WEEKLY SUMMARY SPECIAL REPORT TURNABOUT IN BOLIVIA

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0003173563
• Release Decision: IPPUB U
• Document Page Count: 19
• Document Creation Date: June 23, 2015
• Document Release Date: May 24, 2010
• Case Number: F-2010-00003
• Publication Date: October 29, 1971

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APPROVED FOR RELEASED
DATE: 04-21-2010
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Turnabout in Bolivia
Se
N? 13
29 October 1971
No. 0394/71A
 SE'RET
gen
The
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 77S70~:T
The military-civilian rebellion that toppled the ten-month-old regime of Juan
Jose Torres in August halted almost two years of leftward drift in Bolivia. The
Popular Nationalist Front government of President Hugo Banzer Suarez faces a
formidable task in reversing the political, economic, and social deterioration that has
stifled national development since the death of President Barrientos in 1969. The
governing coalition is an uneasy alliance forged by traditionally bitter antagonists
from unity of purpose in the face of a common enemy. With victory, centrifugal
forces within and among the components of the front are growing as conflicting
partisan interests reassert themselves.
While wrestling with its internal inconsistencies, the new government must deal
with its defeated and dispersed, but not destroyed, opponents. The Popular Na-
tionalist Front has proven its determination to act vigorously against the disarrayed
forces of the extreme left. In fact, the government's pre-emptive measures have the
dangerous potential for degeneration into an indiscriminate campaign physically to
eliminate extremists once and for all. At present, repression appears to be having a
unifying as much as a disruptive effect on the previously fragmented extreme left.
President Banzer has demonstrated an understanding of the problems confront-
ing his country and of the domestic and international realities with which he must
come to terms. He has taken positive steps to move the economy forward after two
years of stagnation. But Banzer, whose mandate depends ultimately upon an armed
forces only recently and incompletely united behind him, may soon find himself
increasingly preoccupied with the day-to-day task of maintaining himself in power.
Thus, while the prospects for Bolivia have improved, it is doubtful that the sustained
stability that has historically eluded the nation is now at hand.
Juan Jose Torres emerged as president of
Bolivia from the confusion of a poorly executed
military coup against Alfredo Ovando in October
1970. Ovando, who had seized power the previ-
ous year from Rene Barrientos' constitutional
successor, Luis Adolfo Siles Salinas, nationalized
the Bolivian Gulf Oil Company and allowed his
government to take on a stridently "nationalist-
revolutionary" tone. Dissident officers succeeded
in ousting C)vando, but failed to consolidate the
coup and allowed Torres to fill the vacuum.
Plotting against Torres began almost im-
mediately and intensified with the new Presi-
dent's avowal of an intention to "deepen the
revolution" and his courtship of the extreme left.
With the exile of Rogelio Miranda and other
higher ranking officers who bungled the October
coup, Colonel Hugo Banzer Suarez became the
leader of middle and junior grade officers op-
posed to Torres. An abortive coup attempt in
January 1971 resulted in Banzer's forced retire-
ment from the army and exile.
Torres was never able to establish his own
constituency and had to perform an intricate
Special Report -2- 29 October 1971
 political balancing act. For ten months, he was
tolerated by the labor- and student-dominated
extreme leftist "popular forces" that had helped
bring him to power. He kept civilian opposition
groups off balance with alternate doses of nego-
tiation and repression, and managed to thwart
antiregime activity by dissident elements in the
armed forces. But Torres' survival in the presi-
dency was due primarily to the weakness of
others rather than to his own strength. It was
clear that his days were numbered unless he could
acquire a powerful base of support.
The armed forces, divided and demoralized,
were dealt another blow in March when high-
ranking military figures, including ex-presidents
Barrientos and Ovando, were implicated in a
bizarre series of earlier events involving arms
smuggling, political murders, and other crimes.
Dissident younger officers, now led by former
Major Humberto Cayoja, were troubled by Tor-
res' leftward drift. The President's vacillating
attitude toward the extreme left's unofficial leg-
islature (the "popular assembly") was interpreted
by many officers to mean that the integrity of the
armed forces as an institution was endangered.
Growing military hostility was complemented by
opposition to Torres on the civilian political side.
Out of power since Barrientos' overthrow of
Victor Paz Estenssoro in 1964, the moderate-left-
ist Nationalist Revolutionary Movement (MNR)
was beset by ideological and personal differences
when Torres assumed the presidency. Neverthe-
less, the party that had authored the National
Revolution of 1952 was still by far the largest and
best organized political party in the nation. In
February, a declaration of unity supposedly
brought together the Paz wing and the followers
of former president Hernan Siles Zuazo. But the
factions continued to engage in separate intrigues
with the Torres government and with political
and military groups. On several occasions, it ap-
peared that some portion of the party was about
to be included in the government, but Torres
finally cracked down hard on the party in April,
and the leadership was forced to go underground.
