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Bolivia is the only Cold War example I know where the U.S., from Eisenhower on, worked with, rather than against, a leftist government with a revolutionary, populist agenda which included nationalization of business assets of U.S. companies. At about the same time (early 50's) the U.S. engineered the downfall of the governments of Iran and Guatemala for fear a Russian allegiance could form. Guatemala was a fife of United Fruit too close to home (like Cuba), and Iran was oil rich and bent on ousting British Petrolium, and was strategically important in terms of geography. Bolivia was different because it was very poor, dependant on the U.S. for aid, the business interest at issue, tin mining, relied on U.S. markets. Bolivia did not flirt with the Soviets the way Guatemala did, by receiving a Soviet arms shipment. The U.S. did not see Bolivia as a threat to break away from the U.S. leash and go communist. It should be noted that President Truman was against a U.S. sponsored coup in Iran and was not militaristic about Guatemala, and if Adlai Stevenson had become president in 1952, instead of Eisenhower, the world would probably have seen many more negotiations, as in Bolivia, rather than military coups, which were the Republican's chosen method. These, 1952 and 1956, were crucial elections for U.S. foreign policy, probably: it is not clear how Stevenson would have behaved as president in the Cold War arena. Historically similar were the McKinley Bryan elections of 1996 and 1900. In 1900 McKinley traded in on the recent war of acquisition, the Spanish American War, which Spain was squirming to get out of before it started, so the U.S. blew up one of its own battleships in Cuba (The Main) as a pretext to declare war. For a Wikipedia treatment of this election and the surrounding issues, click here. Below is a 1900 Republican campaign poster. Note the same argument that the U.S. uses now in Iraq and Afghanistan and that it used during the Cold War: "The American flag has not been planted on foreign soil to acquire more territory but for humanity's sake." In fact more U.S. military died suppressing Aguinaldo and democracy in the Philippines after the war than died fighting the Spanish. Hawaii was stolen from the locals in a series of moves between 1893 and 1900. The 1900 election was not even close. Americans saw the Europeans grabbing colonial plots in the Pacific to lucrative ends, and they were sick of standing around not getting some too. In South and Central America, however, the U.S. had been manipulating and exploiting since the early 1800's. (Monroe Doctrine.)
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Much to the chagrin of the Bush administration, Bolivian president Evo Morales
has been going to
great lengths to separate his country from its economic dependence on the
to strengthen the Andean Community of Nations and the recent signing of a
"People’s Trade Treaty" with
Venezuela, Nicaragua, and Cuba indicate the desire of Bolivia’s Movement Toward
Socialism (MAS) party
government to stand up to Washington by strengthening working economic and
political alliances outside
of direct U.S. influence.
for a country of nine million with a per capita income of barely $1,000
annually. Presidential Minister
Juan Ramon Quintana has charged the U.S. Agency for International Development
with using some of this
money to support prominent conservative opposition leaders, as part of a
"democracy initiative" through
the consulting firm Chemonics International.
A cable from the U.S. Embassy in
party reform project" to "help build moderate, pro-democracy political parties
that can serve
as a counterweight to the radical MAS or its successors." Quintana warned that
"if
does not adjust itself to the politics of the Bolivian state, the door is open"
for them to leave
the country.
To understand Bolivian sensitivities to
to what happened to a previous leftist government in that country which instead
adjusted its politics
to the politics of
In January 1954, while
left-leaning nationalist government in
the leftist Movimiento Nacionalista Revolucionario (MNR) then ruling
acknowledged that some level of radical reform was necessary in that country
which might require challenging
certain elite interests that had been on good terms with the
At first glance, it could appear that the approach the Truman and Eisenhower
administrations took
in handling
of unwarranted
cited as a positive manifestation of the Good Neighbor Policy, which respected
the national integrity
of Latin American nations and pledged to resolve differences without use of
military force.
