User:Calliopejen1/WIP/History of Bolivia (1920-1964)

The Republican Party and the Great Depression
The Liberal Party's long rule of Bolivia, one of the most stable periods in the country's history, ended when the Republicans seized the presidency in a bloodless coup in 1920. The advent of the Republican Party did not at first indicate any profound change in Bolivian politics. Fernando Díez de Medina, a Bolivian writer, commented on the change: "Twenty years of privilege for one group ends, and ten years of privilege for another begins." The 1920s, however, was also a period of political change. New parties emerged as the Republican Party split into several factions. One major opposing branch was led by Bautista Saavedra Mallea, who had the support of the urban middle class, and the other was led by the more conservative Daniel Salamanca Urey (1931-34). A number of minor political parties influenced by socialist or Marxist thought also emerged.

During Republican rule, the Bolivian economy underwent a profound change. Tin prices started to decline in the 1920s. After peaking in 1929, tin production declined dramatically as the Great Depression nearly destroyed the international tin market. This decline was also caused by the decrease in the tin content of ore and the end of new investment in the mines in Bolivia. As economic growth slowed, Republican presidents relied on foreign loans. Saavedra (1920-25) and Hernando Siles Reyes (1926-30) borrowed heavily in the United States to finance major development projects, despite opposition by Bolivian nationalists to the favorable terms for the lender. The so-called Nicolaus loan aroused national indignation because it gave the United States control over Bolivia's tax collections in return for a private banking loan of US$33 million.

During the 1920s, Bolivia faced growing social turmoil. Labor unrest, such as the miners' strike in Uncia in 1923, was brutally suppressed. But the unrest reached new heights of violence after the drastic reduction of the work force during the Great Depression. Indian peasants continued to rebel in the countryside, although they had been disarmed and their leaders had been executed after participating in the overthrow of the Conservative Party in 1899. Now, for the first time, the Indians found support for their cause among the elite. Gustavo Navarro, who took the name Tristan Marof, was Bolivia's most important Indianist. He saw in the Inca past the first successful socialism and the model to solve rural problems. As Indian uprisings continued during Liberal rule, Siles Reyes promised to improve their situation and organized the National Crusade in Favor of Indians.

The social legislation of the Republican governments was weak, however, because neither Saavedra nor Siles Reyes wanted to challenge the rosca (tin mining magnates' political representatives). Siles Reyes's four years of inconsistent rule and unfulfilled promises of radical changes frustrated workers and students. In 1930 he was overthrown when he tried to bypass the constitutional provision forbidding reelection by resigning in order to run again. A military junta ruled until March 1931, when Salamanca (1931-34) was elected as a coalition candidate.

Although he was an esteemed economist before taking office, Salamanca was unable to suppress social unrest and to solve the severe economic problems caused by the Great Depression. Criticism of his administration mounted in all sectors of Bolivian society. Initially reluctant to enter into an armed conflict with Paraguay, he nevertheless led Bolivia into war, a move supported by the military and traditional groups.

The Chaco War
The origin of the Chaco War was a border dispute between Bolivia and Paraguay over the Chaco. This vast area was largely undeveloped except for some minor oil discoveries by Standard Oil in Bolivia and Royal Dutch Shell in Paraguay. The Chaco, which Bolivia traditionally regarded as a province (Gran Chaco), became more significant to Bolivia after the latter lost its Pacific Ocean outlet to Chile. Bolivia hoped to gain access to the Atlantic Ocean with an oil pipeline across the Chaco to the Paraguay River. Despite mediation attempts by various countries, the increased number of border incidents led the military high commands of Bolivia and Paraguay to believe in the inevitability of war.

Salamanca used one of the border incidents to break diplomatic relations with Paraguay and increase Bolivia's military budget, even though the country had severe economic problems. Convinced that Bolivia's better-equipped, German-trained troops, which outnumbered the Paraguayan army, could win the war, Salamanca went to war in 1932.