Preliminary contact had already been made
between the MNR and active and forcibly retired
military officers opposed to Torres. Communica-
tions now expanded, and the discussions were
joined by the Bolivian Socialist Falange (FSB), a
party that had bitterly opposed the MNR during
both Paz' and Siles' years in power. Long-standing
animosity toward the MNR by older military of-
ficers was reduced somewhat by Paz' assurances
that his party favored the preservation and
strengthening of the armed forces. Some higher
ranking officers, however, were still reluctant to
join the budding conspiracy.
The dissidents took a major step forward
when they determined that action against Torres
had to be unified and coordinated, but progress
toward a definite coup plan was hampered by
shortages of funds, government repressive meas-
ures, and distrust among the plotters. The most
serious obstacle was the difficulty of obtaining
firm commitments to join from active-duty of-
ficers with troop commands in the La Paz area.
The plotters suffered a temporary setback in
June, when former Major Cayoja was seriously
wounded in a confused incident near the Boliv-
ian-Paraguayan frontier. Soon, however, leader-
ship of the military dissidents came back to
former Colonel Banzer, who had returned clan-
destinely from exile. By mid-July, a number of
senior active-duty officers, frustrated in their at-
tempts to exert a moderating influence on Torres
and concerned about the future of the armed
forces, were ready to take part. Banzer was
recognized as the figure around whom officers of
all ranks could rally.
After much hesitation, the private business
sector decided that the plotters had a reasonable
chance of success, and weighed in with financing.
By early August, although an over-all leader had
not been chosen and the positions of La Paz area
troop commanders remained uncertain, it was
decided that the time was fast approaching when
the dangers of further delay outweighed the risks
of action. The Torres government was aware of
plotting against it, but had apparently abandoned
Special Report -3- 29 October 1971
 AREA: 424,000 sq. miles
POPULATION: 4,773,000
BOLIVIA
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Special Report -4- 29 October 1971
 its previous strategy of broad pre-emptive public
denunciations. The President's Independence Day
speech on 6 August contained no dramatic policy
announcements and gave no indication of especial
concern about the opposition.
In the late hours of 18 August, the govern-
ment began to move against subversive elements,
and Banzer was among those arrested in Santa
Cruz. Banzer has since told the US ambassador
that he deliberately exposed himself to capture in
a maneuver designed to spark the uprising, al-
ready three days beyond its appointed time. On
the morning of 19 August, it appeared that the
government had successfully pre-empted the
coup. But in Santa Cruz, a protest demonstration
by relatives of those arrested turned into a riot,
and "shock troops" of the two parties involved
seized a radio station and began broadcasting
proclamations. The government mobilized to
defend itself, and ordered troops in the Santa
Cruz area to restore order. President Torres soon
discovered, however, that he no longer com-
manded the bulk of the armed forces. Sparked by
the action of Colonel Andres Selich's ranger regi-
ment in Santa Cruz, military units throughout the
countryside began to declare themselves in rebel-
lion.
The following day, General Mendieta's
Seventh Division in Cochabamba and practically
all other important units outside the La Paz area
proclaimed their support for the now-overt Popu-
lar Nationalist Front. Torres, who remained in
firm control of La Paz, called on the "popular
forces" to defend the government. As the armed
forces away from the capital continued to go over
to the rebel cause, no unit based in La Paz had
come out in opposition to the President as of late
on the 20th. At this point, both sides seemed
hopeful of emerging victorious by demonstrating
strength and a willingness to fight. Torres decreed
the "total mobilization of the people" in order to
wipe out the "vicious fascists."
Early on the morning of Saturday, 21 Au-
gust, the Military Air Transport Service based at
El Alto Airport, just outside La Paz, went over to
the rebels. The air force wavered, but the tide was
turning against Torres. In midafternoon, elements
of the Colorados presidential escort regiment led
by Major Ruben Sanchez passed out arms to
anyone in La Paz willing to fight the rebels.
Anti-Torres troops from the military college
(once commanded by Banzer) began to move into
the city and fighting broke out in the streets. The
Colorados, augmented by armed civilians, at-
tacked the Castrillo regiment at Armed Forces
General Staff Headquarters. Torres exhorted the
Colorados and the "popular forces" to continue
the fight as they battled rebel troops and armed
groups of MNR and FSB members throughout the
city. Forces loyal to Torres held an initial numeri-
cal advantage, but they were heavily outgunned,
especially when an armored unit stationed at El
Alto and the air force entered the fight on the
side of the rebels.
That evening, although the rebel-controlled
radio in Santa Cruz had announced that Colonel
Banzer would be the country's new president, a
three-man junta, including General Mendieta and
Colonel Selich in addition to Banzer, was pro-
claimed from Cochabamba. Rebel forces mopped
up the remnants of the defeated Colorados and
armed civilians in the early hours of 22 August.
