Crisis in the Bolivian Revolution
ALEXANDER, ROBERT J.
Anti-inflation and development programs need U.S. aid Crisis in the Bolivian Revolution By Robert J. Alexander The revolutionary government which has ruled Bolivia since 1952 faced its first...
...Different elements in the population were affected in different ways...
...Moreover, many workers—and, on further reflection, many of their leaders —realized that a general strike would mean Siles's resignation and that there was no one to take his place...
...His regime performed the task of dismantling ancient institutions in preparation for building new ones...
...The program could not have worked had not the International Monetary Fund, the International Cooperation Administration and the U.S...
...Discontent against the stabilization program reached a climax in June...
...This will provide new domestic markets and lay the basis for development of all aspects of the national economy...
...A complete overhauling of the COB seems inevitable sooner or later...
...At the same time, a campaign was launched to limit the power of anti-Siles elements in the labor movement...
...As the end of July, Siles summoned a round-table conference of representatives of the Government mining firm, the private owners and the workers, in the hope that better labor relations would result...
...The revolutionary regime will not be secure until the land is firmly in the hands of the Indian peasants...
...For two weeks, the fate of the Siles regime hung in the balance...
...The wage reductions were largely offset by the fact that the workers no longer had to wait in line all night to obtain the most basic foodstuffs, as they had before stabilization...
...With such a settlement concluded, the Government firm could float loans to permit exploration for new mines and improvement of equipment in the old ones...
...severe restrictions on bank credit...
...Prices doubled, then leveled off, and those for many essential items began to fall...
...The tin-mining industry, which is the chief supplier of foreign exchange, has been on the decline for at least 15 years...
...His courage was demonstrated by his trip to the mining camps, where the workers were all armed...
...In the years just ahead, however, Bolivia will continue to face a shortage of foreign exchange and a constant threat of inflation...
...Meanwhile, the Government, with the aid of Point Four, is drawing up a Three-Year Development Plan—an emergency plan to eliminate some of the worst bottlenecks blocking economic development...
...Also hard hit were the industrialists...
...The Siles regime, however, is not relying only on revival of the mining industry...
...All these developments have put President Siles in a much stronger position than before to come to grips with some of the nation's pressing economic problems...
...In the first half of the month, the country's central labor organization, the Central Obrera Boliviano, held a congress which called for a general strike on July 1 unless the workers were given wage increases sufficient to compensate for the recent price hikes...
...gave the Indian the vote...
...At the same time, rejuvenation of the mining industry and the development of Bolivia's oil resources promises to solve the foreign-exchange shortage which has hampered the country for more than a decade...
...Siles followed up his victory by reorganizing the leadership of the Government party, which was in the hands of his opponents...
...They resold much of what they bought, often living off the proceeds rather than their wages...
...Significantly, this phase was comparatively peaceful...
...There were several reasons...
...Thus, the President won a battle against what had seemed overwhelming odds...
...Corruption was rife in the Government, particularly in the control of foreign exchange...
...wage increases, followed by a one-year freeze...
...Those who suffered most were the miners...
...It provided for establishment of a single foreign-exchange rate, which was to be allowed to seek its own level in a free market...
...On the recommendation of an American economic adviser, George Eder, a stabilization program was adopted on December 15, 1956...
...Construction workers were left roughly where they had been, since their wage increases about equaled the price rises...
...launched a broad educational program, bringing schools into the rural areas for the first time...
...Many workers were prepared to accept a drop in real wages on the ground of national necessity...
...One of these is the agrarian-reform program, which is advancing very slowly...
...The oil workers were followed by the railroad workers, the construction workers, the chauffeurs and other key unions in repudiating the July 1 strike call...
...Another basic problem is the country's failure to export enough to cover essential imports...
...However, the administration of President Hernan Siles survived the crisis, which seems to have cleared the air and launched a new, constructive phase of the national revolution...
...Goods which had been in short supply—which meant almost everything—suddenly became available for those with the money to buy them...
...a cutback in Government economic-development plans, and a general trimming of Government expenditures...
...Before, they had been allowed to import raw materials at 190 bolivianos to the dollar...
...Finally, Siles made a trip to the mining areas, where he found that the rank-and-file were prepared to give a no-strike pledge...
...We can serve our best interests by continuing this aid until its objectives have been achieved...
...and so were the workers, hard hit by skyrocketing prices...
