BL–22. Telegram from the Acting Secretary of State to the Embassy in Bolivia1
320. For Coerr Only
EYES ONLY COERR
Nationalized mines must be placed on as sound an economic basis as possible if there is to be any reasonable opportunity for restoration economic stability in Bolivia. One of key issues to be resolved in this connection is that of COMIBOL labor policy. Your recent reports suggest that GOB may be resolved to carry through to a showdown on commissary price issue at this time. GOB success on this issue could have crucial effect on its willingness and ability to take on other COMIBOL operational and management problems. On other hand, failure of GOB to prevail on commissary price issue would seriously jeopardize chances of its being able to continue a stabilization program having reasonable chance to achieve even minimum objectives.
We believe therefore that entire effort of USG to assist Bolivia over last few years may well hang in balance at this time. For these reasons we strongly favor showdown now on commissary price issue on assumption that GOB is willing stand firm on its agreement with IMF and has a reasonable chance to win out. We mindful of course paramount importance safety U.S. citizens but inclined believe that measures you are taking to safehaven dependents and are [Facsimile Page 2] planning for establishment protected positions if needed for those Americans remaining may place us in best position face showdown that we have had or may be likely to have in future. Therefore consider it important that GOB [Typeset Page 182] continue to believe that in absence of renewal IMF standby, cannot count on U.S. balance of payments and budget support.
Nevertheless, if issue comes to showdown which you consider GOB unlikely to win and if you judge further pursuit of issue by GOB would lead to conflict of such scope and character as to place Americans in unreasonable jeopardy, you authorized, at moment you deem tactically best indicated, to inform GOB that if it makes best possible settlement with miners under the circumstances and even if this does not provide basis for renewal IMF standby, USG will nevertheless be prepared to continue aid on a temporary basis pending total reevaluation of situation with a view to ascertaining whether any basis remains for continuation of a program Bolivia embodying balance of payments and budget support. GOB should understand of course that amount and form of aid for remainder this year and certainly in future years must be related to our estimate of GOB’s willingness and capability of pursuing sound economic practices.
Dept and ICA fully mindful of heavy burden of decision which this instruction places on you. We believe however that issue is of sufficient importance to adopt policy indicated above and that since timing may be of crucial importance, there is no alternative but to place final decision in your hands. We have full confidence in your being able to exercise the judgment here required and will of [Facsimile Page 3] course support you in whatever you decide to do.
ICA concurs.
Acting
- Source: Department of State, Central Files, 824.10/3–3159. Secret; Priority; Limit Distribution. Drafted by Siracusa and signed by Murphy.↩