Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

79. Memorandum of Conversation¹

Santa Cruz, Bolivia, June 7, 1976, 8:30–10:30 a.m.

PARTICIPANTS

• The United States

  • The Secretary
  • Under [Assistant] Secretary Rogers
  • Under Secretary Maw
  • Ambassador Stedman
  • Luigi R. Einaudi, S/P—Notetaker
  • Anthony Hervas—Interpreter

• Bolivia

  • President Hugo Bánzer Suárez
  • Foreign Minister Adriazola
  • Ambassador Crespo
  • Interior Minister Pereda
  • 2 others

Bánzer: My English is Colonel’s English, not President’s English. I am sorry.

The climate today is not normal. This is a hot land, but you have been greeted by a cold south wind.

The Secretary: In the United States, a southwind means a warm wind.

Banzer: Yes. Here it is the opposite.

The Secretary: I have been very impressed by the foliage. It is very luxuriant.

You have been in the United States?

Banzer: Yes. I once spent 2½ years as Military Attaché in Washington. I also spent some time at Fort Knox.

The Secretary: I am very pleased to be here in Bolivia.

We think our relations are now quite satisfactory.

Banzer: Yes. Your Ambassador here is in constant touch with our Ministers. He knows our sentiments well.

The Secretary: I appreciate very much the opportunity to be here with you now and to underscore our interest.

Rogers: I met President Banzer in Lima in December 1974, at the meeting of Ayacucho where the Andean countries signed an agreement on arms limitation.

Banzer: Yes, some advance has been made on this point. But signatures on documents are not enough. We need to take more effective steps.

The Secretary: What do you have in mind?

Banzer: The solution of the landlocked status of Bolivia.

The Secretary: Am I right that Peru has announced that it is ready to discuss the outlet issue?

Banzer: A meeting has just taken place between Chile and Peru in Lima. They will meet again in Santiago at the end of the month. We hope that, once they reconcile their approaches, it will be possible to reach a solution.

The Secretary: We support Bolivia in its search for access to the sea. In Venezuela I spoke to President Perez about it. He agrees.

Banzer: We know this is a difficult matter. But we believe it is not an impossible one.

It is of vital importance to Bolivia.

It is vital because Bolivia’s geographic isolation makes Bolivia a very dependent country. This dependency in turn makes Bolivia underdeveloped, not only economically but emotionally as well.

The Secretary: What I have seen of Bolivia so far does not suggest that you are emotionally underdeveloped. And I take it that although we are closer here to the Atlantic, you are speaking of an outlet to the Pacific.

Banzer: Yes. Access to the sea from the Altiplano is very important to us, for many reasons.

The Secretary: If you get access, you will have to build the necessary infrastructure.

Banzer: There is already a road and rail communication from Bolivia to the Pacific. And there is a port as well. It is not, however, in the area we would receive under the Chilean proposal.

The Secretary: Arica would stay Chilean?

Banzer: Yes. We will have to build a separate port of our own, reach a trilateral agreement with Peru on the port, or conceivably even internationalize part of the city or the province itself.

The Secretary: Would Chile agree to that?

Banzer: We have not discussed that yet. But it would be convenient for Chile. If Bolivia were to build a separate port, Arica would suffer and perhaps even die. Ninety-five percent of the trade handled by Arica is Bolivian. As a practical matter, therefore, it would be advantageous for the Chileans to reach an agreement with us.

The Secretary: Have you decided what territory you would give Chile in exchange?

Banzer: No, not exactly. We are studying our frontiers now.

The Secretary: Is there much population in the territory you would get from Chile?

Banzer: No, very little. The lands are mountainous and desolate. They are empty and underdeveloped.

The Secretary: In sum, you would say the current negotiations depend now on Peru?

Banzer: It depends very much on their relations with Chile. But we believe that there is a very positive disposition in Peru to maintain good relations.

We must realize that only a few years ago Bolivia’s return to the Pacific was a dream. Now that our country knows it has great potential, to get to the Pacific has become a precondition for our development.

