Colonel Hugo Banzer (1971-78), a highly respected officer who had repeatedly attempted to overthrow the Torres regime, ruled for six years, the longest continuous presidential term in recent Bolivian history. Banzer's presidency was characterized by relative political stability and unprecedented economic growth. At first he was supported by the Nationalist Popular Front (Frente Popular Nacionalista--FPN), an alliance between the MNR under Paz Estenssoro, who was allowed to return from exile in Lima, and the FSB under Mario Gutiérrez. Both parties had been enemies until the chaos of the Torres regime gave them a chance for a political comeback in league with conservative elements in the armed forces.

During the first years of the Banzer presidency, the economy improved rapidly. Exports tripled between 1970 and 1974 because of increased production of petroleum, natural gas, and tin, which was then refined in Bolivian smelters. The production of cotton in the Santa Cruz area in eastern Bolivia also tripled between 1970 and 1975.

Despite this economic growth, Bolivia reverted to the repression of earlier regimes. The new minister of interior, Colonel Andrés Sélich, ordered a massive crackdown on the left, abolishing labor unions and closing the universities. The government brutally suppressed a general strike against the devaluation of the Bolivian peso in 1972. In 1974 price increases for basic goods and control of food prices resulted in roadblocks by peasants in the Cochabamba Valley and their subsequent massacre by the military.

The governing alliance disintegrated almost immediately when the MNR and the FSB split. They proved an unreliable support for Banzer because only small factions remained in the FPN. The armed forces were also divided, and various factions tried to overthrow the regime. On June 5, 1974, younger officers belonging to the Generational Group (Grupo Generacional) and led by General Gary Prado Salmón attempted a coup, demanding that Banzer legitimize his rule. It failed, however, as did another on November 7 that was supported by military, MNR, and FSB elements in Santa Cruz.

The November 7, 1974, coup has been called an auto-golpe (selfmade coup) because it gave Banzer a reason to rule without civilian interference. Influenced by the Brazilian model, he announced the complete reorganization of the Bolivian political system and the formation of a "new Bolivia" under military rule. Banzer hoped to keep the support of the business community, the mine owners, the agricultural entrepreneurs in Santa Cruz, and the growing number of loyal bureaucrats.

The government, however, soon began to face serious problems. The "economic miracle" turned out to be a myth, the production of petroleum declined sharply, and Comibol produced at a loss, despite high mineral prices, because it was subsidizing other state agencies. Cotton production also declined when world prices fell.

The stability of the Banzer regime was superficial because the military remained divided by personal rivalry, ideological differences, and a generational gap. Growing civilian opposition was centered in the labor sector, despite the renewed military occupation of the mines. Radical students and the progressive sector of the Roman Catholic Church became spokespersons for the oppressed groups; the peasants also criticized the government.

External factions contributed to the weakening of the Banzer regime as well. The negotiation with Chile for an outlet to the sea had raised hopes in 1974. When an agreement between Banzer and General Augusto Pinochet Ugarte failed because of the opposition of Chilean nationalists, Banzer's position was weakened. After Jimmy Carter assumed the United States presidency in 1976, the United States pressured Banzer to hold elections.

In 1977, with opposition from civilian groups and the military mounting and pressure from the United States increasing, Banzer announced a presidential election for 1980, hoping to remain in control, but labor unrest and hostility to his regime forced him to set the date for 1978. However, General Juan Pereda Asbún, Banzer's handpicked candidate, carried out a coup in July 1978 after the National Electoral Court annulled the elections because of widespread fraud by Pereda's supporters. Although Bolivia continued under military rule, the 1978 election marked the beginning of Bolivia's traumatic transition to democracy during the following four years.

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Source: U.S. Library of Congress