Bolivia's president decides to `stay in power' after all

Embattled President Carlos Mesa on Thursday said he will stay in power after Congress rejected his request to call an early election in August, a move that would have allowed him to step down two years before his term ends.

"I will not turn my back on Bolivia," the historian-turned-politician said in a nationally broadcast address, announcing he will stay, in spite of week-long crippling protests and road blockades.

"I will not leave power in the hands of someone who lacks the legitimacy of the popular vote," he added, in a reference to Senate President Hormando Vaca Diez, who would have been his legal successor.

"I will not escape my constitutional responsibility of remaining as president," Mesa added.

A communique issued by Congress after the five hour session said Mesas's request for an early election was rejected because it was considered "to lack legal basis and being contrary to the constitution."

The road blockades that isolated Bolivia's largest cities for weeks were removed after the lower house of Congress on Wednesday passed legislation raising to 50 percent a combined tax and royalty levied on oil companies, the main demand of organizers of the protests.

The bill, which is likely to also gain Senate approval, was opposed by Mesa, who said it would create problems with the international community because it violates the contracts with the companies and discourages foreign investment.

The legislation levies 32 percent tax on top of the 18 percent royalty tax currently paid by oil companies. Mesa had proposed a similar tax, but it would have been deductible. The house made it non-deductible.

Overwhelmed by the protests, which he refused to suppress by force, and by the congressional reluctance to back his oil bill, Mesa on Tuesday had asked legislators to authorize a general election on Aug. 28 for him to step down one month later instead of 2007.