Let me give you a small example of the meaning of access. If a small farmer here in Santa Cruz needs an incubator, he will have to import it from the United States or Europe. It will be shipped to Arica. Then if a problem occurs at the pier or in storage, the Chilean Government has no interest in resolving it. It is not Chilean cargo. There is a delay. Then the rail line is in bad condition. Suppose there are difficulties. Again, the same thing happens. Chile has no inherent interest in speeding up the shipment.

The Secretary: But don’t you pay?

Banzer: Yes, but trains normally have problems. One day can become weeks. Our poultry man will encounter losses and delays; his delays delay our development day by day. People become discouraged by so many obstacles.

Adriazola: The losses in storage have sometimes run to $650,000 to $700,000 daily.

Banzer: But that is an economic issue. We believe access will have much greater impact by reducing tensions and even avoiding war. Because this has been a festering issue for nearly a century. In Peru generations have been dedicated to the idea of revenge. And the same happens in Chile, where the idea is to defend what they conquered in the War of the Pacific.

The Secretary: If Bolivia were between them, then war would be less likely.

Banzer: Exactly. The existence of a corridor would force the invaded country to align itself with the other. That fact would affect any planning for war and help to deter it.

Our basic objective is to contribute to peace and to develop the area in an integrated manner with Peru and Chile.

The Secretary: Would you get the railway?

Banzer: Yes. And we would immediately seek the resources to improve it and the road, and to construct an airport as well.

Also, our oil pipeline goes through the proposed corridor.

There is no other solution. Any other solution would force Chile to divide its territory.

The Secretary: But will Peru agree to the Chilean proposal?

Banzer: It is possible that they will say yes, but it is likely to be conditioned.

The Secretary: Such as—perhaps—water rights? Because I presume that Peru needs water for the desert areas on its coast.

Banzer: A solution would bring benefits to all three countries.

We are also concerned that without a practical, peaceful solution there could be other kinds of trouble. We are concerned, for example, that the Angolan experience might be repeated here.

The Secretary: Not a second time. We will not tolerate it. Cuba is permitted one military expedition a century.

I know there are problems. Nonetheless, I think that your discussions are useful. I spoke to de la Flor the last time I was in Lima. He said that they would study the issue with care. But I didn’t get the impression that he felt an urgent need to bring the negotiations to a rapid conclusion. Am I wrong?

Banzer: No, you are right. Chile’s attitude is better. Chile needs a solution to improve its image.

The Secretary: I, too, think that Chile wants a solution. In February, I did not believe that Peru had made up its mind.

Do you mind if I discuss this with de la Flor when I see him?

Banzer: No, not at all. But we are concerned that Peru might misinterpret your interest and react adversely. De la Flor is touchy. I don’t know how the two of you get along. I would not want him to take it as US pressure.

The Secretary: No, de la Flor is a friend. I will not pressure him. I will ask what his intentions are.

By accident, he was the first Foreign Minister that I met after becoming Secretary of State. It was at the United Nations. He followed me in speaking at the General Assembly. After hearing his speech, which was interminable, I met him and we talked. His rhetoric is worse than his performance.

Banzer: Obtaining an outlet to the sea is one of the essentials of our policy. We have not, as in the past, made it a partisan issue in domestic policy. It is simply a question of vital national interest.

The Secretary: You are clearly preparing for success by taking an active LOS role. Our delegates complain constantly at the activities of yours.

Maw: No, as a matter of fact, the Bolivians have always taken very positive and constructive positions.

The Secretary: Maw is our expert. He says your speeches are ferocious.

Banzer: I think one way to cooperate on this outlet question would be to strengthen cooperation aimed at increasing the general development of the region. Both McNamara and Ortiz Mena have discussed these issues with us and know them well. The World Bank and the IDB could play an essential role in cooperation for development of the region.

This is a strong argument for Peru also. The area Chile offers us, which borders Peru, is very poor. But so is the Peruvian territory contiguous to it. A pole of development would aid Peru as well.

