BL–32. Despatch from the Ambassador in Bolivia (Strom) to the Department of State1
REF
- Embtel No:122
SUBJECT
- Conversation with the President-Elect, Victor PAZ Estenssoro:
- Comibol
- Political Truce
- Cochabamba Valley Civil War
- Paz’s Visit to Argentina
The Ambassador, accompanied by Mr. Williams and Mr. Thompson,3 called on Victor Paz Estenssoro at his home at 3:30 p.m. on July 12. Much [Typeset Page 202] of the conversation was devoted to the Cuban problem, and this portion of the discussion was reported in the telegram under reference.
Comibal
The Ambassador inquired concerning the Comibol situation. Dr. Paz said that the commission on Comibol was working “seriously” and that immediately upon his assumption of office he would set into motion measures which would in time, perhaps six to eight months, improve Comibol’s financial situation. He realized that reforms would not make their effect felt on Comibol for some time. Dr. Paz said he was concerned by the possibility that Bolivia’s treasury would be empty by the time he took office. He said he understood that the Government of Bolivia had requested the “ICA” August cash grant of $450,000 this month. The Ambassador said that it had been decided that the August grant would not be made in July except with the approval of Dr. Paz. Dr. Paz said that he believed he would be faced with a grave financial crisis soon after August 6 and hinted that he might have to look to the United States for some special emergency assistance at that time. The Ambassador said that while he did not have instructions to say so, he was quite sure that the United States Government would consider any proposals of the Government of Bolivia which were offered if they were consistent with the political realities which the United States Government must take into account in its relations with Bolivia. Thus, for example, it would be politically undesirable for the United States Government to be associated in a financial way with the dismissal of [Facsimile Page 2] supernumerary miners. On the other hand, there might be a possibility of some assistance to the Government of Bolivia in a program of resettlement of dismissed miners. The President-Elect acknowledged the validity of the Ambassador’s comment. Dr. Paz said that he intended to institute certain reforms including, probably, the raising of gasoline prices, the establishment of a rationing system in the mine commissaries, and the re-allocation of miners to redress the present situation in which 65 percent of the miners in Comibol mines work above ground.
The Ambassador said, by way of illustrating one of the things that was wrong with Comibol, that recently an American geologist had talked to him, explaining that he had been hired by Comibol to engage in exploration work. He had said that if the needed exploration was to be accomplished expeditiously, it was desirable that the initial work be done, not on the ground, but from the air. The Bolivian Army’s Geography Institute possessed numerous maps and other data which would be most valuable to the work of Comibol’s geologists, but Comibol had not been able to obtain these data without paying for them. Dr. Paz added, “And Comibol does not have the money.” The Ambassador said that this situation seemed to him to be one which [Typeset Page 203] could easily be straightened out; Dr. Paz said that he would seek to intervene in the situation.
Prospects for Understanding Among Opposition Parties and the MNR
The Ambassador referred to proposals which had been made by Fernando DIEZ DE MEDINA, until recently Ambassador to Rome and the Vatican, that the opposition groups and the MNR mutually agree to a sort of political truce in which they would eschew violence and carry on their activities by purely legal and constitutional means. Dr. Paz [text not declassified] was willing, in his first message to the nation, to express the new administration’s desire for domestic peace and reconciliation. The opposition parties would then be at liberty to make similar declarations.
Cochabamba Valley Civil War
The conversation turned to the continued fighting between Roja’s4 and Veizaga5 forces in the Cochabamba Valley. It was pointed out that large number of campesinos who were engaged in this activity were neglecting their farms and sooner or later would be confronted with famine conditions. [text not declassified]
[Facsimile Page 3]Dr. Paz’s visit to Argentina
The Ambassador wished Dr. Paz every success on his visit to Buenos Aires, especially hoping that Dr. Paz would return with a substantial quantity of free dollars as a result of his negotiations regarding the Bolivian-Argentine Bilateral Agreement. Dr. Paz said that he had been preparing for this part of his trip to Argentina by consulting with Mr. Clark of the International Monetary Fund, and he expected that he would be able to convince the Argentine Government to release perhaps as much as $3,000,000 in free dollars out of the Convenio account. The Ambassador pointed it was also essential to terminate the Bilateral Agreement and Dr. Paz replied this was one of his two prime objectives in making his trip. (As long as the Agreement is in force, the dollars YPFB sells to the Central Bank are blocked dollars. The bolivianos which are put into circulation as a result of these sales are eventually returned to the Bank for the purchase of free dollars which places a strong inflationary pressure on the boliviano.)
For the Ambassador:
Counselor of Embassy