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New Bolivian President Sworn In

August 7, 1989

LA PAZ, BOLIVIA (AP) _ A new generation of political leaders took over in Bolivia Sunday with Jaime Paz Zamora installed as president, even though he came in third in general elections in May.

President Victor Paz Estenssoro, 82, turned over the government to his nephew at a ceremony in Congress.

Paz Zamora, 50, was elected Saturday by Congress after he formed an alliance Wednesday with former military dictator Hugo Banzer Suarez.

None of the candidates received a majority of the vote in the May 7 election and under the constitution the Congress then elects the president from the top three vote getters.

Luis Ossio Sanjines, leader of the Christian Democratic Party and a Banzer ally, is the new vice president. He and Paz Zamora will serve four-year terms.

In his inaugural address, Paz Zamora said the pact with Banzer, his former adversary, ″signals that new winds are blowing in Bolivia.″

He said his government will maintain a free market economy with an emphasis on developing the agricultural sector and small and medium-sized industries. His administration also will continue the economic stabilization program by maintaining a floating exchange rate, pegging prices to supply and demand and attracting foreign investments, the president said.

Attending the inauguration were the presidents of Argentina, Brazil, Panama, Paraguay, Peru and Uruguay. Representing the Unites States were Education Secretary Lauro Cavazos and Prescott Bush, President Bush’s brother.

Paz Zamora heads the Movement of the Revolutionary Left. His alliance with Banzer, leader of the conservative Nationalist Democratic Action Party, surprised many Bolivians and caused a brief run on banks last week.

Paz Estenssoro’s Nationalist Revolutionary Movement has been the most influential political force in the last 40 years and he has served four times as president.

Paz Estenssoro told the new administration, ″We are turning over the government with a healthy economy and in much better shape than it was four years ago.″

When Paz Estenssoro took office in 1985 he fired 23,000 government-employed miners and imposed a ten-fold increase in the price of gasoline and a wage freeze. The measures lowered inflation from 24,000 percent in 1985 to a predicted 6 percent for 1989.

Paz Zamora is expected to bring into the government a new wave of political and economic leaders, including many educated in the United States and Europe.

In May’s presidential election, Paz Zamora won 19 percent of the vote, Banzer 23 percent and Gonzalo Sanchez de Lozada of the Nationalist Revolutionary Movement 24 percent.

Banzer, a former army general, came to power following a coup in 1971. In 1974 Paz Zamora was accused of plotting to overthrow the government and was jailed for six months. Banzer stepped down in 1978 and became active in the democratic process.

Paz Zamora’s Cabinet was sworn in Sunday night with nine members from his party and nine from Banzer’s political organization.

Carlos Iturralde, a wealthy mining executive and ambassador to Washington during Banzer’s rule, was named foreign minister. He said one of his top priorities will be to ″wage a frontal battle against the cocaine trade.″

Paz Zamora was a vice presidential candidate in the 1980 elections after his party formed a coalition with the Communist Party and the Leftist Revolutionary Nationalist Movement under the leadership of Hernan Siles Zuazo.

The coalition won a majority, but a military coup blocked Siles Zuazo and Paz Zamora from taking office. In 1982, the military stepped down.

Siles Zuazo and Paz Zamora resigned in 1985, a year before their term expired, because of social unrest and political pressure.

Sunday’s inauguration marked the first time in 25 years that a government has completed its term and turned over power to a democratically elected administration.

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