When President German Busch carved Bolivia into a totalitarian state three weeks ago, he announced proudly that it was his own doing, that Rome and Berlin had not helped. Last week Bolivia announced a barter agreement with Germany. For German machinery, a 350-mile pipeline across the Gran Chaco, and an oil refinery in Paraguay, Bolivia planned to ship some $15,000,000 of goods, principally petroleum, to oil-hungry Nazis. The man who made the announcement was not mournful Dictator Busch, but his tough, roving-eyed sidekick and Minister of Mines and Petroleum, Dionisio Foianini.
Two years ago Señor Foianini engineered expropriation of the Standard Oil Co. of Bolivia's $17,000,000 Bolivian fields. Ranking 28th in the world's 28 major oil-producing countries, Bolivia last year produced only 106,620 barrels (U. S. production: 1,213,254,000). But potentially important oil resources lie in the foothills of the Andes, where, on its 2,500,000 acres, Standard Oil operated six wells on a 55-year contract before expropriation. Last month Senor Foianini arranged two important treaties that made their extensive exploitation possible. Argentina agreed to permit transportation of Bolivian oil across her territory provided the expropriated fields were not returned to private owners. Paraguay agreed to give Bolivia: 1) a 325-ft. pipeline right-of-way across the Chaco battlefields to the Paraguay River; 2) two free zones for a refinery and a shipping point; 3) a 3O-year monopoly to supply Paraguayan oil requirements; 4) freedom from taxes and levies on shipments from the Bolivian refinery. Since Paraguay uses little oil, main purpose of the treaty was to provide Bolivia with an export outlet to the European market (for which she fought Paraguay unsuccessfully in the Chaco War), making possible the German deal Senor Foianini announced last week. Looking a long way ahead, he generously agreed in return to sell to Paraguay at cost the German-built refinery in 1969.