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FOR: Special Group Assistants FROM:
During the discussion of Bolivia at5 meeting of the Special Groupirector Raborn promised lo provide lor theaper surveying the Bolivian scene. Copies of thisentitled, "Bolivia's Problems and5 and prepared by the Office of National Estimates, .ire enclosed.
FCS hi
CE1TBAL IHTELLIOSHCK AGEHCI
OFFICE CF RATICCIAL ESTIMATES
95
HEHCSAimUM FOR TBE DIRECTOR
SUBJECT: Bolivia's problems and Prospect*
Tola memoranduai examines tbe background of the present critical situation in Bolivia. The military ia. at present Bolivia's only effective stabilizing force. Tbe military govern -nent boa moved successfully through the first stage of an arduous but essentialreassertion of control over the mines, vhich can Bake significant economic progress possible. Bu this course brings the military leadership under new pressure and increases tbe chances of an open break between Barrientos and Ovando--an eventuality which would be likely to produce political chaos or even civil war.
BackfiTound
1. Bolivia's history has been dominated by political Ineptitude sad violence. Proa the time of independencehe country has suffered at the hands of venal, stupid, sod frequently brutal leaders. All five of tbe neighboring countries
have been presented withor have carved offizable slices of
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Bolivian territory. What remain*and-locked crippleation with valuable, but inefficiently-exploited, mineral resources.
Bolivia's population ofillion is far fromercent Indian,ercent mestizo,hite. Within each of these categories there are further major cleavagestrong tribal animosities among tbehe literacy, rate la only ercent and ouch of tbe population has stuck to tho old, primitive ways. Health conditions are veryrontier mentality prevails, and life ia held cheap.
Bolivia has hardly known representative government; olected leaders have usually been replaced ln rather short orflar by political or military strongmen. So far there have beenaper constitutions, but, whatever the trappings, the actual pro-ceases have not been democratic and important elements of the population havo always remained ready to revert to time-tested methods of political violence. In short, theseeople who have never adjusted to peaceful, lawful settlement of differences.
1*. Over time,rowing proportion of tbe population bas bogun to participate politically, mob action bas come to be an important political tool and the danger of anarchy bas increased.
In contrast to tho long line of earlier coupe, the revolutionaopular case noveaant. Spearheaded by tbe tin miners, perhaps the moat si liteat Bolivians, it defeated tbe armed forces and overthrow the oligarchic regime. The government of Victor Paz Estenssoro which that revolution brought to power undertook some positive reformsparticularly in land distributionbut its actions with respect to tbe mines and minors aggravated the country's economic problems.
5. Paxed the three largest tln-prodnclngand put them under control of the Bolivian Mining Corporation (COHBOL). Hie administration allowed tho miners' unions to keep their weapons and maintain their militia organizations;ime, lt mas the miners' leaders, rather than the government managers, who called the tune on mine operations. This, along with corruption ln COMXBOL itself, permitted the cost structure to get completely out of hand. At the same time, extremeuan Lechln smong themere allowed to tighten their control of the miners' unions. Thus, tbe military junta which overthrew Paz in earlyearly Impossible situation ln tbe country's key economic sector.
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Tho Dew military regime faced diemal political and economic conditions. The National Revolutionary Movementaz's old party, vas split beyond mending and was losing strength to the extreme right and to the extreme left. The leaders of the various political parties continued to pursue partisan advantage regardless of the national interest. The economic situation had some favorable aspectsi the agricultural sector had shown antrendumber of years;ft prices bad remained relatively stable, and gross national product bad grownercent annual rateppreciably higher than population growth. But tbe need for more rapid progress waa great. Bolivia is tbe poorest country of South America,er capita gross national product of little moreear; malnutrition Is the rule rather than the exception for much of tbe population.
The leaders of the military junta recognized that correction of the conditions in tbe minesrerequisite for more substantial economic gains, at least in the short run. Tin earnings, which account for the bulk of Bolivia's foreign exchange, declined ln value byercent3 toprimarilyesult of falling production. GCMXBOL, maintaining the same size
labor force, has been operating Increasinglyeficitaking
izable drain on the government's budget; tbe situation vould hove been even more serious had not world tin prices been relatively high Most important of all, the US and other foreign participants made lt clear that additional foreign aid to CCfflBOL under the Triangular Plan was contingent upon the establishment of Bolivian governmental authority ln the mines and upon substantial Improvement in operations.
8. The government leaders realized that to reassert control over the mines would require military occupation of some of the mining areas in the face of violent resistance. Reluctant for sone time, they apparentlyecision in early May to go ahead, and onay they had Union leader Juan Lechin arrested and deported to Paraguay. Tbe miners' unions, Joined by most other unions, reactedtrike, which temporarily paralyzed activity in La Pax and in tbe mining regions. For moreeek there was
small-scale fighting around La Paz, aa veil as in the mining regions.
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The Triangular Plan is an agreement undertaken in1 by the US Agency for International Development, the Inter-American Development Bank, and Went Germany to finance the rehabilitation of COMIBOL. 5 million was furnished for the first two phases of tbe program. But inhe plan vaa suspended because of dissatisfaction on tbe part of the sponsors with the Bolivian performance.
Beginningay, army unit* began to occupy seme of tbe mailertbey also moved into staging areas near the major ones. Government interveners have goneew of the mines to carry out the Junta's decree for tho reorganization of COMXBOL. This Includes provisionsignificant lowering of costsubstantial reduction of tho work force aa welleduction of tbe wages end bonuses of those workers who are retained.
