THE BOLIVIAN-CHILEAN DISPUTE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004100020005-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 19, 2016
• Sequence Number: 5
• Content Type: REPORT

OCI No. 0285/63D
Copy No. 78
SPECIAL REPORT
elease 2006/08/30: CIA-RDP79-00927AO04100020005-2
V 1440
OFFICE OF CURRENT INTELLIGENCE
THE BOLIVIAN-CHILEAN DISPUTE
CENTRAL INTELLIGENCE AGENCY
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GROUP I Excluded from automatic
downgrading and declassification
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A long-standing dispute between Bolivia and
Chile over Bolivia's aspirations for access to the
sea and over Chile's diversion of Rio Lauca waters
has grown in intensity in recent weeks. A climax
of sorts was reached on 12 June when La Paz announced
it was withdrawing its representative from the OAS
Council in protest against actions by the council
chairman, who was attempting to mediate the dispute.
At present, with elections scheduled in both coun-
tries next year, neither side can afford a mean-
ingful compromise, so no solution is likely in the
near future.
Background for the Dispute
quest for its own outlet
to the sea nevertheless
continued to be an issue
between the two coun-
tries.
Bolivia and Chile have had
boundary problems since the late
19th century when Bolivia lost
its seacoast and a valuable
nitrate-producing area to Chile
in the War of the Pacific (1879-
1884). A treaty signed in 1904
obligated Bolivia to acknowledge
transfer of its seacoast to
Chile. In return, Chile granted
Bolivia the duty-free use of the
ports of Antofagasta and Arica
and of the railroads connecting
these ports to La Paz. Bolivia's
This issue now has become
intertwined with a Bolivian
protest against a Chilean plan
to divert waters of the Rio
Lauca for an irrigation project
in the Azapa Valley. The river
rises in Chile and empties into
the salty basin of Bolivia's
Lake Coipasa. Bolivia has
Lauca River - Azapa Valley Project
Lake
Arica
PAC'IFIC')
PACIFIC
OCEAN
Tocopilla
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charged that Chile's utiliza-
tion of the waters of this com-
mon river constitutes an act
of "geographic aggression" and
is demanding as compensation
an outlet to the sea.
Chile announced its Rio
Lauca plans in 1939, held the
project in abeyance during
World War II, and began con-
struction in 1948. The Boliv-
ian Government was kept informed
of progress but made no protest
until the installation was first
tested in November 1961. The
Chilean foreign minister's reply
stated that Chile considered it
had the Bolivians' tacit approval
in view of their failure to reg-
ister a protest in the 23 years
they had known of the project,
and that Chile was using less
than 50 percent of the river's
water.
The Rio Lauca project will
be of major economic benefit to
Chile. The water will be used
for producing hydroelectric
power as well as for irrigation
in the Azapa Valley. The power
generated will be transmitted
as far as the port city of Arica.
Bolivia, on the other hand, has
no plans for utilizing the
river's waters.
Prior to April 1962,
Bolivian-Chilean negotiations
proceeded through normal dip-
lomatic channels. In March
1962, Chile announced its in-
tention to divert the Lauca
waters as soon as the project
was completed. On 13 April,
Bolivia threatened to take
the dispute to the OAS unless
Chile canceled its plans.
The next day, however, Chile
began diverting the Lauca
waters, and on 16 April several
thousand students and workers
protested by attacking the
Chilean Embassy in La Paz
with stones and "Molotov cock-
tails." The rioters managed
to burn the Chilean flag be-
fore being repelled with tear
gas by the local security forces.
Bolivia severed diplomatic
relations and demanded that the
OAS brand Chile as an "aggres-
sor" under Article 6 of the
Rio Treaty of 1947. The OAS
refused to act upon the Boliv-
ian request, and in May it
returned the issue to the
disputants and urged them to
negotiate a peaceful settle-
ment. Gonzalo Facia, chairman
of the council of the OAS,
offered his services as media-
tor. Negotiations have proceeded
haltingly since May 1962.
