July 1 (Bloomberg) -- As U.S. diplomats huddled in their La Paz embassy on June 9, some 20,000 Bolivian protesters outside burned tires, threw dynamite and fired pepper spray at police, who countered with tear gas and water cannons.
Six days later, Bolivian President Evo Morales praised the demonstrators. Traveling to El Alto, the city above La Paz from which most of them came, he said he was proud they had rallied against the U.S. for granting asylum to an exiled former defense minister allegedly involved in massacres.
The incident has forced the U.S. to confront its diplomatic neglect of Bolivia -- and, more broadly, of Latin America, a major trading partner and one of the world's biggest suppliers of illegal drugs.
``There's a sense that the whole relationship has been kind of poisoned'' with Bolivia, says Michael Shifter, a Latin America expert at the Inter-American Dialogue, a center for Western Hemisphere issues in Washington. ``If things continue to go the way they've gone, it can make it much more difficult for the next administration to repair the damage.''
As the U.S. has shifted its focus to hotspots such as the Middle East and North Korea, coca growth has increased in Latin America, defying U.S.-funded eradication efforts. And President George W. Bush hasn't been able to get Congress to pass free- trade deals with Colombia and Panama, disappointing these allies.
Protecting Diplomats
Meanwhile, Morales's rhetoric has gone largely unchecked. In the wake of the June 9 riots, the U.S. State Department recalled Ambassador Philip Goldberg to Washington and questioned Bolivia's commitment to protecting diplomats.
While landlocked and mountainous Bolivia may be the poorest country on the continent, it's hardly irrelevant. Bolivia holds the region's second-largest reserves of natural gas and is the world's third-largest cultivator, behind Colombia and Peru, of coca, the raw ingredient of cocaine. Morales, 48, also has support from American foes including Venezuelan President Hugo Chavez.
The embassy riot in the world's highest-altitude capital capped what has been a raucous two-and-a-half years of relations with the U.S. since Morales, Bolivia's first indigenous president, took office.
A former head of the coca-growers union, Morales routinely rails against what he calls the U.S. empire and has accused the U.S. of plotting to oust him. He has also accused the U.S. of aiding his political opponents as provinces try to break away from the central government. On June 22, Tarija province -- home to 80 percent of Bolivian gas reserves -- voted for greater autonomy, the fourth region to do so in recent weeks.
`Shades of Tehran'
Eduardo Gamarra, a Bolivian professor of political science at Florida International University in Miami, says ``there's absolutely no evidence'' that the U.S. is involved in these efforts. Gamarra says that he saw ``shades of Tehran'' in the June 9 protest, referring to the 1979 takeover of the U.S. embassy in the Iranian capital, and that the protesters in La Paz were clearly ``egged on by the government.''
``Up to this point, the provocation has all been rhetorical,'' says Tom Shannon, assistant U.S. secretary of state for the Western Hemisphere. After June 9, ``we realized that we had a problem of confidence with this government.''
Bolivia gets money from the U.S. for anti-drug efforts. Congress also continues to extend duty-free imports from Bolivia under the Andean Trade Promotion and Drug Eradication Act, even as some in the Bush administration --including the president himself -- have questioned Bolivia's commitment to fighting narcotics trafficking.
Feeding the Frenzy
U.S. officials and Bolivian analysts say Morales is now feeding the frenzy against the U.S. as a distraction from his own political troubles: His new constitution has yet to be approved in a nationwide referendum, and he hasn't been able to stop the autonomy votes.
At the core of Morales's efforts to rile Bolivians are the accusations against former Defense Minister Jose Carlos Sanchez Berzain and ousted Bolivian President Gonzalo Sanchez de Lozada, 78, both of whom fled to the U.S.
The men were allegedly involved ``in the massacre of Bolivian civilians'' when 67 people were killed in September and October 2003 as the government `attacked'' protesters, according to lawsuits filed in Maryland and Miami and later consolidated in Miami. The confrontations, some led by Morales, were sparked partly by Sanchez de Lozada's plan to export natural gas through a port in Chile, Bolivia's historic adversary.
Motion to Dismiss
Attorneys for the two men -- including Greg Craig and Howard Gutman, advisers to the presumptive Democratic presidential nominee, Barack Obama -- filed a motion to dismiss the case, arguing that a trial of two Bolivians accused of crimes in Bolivia has no place in U.S. courts.
Gustavo Guzman, a journalist-turned-diplomat who serves as the Bolivian ambassador to the U.S., says he told Shannon in a meeting at the State Department on June 18 that Bolivia is committed to protecting U.S. diplomats.
Bolivia will submit extradition requests for Sanchez de Lozada and Sanchez Berzain in July, he says, adding: ``It's a demand for justice, not a political issue.''
``Right now we're passing through a difficult moment,'' says Consuelo Ponce, spokeswoman for Bolivia's Foreign Ministry, in a telephone interview. ``We want a closer relationship,'' she added. ``Our top request, though, is to respect our country's sovereignty.'
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