The war raged for the next three years. The Bolivians were defeated in all major battles, and by the end of 1934 they had been driven back 482 kilometers from their original positions deep in the Chaco to the foothills of the Andes. Serious strategic errors, poor intelligence, and logistical problems in reaching the distant battle lines contributed to the losses. In addition, the morale of the Bolivian troops was low, and the highland Indians could not adapt to the extreme climate in the low-lying Chaco. Despite the high command's decision to end the war, Salamanca was determined to continue at all costs. In 1934, when he traveled to the Chaco to take command of the war, Salamanca was arrested by the high command and forced to resign. His vice-president, José Luis Tejada Sorzano, who was known to favor peace, was accepted as president (1934-36).

Salamanca's overthrow was a turning point in the Chaco War. The Paraguayan troops were stopped by new, more capable Bolivian officers, who fought closer to Bolivian supply lines. On June 14, 1935, a commission of neutral nations (Argentina, Brazil, Chile, Colombia, Peru, and the United States) declared an armistice; a definite settlement was finally reached in 1938. Bolivia lost the Chaco but retained the petroleum fields, which Paraguay had failed to reach. Both countries suffered heavy losses in the war. In Bolivia alone, an estimated 65,000 people were killed and 35,000 wounded or captured out of a population of just under 3 million.

The humiliating disaster of the Chaco War had a profound impact in Bolivia, where it was seen as dividing the history of the twentieth century. The traditional oligarchy was discredited because of its inept civilian and military leadership in the war. Unable to deal with growing criticism, its members blamed the loss of the war on the low potential of the Bolivians and saw the earlier pessimistic assessment in Alcides Arguedas's famous novel Pueblo Enfermo (A Sick People) confirmed.

After the war, a group of middle-class professionals, writers, and young officers questioned the traditional leadership. This group, which came to be known as the Chaco Generation, searched for new ways to deal with the nation's problems. It resented the service of the rosca on behalf of the tin-mining entrepreneurs and criticized Standard Oil, which had delivered oil to Paraguay clandestinely through Argentine intermediaries during the war. The Chaco Generation was convinced of the need for social change. Gustavo Navarro, now more radical than during the 1920s, raised the famous slogan "land to the Indians, mines to the state". The military, which came to power in 1936, tried to bring about change with popular support.

Radical military government
On May 17, 1936, Colonel David Toro Ruilova (1936-37) overthrew Tejada in a military coup. Because the officer corps wanted to avoid a civilian investigation of the military's wartime leadership, military backing for the coup came from all ranks. The main backers, however, were a group of younger officers who wanted to bring profound change to Bolivia. Toro, the leader of this group, hoped to reform the country from the top down. His program of "military socialism" included social and economic justice and government control over natural resources. He also planned to set up a corporate-style political system to replace the democratic system established in 1825.

Toro attempted to get civilian support with far-reaching social legislation and nominated a print worker as the first labor secretary in Bolivia. He also nationalized the holdings of Standard Oil without compensation and called for the convening of a constitutional congress that would include the traditional parties, as well as new reformist groups and the labor movement.

Toro was unable, however, to enlist lasting popular support. A group of more radical officers resented his reluctance to challenge the rosca, and they supported a coup by Colonel Germán Busch Becerra (1937-39) in 1937. A new constitution, promulgated in 1938, stressed the primacy of the common good over private property and favored government intervention in social and economic relations. It also legally recognized the Indian communities and included a labor code. In 1939 Busch challenged the interests of the mine owners for the first time by issuing a decree that would prevent the mining companies from removing capital from the country. None of his policies, however, resulted in significant popular and military support, and they completely alienated the conservative forces. Frustrated by his inability to bring about change, Busch committed suicide in 1939.

Despite the weakness of the Toro and Busch regimes, their policies had a profound impact on Bolivia. Reformist decrees raised expectations among the middle class, but when they failed to be implemented, they contributed to the growth of the left. The constitutional convention gave the new forces for the first time a nationwide platform and the possibility of forming alliances. The military socialist regimes also prompted the conservatives to join forces to stem the growth of the left.

