84. Telegram 8579 From the Embassy in Bolivia to the Department of State1 2
Subject:
- Meeting With President Ovando
Ref:
- La Paz 8576; La Paz 8349
1. Although Ambassador Sanjines told us Wednesday noon that our appointment with General Ovando would be at 5 pm Friday, December 26, he called me at my home at 5:15 pm on December 24 to say the General was waiting for us. We arrived together at the President’s home at 5:30 pm and were with him for nearly one and a half hours. Because of the change in time, Secretary Meyer’s letter to President Ovando was not ready for presentation but a usable copy in translation arrived during the meeting. Formal copies were sent to the President dec. 26.
2. The president received me cordially as before although he seemed rather quiet during the first part of the meeting. As time went on he warmed up and impressed me very much as he had in our previous meeting on December 5. I really think that his problem was that he was sleepy as I understood he had just been awakened from a nap when I arrived. Ambassador Sanjines had apparently primed him as to what was on my mind as he promptly initiated discussion of the bad atmosphere here with respect to the U.S.: namely, the alleged “Gulf-CIA-Embassy plot”, and the accusation [Page 2] against me personally, etc. after explaining that his own attitude and that of his government remained as he had explained it to me on December 5, General Ovando said he recognized that “certain elements of the press” were acting in an undesirable manner. He said this would be taken care of since he had given orders to the Minister of Government to see to it that such activities came to an end.
3. After I heard him out I spoke to him frankly along the lines which I had already taken with Ambassador Sanjines (paragraph 2 of La Paz 8576) I laid very hard and direct stress on the fact that I and my government simply could not interpret the real desires of the Bolivian Government so long as the present “hate campaign”, sometimes seemingly abetted by elements of the GOB, stood in such stark contrast to the President’s personal assurances to me that good relationships were desired. Since I had already taken this line with Sanjines the day before and he had passed it on to the President, I was particularly pleased with the identical stress taken in Secretary Meyer’s letter. When it arrived, I presented it to President Ovando who read it very carefully, nodding his head as he went along, since we had progressed to other subjects by that time. His only comment was to repeat that he understood the problem and had given orders to the Minister of Government. He also said he wanted the Minister to meet with me. I replied that I had already requested a meeting since this Minister was next on my list of protocol calls.
4. Other subjects covered during the meeting were:
A) Gulf: The President said he had been pleased with the results of the recent visit by Gulf representatives and that the general framework for settlement which they expressed was very interesting to him. He was awaiting further developments. I told him that Gulf representatives had expressed similar views to me and that I also found the proposals interesting. I expressed the hope again that the government could continue working constructively and positively with Gulf so that a solution could be found thus removing this potential problem for USG-GOB relations. The President then said that for the good of a general settlement he was hopeful work could soon start on the pipeline. I volunteered on this subject that the Gulf representatives had also told me their meeting with Minister Quiroga had been constructive. President Ovando smiled at this, saying the Gulf men had seemed afraid to [Page 3] meet with Quiroga. He said Quiroga could be worked with all right but there was a problem since he was “muy publicosa”. I suppose he meant by this that it was hard to deal with Quiroga privately since he was always trying to use the press for his own purposes.
B) The President mentioned roads 1 and 4 talking about fiscal problems and said there were political pressures from Cochabamba to complete the projects as designed. He said he did not know how the problem could be resolved but understood there was a proposal for Bartos to take over. I said I had heard about the proposal and that everyone seemed to think it had possibilities even though I thought the more desirable thing would be for the Jones Company to finish the work itself if at all possible. The President said he agreed with this.
C) The question of AIFLD came up even though I had told the President I was more interested in the general atmosphere than in any specific problems. I told him that unfortunately after our last meeting the Labor Attache had encountered delays in meeting with the Labor Minister. When he finally did so it was apparently too late since the Minister had already announced determination not to renew the contract. I regretted this as I thought it prevented the kind of review which the President and I had talked about on December 5 and which we hoped might have salvaged the program on some modified basis. I said I doubly regretted this because it not only denied Bolivian labor a useful program and contact with their comrades in the U.S. but also, from the point of view of the Bolivian Government, they had to consider that recent actions expelling ORIT and now AIFLD might alienate the most powerful sector of American labor—a sector from which a society in transition such as Bolivia might logically expect to find sympathy, understanding and support. President Ovando seemed to click on this observation and while writing some notes on the back of an envelope, asked me again to tell the Labor Attache to take up the subject with the Labor Minister. I agreed to do so.
[Page 4]D) The President mentioned MAP, expressing the hope that the full program could promptly be resumed and that Col. Soler could begin to consider what adjustments might be made to better meet the needs of the revolutionary government. I told him, as I had General Torres (La Paz 8575) that the matter was under study. I added that I hoped some resumption could soon be made. He did not press me for particulars.
E) Aircraft loan: The President raised this subject and went into it in considerable detail. He said Bolivia in 1964 was on the verge of agreement with the French to purchase Caravelle aircraft under a $20 million loan when Ambassador Henderson persuaded them that these aircraft were not appropriate and that the GOB should seek help from AID. Eventually, he said, AID turned down a request for financing and they went to the EXIM Bank which agreed to finance the Fairchild-Hiller aircraft and the Boeing 727. The President went on to complain that the Fairchilds were mechanically defective and the financing problem for LAB was insurmountable. He said the matter had been studied from all angles and that there was just no way in which LAB could pay for these three aircraft on the present payment schedule. Furthermore, it made no sense whatsoever to have the two Fairchilds if the Boeing were not here to complement the system. If LAB could not pay, however, [Page 5] the government would have to do so—but to meet this obligation on top of all other commitments would push Bolivia to devaluation. The essence of all this was that Bolivia could not meet the nearly $2 million obligation coming due in 1970 without some form of assistance or debt-stretchout—yet Bolivia still does want to have the Boeing as well as the Fairchilds. Ambassador Sanjines spoke up at this point to suggest that AID might help in consideration of the fact that in a country like Bolivia the LAB air line should be looked upon as a vital development instrument rather than a necessarily self-supporting enterprise. My only comment was that I had insufficient background on the problem to do more than offer to pass their observations on to Washington.
5. Comment: President Ovando’s performance was pretty much the same as it was on December 5. The President seemed friendly and sincere and he wound up hoping I would spend many years here as Ambassador. I think Secretary Meyer’s letter constituted a very forthright expression of the Department’s view, fully supporting me in what I had already expressed. We can only wait and see whether the overt atmosphere will improve as promised, which will depend in longer run on internal political and economic developments. Regarding the aircraft loan, the Department’s 212592 arrived after my discussion with the President. I would appreciate it if paragraph 2 of that message might be reviewed in the light of the present exposition. We are awaiting President Ovando’s message to the nation expected to be given evening Dec. 31, in which he has promised to announce “transcendental measures.”