Torres abandoned the presidential palace shortly
before the arrival of rebel troops and took refuge
in the Peruvian Embassy. Late in the afternoon,
apparently after a conference of rebel leaders,
Colonel Banzer (who had been released by his
guards when it became evident that Torres was
defeated) was presented to a cheering crowd as
the president of Bolivia.
The failure of the anti-Torres forces to nail
down advance military support in the La Paz area
and Torres' decision to fight turned what had
been planned only as a coup into a bloody mili-
tary-civilian revolt. More than 100 civilians were
killed and over 500 wounded. Military casualties
probably totaled at least 100.
Special Report: - 5 - 29 October 1971
 The willingness of both sides to shed blood
for their cause dramatically demonstrated the
polarization of Bolivian political life. Many of
those who conspired and fought against Torres
believe they fought to save the country from
Communism and chaos. President Banzer claims
that his side was prepared to wage a full-scale civil
war. Thousands of workers, students, and other
civilians, whose dedication to Torres was at best
dubious, still took up arms against the "fascist"
rebels to defend leftist gains made during his
tenure. The trial by fire had a unifying effect on
the victors' disparate coalition, but it has also
brought the fragmented extreme left together in
defeat. The bloody fighting will not soon be for-
gotten. The extreme left, which to some extent
felt that it had a role in the decision-making
process in the Torres regime through the "popular
assembly," was deprived of that role by force.
Alienated from the political system, the "popular
forces" may turn to violence to regain their lost
influence. Shortages of guns and ammunition
Interior
National Defense
Agriculture and
Campesino Affairs
Finance
Mines and Metallurgy
Labor and Trade
Union Affairs
Planning and Coordination
Information
Foreign Affairs and Worship
Education
Transport and Communications
Social Welfare and
Public Health
Urban Affairs and Housing
Energy and Hydrocarbons
Industry and Commerce
Secretary General of
the Presidency
*Not on active duty
Special Report
Col. Andres SELICH Chop
Brig. Gen. Jamie Florentino
MENDIETA Vargas
Lt. Col.* Jose G I L Reyes
Military
Raul LEMA Pelaez
Carlos SERRATE Reich
Ciro HUMBOLDT Barrero
Edwin RODRIGUEZ Aguirre
Hugo GONZALEZ Rioja
Mario GUTIERREZ Gutierrez
Agusto MENDIZABEL Moya
Ambrosio GARCIA Rivera FSB
Carlos VALVERDE Barbery
Sergio LEIGUE Suarez
Roberto CAPRI LES Gutierrez
Hector ORMACHEA Penaranda
Alfredo ARCE Carpio
MNR-Nationalist Revolutionary Movement
FSB-Bolivian Socialist Falange
 hampered those who fought in the streets of La
Paz, but the quantity of arms reportedly dis-
tributed to civilians before and during the revolt
suggests that much materiel was sequestered
rather than used in defense of Torres.
Although the decisive fight was in La Paz,
Bolivia's outlying regions, especially Santa Cruz,
played a crucial role in the planning and execu-
tion of the revolt. There is considerable regional-
ist sentiment in Santa Cruz, where many people
regard their relatively wealthy department as a
neglected step-child of the central government
and resent the normally dominant altiplano
around La Paz. Hugo Banzer is one of the handful
of Crucenos to have attained the presidency, and
in contrast to the usual altiplano domination of
high government positions, the Banzer cabinet has
a distinctively Cruceno flavor. This influence in
the new government may prove to be significant,
for in Bolivia regionalism sometimes rivals politics
in importance. There is also an unusual nation-
wide feeling of having participated in the making
of this government, opening the possibility of
further national integration and unity, but this
may not last.
Argentina, Brazil, and Paraguay served as
bases of operation for the anti-Torres plotters and
subtly aided their effort to seize power. Having
taken a part in the reversal of Bolivia's leftward
course, these neighbors are continuing to show a
keen interest in Bolivian affairs. Brazil and Argen-
tina are providing the new government with mili-
tary and economic assistance. Both of these rela-
tively powerful bordering states would be deeply
concerned if the situation in Bolivia showed signs
of a leftist resurgence.
Strictly speaking, the Popular Nationalist
Front is the political alliance of the Nationalist
Revolutionary Movement and the Bolivian Social-
ist Falange. Banzer has stated that the armed
forces support the front, but are not part of it.
The President sees himself and the armed forces
Special Report
President
Hugo Banzer Suarez
"We are going to generate
the spirit needed to attain
the country's fundamental
objectives. "
as separate from the front and as final arbiters.
Nevertheless, the Popular Nationalist Front title
also refers to all the elements of the coalition
government collectively. In this broader sense, it
includes the president, the armed forces, and the
private business sector as well as the two parties.
Banzer's cabinet is composed of five MNR and
five FSB leaders, three military men (one on
"leave of absence" since early 1971), and three
nonparty civilians. Historical animosities render
the government basically incongruous, a situation
further complicated by the pluralistic nature of
some of the front's components.
