Bolivia

AFTER thirteen eventful years of political, social, and economic ferment, the Bolivian revolution has sputtered to a halt. The violent upheaval which altered the fundamental nature of Bolivian society in 1952 still evokes lip service from those in power, but clearly the revolution has lost its way.

A landlocked country marked by awesome contrasts in terrain and climate, this impoverished South American republic seems hardly fit for human habitation. Some 70 percent of its estimated four million inhabitants are Indians, most of whom somehow manage to survive on the altiplano, a cold, bleak plateau running the length of the western part of the country at an altitude 13,000 feet above sea level. Snowcapped Andean ridges isolate the altiplano from Chile in the west and Bolivia’s tropical, sparsely populated lowlands in the east. Precipitous valleys, known as the yungas, intrude like fingers into the eastern Andean slopes, and every descent down their narrow dirt roads becomes a breathless adventure.

In addition, there is a certain Alice in Wonderland quality about this remote nation. During recent months, the entire country has been preoccupied by a yo-yo fad. The political scene is spiced by the presence of two Trotskyite parties and the rightist Falange, whose fringe contains some Nazis. Much intellectual effort has been directed toward economic problems relating to tin mining and agriculture, yet Bolivia is perhaps the only country in the world where the national lottery has been losing money.

Nonetheless, as the popular saying goes, “Bolivia is a beggar sitting on a throne.” The mountains contain untapped mineral wealth of inestimable value, and the fertile lowlands are capable of supporting almost every variety of crop.

The notion that Bolivia’s wealth should be developed for the benefit of all Bolivians is relatively new. Before 1952 the country was pretty much the private preserve of the “tin barons,” three men who owned the large tin mines, and the rosca, the term for the large landowners who kept the Indian peasants of the altiplano in virtual serfdom. Opposition to the status quo was championed by the Nationalistic Revolutionary Movement (MNR), whose political philosophy tended at first toward fascism and then toward Peronism. When the MNR candidate, former economics professor Víctor Paz Estenssoro, received a plurality of votes in the 1951 presidential elections, the results were nullified and a military junta took power. A year later, the MNR led a popular uprising in which armed peasants and miners defeated Bolivia’s German-trained army. Paz became president, and the revolution began.

The unplanned revolution

At the onset the revolution was not a carefully planned program, but rather a series of spontaneous moves. Shortly after Paz took office, the Trotskyites who had control of the tin miners’ unions presented a plan to nationalize the large mines under the direction and control of a government agency. The project was accepted, and the Bolivian Mining Corporation, or COMIBOL, was born. The peasants began to occupy the large estates and drive away the owners. The MNR then ratified and expanded this selfexecuted agrarian reform. The third pillar of the revolution, universal suffrage, was a natural derivation of the MNR’s desire to stay in power. Thus the illiterate Indian peasants were enfranchised.

The MNR proved an effective instrument as it guided Bolivia through a period of revolutionary transition. Under President Paz’s astute leadership, the party managed to create the spirit of enthusiasm vital to a true revolution. In Latin America, only Mexico and Cuba have experienced similar transformations.

Radical social change often leads to economic chaos. Bolivia, with its heritage of underdevelopment, was no exception. The division of the large estates among the peasants caused agricultural production to decline. The miners and their unions took control of the tin mines, which then began to lose large sums of money. Only a huge injection of American aid saved the country from bankruptcy.

Further, President Paz was forced into complicated machinations to maintain his base of political power. In the early years of his regime, he persecuted the Falangists, many of whom were put in concentration camps. Though the repression was mild by Latin-American standards, many scars were left. When the tin miners became too powerful, a new professional army and air force was created with American aid. Finally, the need to build an effective political machine to carry out the goals of the revolution led to abuses, as the MNR gradually waxed fat on governmental graft and corruption.

The military coup

But perhaps the most fatal shortcoming was the political feuding within the MNR. Víctor Paz became convinced that he alone could rule Bolivia, and he began to eliminate potential successors. In 1964 when he decided to run for his third term as president, most of the other important MNR leaders opposed him. In search of support, Paz accepted as his new vice president ambitious Air Force General René Barrientos Ortuno, the choice of the military.

Resistance to Paz was now united. Both the Falange and the extreme left agitated for his removal. Matters came to a head in late October, 1964, when the students took to the streets against the president. The armed forces, which had been planning a coup for several months, finally overthrew the government after Vice President Barrientos declared himself in open rebellion. On November 4, Paz flew to Lima, and Barrientos was installed as president at the head of a military junta.

Revitalizing the tin mines

The rehabilitation of the nationalized tin mines, which account for 70 percent of Bolivia’s exports, is a prime target of the new military government. Production had plunged from 29,500 tons in 1953 to a low of 12,622 tons in 1961. Costs had risen tremendously, and COMIBOL was losing millions of dollars each year. These difficulties are partially attributable to a sharp decline in world tin prices during the 1950s and to the failure of the tin barons to make capital investments during the last years in which they owned the mines. Ore quality had been declining, and little exploration for new deposits had been undertaken. Also, labor costs had risen to unreasonable heights owing to the irresponsible actions of the unions after nationalization, and COMIBOL had become a focal point for the graft which fed the MNR political machine.

The military attacked the problem by attacking the miners. In May, 1965, union leaders were exiled and salaries in the mines drastically cut. When the miners rebelled, they were crushed by the armed forces.