A good policy for you would be to support the development of this area. I think that this is something that the United States could do without raising susceptibilities.

The Secretary: That we can do. It is relatively easy. I will speak to McNamara about it when I return to Washington. He is an old friend.

Banzer: He knows the problem well. He has visited our countries recently.

Even if we do not solve this problem, and obtain an outlet to the sea, we are sure the stability of Bolivia will not be effected.

But if we fail, our people would then know that our country would continue to be an underdeveloped country. They would be very let down. There would be profound internal resentment and some would seek revenge against those who refused to satisfy our needs.

We do not want arms. We want the development of our country. We want peace.

The Secretary: Do you think Peru will make a rapid decision?

Banzer: No. I repeat, there are generations in Peru raised with the idea of revenge. We have a similar problem here. Many Bolivians were educated with the idea of reconquest. But, facing the problem with realism, we can see that we are in no condition to think in terms of revenge. There are still some who do, however. We can convince them. We have the moral authority to do so. They know we are not doing this just to try to stay in power.

The Secretary: We sympathize. Many others in the hemisphere do as well.

Banzer: We have reactivated support not only here but elsewhere. It is a useful weapon. I have spoken to many Presidents. They are committed to our support.

The Secretary: What is Brazil’s position?

Banzer: Full support. Brazil put me and Pinochet in contact for the first time in Brasilia.

The Secretary: What do you think of Pinochet?

Banzer: He is a man of decision. He has problems. But he agrees with us on the outlet. As soldiers, we have committed ourselves and our honor to a solution. The problem is Peru. They have their reasons. Let us not forget that in 1879 Chile invaded Peru, occupied Lima for two years, and committed many moral outrages.

The Secretary: Yes, I know. But Peru has no quarrel with Bolivia. They cannot object to a corridor for Bolivia on the grounds that it would stop their possibilities of reconquest from Chile.

Banzer: If we could add a small port or international role for Peru to the corridor proposed by Chile, it would be a great monument to the will for peace.

We believe that in Peru’s emotions, the future can outweigh the past.

The Secretary: It should be tried. We will give you support in a delicate way, without arousing resentment.

Banzer: The outcome would favor all three countries. But no one dares to admit it publicly. Chile wants to defend its territory. Peru wants more but knows it cannot get it. Bolivia cannot make the announcement because we do not want to upset either one. But it is a good solution.

The Secretary: I will talk to Silveira tonight. What do you think?

Banzer: Brazil is interested. Through us, Brazil thinks that it can gain access to the Pacific. We see this very clearly.

I have some other points as well.

The Secretary: What do you think of Peru’s military buildup?

Banzer: Yes, they have constantly increased their military preparedness. They are preparing revenge. They have obtained much Soviet equipment.

The Secretary: Are they stronger than Chile?

Banzer: In equipment. But Chile has better soldiers.

The Secretary: Bolivia also.

Banzer: Yes. But we do not want to be involved. If there is a war, we would be involved because there is only 120 kilometers width of coast without entering our territory. One division may be able to operate there, but not an army corps. One country or the other would have to use our territory in case of a conflict. We would enter the war against the first that had violated our territory for then we would then not only be landlocked but violated as well.

The Secretary: You think war is possible?

Banzer: Yes, if the problem is not solved as we suggest. We have begun three-way peace talks between the armies. But we do not believe in documents. We need acts.

I think this is all we can say on this issue. The dynamics of our conversation have not enabled me to welcome you properly. Of course, I know the Foreign Minister did so already. I know he did so because I told him to. And I know he did so because I was there too last night—but as an ordinary citizen mingling in the crowd.

The Secretary: I am touched. I did not know you were there.

Banzer: Power is temporary, citizenship is permanent. As a Bolivian citizen, I did not want to miss the first arrival of an American Secretary of State on Bolivian soil. So, last night, I was there in the crowd, with my wife and children, to help receive you.