On closer examination, however, the
alternative form of intervention. The
the policies of the ruling party in
advantage of the economic relationship between the two countries as a means of
achieving
policy goals short of a direct overthrow of the government.
The
realization that the
due to
officials also judged that the balance of forces within the factionalized MNR
could be co-opted in
the direction of
a revolution. Perhaps most significantly,
precedent for future policy by the
financial institutions to ensure that Latin American and other
and domestic economic priorities in line with Western interests.
When the MNR came to power in a bloody uprising in April of 1952, some alarm
bells went off in
Of particular concern was the ideological orientation of the party, which was
explicitly revolutionary
and nationalist and contained an influential left wing. In addition, there was
the fear among
policy makers that heavily armed peasant and worker militias, subjected to
strong Marxist influence,
could end up controlling the country by force.
The popularity of the MNR government, the systematic dismantling of the armed
forces, and the eroded
political power of the oligarchs gave the United States little leverage with
which to build an alliance
with traditionally conservative political forces to compel a change in
government, which was how the
United States had frequently dealt with other Latin American countries
undergoing nationalist upheavals
and leftist challenges.
Like today, the gross inequality of Bolivian society had given rise to
influential and militant worker
and peasant political movements. And, also like today, the new government’s
program was strongly nationalist,
particularly in regard to the country’s natural resources, in which
interests. Yet, it was not long before the
regime’s priorities.
With its landlocked position, dissipated gold reserves, increased costs of
production and imports,
and huge trade deficits, Bolivia’s revolutionary regime had little to counter
the economic power of
the United States. From almost the beginning, the MNR’s pragmatic wing
recognized that no Bolivian
revolution could alienate
but also from the fear of economic retaliation—not an unimportant concern given
on the
from within the MNR to moderate their policy and vigorously pursue reassuring
the
diplomatic channels.
Truman administration officials recognized
of the State Department’s Office of South American Affairs, noted how dependent
"the politically
articulate portion of the population" was upon the mining industry, which was in
turn dependent
on
coffee from
strategic stockpile came directly from the
leverage in gaining political objectives all the easier.
The decision to expropriate, rather than confiscate, the mines—despite immense
pressure from the miners
and other Bolivians for the latter option—was directly related to concerns by
the MNR that they had
to acknowledge that at least some form of compensation was necessary, otherwise
they feared that the
over half of
State for Economic Affairs Willard Thorp had initially informed Acheson, the
of a stockpile to outlast
arrangement for tin, "We will almost certainly get the Bolivian tin eventually.
They have no other
place to sell it."
Thorp acknowledged that leaving
the
any other country from constructing a tin smelter to use the Bolivian
concentrates. By preventing private
purchase in the
from determining the price of tin. We have, in effect, used our stockpile to
force the price down,
since in the absence of the stockpile we could never have held out as long as we
did."3
Based on this economic power, the
president Victor Paz Estenssoro announced that "The United States told us that
they could not
buy tin from us on a long-term basis unless we made an agreement with the North
American stockholders." Given
the nation’s dependency on tin sales, the new government acceded.4
Unlike
not directly controlled by some foreign corporation. However, given that tin
ores are worthless without
tin smelters, and since all such refineries were abroad, the level of dependency
was at least as serious.
Moreover, the United States was the only country capable of processing Bolivian
tin since Bolivia
had no smelting capability of its own and the only non-U.S. smelter capable of
accepting the low-grade
Bolivian ore—located in Great Britain and partly owned by a former mine owner
whose mine had been seized—refused
to accept it.5
Jose Nunez Rosales, as vice president of a government-run mining company, stated
that
to compensate
The leading Bolivian left-wing party went on record to denounce the agreement as
"Yankee imperialism" which
they argued was attempting to "starve
important MNR ideologue, Carlos Montenegro, publicly accused the
to "foster the oligarchy and enslave the popular classes for the benefit of Wall
Street."8
By conditioning foreign aid on compensation for tin mines, the
leadership to give in to demands that resulted in depleting government
resources.9
At
a critical point in the nation’s effort to become more self-sufficient, the
and repay its foreign debts.
