BL–43. Memorandum of Conversation, by the Officer in Charge of Bolivian Affairs (Weise)1
SUBJECT
- Courtesy Call of Vice President of Bolivia Juan Lechin on Acting Secretary of State Livingston T. Merchant
PARTICIPANTS
- Juan Lechin, Vice President of the Republic of Bolivia
- Victor Andrade, Bolivian Andrade Ambassador the United States
- Mr. Livingston T. Merchant, Acting Secretary
- ARA - Mr. Mann
- WST - Robert W. Weise, Jr.
Lechin said that the purpose of his visit was to strengthen relations between Bolivia and the United States. He said he wished to discuss two problems with Mr. Merchant—the first was related to the situation of anarchy which prevailed among labor in the Bolivian mining industry. The reason mineral production has not declined more in the past year, he said, is due solely to the dedication of the individual miner and his desire to maintain output. However, in order to increase production, the miners need food, tools, machinery, and prompt payment of wages, elements which are lacking under present conditions.
Lechin said that many of the difficulties confronting the Bolivian mining industry were created by Patiño and the former mine owners because of their failure to plan long range production and to make provision for an adequate supply of electric power. The principal cause for the decline in minerals production is, however, the lack of capital.
Lechin then said that United States aid to COMIBOL (for modern concentration facilities) was a step in the right direction and that it would help increase production, although it could not be expected that production would reach the 1952 level in the immediate future. He estimated that mineral production could be increased by about 30% within a year after the reorganization of COMIBOL. The shortage of electric power was still a factor which would continue to limit production.
The second problem raised by Lechin concerned the difficulties with which the mine workers themselves were confronted. These difficulties included [Facsimile Page 2] 1) lack of pulperia (commissary supplies); 2) terminal benefits for excess miners; and 3) the inability of COMIBOL to meet payrolls when due. He claimed the workers have had to accept [Typeset Page 218] a lower standard of living as the result of the economic stabilization program imposed on Bolivia by the IMF. IMF policy, he said, is too strict and does not allow sufficient flexibility. He then said that, as a labor leader, he was concerned with the permanent condition of strikes in the mines. These strikes occur not because the Bolivian Government is a Communist government (which he denied), but rather because the workers do not have sufficient tools, food and equipment with which to perform their tasks. These negative condition, Lechin said, have created an atmosphere favorable to enemies of the Bolivian Government. He identified these elements which threaten the Government at present as not the “reactionaries or conservatives” but rather the Communists. He said Cuban intervention and the Soviet offer of a tin smelter have contributed much to the deterioration of the situation in Bolivia. He said the Communists were trying to gain control of the rank and file of the labor movement and to displace the MNR which has had leadership of labor for the past sixteen years. He also said the Communist drive for control in Bolivia is directed towards interests and ends akin to those of Bolivia. [text not declassified]
He then turned to the United States aid program. While a great deal of money has been spent in Bolivia, he said, the results of this assistance have not been as effective they might have been because not enough emphasis has been placed on industrial and agricultural development projects. The only exception, he noted, is in the Department of Santa Cruz, where the United States aid program has made possible a substantial increase in sugar and rice production in the past year. Santa Cruz is the only province which has not suffered from the current economic crisis. While he said he did not consider that the United States was responsible for the current crisis in Bolivia, he nevertheless urged that our aid program be modified in such a way as to eliminate some of its draw backs. He said that our aid program should be directed toward reestablishing a favorable atmosphere for economic development as existed prior to 1957 when our aid became tied in with the IMF stabilization program.
According to Lechin, the USSR offer of a tin smelter and economic aid has spread a false belief that the Soviets could solve all the problems of Bolivia. This concept is false, he added; help to the mining and petroleum sectors of the economy such as is proposed by the Soviets will not benefit the people for sometime to come. Mr. Lechin then returned to his original premise that the crisis in Bolivia is real and that there is an immediate need for emergency aid to tide the economy over until the middle of 1961 when the benefits of the reorganization of the mining industry will begin to become effective. He emphasized that, in order to restore confidence and re-establish political and economic stability, the [Typeset Page 219] Bolivian Government has an immediate need for loans to [Facsimile Page 3] cover current budgetary deficits.
Mr. Merchant thanked Mr. Lechin for his statement and said that the Department would consider all elements of his presentation carefully. He said that the United States placed great importance upon the continuance of good relations with Bolivia, which have always existed between the two countries. He said that the United States is not unaware of the problems of Bolivia and that we are keenly aware of the need for economic development throughout Latin America. Mr. Merchant also emphasized that economic development must be built upon stabilization and expressed the hope that the triangular undertaking recently announced by the United States government, Inter-American Development Bank and the German Government will be a beginning in the solution of Bolivia’s long-range problems. Mr. Merchant referred to the President’s Special Social Development Program for Latin America for which the President has asked Congress for an appropriation of $500,000,000. He said he hoped that when Congress convened in January it would act upon this program and make the necessary funds available.
Mr. Merchant observed that the United States is now in a period between two administrations, which makes it difficult for us as well as for our friends. He felt certain, however, that the new administration will not be less interested in Bolivia and he again assured Vice President Lechin that his statement will be considered very carefully by the Department of State, including other interested agencies of the United States Government.
- Source: Department of State, Central Files, 824.25/12–2960. Confidential.↩