Pledges of mutual cooperation have been
repeated all around, but with the achievement of
the goal that brought erstwhile enemies together,
the front's cohesion is being tested by resurgent
partisan interests. Banzer had to push the parties
into forming a coordinating apparatus to allow
the issuance of joint policy statements, and he has
warned them that their alliance cannot remain
exclusive. The President is reportedly displeased
with the use of government positions to dispense
jobs to party members incompetent to handle
them, and disturbed by the MNR's persistent at-
tempts to organize labor and peasants in its
support.
Despite optimistic public statements that the
parties can and will put real coordination of
SE
 THE MILITARY HIGH COMMAND
Commander in Chief Brig. Gen. Joaquin ZENTANO Anaya
Chief of Staff (currently vacant)
Inspector General Brig. Gen. Jose CARRASCO Riveros
Army Air Force
Commander - Brig. Gen. Federico ARANA Serrudo Commander Col. Oscar ADRIAZOLA Valda
Chief o Staff Col. Eladio SANCHEZ Gironda Chief of Staff Lt. Col. Luis GARCIA Pereyra
Navy
Commander - Rear Adm. Javier PINTO Telleria
Chief of Staff - Capt. Eduardo RIVERA Fiorilo
effort above individual objectives, Banzer appar-
ently has no illusions over their ability to main-
tain either internal unity or a spirit of coopera-
tion. The President has implied that, if necessary,
the armed forces will carry on alone.
The revolution lifted the armed forces out of
disunity and reaffirmed its traditional stature as
the premier national institution. The command
structure was reorganized to restore the post of
armed forces commander in chief, and Banzer has
tried to consolidate his position by filling key
commands with officers who helped plan or sup-
ported the revolt. The President is well aware that
his ability to maintain himself in power ulti-
mately depends on the continued loyalty of the
military.
The solidarity of the armed forces behind
the President is not certain, however. Notwith-
standing recent military orders declaring the
institution's "absolute removal from sectarian
political interests" and prohibiting membership in
political parties to active-duty personnel, the
armed forces are inextricably involved in Bolivian
political life. Commander in Chief Iriarte was
known to covet the presidency and met with
dissident MNR leaders in an attempt to line up
support for an eventual bid for power. Banzer,
aware of his activities and his lack of a large
following in the officer corps, forced Iriarte to
resign in mid-October.
Many officers are not entirely satisfied with
the latest distribution of commands. The rein-
statement of certain unpopular officers and their
return to high positions is another point of fric-
tion. There are, of course, those who are simply
dissatisfied with their own reward for their part in
the revolt. But there are also more basic diver-
gencies in military thinking. Many younger offi-
cers are "institutionalists," i.e., concerned pri-
marily with military professionalism and anxious
for the armed forces to withdraw from govern-
ment. They would like to see an organizational
restructuring and the removal of those who they
feel have brought disrepute upon the armed
forces.
Other officers reportedly would like to re-
move the MNR from its place in the ruling coali-
tion. Animosity toward the MNR still runs deep
among some officers. It defeated the military in
1952 but never completely destroyed the armed
Special Report
-8- 29 October 1971
 forces as an institution. Officers who would not
accept MNR ideology and pledge their loyalty to
the party were removed from active duty en
masse. Many of them later resumed their military
careers, but still harbor a deep resentment toward
the party.
A much smaller number of higher ranking
officers may be scheming to accomplish the
elimination of all political and private civilian
influences from government, with the goal of
establishing a military dictatorship. Conflicts will
continue within the armed forces, and President
Banzer can ill afford to take military support for
granted. The delay between Iriarte's ouster and
the appointment of Joaquin Zenteno Anaya in his
place could reflect submerged strife.
Despite its historic achievements (which in-
clude maintaining itself in power for twelve
years), the MNR proved incapable of perpetuating
the alliance of interest groups that carried out the
National Revolution of 1952. During its later
years in power, the party suffered from defec-
tions and factionalism. In the face of this splinter-
ing off of constituencies to form new parties on
its left and right, it still managed to retain a mass
following, even after being overthrown. Thus, the
Nationalist Revolutionary Movement has dis-
tinguished itself from many small, highly per-
sonalistic, and more ephemeral rival groups.
Intraparty disputes persisted throughout the
MNR's seven years in opposition (1964-71).
Ostensibly settled by a "declaration of unity"
early in 1971, the disputes persist and current
internal battle lines reflect the same old personal
rivalries and ideological differences. Party head
and former president Victor Paz Estenssoro has
returned from exile in Peru and his followers have
the upper hand. His main opponent in the party,
ex-president Hernan Siles Zuazo, is in Chile. Paz
supporters are reportedly determined to prevent
his return, although there is no sign that Siles
wants to come home now.
In late August 1971, a group of left-wing
party leaders, calling the government's violent
eviction of students from university buildings in
La Paz "contradictory with any revolutionary,
nationalist, and popular stance," unsuccessfully
demanded that the party leave the government.
