262. Despatch From the Ambassador in Bolivia (Drew) to the Department of State 1
SUBJECT
- Bolivia; Conversation with Hernan Siles Zuazo, presumptive President of
Opposed as I am to lengthy despatches, I fear that this will be an exception to my rule, as it summarizes my first conversation with the Vice President of Bolivia, Señor Hernan Siles Zuazo, since his nomination as the candidate of the MNR Party for the Presidency of the Republic and, barring unforeseen developments or acts of God, the presumptive President of Bolivia beginning August 6 of this year.
Setting
[Here follows discussion of Bolivian political history.]
Presidential Succession
Siles said that he had recently done everything in his power to prevail on Paz Estenssoro to seek a new term in office. He had suggested that the President go abroad now to regain his health, leaving Siles as Acting President or that as soon as Paz was reelected he leave for six months or a year while Siles held down the Presidency awaiting his return. The President had objected on the grounds that it would not be sufficient time to regain his health. Regretfully, said the Vice President, he had finally consented to be the Party candidate. He said that, nevertheless, during the course of the recent Convention of the MNR Party in La Paz, he had five times in writing withdrawn as a candidate.
Party Politics
The Vice President repeatedly said that he was not going to occupy the Presidential chair but rather an “electric chair”. He repeatedly expressed doubts that he would ever take office on August 6. … Señor Siles’ principal preoccupation is with the inflationary processes and the declining rate of the boliviano, which he expects to reach 6000 to one dollar by next May. He said that he feared that this would accentuate inflation, inspire Communist and radical elements to redouble efforts to take power and cause pressure to come upon the present regime to go left.
[Page 534]Foreign Assistance
The Vice President said that economic aid from Europe was a myth, help from Bolivia’s neighboring countries an impossibility, and assistance from the Soviet Union even more remote. He said that if foreign assistance, obviously from the United States, was not forthcoming, the inflationary process would bring about the downfall of the present liberal, democratic regime inevitably to be followed by a Communist Government which within a matter of weeks or months would in turn be overthrown by a combination of a rightist and military forces which would destroy all the democratic progress made by the MNR and which would have to turn without fail to the United States for a more expensive aid program than the current one. He mentioned the Castillo Armas Government in Guatemala as the type of regime he feared.
Domestic Politics
Señor Siles said that he was going to make a speech on February 2 which would constitute a statement of his platform for the future. In fact, he read to us lengthy excerpts from his proposed speech which were not particularly impressive as they dealt mainly with agricultural production, health conditions, the birth rate, etc.
He admitted that Juan Lechin and the COB would control a majority of the members of the forthcoming Congress as they had the recent Convention. He said that he nevertheless was not going to be a puppet of Lechin and the COB. He intended to write to Nuflo Chávez, the nominee for the Vice Presidency,2 and Lechin and lay down his terms for the future. If they were not accepted, he would reject the nomination before his February 2 speech.
Foreign Policy
The Vice President could not have been more emphatic and convincing in his repeated affirmations of friendship for the United States and his intention to continue the policy of the present Administration of close economic and political collaboration with the United States. He assured us that he would carry out the letter and the spirit of the new Petroleum Code and the recently adopted regulations, would continue the Investment Guaranty Program, would support and encourage the present Mining Mission, etc. He expressed his highest regard for the Technical Assistance Program and his resolve to support and cooperate with it.
[Page 535]External Debt
In response to a question by Mr. Powell, the Vice President said that he was anxious to restore Bolivia’s international credit by finding some device, such as a loan on the Mathilde Mine or through payment of profits from the coffee industry, to make at least token payments on the foreign debt. He realizes that it was a black mark for Bolivia and precluded any possible aid from the World Bank or the International Monetary Fund.
Opposition
The Vice President blamed most of the corruption by Party members to the lack of an Opposition in the present Government. He stated emphatically that he intended to encourage an Opposition in Congress, to maintain a free press and to refrain from imprisoning political opponents.
Fiscal Mission
When I suggested that the establishment of the Stabilization Council with American technicians in the role of advisers might do a lot to check inflation, the Vice President expressed his concurrence in the proposed Fiscal Mission, but warned that it would become a weapon of the Opposition, particularly Communists, to attack the United States on grounds that it was intervening in the internal affairs of Bolivia. Mr. Powell and I made it plain that we did not take too much stock in this position.
Personnel
Señor Siles spoke glowingly of Barrau the new Foreign Minister and mentioned Señor Guisbert, a prominent local businessman, as one of his principal advisers. He attempted a defense of members of his Planning Board who are at the very least, ex-Communists, Messrs. Dujovne, Rangel and Fossati. I fear Mr. Powell and I looked unimpressed.
On various occasions throughout the course of our two-hour conversation, Mr. Powell and I emphasized as strongly as we could the necessity for creating a favorable climate for foreign investments. We also elicited from Siles assurances that he was in favor of free enterprise and opposed in principle to “statism”. We pointed out that it was the spirit rather than the letter of laws which influenced final decision of foreign companies about investments abroad. Mr. Powell made a strong plea for proper treatment of industry. Señor Siles expressed complete concurrence with our position. We pointed out that drastic public statements along Marxist-Socialist lines by people like Lechin could be turned against Bolivia’s interests even to [Page 536] the point of reducing or stopping our aid. When I mentioned to the Vice President that I expected soon to invite Lechin for a luncheon meeting, he endorsed the idea and said he would like to be present.
Conclusion
Nothing the Vice President said was out of character as I know him. He reaffirmed my opinion of him as a sincere, well-meaning, if somewhat naive, idealist. I am satisfied that he is quite sincere in his affirmations of friendship for the United States and his intention to continue the policies of the Paz Administration, in particular with regard to close collaboration with the United States. As for his declarations of intention to take a firm and independent stand toward Lechin and the COB, I fear that he will find himself playing the role of a David against a Goliath. However I confess I had not been aware of the mystique in his character which prompted him to make repeated references to the Presidency as being an electric chair, to express doubts that he would ever take office if inflation were not checked, to the statement that he would be strung up from a lamp post like Villarroel or the possibility that if all else failed that he would emulate Vargas and put a bullet in his brain.
When the Vice President repeatedly stated that he was “alone against the wall”, I tried to encourage him by assurances of moral support. While the Vice President seemed self-assured and confident, the actual words he used were startling, to say the least.
Mr. Powell and I believe that the Vice President is a man imbued with genuinely friendly sentiments toward the United States and with honest intentions to carry on the work of his prospective predecessor. We are confident that if he does take office, we will have in Hernan Siles Zuazo a well-meaning, genuine friend who will look to us for moral and material aid and who will seek and be guided by any reasonable recommendations we may have to make in such fields as foreign investments, technical assistance, etc., wherein we have a legitimate concern.
I believe that the Vice President is and will try to continue to be a genuine Bolivian patriot who will reject any form of Marxist-Communist ideology and will endeavor to do his best for Bolivia.