The rise of new political groups
After a few months under the provisional presidency of General Carlos Quintanilla Quiroga (1939-40), the chief of staff during the Busch regime, the government changed hands again. General Enrique Peñaranda Castillo (1940-43) was elected president in the spring of 1940. Peñaranda's support came from the traditional parties, the Liberals, and the two wings of the Republicans, who had formed a concordancia to stem the growth of the movement toward reform.

The trend toward reform, however, could not be halted, and a number of new groups gained control of the Congress during Peñaranda's presidency. These groups, although very different in their ideological outlooks, agreed on the need to change the status quo. They included the Trotskyite Revolutionary Workers Party (Partido Obrero Revolucionario, POR), which had already been formed in 1934, as well as the Bolivian Socialist Falange (Falange Socialista Boliviana, FSB), founded in 1937 and patterned on the Spanish model. The Leftist Revolutionary Party (Partido de Izquierda Revolucionaria, PIR) was founded in 1940 by a coalition of radical Marxist groups.

The most important opposition to the concordancia came from the Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario, MNR). The first party with widespread support in Bolivian history, the MNR had a membership that included intellectuals and both white-collar and blue-collar workers. It was founded in 1941 by a small group of intellectual dissidents from the middle and upper classes and represented persons from a wide range of political persuasions who were united by their discontent with the status quo. Among its leaders were Víctor Paz Estenssoro, a professor of economics; Hernán Siles Zuazo, the son of former President Siles Reyes; and several influential writers. The party's program included nationalization of all of Bolivia's natural resources and far-reaching social reforms. Its anti-Semitic statements resulted not only in the imprisonment of MNR leaders but also in charges by the United States government that MNR was under the influence of Nazi fascism.

As the leader of the congressional opposition, the MNR denounced Peñaranda's close cooperation with the United States and was especially critical of his agreement to compensate Standard Oil for its nationalized holdings. The MNR members of the Congress also began an investigation of the massacre of striking miners and their families by government troops at one of the Patiño mines in Catavi in 1942. MNR influence with the miners increased when Paz Estenssoro led the congressional interrogation of government ministers.

The MNR had contacts with reformist military officers, who were organized in a secret military lodge named the Fatherland's Cause (Razón de Patria, Radepa). Radepa was founded in 1934 by Bolivian prisoners of war in Paraguay. It sought mass support, backed military intervention in politics, and hoped to prevent excessive foreign control over Bolivia's natural resources.

In December 1943, the Radepa-MNR alliance overthrew the Peñaranda regime. Major Gualberto Villarroel López (1943-46) became president, and three MNR members, including Paz Estenssoro, joined his cabinet. The MNR ministers resigned, however, when the United States refused recognition, repeating its charge of ties between the MNR and Nazi Germany. The ministers returned to their posts in 1944, after the party had won a majority in the election and the United States had recognized the government. Villarroel's government emphasized continuity with the reformist regimes of Toro and Busch. Paz Estenssoro, who served as minister of finance, hoped to get popular support with a budget that emphasized social spending over economic development. But the salary increase for miners did not bring about their consistent backing of the government and only managed to strengthen the ties between the MNR and miners.

The Villarroel government also tried for the first time to get the support of the campesinos. In 1945 it created the National Indigenous Congress to discuss the problems in the countryside and to improve the situation of the peasants. However, most of the social legislation, such as the abolition of the labor obligation of the campesinos to their landlords, was never put in effect.

Villarroel was overthrown in 1946. He had been unable to organize popular support and faced opposition from conservative groups and increasing political terrorism that included murders of the government's opponents. Rivalry between the MNR and the military in the governing coalition also contributed to his downfall. In 1946 mobs of students, teachers, and workers seized arms from the arsenal and moved to the presidential palace. They captured and shot Villarroel and suspended his body from a lamppost in the main square, while the army remained aloof in the barracks.