Siles is reportedly concerned that the party will
otherwise permanently alienate its student and
labor sectors and offend its peasant supporters.
Thus far, the MNR's left wing has been content to
press its view within the party. There are signs,
though, that the establishment of a new "MNR of
the left" may be under consideration. Some left-
wing leaders are reportedly avoiding participation
in party councils, probably to avert being identi-
fied with its current policies. An outright defec-
tion by Siles could cause a formal party split. On
the other hand, left wingers could be expelled
from the party in a move to dissociate the MNR
as a whole from those who plotted with former
armed forces commander Iriarte, and to pre-empt
a breakaway move.
The 64-year-old Paz appears to be preparing
for an attempt to return to power by unifying
and strengthening the MNR behind him. Mindful
of the importance of reviving the party's revolu-
tionary image, the former president has reiterated
its dedication to "revolutionary nationalism,"
which Paz defines as a process of "accomplishing
tasks in order to arrive at the transition to social-
ism." Paz' socialism is both non-Marxist and ''in
the future." Calls for cooperation among the
members of the governing front and denial of
presidential ambitions notwithstanding, Paz has
indicated that he still considers himself the only
real caudillo in Bolivia, and he reportedly had
told party leaders to regard participation in the
Banzer government as a springboard for the
party's peaceful return to power. While he has
joined President Banzer in publicly discounting
the possibility of elections in the near future, Paz'
strategy seems to envisage a victory at the polls.
Paz probably hopes to bring various party
factions into line at a convention tentatively
scheduled for December, and then concentrate on
Special Report - 9 - 29 October 1971
 Victor Paz Estenssoro
"I leave false modesty
dillo of Bolivia. "
expanding the party's base of support. The
former president faces serious obstacles, however.
Even his loyal supporters have expressed dis-
satisfaction with the MNR's share of government
patronage; especially with the fact that the
Falange controls the Ministry of Agriculture and
Campesino Affairs. There is also dissension over
the filling of available positions, and some who
claim to have fought loyally for the party feel
that they have been passed over for jobs in favor
of the less deserving. Some younger party activists
especially resent the monopolization of party
power and prestige by old-line leaders, a feeling
that may extend to Paz himself.
Rank-and-file support for the alliance with
the FSB is less than enthusiastic. Paz has in-
structed middle-level party leaders to explain the
necessity for it to the masses, but the large
residue of animosity will not be easily overcome.
Progress toward Paz' goals will also be hampered
by the fact that even within his inner circle there
is dissension over party affairs. There is constant
maneuvering for position within this group, and
personal or ideological loyalties consistently take
a back seat to opportunism.
In the unlikely event that internal solidarity
is achieved, the MNR's prospects for strengthen-
ing itself numerically would improve. But a major
success in this endeavor will depend upon the
benefits the party can offer to potential members.
If government repressive measures become more
severe, Paz himself could conclude that continued
participation in the ruling coalition is a net lia-
bility. In the meantime, although he is aware that
the MNR could become indelibly identified with
repressive policies it cannot fully control, Paz
apparently considers maintaining the party's role
in the government and cultivating support in the
armed forces to be essential. He seems content to
rationalize the party's alliance with its old politi-
cal nemesis by insisting that the FSB's attitudes
have 'changed and that it is not a significant politi-
cal force anyway. He is convinced that the enmity
between his party and the armed forces can be
overcome, and he will probably attempt to con-
vince military men that the two institutions need
each other. Paz' persuasive efforts will be con-
tending with die-hard elements within the armed
forces, political groups that supported Barrientos,
the Falange, and the MNR itself to see to it that
the party leaves the alliance one way or another.
For the first time since its founding in the
mid-1930s, the Bolivian Socialist Falange is an
important participant in government. In fact, its
influence within the Popular Nationalist Front is
out of proportion to the party's actual popular
following.
The Falange initially attracted extreme right-
ist support because of its identification with
fascism, although the party actually stood for
conservative social reform. During the MNR's
years in power, the Falange was a formidable and
sometimes violent opposition. The Falange was
united in the period prior to Paz' overthrow, but
expectations of participation in the Barrientos
government were unfulfilled, and the party re-
mained in its traditional role as an opposition
force of diverse make-up. By the late 1960s, vari-
ous factions, including a vitriolic left wing,
brought the party to a state of such internal
anarchy that it ceased to be a significant political
force.
During the Ovando and Torres regimes, how-
ever, the party reorganized, expelled its way-out
Special Report _10- 29 October 1971
 leftists, and began to project an image of modera-
tion, right of center in Bolivian terms. The op-
portunistic, somewhat eccentric Mario Gutierrez
returned from semiretirement to resume leader-
ship of the party. The party secured its present
position by taking part in the planning and execu-
tion of the revolt against Torres. It now claims to
stand for a "Christian Socialism" based on the
papal encyclicals and other church documents. It
draws support mainly from larger landowners,
small businessmen, and professionals. The center
of its strength is in Santa Cruz, but the actual
popular support commanded by the party
throughout the country is still limited. The
Falange seems to be the group with the most to
gain from participation in the coalition govern-
ment, and it almost certainly would oppose a
move to hold elections soon.
