Bolivia's leader, Carlos Mesa, unveils a number of economic measures as indigenous and labor leaders threaten unrest.

  BY KEVIN G. HALL
  Knight Ridder News Service

  LA PAZ, Bolivia - Appealing for calm and asking for sacrifice, Bolivian President Carlos Mesa on Sunday unveiled austerity measures designed to right a listing ship of state as average Bolivians braced for potential violence and perhaps the fall of another leader.

  Mesa's prerecorded television address to the Andean nation came as radical leaders of labor and indigenous groups threatened a return to the violence that left at least
  56 dead and toppled former President Gonzalo Sanchez de Lozada in October. Mesa, an apolitical television commentator, was his vice president and assumed the
  presidency warning he would step aside if any more blood is shed.

  With 191 coups or revolutions in its 178 years as a republic, Bolivia is the poorest nation in South America and a tinderbox. The slightest provocation, real or perceived,
  may push the country over the edge and into new social unrest. In La Paz over the weekend, residents stocked up on food, water and cooking gas amid fears that
  violence may come in days.

  In the Sunday night speech, Mesa backed away from expected immediate fuel tax hikes and an end to subsidized cooking gas for the poor. Instead, he would free
  government-controlled prices over time, allowing for a gradual price hike of up to 6 percent depending on domestic and international price factors.

  Mesa announced an across-the-board 5 percent cut in government spending to help close a $414 million deficit. He would raise $95 million with an 18 percent tax on oil
  companies and another $100 million if Congress approves his plan to tax all financial transactions in Bolivia. And he would save $35 million with austerity measures such as reducing his salary by 10 percent and that of Congress by 5 percent.

  Bolivian lawmakers on salary alone make more than $2,000 month while the majority of the poor earn a basic monthly wage of about $50-$60. Mesa promised to
  eliminate congressional perks that inflate salaries as high as $5,000 a month.

  REFORM PROMISED

  Mesa unveiled 23 decrees and three reforms needing congressional authorization. He also promised to reserve government purchases of up to $1.1 million for Bolivian
  companies ''using it as an instrument for growth.'' That measure appears designed to deflect attention from the planned export of Bolivia's vast and untapped natural
  gas.

  The previous government fell because of nationalist outrage over a $6 billion pipeline project to export natural gas out of Bolivia to the United States through Chile, the
  hated neighbor that took landlocked Bolivia's coastline in a 19th century war. Mesa also announced he would revoke a controversial 1997 law that opened up the oil and gas sector and send to Congress on Tuesday a new hydrocarbons proposal to help the poor country tap its rich underground wealth.

  Even before Mesa's address, opponents who had granted him a three-month grace period were threatening new unrest.

  ''More than 100 days have passed and there are no signs of change. After 100 days we can say he is the face of neocolonization, he has shown continuity'' with the
  disgraced previous government, said Roberto de la Cruz, an Aymara Indian and president of the Regional Workers Union (COR), a radical workers's group in El Alto.

  PROTESTS LOOM

  El Alto saw the worst of last year's violence, and its urban poor are angry and appear itching for another fight. De la Cruz and his group were key reasons the
  government fell in October. In an exclusive interview in a home, he promised new protests soon to bring down Mesa, close the Congress and change the so-called
  neoliberal economic system espoused by the United States.

  ''We are recruiting leaders to organize a popular, pacific but confrontational rebellion,'' he said, declining to provide a date certain but denying published reports that his
  followers are taking up arms. ''We don't need weapons to defeat neoliberalism!'' The measures won't satisfy Bolivia's most prominent native leader, Evo Morales, who
  nearly won the presidency in 2002. A day before the speech, he vowed that from the legislature, his Movement to Socialism Party (MAS) would force deeper cuts in
  public salaries to show solidarity with the poor.

  In a running daylong interview as he traveled through Bolivia's tropics, Morales made it clear he wants Mesa to stay in power, at least long enough as the MAS can make expected huge gains in municipal elections nationwide in December.

  ''For questions of stability, it is important that Mesa stays,'' said Morales, who has won legitimacy through the ballots and sees it threatened by groups more radical than
  his. Bolivia's problems threaten to become regional problems.

  Neighboring Peru and Ecuador have similar dynamics where majority indigenous groups are angry with their governments fragile. The United States has much at stake
  too.

  The region is the world's biggest supplier of coca, the plant from which cocaine is made. U.S. antinarcotics aid and alternative development programs in the region have exceeded $1 billion in the past decade, but efforts are being undone by political instability in the region.

  Before addressing his nation Sunday night, President Mesa had been out of view for four days, negotiating with politicians and interest groups. He agreed to be
  interviewed, then canceled because of the sensitivity of his Sunday night speech and the country's tense social situation.