The hope now is to utilize effectively the so-called Triangular Plan. Under the first two phases of the plan, Bolivia received $28.5 million from the United States, West Germany, and the Inter-American Development Bank. These funds, intended to enable COMIBOL to purchase the capital equipment necessary to maintain and increase production, failed to achieve the hoped-for improvements because Paz and the MNR were unable to impose the necessary reform measures upon the miners and their unions. Under the third phase of the Plan now being considered, COMIBOL hopes to receive $10 million for purposes of exploration, research, and capital improvement.

Many observers feel that Bolivia’s mining problems can be solved by the private sector. Presently there are over 2200 small and medium size private mines in Bolivia. Production in these mines has increased 40 percent in the last two years. One of the stated goals of the Alliance for Progress in Bolivia is to expand the private mining sector. To this end the Bolivian Mining Bank is slated to receive a $5 million loan from the United States for the exclusive purpose of developing the private sector.

New hope in minerals

Bolivia’s mineral potential is fantastic. Known unexploited deposits contain tin, zinc, antimony, tungsten, and copper. A recent report concluded that in one of the more inaccessible regions of the country, there are deposits of gold which may be worth as much as $3 billion. Resources such as highgrade asbestos, clay, and magnesite have been largely neglected. With prices of most metals at high levels, it is not surprising that much interest, both domestic and international, is being expressed in Bolivian mining.

The new military government has demonstrated much more sympathy toward the private sector than was evidenced by the MNR regime. A new mining law and a proposed new investment code have both met with favorable reaction from the business community. Yet this is an area where political considerations must be given high priority. Emotional opposition to permitting foreign capital to control extractive industries runs high, and the past history of private mining in Bolivia makes rather unpleasant reading. Feasible solutions under consideration include the limitation of private investment to small and medium size mines, and the formation of “mixed companies,” owned jointly by private investors and the government.

Another potential source of great wealth is the lowland region around the city of Santa Cruz in eastern Bolivia. A program of colonization and agricultural development, begun under Paz and the MNR, is transforming this once wild and uninhabited land into a booming center of activity. Before 1961, Bolivia had to import $14 million worth of sugar annually to meet domestic needs. Now a surplus of sugarcane is grown in the Santa Cruz area, and the problem has become one of stimulating local consumption, which ranks as the lowest per capita in Latin America. Other crops are rice, cotton, and fruits. The region produces abundant tropical hardwoods, such as mahogany, and a promising oil and natural gas industry is being developed.

Barriers to progress

Two problems, one human and the other geographic, hinder progress. The population of Bolivia is concentrated in the highlands. Much effort has been made to entice Indian peasants from the altiplano to the Santa Cruz lowlands in order to increase both farm productivity and local markets. Though it has been demonstrated that such a change in environment can be made if the colonists are properly prepared, so far most of the settlers have come from other regions.

In addition, transportation problems are seemingly insuperable. The Andean barrier hinders the shipment of products to the altiplano, and facilities are inadequate for transportation to countries, such as Argentina and Brazil, which border the lowlands. Alliance for Progress funds are being used to finance construction of roads, which will help to alleviate the difficulties. Longrange hopes for the region center around the opening of the populous markets of Rio de Janeiro, São Paulo, and Belo Horizonte in Brazil to Bolivian exports.

Víctor Paz and the MNR had succeeded in mobilizing the masses toward a sense of participation in the future of the country. The Indian peasants are now fully conscious of their own personal dignity and aware of the possibilities of a better life in years to come. The miners, aroused to overexpectation by the agitation of the unions, are resentful because their living and working conditions have improved little since 1952. Thus, there is much unfinished work to be done within the revolution.

The issue centers on the identity of the man and the group which will attempt to carry on the revolution. Barrientos, who was forced to take on Army General Alfredo Ovando Candia as his co-president during the revolt of the miners last May, wants very much to become a constitutional, popularly elected president. So far, despite efforts to woo the peasants, he has failed to build a base of political support.

The conservative Falange is the largest of the parties, apart from the MNR. It suffers from internal divisions, between those who look back with nostalgia upon the years of struggle against the MNR and those who wish to reshape the party in a Christian Democratic mold. The problem is that another group has taken the Christian Democratic name and has obtained recognition from the international Christian Democratic movement.

The MNR still exists as a party, but its future is clouded. Many of its leaders are in exile, and it no longer has access to the patronage which was the source of so much of its strength.

The international Communists have gained footholds in the universities and the mines, but they are more of a nuisance than a threat. A Communist take-over is considered inconceivable, since Bolivia is much too vulnerable to outside pressures. Its lack of an outlet to the sea and its extensive, unprotected frontiers would enable neighboring South American nations to strangle a Communist Bolivia. In addition, the Bolivian economy would collapse without American aid.

The American Embassy in Bolivia has recovered nicely from the shock of the 1964 coup. It was not wholly unexpected, yet the feeling was that it could be discouraged, or that Paz would weather the storm. Ambassador Douglas Henderson had maintained a close relationship with Paz, to the extent of appearing in public with him during the 1964 presidential campaign. Yet because the military junta is so unabashedly pro-American, it has been relatively simple to restore a close, effective relationship with the government.

Dissatisfaction with the military regime is reaching widespread proportions. The students are beginning to demonstrate. The miners, unhappy with salary cuts and the heavy-handed application of military discipline, are renewing their protests. Virtually all political parties are in opposition. The government, showing signs of nervousness, has decreed a harsh security law, and at the same time has made a vague promise of elections in 1966.

Bolivia has been receiving more United States aid per capita than any other Latin-American nation. The hope was that it could become a showplace for the Alliance for Progress. This may still be possible, but the first step will be to settle the political uncertainties and get on with the work of the revolution.