I would like you to have a clear understanding of who we are. This is a government of the Armed Forces. We call it such because the Armed Forces have the fundamental responsibility of government. But we have the support of civilians as well. There are only 40 officers in the government compared to thousands of civilians. This is not a pre-eminently military government.

We have clear goals. We seek national unity. Our geography conspires against unity. We have varied cultural origins. In the highlands, Quechua and Aymara, here in the lowlands, Guarani.

We seek the physical, cultural and spiritual integration of our country. And we have done much. Here in Santa Cruz, before, it was difficult for a man of the highlands to survive. Now they are doing much, they are the promoters of growth.

The Secretary: People from the highlands?

Banzer: Yes, the majority of the new settlers here are from there.

We want development because we have great potential. We now have 5½ million people in this country. We could support 50 million. We are rich in minerals. All forms of energy and raw materials abound.

This wealth has long been dormant, awaiting better opportunities. Now is the time to take advantage of it.

This development effort should be directed to help the human base, the peasantry. Then we will be a nation, not a collection of villages. And then we must return to the sea.

These are the objectives of the Bolivian people.

The Secretary: We followed your coming to office and your policies since with great interest. We want to help you as best we can.

Banzer: Thank you. We do recognize the cooperation we have been receiving from the United States, but we are bothered by delays. Too often, opportunities are lost because of delays.

There is a program worthy of mention in this connection. It is help for the Bolivian Government Agency for Community Development. It is directed primarily to and by the peasantry. We have succeeded in changing attitudes.

The US Government has helped, but we could use more help. We need permanent support in this regard.

The peasant must also work for his own development. Before, the peasant always asked for everything from the government: he wanted schools, water, everything to be provided to him by the government, without his contributing anything. Now, through this community development organization, the peasant contributes 1/2. The other the government provides, partly through its own funds, sometimes through external credits. This effort needs permanent support. There are similar programs, such as civic action of the Armed Forces, that work only with domestic resources.

Programs seeking these objectives are giving good results. The effort our government is investing in the future is to change permanently the attitudes of the peasants by offering them the means of improving their own lot through low-interest, long-term credits. These are now 50–50. In the future, we want them to take the major responsibility themselves.

The Secretary: What exactly can be done to help from the outside?

Banzer: Bolivia needs roads, dams, schools, hospitals. Technical cooperation is essential to improve crop yields. The United States Government, through its Embassy, has been in constant contact with our officials and our efforts. The Embassy works, but the results are slow.

Ambassador Stedman: We have two development loans to Bolivia now, from AID.

The Secretary: How long did they take to negotiate?

Stedman: The first loan took 18 months. The second . . .

The Secretary [To Banzer]: Our AID bureaucracy is composed of junior professors who could not reform the United States, so they are dedicated to reforming the rest of the world. And their conditions are endless.

Banzer: We believe that our development policies, with the support of private enterprise and others, can help us develop a great deal without social and political costs. The results go beyond what has been given.

We can see the results in the stability and peace here in Bolivia. We are something of an island of peace within South America. There are no kidnappings here. No crimes. Strikes last hours, not weeks.

The Secretary: So that is why you are called underdeveloped! In these days no country can be self-respecting without kidnappings and popular demonstrations.

Banzer: It could be that, in the past, our people were a bit intimidated. But we value politics. We have studied it. We will be developing a new political system by 1980. It will not be a traditional one. That gave bad results. We must find a new political formula that will not repeat the errors of the past. Then we will have fulfilled the responsibility of the Armed Forces. We will then be able to continue to help our country, but without assuming direct responsibility for the nation’s course.

This phenomenon is rather generalized. In our countries, the military are frequently obliged to assume power to rebuild the political situation.

The Secretary: I know that in Chile the military had never interfered before. When they did, it was because they thought they faced an extreme situation. We understand your problem.

Do you get political science lectures from our representatives?

Banzer: No.

Stedman: There are no junior professors here.

The Secretary: I remember what conditions were like in Bolivia when I first came to Washington. Things have improved.