By January 1953, the British Embassy could report to the Foreign Office that
President Paz Estenssoro, "was
getting a lot of help and advice from the Americans and knew when to bend his
knee."10
Thus,
it was clear from an early stage of the revolution that the economic weakness of
the economic power of the
dropped by one-third.11
The Bolivians were desperate for large-scale
financial assistance. In a memo to President Dwight Eisenhower, Secretary of
State John Foster Dulles
argued that additional loans for Bolivia should be further postponed until there
was a clearer view
of the country’s political direction and payments prospects.12
In preparation for a meeting with Bolivian Foreign Minister Walter Guevera,
Dulles was advised by
Assistant Secretary of State for Latin America John Moors Cabot that he let the
foreign minister know
that
(a) To dispel strong suspicions, still held by some sectors of American opinion,
that the Bolivian
Government is dominated by communist influence;
(b) To reach a prompt and just final settlement of claims arising from the
nationalization of mining
properties in which there is an American interest;13
Following a
Paz announced cabinet changes in late October 1953, shifting the government’s
ideological composition
to the right. As a result, a State Department official observed that "the
Embassy is under the
definite impression that the action of the United States Government in
furnishing food grants to
has begun to pay dividends."14
Bolivian Minister Guevera confirmed to
for placing pro-United States elements "in a position of dominance."15
Similarly,
a National Intelligence Estimate noted that the MNR government had become
increasingly friendly to
the
By this point, the Embassy could begin to influence some government
appointments, even for relatively
minor posts. For example, by November 1953 the State Department could report
that the appointment of
an alleged communist to teach at the newly-opened
voiced its objections.17
Assured of his influence, Ambassador
Edward J. Sparks could confidently predict that "the Embassy expects the MNR
Government progressively
to limit the opportunities for the Communist parties …"18
In addition to using the threat of aid withdrawal to push the Bolivian
government into taking a stronger
anti-Communist stand and establishing tentative compensation arrangements with
former mine owners,
the United States also insisted that U.S. aid must be supervised by U.S.
officials at all levels.19
This aid was not enough to improve the standard of living in
poorest country—but it made the nation more dependent. A report of the Bolivian
Planning Board noted
that "Rather than an impulse to improvement, the aid has represented a means
only of preventing
worse deterioration in the situation as it existed."20
As a result, in subsequent years
as well. For example, the Petroleum Code of 1955, written by
public debate or alterations by Bolivian authorities, forced the Bolivian
government to forego its
oil monopoly.21
Offers by the
with its nationalized oil industry were met by a threatened withdrawal of
the
was due only to this desperate need for foreign exchange and pressure from the
the once strongly nationalistic MNR agreed to these concessions.24
In 1954, the
of George Jackson Eder to take charge of an economic stabilization program.
the MNR government agreed to this decision "virtually under duress, and with
repeated hints of
curtailment of
grata to the
bore striking resemblance to the Structural Adjustment Programs which have since
been imposed on
dozens of debt-ridden countries in Latin America and elsewhere, consisted of the
devaluation of the
boliviano; an end to export/import controls, price controls, and government
subsidies on consumer
goods; the freezing of wages and salaries; major cutbacks in spending for
education and social welfare;
and an end to efforts at industrial diversification.27
Assistant Secretary of State Richard Rubottom, in reference to a Bolivian
development plan supporting
peasant farmers, said "We had to tell the Bolivian Government that they couldn’t
put their money
into it and we weren’t going to put ours into it."28
Though nominally a technical adviser,
would be better off by leaving the economy entirely in the hands of private
enterprise. He was contracted
and paid by the
administrative control of the economy.29
This gave the
unprecedented power to control the course of the Bolivian revolution.
