'Bolivia is shattered': Election crisis leaves deeply divided nation

By Monica Machicao, Daniel Ramos and Sergio Limchi

LA PAZ/SANTA CRUZ (Reuters) - From Bolivia's capital La Paz high in the Andes to the steamy city of Santa Cruz in the eastern lowlands, weeks of protests have loosened leftist President Evo Morales' grip on power and left his South American nation deeply divided.

At least three people have been killed in street battles that erupted after Bolivia's opposition accused Morales of rigging an Oct. 20 election, threatening to end to his 14-year rule amid signs his support is waning among the police and military.

The turmoil could topple Latin America's longest standing leader, a survivor of the region's leftist "pink tide" who swept to power in 2006 as Bolivia's first indigenous leader. It has already hammered the country's shaky economy, damaging its image with global investors.

In a damning report, the Organisation of American States (OAS) said on Sunday that Morales' election victory should be annulled due to irregularities and a new ballot held. The OAS announcement prompted several key allies - including a minister, regional governor and government legislators - to resign.

Morales - a 60-year-old former union leader who remains popular with many Bolivians, particularly in poorer rural areas - agreed to a new vote but it was not immediately clear whether he will be a candidate.

Yet, with Morales' supporters clashing in the streets with opposition protesters in recent days, some Bolivians said they could see no easy resolution to the worst crisis in decades in the nation of 11 million people.

"Bolivia is shattered. We all hate each other," said Sandra Patiño Huitron, 46, a receptionist in Santa Cruz, the nation's largest city. She said that despite showing early promise, the Socialist leader had proven to be a disappointment and Bolivia needed a new path forward.

"If we continue like this, we will be worse than Venezuela," Patiño said, referring to an economic and political crisis in another left-leaning South American nation that has driven more than 3 million inhabitants to flee in recent years.

Opposition leader Carlos Mesa, who came second in October's vote, said on Sunday that Morales should withdraw as a candidate after the OAS issued its report. He called for people to remain "mobilized" until there was a resolution of the crisis.

Morales - who has overseen more than a decade of solid economic growth and used taxes from mining and natural gas projects to build roads and schools - has slammed the opposition and in particular protest leader Luis Fernando Camacho, accusing them of stoking unrest and undermining the constitutional order.

Camacho, a civic leader from Santa Cruz who has become an opposition icon, said on Sunday that protesters would only return home once democracy has been restored.

'CUSP OF CRISIS'

Bolivia's opposition accuse the charismatic Morales of clinging to power and trampling term limits after he ignored a 2016 referendum in which voters rejected his request to run again in this year's election.

Morales appealed to Bolivia's top court, packed with government loyalists, which struck down term limits allowing him to run for a fourth straight mandate, a move that angered even some of those who supported him before.

The Oct. 20 election was marred by allegations of fraud after an unexplained halt to the vote count was followed by a sharp swing in the president's favour.

Since then Bolivia has been in crisis, with many cities shut down by road blocks, some borders closed and government buildings picketed.

Lucio Ilray, waving a Bolivian flag as he protested in La Paz, said he wanted to avoid the country slipping into "tyranny".

"Bolivia is a free and sovereign country. We are fighting for our democracy," he said.

Daily marches and riots have left public buildings shuttered and tear gas hanging over La Paz's central Murillo plaza. There are regular late night clashes between protesters on both sides armed with slingshots, clubs and even sticks of dynamite.

In a setback to Morales, Juan Carlos Huarachi - the head of the Bolivian Workers' Confederation union group - dropped his staunch support for the president on Sunday and urged him to consider stepping down if it would help restore peace.

Morales has generally remained defiant, insisting that the stand off was not about him but about the need for a government of 'the people' to remain in power.

However, on Sunday, he suggested Bolivia needed "new political actors" - though he did not say whether he would stand aside in the fresh election.

Morales' departure would deprive the Left of a powerful icon in Latin America. Leftist leaders in Venezuela and Cuba have rallied behind him, while Argentina's Peronist President-elect Alberto Fernandez and Mexico's foreign ministry have voiced support.

A La Paz-based Western ambassador said the challenge to ending the stand-off was getting everyone now to agree on the way forward.

"The question is whether the public and the opposition accept this," the diplomat on Sunday, adding that the international community needed to play a major role to ensure free and fair elections.

"(Morales) may need to stand down as a candidate and the TSE (electoral tribunal) needs to be elected in coordination with the opposition and civil society."

(Reporting by Monica Machicao, Daniel Ramos, Sergio Limchi, Miguel Lo Bianco and Adam Jourdan in Buenos Aires; Writing by Adam Jourdan; Editing by Dan Flynn and Daniel Wallis)

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