Letter to President Paz Estenssoro Concerning a Long-Range Program for the Development of Bolivia.

Excellency:

The Government of the United States has long had a deep concern for the welfare of the people of Bolivia; and a close friendship for your country. We believe it is essential to work with you in helping the Bolivian people satisfy their aspirations for a better life and for increased social justice. This means rapidly stimulating the growth of your economy in order to raise the standard of living of the Bolivian people.

To this end I recently sent a special economic mission to Bolivia to explore, with the Bolivian government, ways in which the United States and its free world allies could effectively aid the intensified development of Bolivia. That mission has returned, and on the basis of its reports we are prepared to take some immediate steps which have been in preparation for several weeks.

However, we must realize that these steps are just the beginning in the development of a long-range plan for the steady growth of the Bolivian economy. Bolivia is a country rich in resources, and in the skill and courage and determination of its people. As these riches are liberated and used to the benefit of the Bolivian people, we can help eliminate poverty from your land. This will require the combined efforts of the Bolivian government and people and the industrial nations of the West.

First, we commit ourselves to help in the long-range, systematic development of the Bolivian economy--looking on Bolivia as a full partner in the Alliance for Progress-working toward the day when all Bolivians can enjoy a higher standard of living and external assistance is no longer required.

Secondly, we will cooperate with the Bolivian National Planning Commission, the United Nations Advisory Group and the Inter-American Economic and Social Council to work together in developing a long-range program of economic development-and in preparing the necessary technical studies needed to implement this plan. Such a plan can be the guide to the contributions and loans of all resource supplying institutions.

Third, if you believe it will be helpful, I am prepared to send a special representative to assist in carrying forward the Program and especially to try to insure that United States assistance--from all sources--contributes effectively to the long-term development of the Bolivian economy. With your approval this representative can be dispatched in the very near future.

We are also willing to begin immediately on a series of projects important to the economic development of Bolivia. These are projects which are already in an advanced state of preparation and which will make an immediate contribution to national welfare. Other urgent projects--such as low-cost worker and campesino housing--can be undertaken as soon as planning and programming are complete.

Fourth, a loan agreement was signed with the Bolivian Government on March 24, providing $3.5 million to finance the purchase of urgently needed machinery and equipment to improve the operating efficiency of the state-owned mining enterprise, COMIBOL. This amount constitutes the United States contribution to the first phase of a "triangular" program for the rehabilitation of the Bolivian mining industry. The Federal Republic of Germany has also made a similar sum available for this purpose. It is expected that the Inter-American Development Bank will announce its contribution to the triangular agreement soon. The loan arrangements also provide for new geological explorations and research for improved recovery facilities under a management consultant contract with the expert West German firm of Salzgitter. Urgent discussions with the two latter partners in this operation are currently in progress to complete working arrangements for the first phase of this project and to consider the total investment eventually to be required.

Fifth, the YPFB has recently made application to Washington lending agencies for a loan to finance the import purchase of essential repair and replacement equipment urgently needed to restore oil production to former levels. In response to this request the International Cooperation Administration will extend an immediate loan for YPFB of $6 million for this purpose.

Sixth, the diversification of the Bolivian economy urgently requires the extension of its existing road network to open up new areas for settlement. I propose that steps be immediately taken to accelerate the use of counterpart over and above the Bs 16 billion now earmarked for road construction. In addition we will, as soon as plans are complete, loan $2 million to finance the equipment costs of this road program.

Seventh, pursuant to the objectives of our "Food for Peace" program, and in agreement with your Government, $1,350,000 of surplus agricultural products are being allocated for a school lunch and family relief program to be administered by voluntary relief agencies under PL 480 Title III. To cover the transportation and distribution costs incurred in this program, a sum of $500,000 is being made available from United States dollar funds.

Eighth, in addition, several other projects to be financed by counterpart funds have already been agreed on.

As a result of these special measures, existing programs, loans already committed to Bolivia by such agencies of the United States government as the Development Loan Fund (for the El Alto airport and the La Esperanza Sugar Mill, for example), and funds committed by the Federal Republic of Germany and such agencies as the Inter-American Development Bank, a total of some $50 million in free world assistance is pledged to Bolivia. The projects to be financed through this assistance are regarded by my Government as initial steps towards the realization of the longer-range program of economic development to which I have already referred.

With these steps I believe we can begin to help the Bolivian nation move toward its ultimate destiny as a strong and prosperous country. Bolivia has a vital role to play in the task of developing our hemisphere and in the preservation of the values of American civilization. This great revolution has blazed a path for others to follow. And I believe that if we work together the horizons of your people and mine will be unlimited--and that the next ten years will see the fulfillment of the hopes of the American people for economic progress with social justice.

My best personal good wishes,

JOHN F. KENNEDY

[His Excellency, Victor Paz Estenssoro, President of the Republic of Bolivia]