a program that in his own words "meant the repudiation, at least tacitly, of
virtually everything
that the Revolutionary Government had done over the previous four years." He
further described
how his goal was to convince the new MNR administration that stabilization would
only be possible through
a total transition to a free market economy.30
Furthermore,
compensation was to be guaranteed in the event of any future nationalizations,
and that all price controls
be repealed.31
His prescription for the favorable investment
climate he believed necessary was that the Bolivian government had to offer a
stable political environment,
a strong currency, and labor conditions that minimized the risks of any
interference from labor or
political leaders.32
The effect of
particularly its efforts at diversification of production, but to alter the
revolution’s political
structure by effectively curbing the power of the trade unions and displacing
socialist-leaning leaders
of the MNR. The MNR went so far as to allow labor representatives into the
government only if their
unions supported the stabilization program.33
Under the U.S.-encouraged
and subsidized reconstituted military, hostile union militias could by then be
neutralized.
The resulting split in the MNR dramatically reduced its mass base, making the
leadership even more
dependent on
leadership, feeling threatened by the movement’s left wing and facing resistance
by the betrayed miners,
turned increasingly toward the resurrected military, and even sent an elite army
unit to the U.S. Army’s
School of the
It became virtually impossible, then, for the MNR to balance its independence,
beliefs in the redistribution
of wealth, and its "anti-imperialist" rhetoric with the realities of dependency,
exacerbated
by the economic crisis of 1956-57. The increasingly alienated and apathetic
peasantry, manipulated
by competing political factions, was too powerless to challenge this dramatic
shift to the right.
In addition to various programs in agricultural development, construction,
technical assistance, and
food aid, the
than 10 years,
growing from $1.5 million in 1953 to $22.7 million in 1959.
The Bolivian revolution turned to the right under the presidency of Siles Zuazo
from 1956-1960 and
continued the pattern under Paz Estenssoro’s second term beginning in 1960. The
massive popular base
of support which had previously defended the MNR from right wing attacks and
traditional conservative
elements evaporated. By the time the army seized control in 1964, there was
little to stop it.
In the end, the
the government. The nation’s high level of dependency made it possible for the
the course of the revolution in a direction more compatible to
The move was facilitated by the predominantly middle-class orientation of the
MNR and the inability
of its more radical factions to ever completely dominate the party. While the
revolution succeeded
in undermining much of the old order through its breakup of the hacienda
system and its nationalization
of the tin mines, it never succeeded in really developing a new order to take
its place. This made
it possible, in the words of Anthony Freeman of the State Department’s
States
The
support to the revolutionary government. Indeed,
prior to the revolution, since the old ruling class—tied to the tin
barons—maintained conflicting interests
with the
Security Council saw the successful handling of the Bolivian situation as a
model for making support
of the
would exploit to the fullest this model in its future relations with countries
in
elsewhere.
In many respects,
toward
by U.S.-supported International Financial Institutions, has served as the axis
to institutionalize
economic leverage to the extent that more overt forms of intervention to advance
strategic or economic
interests are no longer necessary.
the final outcome of United States policy was not as dramatic as what transpired
in Guatemala during
that same period, the impact on the people of Bolivia—in terms of the human
costs of living within
a system where once-promised social, economic, and political rights were
subsequently denied to the
majority of the population—was no less severe.
With the globalization of the economy, most Latin American countries now have as
few choices in choosing
their economic policies as did
in the taming of the Bolivian revolution is that it proved a training ground for
developing the model
for what was to come throughout the hemisphere.
The government of Evo Morales, representing a popular mass base of support from
the country’s poor
and indigenous majority, is very different than the largely white, middle- class
leadership of the
MNR. Similarly, economic support from oil-rich Venezuela and its efforts at
strengthening its economic
relationships with its Latin American neighbors and with Europe, also make it
far less likely that
today’s government will buckle to the kind of pressure imposed by the United
States a half century
earlier.
At the same time, unless and until
from within the
the economic conditions of its people.
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