President Sánchez de Lozada will focus his foreign policy on attracting foreign investors to Bolivia to help reinvigorate his country's economy. Showing a decade of solid fiscal management and relative social and political peace, Sánchez de Lozada will seek to present Bolivia as the most stable country in the Andean region. Contrasting it with the political turmoil experienced in Peru, Ecuador, Venezuela, and Colombia in recent years, the unprecedented decade of economic prosperity, political peace, and democratic stability will serve as Bolivia's foremost letter of recommendation to world financial institutions.
Yet, the recent social unrest produced by the ongoing tensions between the government and the police over salaries and benefits has cast a shadow of doubt over the government's ability to maintain social peace after three years of meager economic growth. The last presidential election left some concerns about the strength of Bolivia's political system. The emergence of populist and antiestablishment indigenous leaders who together captured more than 50% of the votes has left many preoccupied with the consolidation of Bolivia's democracy. Joining efforts to strengthen mechanisms of democratic accountability in the region and promoting the consolidation of democratic practices throughout Latin America will be President Sánchez de Lozada's best strategy to prevent further deterioration of the Bolivian democracy.
President Sánchez de Lozada is expected to pressure the United States to deliver on its promise of creating a Free Trade Zone for the Americas by 2005. Bolivia would benefit enormously from having freer access to U.S. markets. Much of President Sánchez de Lozada domestic success will depend on his ability to generate economic growth. Opening new markets for Bolivian products is an essential condition to generate growth in Bolivia. President Sánchez de Losada will use his well-earned reputation to promote freer access for Bolivian products in industrialized countries. Also, Bolivia— with Colombia, Peru, Ecuador, and Venezuela—forms the Andean Community that established the Andean Free Trade Zone in 1993 and expected to create a free market zone by 2005. Ongoing instability in the economies of the region could threaten its viability.