...About 25 per cent of this had been used up by July 1957...
...Wages for various categories of workers rose from 30 to 500 per cent...
...In the past five-and-a-half years, that revolution nationalized the Big Three tin mines, which had dominated the country's economic life for nearly five decades...
...Treasury put up a joint $25-million stabilization fund on which Bolivia could draw...
...All these things were started during the administration of President Victor Paz Estenssoro (April 1952-August 1956...
...The new President faced a precarious economic situation...
...He appointed a new executive committee, which is recognized by most of the party rank-and-file though not by his foes...
...At the same time, the Government firm is negotiating with former owners for an overall settlement on payment for their properties...
...Chile and elsewhere...
...Suddenly, the unions started rallying to the side of the President...
...The best of the older mines have been virtually worked out, and little has been done to find new ones, though they are known to exist...
...The peasants, too, probably benefited...
...Now the industrialists were suddenly confronted with a large increase in costs and a reduction in their market...
...It is designed not only to shore up the Government's wobbly financial position and provide essential foodstuffs for the present transition period, but also to promote the program of economic development on which the country's entire future depends...
...Commercial employes, particularly those at big import houses, were better off...
...The Revolution, particularly the agrarian reform, has made citizens of the Indians, who form the great majority of the population and were previously little better than slaves...
...Basically, the long-range picture in Bolivia is an optimistic one...
...The prices on their produce rose, and, since they were not large purchasers of imported goods, they did not feel the impact of the price rise on imports...
...If it is to develop into a modern, self-respecting state, it will need American aid for several more years...
...The middle class, which had originally supported the MNR, was becoming increasingly discontented...
...Factory workers, who had been partly subsidized by the import of goods at fictitiously low foreign-exchange rates for sale in company stores, suffered a considerable drop in real wages...
...Those unions which had declared against the strike refused to participate in any meetings of the COB until the executive committee elected at the recent congress resigned...
...now the firms were again handling most Bolivian imports, and their employes shared in the gains...
...It has also signed an agreement with Gulf Oil to build a pipeline to the Pacific...
...Inflation was raging out of control, and the boliviano plummeted to 15.000 to the dollar within a few months after the change of administrations...
...The Point Four program in Bolivia is probably the most extensive anywhere in the world...
...After stabilization, prices in the mining-company stores rose to the general market level, and wage boosts of up to 500 per cent were not enough to offset the resultant loss to the miners...
...With the election of 1956, in which Siles...
...Bolivian manufactured goods sold very cheaply in neighboring countries...
...In recent years, this situation has been complicated by labor discontent...
...and carried out a number of long-overdue economic-development projects...
...candidate of the Government's Movimiento Nacionalista Revolucion-ario, won an overwhelming victory, the Revolution entered a new phase...
...Previously, they had been able to buy goods in company stores at prices as low as 1 per cent of the retail figure...
...With the establishment of a single rate, a big source of corruption was eliminated...
...Finally, Siles's opponents underestimated his popularity throughout the country, Although the President is not prepossessing in appearance and is no great orator, he has a reputation for being absolutely honest, which is more than can be said for many of his foes...
...The effects of the stabilization program were immediate and dramatic...
...inaugurated an agrarian-reform program to return the land to the Indian population...
...and much of what was produced w as exported illegally to Peru...
...As a result...
...In the past year, it has granted concessions to a number of foreign oil companies to drill in Bolivia...
...He told the delegates at the COB congress that he would be overthrown before he would unleash a new round of inflation, and he urged them to call off the strike...
...It is hoped that, within four or five years, oil will replace tin as the country's chief foreign-exchange earner...
...Another group which lost heavily was the politicians and labor leaders who had enjoyed the privilege of importing at a special exchange rate...
...aid Crisis in the Bolivian Revolution By Robert J. Alexander The revolutionary government which has ruled Bolivia since 1952 faced its first serious challenge this summer—from within its own ranks...
...It is to the credit of the United States that it has already done so much to advance Bolivia's transformation from a semi-feudal, semi-colonial nation to a modern, independent, prosperous state...
...Then, to everyone's surprise, Siles defied the threat...
...Previous to stabilization, the import firms had had competition from politicians and other insiders who were permitted to import goods at the rate of 190 bolivianos to the dollar...
...Among the principal labor groups, only the miners held out...
Vol. 40 • September 1957 • No. 37
