During the military populist governments of General Ovando and General Torres in the late 1960s, Bolivia initiated relations with the Soviet Union and East European countries. The first formal exchange of ambassadors with the Soviet Union took place in 1969 and continued into the late 1980s. Political relations with the Soviet Union were strained somewhat during the first years of the Banzer regime, but they improved quickly when the Kremlin promised aid for the construction of huge metallurgical plants, such as La Palca and Karachipampa. A paradoxical situation thus developed as the Soviet Union established extremely good relations with the right-wing military government.

With the advent of democracy in the early 1980s, relations with the Soviet Union continued to improve. The UDP government established greater commercial ties, and political relations reached their highest level since 1969. But the situation deteriorated somewhat following the discovery of anomalies in the construction of the huge metallurgical complexes of the 1970s. La Palca and Karachipampa became useless white elephants, but the Bolivian government still owed for the cost of their construction. In 1985 Bolivia requested that the plants be made functional and that the Soviet Union take responsibility for their poor construction. One of the major points in contention was the use of obsolete technology that rendered the plants too expensive to operate. The Soviet Union refused to take responsibility for any defects in the construction of the plants. Simultaneously, the Soviet Union was quite stringent in applying conditions for the repayment of Bolivia's debt. Bolivia requested that its debt with the Soviet Union be renegotiated along the lines of Paris Club agreements, but Moscow refused.

Cool relations with the Soviet Union were also attributed to Bolivia's continued refusal to grant landing rights to Aeroflot, the Soviet Union's national airline. Landing rights had been negotiated during the Siles Zuazo presidency. In 1985 the new Bolivian government had promised Moscow that Aeroflot would be allowed to land on Bolivian territory. In return, the Soviet Union agreed to grant 200 scholarships and 200 round-trip tickets for Bolivian students and US$200 million in aid. Nonetheless, the conservative daily El Diario led a campaign to deny landing rights to Aeroflot, and other airlines, including United Statesbased Eastern Airlines, joined in this effort. A report from the military's National Security Council claiming that Soviet spies and arms, rather than travel agents, would be sent to La Paz served to shelve a decision on this issue.

Custom Search

Source: U.S. Library of Congress