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94 Chapter 6 Bolivia under Banzer Hugo Banzer The reformist military governments of Ovando and Torres were swallowed by a coup perpetrated by a coalition of right-wing business interests coalescing around a U.S.-trained conservative military officer, General Hugo Banzer. He received financial support from the U.S. government, which was worried about Bolivia’s latest left-wing turn (Baird 2010). It was not the first time that Banzer, who came from a wealthy ranching family of German origin in Santa Cruz, had attempted to seize power. He had been vying for political position since first appointed minister of education under the regime of his personal friend, General Barrientos. In 1971, Banzer finally achieved his goal, with the support of the United States and the MNR’s chief architect, Víctor Paz Estenssoro, and installed the longestlasting regime Bolivia had experienced in more than a century. Banzer was a graduate of the U.S. military’s School of the Americas, and in his first year as president, he benefited from a substantial injection of U.S. military assistance. He also joined Operation Condor, which coordinated intelligence operations and repression among South American military dictatorships (Dinges 2004). State mine infrastructure continued to deteriorate for lack of investment in modernization and exploration as Banzer diverted resources to support the evergrowing patronage system that propped up his regime. He benefited from fortuitous circumstances: the rise in oil prices during the early 1970s boosted government revenues, in no small measure because petroleum production had surged after the 1969 nationalization of Gulf Oil’s holdings. Advantageous market conditions for hydrocarbons and tin, and an increase in cotton production in the east, combined with the small share of the post-1973 petrodollars Bolivia was able to borrow on international financial markets, permitted a reasonable rate of economic growth. But this prosperity rested on shaky foundations. As with other countries throughout Latin America, the infusion of borrowed petrodollars dramatically increased debt. Government-backed loans for agricultural modernization favored 95 Banzer’s family and friends: the export-oriented agricultural elites in the eastern lowlands near Santa Cruz. The majority of these borrowers, foreshadowing Mexico a decade later, defaulted. Some loans did actually finance agricultural projects but were never repaid, while others provided capital for Bolivia’s entry into the nascent coca/cocaine trade. Still other borrowers simply turned the loans around and deposited them directly in Miami banks (Dunkerley 1984). Banzer relied on the support of about 20 percent of the civilian population from the most conservative elements of the middle and upper classes. Mediumsized private mining companies continued to expand, emerging as the country’s most significant business group. Other influential interests were La Paz–based importers and manufacturers, who pushed an agenda of strictly controlled wages and lowered import duties on intermediate products, and eastern lowland elites based in Santa Cruz, with investments in agribusiness and independent gas and oil production. An increasingly powerful Santa Cruz Civic Committee demanded the retention of profits from the region’s growing oil and gas industry through vociferous demands for government decentralization. Public support for military regimes was highest between 1966 and 1974, when the dictatorships could count on campesino acquiescence in exchange for guarantees to land and education. But in 1974, General Banzer miscalculated and ordered troops outside Tolata, Cochabamba, to fire on a campesino protest over price hikes, killing more than 150 people. Campesinos abruptly shifted their loyalties to the opposition. The Tolata massacre consolidated an emerging indigenist movement in the highlands, under the leadership of the Aymara Katarista movement (named for the leader of the late-eighteenth-century rebellion, Tupaj Katari). Katarismo heralded a decisive break with the government-sponsored unions linked to the 1952 revolution’s modernizing project. In the face of over four hundred years of exclusion, early Katarismo promoted an indigenous nationalism that merged class consciousness with indigenous demands. It had enormous influence, propelling the founding of the national Confederation of Campesino Workers’ Unions of Bolivia (Confederación Sindical Única de Trabajadores Campesinos de Bolivia, or CSUTCB) in 1979. The CSUTCB joined the COB and steadily gained importance, playing a decisive role in restoring democracy in 1982, even though campesinos were prevented from assuming top COB leadership, always reserved for a miner. Banzer’s antileft crackdown was one of the most ruthless Bolivia has ever seen, and the “little general” from Santa Cruz was widely feared. He banned all left-wing parties, shut down the COB, and closed the universities. With the...

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