Party leaders have pledged to make the al-
liance work, but many members have fought the
MNR for years. They remember their persecution
under MNR governments and blame the MNR for
the death in 1.959 of Oscar Unzaga de la Vega, the
Falange's founder. There is also some rank-and-
file dissatisfaction with the party leadership's con-
centration on governmental rather than party
affairs, and complaining over patronage matters.
On the whole, however, the FSB appears to be
unified in support of the government and enjoys
much better relations with the armed forces than
does the MNR. Many officers holding high gov-
ernment or military posts are thought to be
favorably disposed toward the party. Signifi-
cantly, Colonel Selich's Interior Ministry is largely
staffed with FSB members. President Banzer
seems to be pleased with the party's attitude and
conduct.
As Bolivian businessmen watched the
economy stagnate, public order break down, and
respect for private property deteriorate under
Torres, they concluded that the private business
community might be eliminated completely if the
nation's leftward drift continued. When an anti-
Torres movement demonstrated its seriousness
and potential, the private sector responded with
financing, and it is closely identified with the
success of the rebellion.
The private business sector is represented in
the new government by the minister of industry
and commerce and by the secretary general of the
presidency. It has every reason to be pleased with
the Popular Nationalist Front, the government's
economic policies, and the curbing of labor's po-
litical power. Businessmen are now primarily
concerned with preserving stability, maintaining a
favorable climate for private enterprise, and at-
tracting foreign aid and investment.
The front now running Bolivia is basically
moderate, nationalist, and anti-Communist. Presi-
dent Hugo Banzer, a respected military profes-
sional, minister of education under Barrientos,
and one-time military attache in Washington,
appears on the surface at least to be firmly in
command of the coalition government. There are,
however, disturbing signs that elements demand-
ing the continued application of highly repressive
measures have considerable influence, if not out-
right control, over vital aspects of government
pol icy.
Foreign Minister
Mario Gutierrez Gutierrez
"We, the Falangists, seek a
Christian Socialism. "
Special Report - 11 - 29 October 1971
 The President has promised to end national
disorder, "pull Bolivia from chaos," and "recon-
struct the fatherland" through peace, order,
work, discipline, and sacrifice. He has pledged to
eliminate the divisive concepts of left and right
from political life and to substitute the unifying
ideal of nationalism. Banzer has indicated that
elections will be held eventually, but he has stated
that social peace and the solution of Bolivia's
basic problems must come first. He views as his
most important immediate tasks the restoration
and preservation of order and the achievement of
economic progress.
The day after assuming the presidency,
Banzer made it plain that he was prepared to deal
summarily with recalcitrant leftists. After a pacifi-
cation committee unsuccessfully attempted to
contact armed students occupying San Andres
University in La Paz, shooting broke out and
troops backed by armored cars and air support
stormed the building. Eight students were killed,
25 wounded, and hundreds made prisoner. The
government has since taken other measures to
neutralize student opposition. In early Septem-
ber, all universities were ordered closed until next
March. Administrative positions and professor-
ships were declared vacant. Rehiring and reorgani-
zation will be used to eliminate extreme leftist
influence and to prevent the universities from
serving as bases for antiregime activity. Primary
and secondary schools have also been closed for
the school year, and changes in staffs and cur-
ricula are planned. Many students have been ar-
rested in the government's all-out effort to eradi-
cate the National Liberation Army; some remain
in custody.
The government has also undertaken to
depoliticize and restructure the labor movement,
and has begun by dismantling union leadership.
Most of the higher level union leaders are either
under arrest, in exile, or in hiding. Labor Minister
Humboldt has stated that trade union rights and
wage agreements already in effect will be re-
spected, but has emphasized that labor leaders'
involvement in conspiracy and political activities
is another matter, to be dealt with by the Min-
istry of Interior. Preliminary moves have already
been made to install a more pliable brand of
union leadership, and President Banzer has
promised that new guidelines for trade union
activity will be issued.
Repressive measures have not been confined
to selective actions against potential centers of
opposition activity. Banzer coupled a qualified
guarantee for freedom of action for all political
parties with the initiation of a campaign against
"anarchists," and proclaimed that anyone who
attempts to confront the government with force
or "create chaos" will be imprisoned. The Min-
istry of Interior under Colonel Selich has inter-
preted this mandate in broad terms. It is becom-
ing increasingly clear that the labels guerrilla,
anarchist, Communist, and conspirator are being
liberally applied to workers, students, journalists,
and politicians who are actual or potential op-
ponents of the government. It may even be that
Colonel Selich is not completely responsive to
President Banzer's direction. Selich has vowed to
rid the country of leftists, and his ministry has
been aggressive in the performance of its duties.