The sexenio (1946-52)
The six years preceding the 1952 Revolution are known as the sexenio. During this period, members of the Conservative Party tried to stem the growth of the left, but they ultimately failed because they could not halt the economic decline and control the growing social unrest. Enrique Hertzog Garaizabal (1947-49), who was elected president in 1947 after the interim rule of a provisional junta, formed a coalition cabinet that included not only the concordancia but also the PIR. He hoped to retain the backing of the Conservative Party forces by not increasing taxes, but he tried also to gain labor support, relying on the PIR to mobilize the workers.

The labor sector did not cooperate with the government, however, and the PIR became discredited because of its alliance with the conservative forces. In 1946 the workers endorsed the Thesis of Pulacayo, in which the miners called for permanent revolution and violent armed struggle for the working class. As the labor sector became more radical, the government resorted more and more to oppression, and confrontations increased. The dismissal of 7,000 miners and the brutal suppression of yet another uprising in Catavi in 1949 made any cooperation between the government and the workers impossible.

The MNR emerged as the dominant opposition group. Although most of its leaders, including Paz Estenssoro, were in exile in Argentina, the party continued to be represented in the Chamber of Deputies and the Senate. During the sexenio, the party, despite its predominantly middle-class background, repeatedly took the side of the workers and adopted their ideology. The MNR also came to support the defense of Indian rights, as violence in the countryside increased when the promises given at the National Indigenous Congress were not fulfilled.

The MNR's attempts to gain power during the sexenio were unsuccessful. Its 1949 coup attempt failed, although with the support of the workers and some military officers it succeeded in gaining control of most major cities except La Paz. The MNR's attempt to gain power by legal means in 1951 also failed. In the presidential election of May 1951, the MNR's Paz Estenssoro, who remained in exile in Argentina, ran for president and Siles Zuazo ran for vice president, both on a platform of nationalization and land reform. With the support of the POR and the newly formed Bolivian Communist Party (Partido Comunista de Bolivia, PCB), the MNR won with a clear plurality. The outgoing president, however, persuaded the military to step in and prevent the MNR from taking power. Mamerto Urriolagoitia Harriague (1949-51), who had succeeded the ailing Hertzog in 1949, backed a military junta under General Hugo Ballivián Rojas (1951-52). Under Ballivián, the government made a last futile attempt to suppress the growing unrest throughout the country.

By 1952 the Bolivian economy had deteriorated even further. The governments of the sexenio had been reluctant to increase taxes for the upper class and to reduce social spending, resulting in high inflation. The tin industry had stagnated since the Great Depression, despite short revivals during World War II. Ore content had declined, and the richer veins were depleted, increasing tin production costs; at the same time, tin prices on the international market fell. A disagreement with the United States over tin prices halted exports temporarily and caused a decline in income that further hurt the economy. The agricultural sector lacked capital, and food imports had increased, reaching 19 percent of total imports in 1950. Land was unequally distributed—92 percent of the cultivable land was held by estates of 1,000 hectares or more.

The social unrest that resulted from this economic decline increased during the last weeks before the 1952 Revolution, when a hunger march through La Paz attracted most sectors of society. The military was severely demoralized, and the high command called unsuccessfully for unity in the armed forces; many officers assigned themselves abroad, charged each other with coup attempts, or deserted.

By the beginning of 1952, the MNR again tried to gain power by force, plotting with General Antonio Seleme, the junta member in control of internal administration and the National Police (Policía Nacional). On April 9, the MNR launched the rebellion in La Paz by seizing arsenals and distributing arms to civilians. Armed miners marched on La Paz and blocked troops on their way to reinforce the city. After three days of fighting, the desertion of Seleme, and the loss of 600 lives, the army completely surrendered; Paz Estenssoro assumed the presidency on April 16, 1952.

Radical reforms
The "reluctant revolutionaries", as the leaders of the multiclass MNR were called by some, looked more to Mexico than to the Soviet Union for a model. But during the first year of Paz Estenssoro's presidency, the radical faction in the party, which had gained strength during the sexenio when the party embraced the workers and their ideology, forced the MNR leaders to act quickly. In July 1952, the government established universal suffrage, with neither literacy nor property requirements. In the first postrevolutionary elections in 1956, the population of eligible voters increased from approximately 200,000 to nearly 1 million. The government also moved quickly to control the armed forces, purging many officers associated with past Conservative Party regimes and drastically reducing the forces' size and budget. The government also closed the Military Academy (Colegio Militar) and required that officers take an oath to the MNR.

