Víctor Paz Estenssoro

Víctor Paz Estenssoro, politician: born Tarija, Bolivia 2 October 1907; President of Bolivia 1952-56, 1960-64, 1964, 1985-89; died Tarija 7 June 2001.

Few will dispute that Víctor Paz Estenssoro was the most influential figure in 20th-century Bolivian politics. He was president four times, for a total of more than 12 years straddling four decades. But, even when he was not president, he was often the major player behind the throne. He will be remembered most for his extraordinary feat of overseeing two "revolutions" at completely opposite ends of the political spectrum.

First, in 1952, he was literally carried on the shoulders of miners to the national palace, where his government implemented what was then South America's most radical programme (seven years before Fidel Castro arrived in Havana). In 1985, he pushed through neo- liberal measures which effectively reversed the main planks of the 1952 revolution and crushed the miners as the country's most organised political force.

Such an ideological volte-face is not uncommon in Latin America, but few leaders have turned quite such a complete circle. It can be best explained by what his supporters describe as Paz's intelligent pragmatism. Certainly, Bolivia in the early 1950s was very different to the mid-1980s. Its main export was tin, but only three families, known as "La Rosca", controlled 80 per cent of the industry. The countryside was largely feudal.

Paz fought as a NCO in the Chaco war with Paraguay of the 1930s, which unleashed social forces pushing for change. He decided to enter politics first as a deputy in 1938. Four years later he was one of the co-founders of the Nationalist Revolutionary Movement (MNR) in 1942 on 7 June (by strange coincidence, the same date he died). The party was initially influenced by European Fascism, but was later more akin to Peronism and other populist parties which are multi-class, anti- Communist and strongly nationalist.

It won the elections of 1951 on an anti-oligarchic platform, but was cheated of victory and a military junta took over. An armed insurrection in April 1952, mainly by miners, MNR activists and the police, was successful, and Paz returned from exile to head the new government.

The MNR government nationalised the mines, expropriated large numbers of big estates, and extended the vote to the majority Indian population. For the first time, Aymara and Quechua Indians were allowed to walk on pavements in the centre of La Paz, until then a privilege of the white élite.

Largely as a result of US pressure and the terms of its aid, the MNR governments gradually lost their radical direction. Paz himself was ousted in 1964 after just three months of his third term as president by his military vice-president.

In contrast to the MNR's other leaders of his generation, Paz was born into a land-owning family in the southern department of Tarija. This partly explains why his instincts were conservative and nationalist, rather than radical. He always occupied the centre-right ground of the party.

He was never a strong ideologue, but a cool calculator of political opportunity. This led him, for example, to support the military regime of General Hugo Banzer (1971-78) in its early years, although he later had to seek exile.

Paz did not become president again until 1985, when he was 78. Years of political instability, declining tin prices and poor economic management had led Bolivia to the brink of bankruptcy. Inflation had risen to 20,000 per cent. Brown bags were used instead of wallets to carry wads of notes.

"Bolivia is dying on us," Paz said. Within a fortnight, he passed Decree 21,060 (the figures entered Bolivians' everyday vocabulary), which broke with the country's statist past and introduced a free-market model which endures to this day.

Public spending was slashed, price controls lifted, and foreign capital assiduously sought. Later, when the price of tin collapsed, most state-owned mines were closed, and 20,000 of Paz's erstwhile allies sacked. Two states of siege were imposed to control the protests.

Inflation was dramatically reduced and economic stability restored. Paz signed legislation designed to curb Bolivia's sizeable coca economy. But in practice its enforcement was half-hearted, as cocaine dollars were crucial to stabilising the exchange rate and providing job opportunities for sacked workers.

Paz was by character a serious, austere man and no admirer of frivolity. He was an avid reader, and trained in economics and law. His nickname was "el mono" (the monkey) because of the shape of his head.

He will be applauded most for leading the 1952 government which helped to drag Bolivia out of its feudal past. His 1985 government was eulogised by officials from the World Bank and the IMF. He undoubtedly helped to set a trend: later, Argentina's president Carlos Menem and Venezuela's Carlos Andrés Peréz also reversed their parties' statist traditions and embraced a similar model.

Paz recognised the social cost of his policies, and set up a special "safety net" fund for the unemployed. But, after 15 years of free market policies, most Bolivians remain wretchedly poor ­ it is the only South American country to qualify for special debt concessions usually reserved for sub-Saharan Africa. In 1952 Bolivia was the poorest country in South America, and it remains so now ­ Paz's two revolutions failed to change that.

James Painter