The President has given qualified pledges of
freedom from government interference to the
media, but many journalists have been arrested or
harassed, and some of the more outspokenly
leftist members of this group are in custody. The
journalists' trade union has been "intervened"
(temporarily taken under control) and its reorgan-
ization is under study by a government commis-
sion.
Most of the individuals arrested thus far have
been released after interrogation, but the govern-
ment contends that many extremists are too
dangerous to be allowed back on the streets, and
that in some cases even exile is too risky. Remote
work camps are in the Bolivian tradition and a
number have been set up to confine those who
are believed to be especially likely to cause
trouble.
The government's vigorous actions demon-
strate its determination to survive, and most of
Special Report -12- 29 October 1971
 those incarcerated are probably regarded as real
threats who must be dealt with firmly. In the long
run, however, the bitterness and hatred spawned
by the bloody revolution and its repressive after-
math may prove far more dangerous. There is
reason to believe that repression could intensify
rather than taper off. Some military and Falange
figures apparently feel that the opportunity to
eliminate the extreme left once and for all should
not be passed up. In any event, the government is
not convinced that its pre-emptive measures will
be entirely effective, and preparations are being
made to counter anticipated civil disturbances
and terrorist or guerrilla activities. Priority is
being placed on augmenting the mobility of the
armed forces and on the organization of new
mechanized units to be deployed to major cities.
Brazilian and Argentine, as well as US, military
aid is being applied to this effort.
Banzer has not neglected the nation's eco-
nomic problems. An influx of foreign aid is help-
ing to reverse the economic decline of the past
two years. The US, Brazil, Argentina, and a num-
ber of West European countries are contributing.
The private business sector seems to have con-
fidence in the future. A number of suspended
investment projects have been resumed, and new
plans have been announced. The National Cham-
ber of Industries has decreed a price freeze on
manufactured goods in order to aid the economic
recovery, and other gestures of cooperation have
come from the private financial sector and from
public institutions. The government is empha-
sizing the importance of job-creating construction
projects and is channeling funds into public works
to reduce unemployment, which had reached over
20 percent of the labor force under Torres. The
main source of these funds is a new $12 million
program loan from the US. Despite encouraging
progress, serious problems remain. Even with for-
eign assistance, an uncovered deficit of $20 mil-
lion is anticipated for the 1971 central govern-
ment budget. This year's balance of payments
deficit may reach $8 million. The foreign debt
already exceeds $400 million.
The President has stated that although he
considers the Gulf nationalization to have been a
mistake, it is irreversible. The completion of
financing arrangements for the long-planned
Santa Cruz to Yacuiba pipeline is a major step
toward the generation of revenue from the sale of
natural gas to Argentina and the fulfillment of the
compensation agreement with Gulf. The govern-
ment has adopted a positive attitude toward nego-
tiations with two US mining firms over compensa-
tion for facilities nationalized by Torres. The
arrangements being worked out concerning these
mining operations will be especially important to
the Bolivian economy in their effect on the main-
tenance of support from the US and international
financial agencies. They will also have an impor-
tant bearing on the success of the government's
attempts to attract new foreign private in-
vestment.
Banzer professes to believe that if his govern-
ment can demonstrate an ability to reduce un-
employment and get the economy back on its
feet, the great mass of peasants and workers will
be immunized to the exhortations of the extreme
left. The President also feels that bread-and-butter
issues can be used to build support for the Popu-
lar Nationalist Front. Creating jobs and stimu-
lating the economy are bound to be popular, and
a good start has been made in these areas. On the
other hand, reduction of miners' and government
employees' wages or devaluation of the peso-
issues with political and emotional overtones as
Minister of Interior
Andres Selich Chop
"There will be na rest un-
til the last oc off' Ca
Communism is alimi-
noted.
Special Report - 13 - 29 October 1971
 well as significance for financial stabilization-
must be dealt with soon. The pressures to place
political expediency over economic considera-
tions will be great.
On the international scene, the effects of the
change of government have been predictable.
Bolivian-US relations have improved markedly.
Despite the anti-Communist rallying cry of the
revolt, there has been no immediate hostility be-
tween the new government and the Communist
world. Bolivia has indicated that it will uphold its
agreements and contracts with the Soviet Union
and Eastern Europe. Official Communist repre-
sentatives have been careful to maintain a correct,
business-as-usual approach. Discussions centering
on the utilization of previously granted credits
and the installation of mining and smelting facili-
ties are continuing. Concern over Communist
China's "dumping" of antimony on the world
market could provide motivation for the estab-
lishment of at least commercial relations with
Peking.