Last September Bolivia withdrew
from OAS Council activities
in protest against an alleged
lack of OAS action on the
Lauca problem, but resumed its
seat during the Cuban crisis.
Current Developments
Public feeling in both
Chile and Bolivia has been
heightened recently by Bolivia's
national celebration of a "Week
to the Sea" from 16 to 23 March,
its use of a postage stamp on
all mail to Chile bearing a
similar slogan, Chile's repres-
sive tactics against a Chilean
radio station which broadcast
a pro-Bolivian news program,
and other mutually harassing acts.
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Meanwhile, Facio's efforts
in the OAS have been hampered
by Bolivia's endeavors to link
the Rio Lauca controversy with
its access-to-the-sea aspira-
tions. The problem is compli-
cated by the fact that his de-
sire to separate the two issues
coincides with the position of
the Chilean Foreign Ministry.
Early last week a Bolivian
note implying criticism of Fa-
cio's mediation role was inad-
vertently circulated to the
members of the OAS Council
while Facio was out of Washing-
ton. Facio, reportedly greatly
offended, made it known that
he was ending his mediation
endeavors. Bolivian Foreign
Minister Fellman then announced
that his country was withdrawing
front the OAS because of that
body's "incompetence." He
later clarified this by saying
Bolivia was withdrawing only
from the Council of the OAS.
The full ramifications
of Bolivia's decision are still
not clear. Its OAS representa-
tive and ambassador to the US
are both urging the Foreign
Ministry to reconsider. it
seems likely that the withdrawal
will hamper rather than help
Bolivia in its efforts to seek
diplomatic support from other
Latin American governments.
Bolivia may, however, be plan-
ning to bypass the OAS and sub-
mit the Rio Lauca and sea-access
issues to the UN when the Gen-
eral Assembly convenes in Sep-
140
tember. Possibly in an effort
to line up support in that body,
La Paz has been extending its
diplomatic relations to include
several key Afro-Asian countries.
Unless Bolivia becomes con-
vinced that its withdrawal from
the OAS Council has definitely
worked against its best interests,
it is not likely to resume nor-
mal diplomatic representation
at the OAS until the election
of a new council chairman in
November.
In spite of the current
bad feeling, Bolivia probably
would be content to resume nor-
mal diplomatic relations with
Chile if Santiago would agree
to keep the door open for a
possible agreement on freer
Bolivian sea access. The Bo-
livian Foreign Ministry evi-
dently is banking on a Chilean
memorandum of 10 July 1961,
which stated that Chile always
has been prepared to discuss
the possibility of giving Bo-
livia some form of sea access
in return for some kind of
nonterritorial compensation.
However, the dispute now
is further complicated by the
fact that the issues involved
have become matters of national
pride and by the national elec-
tions scheduled for next year in
both countries. In Bolivia,
President Paz Estenssoro prob-
ably would be heavily attacked
from the political right and
left should he agree to an
accommodation which was less
than favorable to Bolivia.
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Outlook
Thus, it is unlikely that
a satisfactory solution to the
dual Bolivian-Chilean problem
will be found until after the
elections. It is equally un-
likely that Chile in the mean-
time will make the concession
Bolivia wants in order even
to resume diplomatic relations.
During the past six months
Bolivia has been sending de-
marches to the other hemisphere
governments seeking their sup-
port, and it is possible that
continued Bolivian pressures
will bring results. The combi-
nation of increased hemisphere
diplomatic pressure and the
strong desire on Chile's part
for nonterritorial concessions--
such as increased water rights--
might result in a future agree-
ment with Bolivia which could
lead to a modification of its
land-locked status.
Such a quid Aro auo might
result in a Chilean offer to
Bolivia of an expanded port
enclave and more extensive
rail facilities from La Paz
to the sea. On the other hand,
Bolivia probably would consider
exclusive use of the seemingly
abandoned port of Mejillones
between the Chilean ports of
Antofagasta and Tocopilla
as adequate compensation.
There is no reason to believe,
however, that Chile will agree
to any major modifications
of the Treaty of 1904, such
as a corridor to the sea, to
satisfy Bolivia's seacoast as-
pirations.
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