I believe, sociologically, that the Armed Forces career is the one that is most open to talent. Is that so?

Banzer: Yes, that is very true. But there are some other characteristics of government that must also be kept in mind. We know we must respect human dignity and freedom of the press. Sometimes freedom becomes libertinage, but we know freedom must be respected.

The Secretary: If you lived in a city where the only morning newspaper was the Washington Post, I am not sure that you would be so favorable to freedom of the press.

Banzer: I know, I lived there.

The Secretary: They only write well about Rogers because he is a Democrat.

Banzer: I also wanted to explain that we seek to link economic to social development. As the standard of living improves, the chances of peace also improve.

In foreign affairs, we believe that the international community must resolve its differences. Rich and poor countries cannot coexist at peace for ever. The naked differences that exist now increase the danger of communism. We believe the industrialized countries should recognize the importance of better prices for raw materials. Current patterns create permanent tensions.

The Secretary: I agree with you. We have made a major effort in this regard. We have philosophical disagreements internally. Many of our people are instinctive ideological advocates of the free market. Yet we cannot reject internationally what every government accepts domestically. We favor stabilization of prices, but it is a slow process.

If I may make a point, not aimed particularly at Bolivia, because many were involved. The confrontation at Nairobi helped our internal enemies. It lead to a stupid two-vote margin which helped the enemies of cooperation for development. Bolivia abstained. Our friends must understand that we need help. We cannot allow an unholy alliance between radical LDCs and US conservatives to kill development.

Banzer: I would like to comment on the strategic tin stockpile. We believe it is adequate and that it should be maintained. But we do not believe it should be used as a strategic instrument to control prices. For us, it is hard to mine our mineral riches. Yet Bolivia is the only free world major tin producer. Any variation in price affects us greatly. And our ores are expensive to extract. Mining is the base of our economy.

I repeat, I have no objection to strategic stockpiles as such. But I do not believe they should be used to regulate prices.

The Secretary: We have no policy to regulate prices by manipulating strategic stockpiles. Nixon wanted to reduce the stockpiles. This was not aimed against Bolivia, of which he was an admirer. We have signed the Tin Agreement. I have made clear we do not want fluctuations, particularly downward. [Turns to Stedman] Is something being planned now?

Stedman: There is no authority . . .

Banzer: I hope you will not get new authority from Congress.

The Secretary: Has any been requested?

Stedman: Yes, but . . .

The Secretary: Who is the Chairman?

Stedman: Bennett.

Banzer: This would have a major impact on Bolivia.

The Secretary: They won’t have time. Fortunately, Congress has only 70 days left in this session, of which 40 will be spent studying the sexual exploits of their colleagues.

Banzer: That is why democracy sometimes doesn’t work.

In your UN speech you said technology should be part of the patrimony of humanity. We agree. Bolivia has a great need for technology. And yet we contribute scientific know-how to the rest of the world. For example, there are more than 1,000 Bolivian doctors in the US. In Chicago alone, there is a colony. We train them at $30,000 a head. We get no compensation when they leave. We hope more could be done on this front.

The Secretary: We agree. I discussed this very issue in Nairobi.

Banzer: On another point, in Nairobi, it was agreed that development assistance should go to the neediest. But the lowest level do not give returns. Bangladesh continues, does not resolve its problems. Money will not solve their problems.

I believe assistance should go to countries with high development potential. Bolivia has great food potential. That is the best help to give internationally. Assistance based on profitability. It is better to invest in productive areas and then to grant food so produced to those who cannot help themselves. We in Bolivia will be wheat exporters soon.

The Secretary: On the question of technical personnel and the brain drain, I have referred to this many times. I really don’t know how to solve it. We would be interested in your ideas. Do you have some proposals?

Your other point is interesting. Our attitude on foreign assistance is to give preference to countries in this hemisphere. Between Bolivia and Bangladesh, we would prefer to give more to Bolivia.

