Office of the Historian

65. Briefing Memorandum From the Assistant Secretary of State for Inter-American Affairs (Kubisch) to Acting Secretary of State Rush1

Washington, October 3, 1973.

Postponement of the Bolivian President’s State Visit

At 5:00 p.m. Tuesday, October 2, Acting Foreign Minister Cespedes informed Ambassador Stedman in La Paz that President Banzer wished to postpone his State Visit scheduled for October 16–17. Cespedes said the reason for this decision was that the GOB will shortly announce stringent new economic measures which could provoke popular unrest. The Bolivian authorities state the armed forces may be required to maintain order, in which case President Banzer believes it necessary to remain in Bolivia (La Paz 6010).

We have no specific information regarding the actions the GOB is preparing to take. We know that a special governmental commission has recommended that a number of politically sensitive measures be enacted to correct the deteriorating fiscal and monetary situation.

Banzer’s decision to deal with this problem at this time and at the expense of the State Visit, to which he has attached great importance, clearly indicates the seriousness of the domestic situation. The GOB’s failure to obtain large-scale commercial financing for its budgetary deficit, together with the realization that we are unwilling to respond favorably to requests for budget support in the form of program assistance, probably precipitated the decision. At the same time, the apparent urgency of the situation indicates that we can expect renewed requests for program assistance to cover Bolivia’s budgetary shortfall.

  1. Summary: Kubisch informed Acting Secretary Rush that Banzer’s decision to postpone his State visit indicated the seriousness of the economic and political instability in Bolivia. Kubisch reported that the unwillingness of the U.S. Government to offer assistance for budget support likely contributed to Banzer’s decision.

    Source: National Archives, RG 59, Central Files 1970–73, POL 7 BOL. Confidential. Drafted by Binns on October 3. Karkashian and Shlaudeman concurred. Attached is telegram 6010 from La Paz, October 2, not published. On October 9, Pickering forwarded to Scowcroft a copy of Banzer’s October 3 letter to Nixon apologizing for the postponement and a suggested reply. (Ibid., Central Foreign Policy File, P750018–0349) In telegram 6283 from La Paz, October 16, Stedman informed the Department that he thought Banzer postponed so that he could hold negotiations with international and Bolivian officials regarding austerity measures. (Ibid., P750018–0343) Banzer’s trip was not rescheduled.

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