The High Cost of Revolution

Bolivians last week celebrated the first anniversary of the bloody revolution that brought to power the leftist-nationalist government of President Victor Paz Estenssoro. For five hours, partisans paraded through La Paz's zigzag streets, brandish ing the guns they seized in last year's fighting, shouting "Viva el Presidente !" and "Down with Imperialism!" A big banner draped on the presidential balcony proclaimed: "Economic Independence." A miners' contingent marched past with three dogs labeled "The Tin Barons"-- a slap at the three big tin firms nationalized during Paz Estenssoro's first year.

The President, fortified with a bottle of Coke, told 50,000 cheering workers and peasants at La Paz's Sport Stadium that his revolutionary program of reforms was just getting started. Next, he shouted, would come free elections (with women voting for the first time), land reform and the reorganization of Bolivian finances.

Considering the somber economic picture before him, these were brave words from the President. Though tin has been nationalized, the tin companies have not been compensated. Until U.S. shareholders are satisfactorily reimbursed, the U.S. is unwilling to sign a long-term contract for tin. The Bolivian economy, lopsidedly dependent on tin income, is near collapse. Unable to get permits to import raw materials, the textile industry has sharply curtailed production. Foodstuffs, normally imported, including wheat, meat, rice and sugar, are in critically short supply. Teachers are pressing for cost-of-living pay increases. The government has had to print more currency; since the revolution, the boliviano has dropped from 250 to 530 to the dollar.

Two months ago, Bolivians saw a ray of hope when the British signed a long-term contract for all the output of the Patino mines--about half Bolivia's production. And last week there were encouraging reports that the Patino interests were about ready to settle with government negotiators on the big question of compensation. Such a deal, reported to provide for payment of 5% of net sales into a fund from which the former owners would be reimbursed, could set the pattern for a settlement with all shareholders.

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