Banzer: I also have a point on the question of transnational corporations. Sometimes they disturb the morals of the people. They are not directly tied to governments, but their attitudes affect the relations of host countries with the countries where the transnationals are headquartered. Here in Bolivia, for example, Gulf is the United States. Popular opinion does not distinguish between Gulf and the US Government.

The Secretary: We do not object to measures to control transnationals. Your major problem is to decide at what point controls become so burdensome that the parent company no longer feels it is worthwhile to compete. In the United States we believe there is some legal obligation not to have expropriations without compensation. But we also believe the company should meet international standards, and we are prepared to consider formalizing them on questions of illegal conduct.

Banzer: Could be. But the companies should behave better.

The Secretary: We do not say that there should be no regulation, only that it should not discriminate against the companies.

Banzer: Let us now turn to the drug issue.

The Secretary: Yes, I was going to raise it.

Banzer: We know Bolivia produces coca leaf that is in turn used to produce cocaine. We would honestly like to cooperate to neutralize the damage so caused. We have a narcotics control law. We are implementing the law. But we have few resources.

To be effective, we have drawn up a plan. We must first attack production (and here we have a substitution program, but coca is very profitable, and we must find alternative incentives). Second, we must control the elaboration (but this is something that requires substantial means, such as helicopters, etc.) Cocaine can be manufactured anywhere. It is easy to make.

The Secretary: You will not find it with helicopters, if it is being produced in a private home.

Banzer [Nods]: Then, thirdly, we must control sales and marketing. For this we need specialized and well-paid personnel.

The Secretary: What do you need specifically to implement your program?

Stedman: They have presented us a $50 million program over five years.

The Secretary [To Banzer]: Our bureaucracy is torn by conflicting emotions. They want to do something, but they don’t want me to do it.

[Turns to Rogers] This has been going on long enough. I want to know from Vance exactly what he did in Colombia. I want a full report on the situation in Bolivia, Colombia and Mexico. And I want to know, not what our people think they can get, nor what they think they can negotiate. I want to know what our people think they need, not what they can get from OMB.

[To Banzer] We will get in touch with you in a month.

Banzer: We believe that $290 million worth of cocaine goes annually to the United States, causing death and other problems. We should be in a position to do something.

Rogers: It would certainly help our balance of payments.

Banzer: We want to help you. We do not have the resources to do all we want.

The Secretary [To Rogers]: I want an answer by opening of business on Monday. Have Vance send the answer to me through Eagleburger.

[Turns to Banzer] We will be in touch within a month with our preliminary ideas.

Banzer: I would like to send my greetings through you also to President Ford and to the American people and my special congratulations on your bicentennial.

The Secretary: I would like to thank you also, in the name of President Ford. This has been a very useful conversation. We will do our utmost to respond positively.

Banzer: I agree. I think it is possible that we have saved tons of paper and years of negotiations.

The Secretary: I believe anything can be solved in two hours. The problem is to terrorize the bureaucracy so that it will find the two hours.

1. Summary: Assistant Secretary Rogers, Ambassador Stedman, Secretary Kissinger, and President Banzer held a wide-ranging discussion of U.S.-Bolivian relations.

   Source: National Archives, RG 59, Central Foreign Policy File, P820118–1270. Secret; Nodis. Drafted by Einaudi on January 18, 1977, and approved in S on March 7, 1977. Brackets in the discussion are in the original. The meeting was held in President Banzer’s home. Kissinger visited Latin America from June 6 to June 13. In a May 26 memorandum, Rogers briefed Kissinger for his meeting with Banzer. (Ibid., ARA/AND Files, Records Relating to Bolivia, 1976–1978: Lot 78D46, POL 7, Kissinger Visit) In telegram 4516 from La Paz, June 9, the Embassy sent a summary of Banzer’s narcotics action plan to the Department. (Ibid., Central Foreign Policy File, D760221–0079) On June 17, Kissinger approved a request that he recommend Presidential approval for a $45 million coca substitution program in Bolivia. (Memorandum from Vance and Luers to Kissinger, June 11; ibid., P760117–1018)