The government then began the process of nationalizing all mines of the t​hree great tin companies. First, it made the export and sale of all minerals a state monopoly to be administered by the state-owned Mining Bank of Bolivia (Banco Minero de Bolivia, Bamin). Then it set up the Mining Corporation of Bolivia (Corporación Minera de Bolivia, Comibol) as a semi-autonomous enterprise to run state-owned mines. On October 31, 1952, the government nationalized the three big tin companies, leaving the medium-sized mines untouched, and promising compensation. In this process, two-thirds of Bolivia's mining industry was turned over to Comibol.

A far-reaching agrarian reform was the final important step taken by the revolutionary government. In January 1953, the government established the Agrarian Reform Commission, using advisers from Mexico, and decreed the Agrarian Reform Law the following August. The law abolished forced labor and established a program of expropriation and distribution of the rural property of the traditional landlords to the Indian peasants. Only estates with low productivity were completely distributed. More productive small and medium-sized farms were allowed to keep part of their land and were encouraged to invest new capital to increase agricultural production. The Agrarian Reform Law also provided for compensation for landlords to be paid in the form of twenty-five-year government bonds. The amount of compensation was based on the value of the property declared for taxes.

During the first years of the revolution, miners wielded extraordinary influence within the government. In part, this influence was based on the miners' decisive role in the fighting of April 1952. In addition, however, armed militias of miners formed by the government to counterbalance the military had become a powerful force in their own right. Miners immediately organized the Bolivian Labor Federation (Central Obrera Boliviana, COB), which demanded radical change as well as participation in the government and benefits for its members. As a result, the government included three pro-COB ministers in the cabinet and accepted the demand for fuero sindical, the legally autonomous status that granted the COB semi-sovereign control over the workers of Bolivia. The MNR regime gave worker representatives veto power in all Comibol decisions and allowed for a co-government in mine administration. The government also established special stores for the miners, increased their salaries, and rehired fired workers.

The peasants also exerted a powerful influence. At first, the government was unable to control the occupation of land by the peasants. As a result, it could not enforce the provisions of the land reform decree to keep medium-sized productive estates intact. But the MNR eventually gained the support of the campesinos when the Ministry of Peasant Affairs was created and when peasants were organized into syndicates. Peasants were not only granted land but their militias also were given large supplies of arms. The peasants remained a powerful political force in Bolivia during all subsequent governments.

The unfinished revolution
Although these major steps were never reversed, observers have regarded the revolution as unfinished because it lost momentum after the first years. The divisions within the MNR seriously weakened its attempt to incorporate the support of the Indian peasants, the workers, and the middle class for the government. In 1952 the MNR was a broad coalition of groups with different interests. Juan Lechín Oquendo led the left wing of the party and had the support of the labor sector. Siles Zuazo represented the right wing and had the backing of the middle class. Paz Estenssoro was initially the neutral leader. Because the majority of the MNR elite wanted a moderate course and the left wing demanded radical change, the polarization increased and led eventually to the destruction of the MNR in 1964.

The country faced severe economic problems as a result of the changes enacted by the government. The nationalization of the mines had a negative effect on the economy. The mines of Comibol produced at a loss because of the lack of technical expertise and capital to modernize the aging plants and nearly depleted deposits of low-grade ore. Declining tin prices on the world market contributed to the economic problems in the mining sector. Nevertheless, workers in the management of Comibol increased salaries and the work force by nearly 50 percent.

The decline of agricultural production contributed to the rapidly deteriorating economy during the first years of the revolution. Although anarchy in the countryside was the main reason for the decrease in production, the peasants' inability to produce for a market economy and the lack of transport facilities contributed to the problem. The attempt to increase agricultural production by colonizing the less densely populated valleys was not successful at first. As a result, the food supply for the urban population decreased, and Bolivia had to import food.

