of peaceful protesters who answered opposition calls for further mobilisation.
President Lozada cancelled the income tax reform project, which would have affected workers earning just $150 a month, having justified the tax hike to reduce its deficit - now 8.5 per cent of the budget - to the 5.5 per cent demanded by the International Monetary Fund.
President Lozada called for a "new fraternal dialogue among the Bolivian people" while police called off their protest on Thursday after a fast-track agreement offered hefty bonuses and indemnity of $10,000 to the families of murdered officers.
"The protests will continue until the government resigns," said opposition leader Mr Evo Morales, who finished a close second in last year's presidential elections.
The indigenous organiser led protests by coca farmers last month which were brutally crushed by state security forces, leaving a dozen farmers dead.
However, the latest wave of protests has enjoyed much broader national support, including business leaders frustrated at the virtual collapse of domestic industry.
President Lozada, who ruled Bolivia from 1993-1997, won less than a fifth of the popular vote in last year's elections and was nominated by a fractured parliament. An easy target for satire, Mr Sanchez de Lozada speaks Spanish with a US accent, having spent most of his life abroad. In his first term of office President Sanchez de Lozada privatised state assets and caved in to US demands for control of coca eradication efforts.
The US government declared its "total" support for the embattled Bolivian President who recently agreed to host 300 US troops and establish a US army base in the Amazon region in return for $4.5 million in US military aid. The Bolivian crisis has highlighted growing unrest across the region where free market policies have led to the repeal of labour laws, the decline of wages and the collapse of subsistence farm incomes.