Morales set to challenge U.S. on trafficking, aid

WASHINGTON - When Bolivia's Evo Morales is sworn in as president on Jan. 22, analysts say he's likely to challenge two policies long cherished by the Bush administration -- that U.S. aid must be tied to investment-friendly policies, and that coca crops must be eradicated.

A former coca growers' leader, the fiery Morales toured France, Venezuela, Cuba, Spain and China -- all not exactly friendly to the Bush administration -- and in Venezuela vowed to join the ``anti-neoliberal, anti-imperial fight.''

So far, the Bush administration's reaction has been cautious. A number of officials, from Secretary of State Condoleezza Rice on down, have said Washington will wait to see how Morales governs before passing judgment on his policies.

Assistant Secretary of State for the Western Hemisphere Thomas Shannon already said this week that Washington wants to talk with him about drug trafficking. Morales replied he would be willing to do so.

The Bush administration has been debating for some time how to tackle Morales, whose election comes as left-wing leaders seem well positioned to seize power in Peru and Mexico, further entrenching the region's leftward trend of recent years.

For now, the decision is to use the Millennium Challenge Account (MCA) -- a massive U.S. aid program launched by President Bush in 2002 -- as a big carrot to entice Morales to behave, U.S. government officials familiar with the deliberations say. Just before Morales' election, Bolivia presented a proposal for $598 million in aid from the MCA fund to build roads linking remote areas and help finance alternate export industries. If awarded, this would be the largest MCA grant to date.

`REAL LITMUS TEST'

But crucial details will have to be worked out with the new Morales administration in what will become a test of both the Bush administration's willingness to work with Morales and the Bolivian leader's acceptance of the capitalist system.

''The [MCA] conditions have to do with a free market, with its checks and balances,'' said one Latin American diplomat who asked to remain anonymous because of the sensitivity of the issue. ``If you want to migrate to a different system, obviously you will reject those conditions . . . It is a real litmus test of the Bolivian government's moderation.''

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