9- The Junta bas managed to take the first difficult stops on this problem, but lt is by no means out of tbe woods. Although certain of the extreme leftist leaders have left tbe mines and gone into exile, new and more determined resistance on the part of tbe miners may occur ao the scope of the COMIBOL decree becomea elesrer to them. Or they may try to frustrato the government's efforts by means of passive resistance. In any case, ttie government willood part of the potential benefit from tbe reduction Df tha labor force in tbe mines if lt cannot find alternate productive employment for the laid-off workers.
The Barrlentos-Orando Rivalry
10. The military is, at present, Bolivia's only effective stabilizing force. Thus, tho reason for greatest concern during these past few difficult weeks has been ebc evidence of the deepening
of the long-standingbetween tbe two most important military leader* aadurther coalescence amonged political groups in opposition to the Junta. Air Force General Rene Berrientos, vho became president of tbo Junta after tbe overthrow of Pnz last fall, vaa clearly tbe leading force in tbe decision to bring tbe mines under control. But in the very early stages of that effort, General Alfredo Ovando, Ccmraander of the Armed Forces, undercut Junta policy by signing on his own Initiative ceaoe-flre agreements with representatives of tbe diners. An open break between tbe two atabltloua generals waa narrowly avoided when Bexrlentos accepted Ovando oa co-president of tho Junta and hod himself appointed co-Cctaaandcr of tbe Armed Forces. But this doos not look toery durable- arrangeseent.
11. areer military officer, is obviously courageous, If somethingwashbuckler. ifted, though volatile leader, be Is strongly pro-US and utl-Ccessunlst. Els support in tbo Armed Forces is largely centered In the Air Force and among tho younger army officers and KCOs. He also hasbacking among Indian peasant groups, particularly In bis native Cocbabemba arwa. However, Borrlentos vaa unable to organize sufficient support among Bolivia's organized political
pertiea to put over hie presidential candidacy for the election which had been scheduled for this year and which Is now indefinitely postponed. Bis political ambitions and tactical mistakes probably have cost him tbe support of acme of the officers who took pert In overthrowing Paz.
Ovando,rofessional soldier, has considerable support among those career army officers who prefer to keep tbe Army out of politics and among thoseightist, political background. Be has almost no popular appeal, but has been courted by anti-Barrientoe politicians as the only military leader capable of checking the letter's political strength. Ovando avoided overt political ties2, but bis earlier political background was with the rightist Falange movement (FSB) ousted from power
Leaders of the FSB, sharply opposed to Barrientos, have allied their party with the extremelth Juan LechlD'a National Leftist Bevolutionary Party (PRIM) and the Bolivian Cosraunlst Party (PCB). Representatives of this political bombina-tion have been in contact with Ovando end hope to use him to depose Barrientositheroup leader, or eventuallyandidate in presidential electiona.
IU. The HflR, which vat responsible for2 revolution and continued to be the dealneat partyolivia forozen years, now hasraction of Its former strength. There vas always tension between the moderate and radical wings of the MHR; finally Juan Lechin basod bis organization of the PR IN on what had been the MSB's radical wing. Disputes between Paz and other Key party leadersotably former President Bernan Bilesed to further fragmentation and to the lose of members of the more extreme parties. MRU leaders are, moreover, mistrusted by many of the military, including some members of the Junta. Thisey factor early this year in dissuading the electioneering Barrientos from identifying olosely with the main faction of the MRU,eB leads. While this part of the MHR would almost certainly support Barrientoshowdown, another, mealier faction is so bitterly opposed to him that it might throw its weight to Ovando.
Outlook
15. Oiven the fragility of the political situation ln Bolivia and the likelihood that similar conditions will prevail for tbe foreseeable future, we believe that sn early attempt to return to elective government would be more likely to produce cbaoa than constitutionalism.
The Juntaand Berrien toe, in particularhss moved with determination through tho first stage of en arduous but essential undertaking. By pressing ahead on Its present course vlth respect to the mines and continuing its essentially moderate overall policy, the Junto could, over time,ounder foundation for both economic improvement and political stability. Whether or not lt can survive long enough to accomplish this depends, above all, on the avoidance of an open split between Barrientos and Ovando. Ve estimate the chances ere no better than even that they will manage toorkable relationship. Both men are ambitious and either might move to profit from what beavorable set of circumstances to oust bis rival. But both realize that, if they become openly opposed to each other, the result could be civil war.
Evenirect confrontation between Barrientoe and Ovando is avoided, there laonsiderable danger that one or both will be assassinated. This is particularly the case far Barrientos; ln tho last three years there have been atalf-dozen attempts on his life. Tho removal of Barrientos by either assassination or overthrow wouldreater Impact than would the elimination of Ovando. If Barrientos were removed, the
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peasants and some of tbe younger military would be likely to take up arms against tbe goveraient; If Ovando wore removed, there would bo dissension among some of the senior officers and violence initiated by tbe extremist political parties, but most of the military and tbe peasantry would probably back the governscnt.
18. haotic situation, particularly one in which the military forces split, extremists of tbe right or leftcrabination of the twoight manage to gain controlewaint. The rightist FSBtrong and fanaticubstantial part of it in Lo Paz. Tbe Ccararunlsts and tbo leftist FRIM would have the backing of many, perhaps moot, of the miners. If these rightist end leftist elements adhere to plans to act in cccablnatlon, tbey couldtrong force to seize control, though they would almost certainlyoiling out bofore tbey had held power long.
FOR THE BOARDATI ORAL ESTIMATES:
SHERMAN KENT Chairman
Original document.
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