EARLY last April the thin air of La Paz, 12,000 feet above sea level, crackled with gunfnre, and the latest Bolivian revolution got under way. After a few days the government forces admitted defeat. Between 1,000 and 3,000 persons had been killed in the bloodiest clash in recent Bolivian history. Soon Victor Paz Estenssoro, leader of the National Revolutionary Movement (M. N. R.), returned from six years of exile and assumed the Presidency.
Almost his first official act was the announcement that he would appoint a commission to prepare for nationalization of the tin mines owned by the Patiño, Hochschild, and Aramayo groups, the “Big Three.” Attention was thus focused at once on the question of tin, which is in fact the key to recent developments in Bolivia.
When the modern state of Bolivia was created by the men who liberated the region from Spanish rule, an ethnic and economic unity which had existed for centuries was broken up. This initiated a long decline, with the result that the area which had led the continent in civilization, population, and wealth became one of the most backward. The decline was sharply accelerated when the weakened country was deprived of its seacoast by Chile. Today 85 per cent of the population of 3,500,000 is engaged in subsistence farming, follows the old customs, and speaks only the ancient tongues, Aymara and Quechua. Most of the rest of the people live, directly or indirectly, from the export of tin ores. The subsistence agriculture does not suffice to feed the cities, which must import necessities with the proceeds from the sale of tin.
The educated Bolivian, aware of his country’s former greatness and present backwardness, has developed a proud and hostile nationalism. The disastrous Chaco war against Paraguay in the thirties intensified this feeling and made possible the brief but spectacular career of President Germán Busch. Busch’s militant nationalism antagonized the outside world but made him a hero in Bolivia.
The M. N. R. clearly derives its strength from the nationalistic tradition. It aspires to be the party of the Indian and the voice of the submerged 85 per cent, whom it proposes to educate away from their centuries-long habit of scratching the soil for a bare livelihood and set to work to tap the virtually untouched natural resources of the country. In order to get the funds for this program and to free the people from the political domination of the tin interests, it intends to nationalize the tin mines. It is suspicious of anything that smacks of foreign interference but will welcome the aid of foreign capital and know-how.
Observers outside Bolivia have fallen into the error of assuming that the M. N. R. is unique in its nationalism, its social planning, and its hostility to the tin interests. Actually these attitudes are claimed by all the parties, being essential to political success in Bolivia today. The M. N. R., not unnaturally, has welcomed and perpetuated the delusion that the opposition has other aims; the opposition has done nothing to correct the error abroad but has stubbornly attacked it at home.
The M. N. R. carries on a continuous campaign against the “Rosca”–that is, the coalition of “vested interests”–which supposedly consists of the hirelings of the tin interests and the feudal landholders. Probably the Rosca, or a reasonable facsimile of it, once existed, but events of recent years show that it is either dead or impotent. Moreover, a box score of laws directed against the tin interests would show that such legislation is passed whether the M. N. R. is in power or not. The most that can be said for the M. N. R. is that it is the only party with an unequivocal program and the only one which has succeeded in becoming identified with that program.
The M. N. R. participated in the coalition government of President Gualberto Villarroel, which was established in December, 1934, by a military coup, and Paz Estenssoro served as Minister of Finance. Despite growing differences between the military and the M. N. R., the government remained in power until July, 1946, when a teachers’ strike for higher wages led to street riots which developed, apparently spontaneously, into a revolution. The violence culminated in the hanging and mutilation of President Villarroel by a mob and the escape of Paz Estenssoro and others into exile.
