Created: 6/5/1981

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BOLIVIAi Growing Pressure on Garcia Heza

Senior military offiaere, oonoemed about the economiction, my force Garcia Heza to step down Boon.

The leading contenders. Generals Cayoja and Anex, believe the decisioneplacement must be made quickly so that Bolivia can get on with the task of normalizing its foreign relations. They consider this an essential condition for resolving the nation's severe economiccultiea. fM

Bolivia may soonoreign exchange crisis. tradereductions in new credits, and growingflight recently have causedoss of foreign exchange.

Unless these trends are reversed, Bolivia is likely to exhaust official international reserves this month. La Paz reportedly is delaying foreign exchange paymentsbanks and drawing on third-party deposits.

Argentina, which is Bolivia's major financial backer, fulfilled an earlier aid ccemitment by5 million loan during the first quarter Pollowing the takeover by Garcia Heza, however, official loans from the OS, Prance, West Germany, and tho Andean Pact countries were suspended. No new foreign credit will be provided by international commercial banks under the termsebt refinancing agreement concluded in early Hay. AjJ)

Bolivia's5 million standby agreement with the IMF evidently is being postponed because thehaa failed to meet the targets of the accordnder terms of the refinancing accord, failure toew standby soon will automatically put Bolivia into default with international banks.


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