73. Telegram 3254 From the Embassy in Bolivia to the Department of State1

3254. Subj: Bolivian Concerns About Peruvian Arms Build-Up and Internal Security Problems.

1. During conversation with President Banzer on May 8 about alleged Gulf Oil Co. bribery, he said he wished to review a deep-seated concern about Peruvian arms build-up and internal security problems affecting Bolivia. Present during the conversation was the Minister of the Interior, who at the moment was also acting Foreign Minister.

2. President Banzer said that he has received continuing reports of sizeable quantities of military equipment arriving at the Port of Matarani. He said that information is reaching him from highly reputable officials of Bolivian state entities who have visited Matarani seeking to expedite delayed shipments of needed materials for their operations in Bolivia. These officials have stated that ships not carrying military equipment are being delayed and that dock facilities are being pre-empted for delivery of Soviet tanks, ammunition, and other military equipment. President said that the Peruvian authorities in the Matarani area are telling inquirers that much of this equipment is destined for La Paz so as to reduce any Peruvian concerns about an arms build-up in their own country.

3. President Banzer said that continuing reports of sizeable arms delivery to Peru, particularly in the southern area, is a matter of great concern to him. He is worried, he reported, about the possibility of conflict between Peru and Chile and also about possible use of military equipment across Bolivia’s borders. He said he would like to turn to his other concern which involves the concentration of extremists, terrorists, and Communist forces on Bolivia. He asked the Minister of Interior to elaborate.

4. The Minister of Interior said that the recent successes of Communist forces in Indo-China have inspired groups such as the ERP and the ELN to consider that they are engaged in a winning cause. They [Page 206] therefore are encouraged to take more aggressive action, especially against countries like Bolivia which are calm but weak. He noted that Bolivia has frontiers with five Latin American nations and is unable to adequately cover those borders to prevent infiltration. The Minister went on to note that a recent meeting in Lisbon of ELN type groups has resulted in decisions to move against Bolivia and Paraguay. He said that information received from Argentine intelligence sources is that some fifty armed guerrillas are being prepared to penetrate into Bolivia. He observed that another motivation for picking on Bolivia was the continued bitterness in the extreme left forces about the liquidation of Che Guevara here. The Minister said that the problem of Bolivia’s internal security is or should be a concern for its neighbors and also for the US. He expressed the hope that it might be possible to have continuing conversations with us on these problems with the aim of developing some form of common strategy.

5. President Banzer then said that the two concerns, i.e. Peru and internal security, were constant preoccupations of his and referred me back to the conversation in his office with USCINCSO General Rosson in September 1974. He said that the Bolivian population gives little or no support to extremist elements, but with a new aggressiveness on the part of those hostile to Bolivia, it is possible that inroads in some areas might be made. He said that Bolivia needs either to increase its internal security capability through delivery of military equipment or to accelerate economic development activities. At one point he noted that possibly both courses of action need to be pursued. He noted that the regime has the full support of all elements of the Armed Forces and of the population. He said that he had recently dispatched the chiefs of staff of the three Armed Forces around the country and that their report confirmed the solidarity of adherence to the Banzer regime. He said that if it were in the interest of the US to help Chile, one way is to provide assistance to Bolivia. For example, he said Bolivia’s production of foodstuffs could be expanded greatly and thus Chile could be fed from a neighboring country rather than having to import food from longer distances as it does now. He also said that in relation to the arms build-up in Peru some additional military assistance to Bolivia, which is now more closely attuned to the ideology of Chile, would help keep the relative strengths in nearer balance. While on the subject of Chile, he said that while he is hoping that some progress can be made toward a solution of the access to the sea, he can only state at the moment that Chile has shown a disposition to discuss possibilities.

6. President concluded the talk by repeating what he had said earlier in the discussion about the Gulf Oil Co. matter—that he considered the bilateral relations between Bolivia and the US as excellent. He [Page 207] said he even detected that they had improved in recent months. While he did not clearly or specifically ask me for anything, it is quite clear that he is repeating his firmly held view that the US should seriously consider expanding military and economic assistance here for the benefit of Bolivia, the deterring of tension between Chile and Peru, and to avoid potential build-up of hostile elements in what he considers to be a strategic geographic area. I intend to dig further into the basis for the Minister of Interior’s analysis, either directly or indirectly. It may be that we can dispel some of the pessimistic attitudes by offering differing and more profound analysis of currents in neighboring countries and within terrorist groups. The conversation with the President and the Minister of the Interior did reveal that both are seriously concerned but that some of their preoccupation may be based upon their isolation, frustration, and weakness. I have no recommendations for new or different action by the US at this time and will report further if additional information or observations are developed by me or members of the Embassy staff.

  1. Summary: President Banzer, Minister of the Interior Pereda, and Ambassador Stedman discussed threats to Bolivia’s external and internal security.

    Source: National Archives, RG 59, Central Foreign Policy File, D750164–0238. Confidential. Repeated to Lima, Santiago, and USCINCSO. The May 8 conversation between Stedman and Banzer is reported in telegram 3201 from La Paz, May 8. (Ibid.) On May 7, the Bolivian Cabinet required Gulf Oil Company to state if it had passed bribes to Bolivian officials between 1966 and 1972, and it requested a U.S. Government investigation. (Telegram 3191 from La Paz, May 8; ibid., D750162–0178) The September 1974 Banzer-Rosson conversation is summarized in Document 69.