Renewal of relations with Cuba and re-estab-
lishment of diplomatic ties with Chile, both in
train under Torres, are most unlikely now. Che
Guevara and Cuban aid to Bolivian guerrillas are
bitterly remembered. Castro's calls for armed
struggle against the Banzer regime and moral and
materiel support for Bolivian revolutionaries have
renewed old animosities. The ideological affinities
that had shown promise under Torres of miti-
gating historic Bolivian-Chilean differences are
gone. Foreign Minister Gutierrez, an expert on
Bolivia's claim to a seacoast, has expressed a de-
sire for a positive dialogue with Chile, but he has
also reiterated Bolivia's unalterable demand for
sovereignty over an outlet to the Pacific. There is,
finally, a Bolivian belief that Cuban and Chilean
men and materiel have been involved in guerrilla
incidents that have occurred since late August.
While disarrayed and clearly on the defen-
sive, the extreme left is not destroyed. Many
student, labor, and political leaders are under
arrest or in exile, but some important figures
remain in hiding. Various groups are trying to
reactivate clandestinely, and maneuvering for the
leadership of an incipient leftist united front is
under way.
A major government pre-emptive offensive is
in progress against active and potential guerrillas.
The National Liberation Army (ELN) is the
primary target. It is a direct descendant of the
ill-fated revolutionary movement founded and led
by Che Guevara and has received support from
Cuba and from the Uruguayan Tupamaros. Gov-
ernment claims that foreigners are involved in the
latest guerrilla incidents and that Cubans and
other foreigners have been killed in clashes initi-
ated by army rangers remain unsubstantiated.
Since Guevara's death in 1967 the ELN has
operated only sporadically and has remained a
small, generally ineffective organization. Now,
however, it could benefit from a reservoir of
violence-prone potential recruits, alienated and
radicalized by their
The group's current ability to imple-
ment its plans is doubtful, but it will be anxious
to demonstrate its viability. Isolated but dramatic
acts of terrorism, which require only limited
resources, would serve this purpose.
Whether or not angry dissidents choose to
serve under the banner of the National Liberation
Army, they are potential perpetrators of violent
acts of opposition, and they will be sought after
by emerging centers of opposition activity. A
Revolutionary Resistance Front claiming to repre-
sent most other extreme leftist political groups
Special Report -14- 29 October 1971
 proclaimed its existence in late August, called for
a unified armed struggle, and denounced deposed
president Torres for betraying the people by send-
ing them to a useless slaughter. Nothing further
has been heard from this group. The relationship,
if any, between Bolivia's small Communist narties
and the so-called front is unclear.
Former president Torres believes that in
defeat the "popular forces" finally realized their
identity of interests with his government. Torres
considers himself the natural focus of a resistance
movement, and has vowed that his revolution will
eventually rise again to crush its enemies. The
former president, who entered Chile in mid-
October after his expulsion from Peru for en-
gaging in political activities, has stated his ad-
herence to a "patriotic anti-imperialist front of
national liberation," but whether he referred to a
specific organized group is unclear. One of his
loyal supporters, Major Ruben Sanchez, has lately
had kind words for Che Guevara and has called
for a guerrilla war against the Banzer government.
Sanchez plans a "long journey" that he says will
take him back to Bolivia. Still to be heard from
on the opposition scene are student leader Oscar
Eid, whose whereabouts are unknown, and labor
leader Juan Lechin, head of the now-defunct
popular assembly, who is currently in Venezuela.
The extreme left is under severe pressure.
Political groups are operating feebly if at all. The
opposition has a long way to go in overcoming its
ideological differences and establishing an effec-
tive unified command. But the conviction that
coordinated action is necessary appears to be
taking hold, and government repression will
stimulate further cooperation. If violent acts of
Former President
Juan Jose Torres
quer. "
tions and the will to con-
"I claim the role of last
fighter, and consider my-
self a staunch revolution-
ary with steadfast convic-
opposition are forthcoming, they will be used by
the government to justify intensified repressive
measures. Given the present climate of hatred, the
mutual desire for revenge, and the access of both
sides to weapons, there is real danger of another
vicious spiral of reciprocal violence.
Instability in Bolivia is the norm, continuity
the rare exception. In 146 years of independence,
the nation has changed its government on the
average of once every nine months. There is little
reason to believe that the recent revolt ushered in
a political millennium. The blood of the August
rebellion had hardly dried when political
machinations resumed.
On the other hand, the early departure of
the Popular Nationalist Front or the Banzer gov-
ernment is not a foregone conclusion. In Bolivia,
opportunism takes precedence over party and
principle, and the inherent incongruity of the
present front does not automatically disqualify it
from survival. The front can avoid disintegration
if the leaders of its components continue to find
the alliance in their own best interests, and the
components themselves remain intact.
President Banzer's fate is not necessarily tied
to that of the front. His political future hinges on
continued support from the armed forces. Banzer
has thus far concentrated on order and economic
Special Report - 15 - 29 October 1971
 progress, and it is doubtful that he has charted his ian presidents who are now considered national
course beyond these objectives. The President has heroes, but who also share the dubious distinction
announced his intention to follow in the foot- of having died violently while in, office.
steps of Busch, Villarroel, and Barrientos, Boliv-
Special Report - 16 - 29 October 1971