811.516 Export-ImportBank/5–2047: Telegram

The Secretary of State to the Embassy in Bolivia


313. Eximbank on May 21 gave Bolivian Emb and BDC representative for transmission Corp and Bolivian Govt for review drafts of (1) amendment to Eximbank Corp credit agreement increasing credit $3 million and (2) letter allocating $8.5 million to petroleum program and establishing terms and conditions thereof. Additional $3 million credit and allocation to petroleum program is as indicated in allocation letter based entirely on petroleum program as presented to Eximbank Dec 1946. Bank disturbed by situation reported urtel 486 May 20 and agrees that Kinnear’s statement that proposed changes in petroleum program would require complete reexamination program by Bank. This would involve considerable delay and uncertainty re outcome.

Kinnear letter May 13 from La Paz41 informs Eximbank that YPFB Board proposes change YPFB by-laws shifting authority from manager to Board and to employ large number political appointees. If YPFB Board still plans these actions Bank would like you in whatever manner you judge best indicate emphatically to Bolivian Govt that Bank seriously objects to these steps and that they would impair Eximbank confidence in YPFB ability to conduct petroleum program. Please point out that at instance of Eximbank loan agreement between Corp and YPFB provided that manager YPFB must have full authority.

For your information and communication to Bolivian Govt at your discretion after consultation with Mariaca Eximbank fully supports position taken by Mariaca and Bank confidence in YPFB based on ability and authority Mariaca as manager. Bank desires be informed developments this matter earliest.

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