U.S. raps Bolivia drug failings but maintains aid

By Arshad Mohammed

WASHINGTON (Reuters) - Bolivia has failed to do enough to fight the drug trade, the United States said on Tuesday, but it did not cut off aid to the Andean nation despite tit-for-tat expulsions of their ambassadors last week.

In an annual assessment, the White House placed Bolivia -- the world's third-largest cocaine producer -- as well as Myanmar and Venezuela on a list of states that had "failed demonstrably" to meet their counter-narcotics obligations.

Being on the list allows the White House to cut off U.S. aid other than counter-narcotics and humanitarian funds.

However, the United States said it would continue bilateral aid programs to Bolivia for now as well as aid to Venezuela's democratic institutions and to small community development projects in the oil-exporting nation.

This support for Bolivia and Venezuela is "vital to the national interests of the United States," a White House statement released with the list said.

The White House also said Afghanistan had made "some progress" in combating narcotics under the leadership of its president, Hamid Karzai.

"However, drug trafficking remains a serious threat to the future of Afghanistan, contributing to widespread public corruption, damaging legitimate economic growth, and fueling violence and insurgency," it said.

Bolivia's leftist president, Evo Morales, last week ordered the expulsion of U.S. Ambassador Philip Goldberg from La Paz, blaming him for intensified opposition protests. The United States described the charge as baseless and then expelled Bolivia's envoy.

Venezuela failed to meet counter-narcotics obligations for the fourth consecutive year, a U.S. official said, while Bolivia was put on the list for the first time.

"This was not a hasty decision," David Johnson, assistant secretary of state for the Bureau of International Narcotics and Law Enforcement, told reporters. Bolivia had staged a "retreat" from its international obligations to control cocaine trafficking, he said.

"It remains a major narcotics producing country and its official policies and actions have caused a significant deterioration in its cooperation with the United States," he said of Bolivia.

"President Morales continues to support the expansion of illicit coca leaf production despite the fact that current legal cultivation far exceeds the demand for traditional legal consumption," Johnson said.

US ORGANIZES FLIGHTS

Johnson noted that the Bolivian government had recently forced the removal of U.S. Agency for International Development workers from the Chapare region, where they had been working to provide alternative livelihoods to cocaine production.

In addition, he said Bolivia had required the withdrawal of U.S. Drug Enforcement Administration agents from Chapare, where Morales rose to prominence as a fiery union leader.