Disillusioned by the outcome of their advent to power by the easy but treacherous road of alliance with the army, the M. N. R. leaders now started a vigorous campaign of political education. This was a new and truly revolutionary idea, for traditionally elections served merely to indorse the party in the saddle, and power changed hands only by military coup. The effort bore fruit in the presidential election of May, 1951. Campaigning from exile, Paz Estenssoro received 45 per cent of the total vote of 120,000, a clear plurality, (The smallness of the vote is explained by the high rate of illiteracy and the lack of woman suffrage.) Since no candidate gained a majority, the President was supposed to be chosen by the new Congress from among the three candidates in the lead, and it was a foregone conclusion that Paz Estenssoro would win. But a military junta headed by General Hugo Ballivián deposed the incumbent President Urriolagoitia without firing a shot, and the new Congress never met. Far from denouncing this violation of constitutional procedure, President Urriolagoitia gave the coup his blessing and said that it was “maintaining democratic traditions.” The revolution which swept Paz Estenssoro into power in April was the natural reaction.
The Villarroel government had passed various measures to ameliorate the lot of peasant and worker. It had not moved to nationalize the tin mines because the uninterrupted production of tin was of critical importance to the United States. (With Malaya and Indonesia in Japanese hands Bolivia was practically our sole source of ore.) Apart from all other considerations, including Bolivia’s obligation to cooperate in the war effort, it was clear that the United States would not stand idly by while nationalization was attempted, Today the United States has a stockpile of tin and is purchasing freely in Malaya and Indonesia. Virtually no tin has been shipped from Bolivia in almost a year, partly because of difficulties imposed by the Urriolagoitia government in efforts to curry favor with the voters, and partly because of a deadlock in price negotiation with the Reconstruction Finance Corporation; the R. F. C. has offered approximately $1.18 per pound; the Bolivians insist they must get about $1.50, because of increased costs.
On the domestic front the M. N. R. is in a firm position at this moment. It is no longer, as it was in 1943-46, the junior member of a coalition government. The conditions for nationalization are therefore as auspicious now as they are likely to be in the foreseeable future. Several considerations, however, favor a go-slow policy. The M. N. R. could consolidate its present position by renewing the export of tin and thus bringing back prosperity, but it could scarcely do this if it attempted the total reorganization of the industry. The operation of tin mines requires technical know-how, and the present operators could withdraw the technicians. Moreover, the operators–particularly the Patiño group, which also has extensive holdings in the Far East–can freeze Bolivia out of the world market simply by keeping the price below the break-even point for Bolivia. Bolivian production costs are high because Bolivian ores must be mined, whereas the ores in Malaya and Indonesia are found in alluvial deposits and are recovered much more readily. Before the Second World War, the tin cartel set production quotas and fixed the price high enough to keep Bolivia in the market and give very handsome profits to the low-cost producers in the Far East.
With this situation in mind, the commission on nationalization will undoubtedly make an effort to reach an amicable agreement with the Big Three mine owners. Presumably such an agreement, while based on formal nationalization, would include compensation for the owners and some arrangement by which they would act as stewards of the mines and keep the technical management in their hands. Whether a satisfactory formula can be devised depends in large measure on the mine owners. They will find Pax Estenssoro forthright, firm, and reasonable. The forty-four-year-old economist sizes up a situation rapidly and communicates his decision directly. Unlike most Latin American politicians, he does not say “yes” just to be polite when the “yes” may mean anything from yes to maybe to no. He can change his mind when the facts warrant, but he does not change with every shift of the wind.
The mine owners are aware that no important political faction in Bolivia is really friendly to them. The utmost they could hope to get from any anti-M. N. R. group would be a slower pace of change; the political realities of the country are such that they cannot expect a reversal of the direction of change. If they consent to deal with the M. N. R. they will at least have the advantage of dealing with principals. The M. N. R. is the only organization which has sufficient popular backing to make concessions and then win their acceptance by the country. If the owners can reconcile themselves to the idea that ultimate nationalization is inevitable, and negotiate to salvage what they can, they may accomplish a good deal. They have some strong bargaining points.
In trying to free the Indian from the shackles of ignorance and apathy the M. N. R. will have a long, hard road to follow. Its moral position is weakened by the fact that it has not scrupled to play the game of power politics when occasion offered. But it does appear that a grass-roots movement has started in Bolivia which may ultimately prove more important than the ups and downs of any one party. Bolivia may at long last be on the road to progress and enlightenment; it may yet catch up with the twentieth century.