Solvency & Self-Respect

Bolivian tin miners are tough and violent men. Last month a gang of miners with a vague and perhaps imaginary grievance dragged a member of the legislature from his house, strapped a stick of dynamite to his body, and blasted him to bits. When his pregnant wife came running out of the house waving a white handkerchief, a miner shot her to death.

In view of the miners' propensity for violence, a lot of Bolivians expected trouble when, on Aug. 1, the government-owned tin corporation, Comibol, put into effect an announced plan to cut the work force at the Catavi tin mines by 30%, effective Sept. 1. Members of the Red-riddled Miners Union muttered threats of violence and a nationwide general strike. But by last week's end, to the nation's surprise and relief, no serious trouble had erupted.

Operation Triangular. Bolivia's President Victor Paz Estenssoro may have been less surprised than many of his countrymen. He is a cautious man who refrains from making important moves until he feels sure the odds are with him.

Paz Estenssoro's goal is to make the tin mines profitable again by modernizing equipment and de-featherbedding payrolls. If he succeeds, that will be an important victory for him and for Bolivia. Before Bolivia's 1952 revolution, led by Paz Estenssoro, the tin mines produced the ore equivalent of about 30,000 tons of tin a year, accounted for the greater part of the nation's foreign exchange. Within a few years after the triumphant revolution nationalized the mines, production and efficiency sank to the point where the mines ceased to be profitable. In recent years, they have produced only about 17,000 tons of tin a year, have operated at an average an nual deficit of $8,500,000.

During the Eisenhower years, the U.S. channeled most of its economic aid to Bolivia into agricultural development because the Administration was reluctant to aid nationalized mines, and wanted to see the Bolivian economy diversified. Under the Kennedy Administration, the policy of no aid to tin mining has been abandoned. U.S. Ambassador Ben Stephansky persuaded President Paz to adopt a program calling for a 65% increase in Bolivian tin production by 1967. To obtain funds for modernizing the mines, Comibol entered into a three-cornered aid pact, called "Operation Triangular," with the U.S., the Inter-American Development Bank and West Germany. In return for $38 million in aid, Comibol undertook to operate its mines more efficiently and to drop 6,000 men from its 26,000-man work force.

Point of Definition. Catavi, the country's largest single tin-mine complex, seemed a good place to start. It accounted for 30% of Comibol's operating losses, and half of its 7,000 employees were superfluous. "Be firm, don't weaken," Paz Estenssoro said to Comibol's President Guillermo Bedregal.

Bedregal has no intention of weakening. He is bent upon renovation of the tin mines as an essential step to ward restoring national solvency and self-respect. "We are facing a point of definition in this country," he says. "This is absolutely the most important development since the revolution."

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