High inflation, primarily caused by social spending, also hurt the economy. The value of the peso, Bolivia's former currency, fell from 60 to 12,000 to the United States dollar between 1952 and 1956, affecting primarily the urban middle class, which began to support the opposition.

The bankrupt economy increased the factionalism within the MNR. Whereas the left wing demanded more government control over the economy, the right wing hoped to solve the nation's problems with aid from the United States. The government had sought cooperation with the United States as early as 1953, a move that had given the United States influence over Bolivia's economy. Because of United States pressure, the Bolivian government promised to compensate the owners of nationalized tin mines and drew up a new petroleum code, which again allowed United States investments in Bolivian oil.

During the presidency of Siles Zuazo (1956-60 and 1982-85), who won the election with 84 percent of the vote, United States aid reached its highest level. In 1957 the United States subsidized more than 30 percent of the Bolivian government's central budget. Advised by the United States government and the International Monetary Fund (IMF), the Siles Zuazo regime then in power reduced inflation with a number of politically dangerous measures, such as the freezing of wages and the ending of the government-subsidized miners' stores.

Siles Zuazo's stabilization plan seriously damaged the coalition between the MNR and the COB. The COB called immediately for a general strike, which threatened to destroy an already disrupted economy; the strike was called off only after impassioned appeals by the president. But the conflict between the government and the miners' militias continued as the militias constantly challenged the government's authority. Siles Zuazo faced not only labor unrest in the mines but also discontent in the countryside, where peasant leaders were competing for power. In an effort to quell the unrest, he decided to rebuild the armed forces.

During the Siles Zuazo administration, the strength of the armed forces grew as a result of a new concern for professionalism and training, technical assistance from the United States, and an increase in the size and budget of the military. In addition, the military's role in containing unrest gave it increasing influence within the MNR government.

Although the stabilization plan and the strengthening of the armed forces were resented by Lechín's faction of the party, the first formal dissent came from Walter Guevara Arze and the MNR right wing. Guevara Arze, who had been foreign minister and then minister of government in the first Paz Estenssoro government, split from the MNR to form the Authentic Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario Auténtico, MNRA) in 1960, when his presidential hopes were destroyed by Paz Estenssoro's candidacy. Guevara Arze charged that the MNR had betrayed the revolution, and he posed a formidable opposition in the presidential election of 1960.

Conflicts within the MNR increased during Paz Estenssoro's second term (1960-64). Together with the United States and the Federal Republic of Germany (West Germany), Paz Estenssoro endorsed the "Triangular Plan", which called for a restructuring of the tin-mining industry. The plan demanded the end of the workers' control over Comibol operations, the firing of workers, and a reduction in their salaries and benefits; it was strongly opposed by the COB and Lechín's MNR faction.

In 1964 Paz Estenssoro decided to run again for president, using a revision of the 1961 Constitution that would allow for a consecutive term, and he forced his nomination at a party convention. Lechín, who had hoped to become the presidential candidate, broke away to form the National Leftist Revolutionary Party (Partido Revolucionario de la Izquierda Nacional, PRIN). With his support in the MNR dwindling and opposition from the labor sector mounting, Paz Estenssoro accepted General René Barrientos Ortuño as vice presidential candidate. Because most opposition groups abstained, Paz Estenssoro was reelected with the support of the military and the peasants. Paz Estenssoro had come to rely increasingly on the military, whose role as a peacekeeper had made it an arbiter in politics. But this support was to prove unreliable; the military was already planning to overthrow him. Moreover, rivalry among peasant groups often resulted in bloody feuds that further weakened the Paz Estenssoro government.

During its twelve-year rule, the MNR had failed to build a firm basis for democratic, civilian government. Increasing factionalism, open dissent, ideological differences, policy errors, and corruption weakened the party and made it impossible to establish an institutional framework for the reforms. Not even the peasants, who were the main beneficiaries of the revolution, consistently supported the MNR.