811.516 Export-Import Bank/5–2047: Telegram

The Ambassador in Bolivia ( Flack ) to the Secretary of State

restricted

486. Export-Import Bank from Kinnear.35 In conference today between President, Vice President, Minister Economy, Ambassador Flack36 and myself, Bolivian Government officially requested a change in the petroleum program by reducing Cochabamba refinery to 3,000 barrel capacity and increasing Sucre refinery to 2,000 or 3,000 barrel capacity with reforming plant. Government will send an official application to Export-Import Bank along this line. I explained to President that present program had been approved by all concerned and present contracts between entities involved were drawn on this basis and that proposed change must be considered through regular channels by Board Directors Export-Import Bank and that inauguration petroleum program would thereby be delayed considerably. If revised petroleum program should be approved by Export-Import Bank, Bolivian Government offers to provide through Banco Central funds necessary to meet possible deficiencies in Cochabamba–Santa Cruz highway construction. I explained to the President I had no authority to discuss this matter and formal application therefore will be sent to Export-Import Bank. The proposed change is not favored by some officials YPFB. Have informed YPFB and Corporación that all consideration drafts of contract will naturally be suspended pending consideration by Export-Import Bank of new Bolivian Government proposal.

President reiterated that he wanted increase in Sucre capacity to balance distribution and avoid one-sided economic development in Bolivia adding that this also presented important political aspect for stability of government.

Leaving La Paz May 21 for Guayaquil, Ecuador. Letter follows reporting on Bolivian matters. Reference your telegram May 19,37 believe Guamote–Tambo highway contract obligates Jones38 to complete highway between the two towns. May be able offer comments after conference with Ecuadoran Government. [Kinnear.]

Flack
  1. Edwin R. Kinnear, Representative of the Export-Import Bank.
  2. Enrique Hertzog, Mamerto Urriolagoitia, German Costas, and Joseph Flack, respectively.
  3. Not printed.
  4. J. A. Jones Construction Company.