February 19
General Augusto Duartes, the military governor of the Special Territories of Chilean Bolivia, held a special public forum in Santiago to speak about reconstruction efforts in occupied Bolivia. This forum was open to all members of the public who wished to attend, including foreign ambassadors and press, and a healthy crowd turned out to listen and ask questions about the program. General Duartes and a number of his aides spoke in several sessions covering approximately six hours, addressing the topics of security, reconstruction, and economic growth. Also present, though he did not speak, was retired general Francisco D'Alarch, who developed and implemented the current strategy for the occupation and reconstruction of occupied Bolivia.
General Duartes began the special forum by addressing the security situation. Over the last two years, activity by insurgents dropped from thirty-one 'significant incidents' in 1938 to just eight significant incidents in 1940. General Duartes noted that most 'incidents' now occurring take place between armed drug smugglers attempting to enter from Bolivia, with fourteen incidents since January 1st of 1940. General Duartes acknowledged, however, that hostility remains between the native 'Bolivian' population and the Chileans of the garrison force, and that resistance has generally shifted to passive and nonviolent events, which largely go unreported. Duartes cautioned that foreign visitors, particularly Europeans who could be mistaken for ethnic Chileans, should continue to be alert for trouble and should consult with local police officials for safety, as experience has shown this helps prevent undue difficulties.
Duartes also addressed the political situation in the Special Territories, noting that everything remained on track for the August 1942 elections and the creation of the Chilean Bolivian Special Administration Region. The 1942 election will allow the locals to chose elected representatives to serve in the Chilean Bolivian Special Administrative Region congress. This election will be the first election ever held in Bolivia with universal sufferage. The CBSAR congress will begin by overseeing a number of facets of local government, and will end Chile's direct military rule of the Special Territories. Duartes said that many Bolivians, particularly those of the poorer classes, are excited by the chance to participate in government for the first time in their lives, but many remain skeptical that the Chilean government will let the elections take place. Duartes noted that this gives the Chilean government a very strong reason to keep on track with the current reconstruction plan, "proving to the citizens of the special territories that Chile's vows are iron-clad and sacred."
For the second session, Duartes relinquished the podium to two of his advisors, military engineer Colonel Arturo Duran and economic expert Claudio Valenzuela. Colonel Duran spoke first about the recent re-opening of the Catavi tin mine in Llallagua, Potosi Department, which has been inactive since the Andean War ended. Duran also addressed his military engineers' work in rebuilding demolished bridges and roads destroyed by the Bolivian Army during their scorched-earth retreat at the end of the war. Valenzuela took over to explain the government's overall challenges in funding reconstruction efforts. He called attention to the fact that the government made a conscious decision not to merely repair or replace damaged infrastructure, but, whenever possible, to build the infrastructure which actually is needed. For instance, Valenzuela addressed the issue of road building, demonstrating the level of improvements the Chilean government made to a major road artery in Potosi.
Colonel Duran returned to the podium after lunch to continue the discussion on reconstruction, addressing the controversial "Special Working Brigade" formed from criminals. These criminals, generally those imprisoned for nonviolent crimes, are offered the opportunity to work as volunteers in the Special Working Brigade, working on reconstruction projects such as road and structure-building, in turn receiving a working wage and benefits. Duran argued in favor of the program, pointing out that the laborers are all volunteers who would otherwise be costing the government money for their continued incarceration. Duran also showed examples of some projects built by the Special Labour Brigade, including housing groups designed to replace many of the shantytowns which many Bolivian people still live in. These houses, constructed of earth placed in sandbags and compacted to firmness, then plastered or cemented over for final finish, are designed to be inexpensive but efficient, particularly in thermal insulation. Duran recommended that the design be considered for use in Chile proper, as it cost significantly less in materials cost to construct than a full-scale wood-framed house, bringing better housing to those who may otherwise be forced to live in slums.
In the closing two sessions, Valenzuela spoke of the continuing large-scale economic issues currently ongoing in Chilean Bolivia. Construction of new infrastructure continues to be the largest of the challenges facing the region. Valenzuela pointed out the start of construction on a two hundred seventy-five kilometer long metric-gauge railway line between Villazon to Villamontes, which will link the two separated halves of the Bolivian railway system. This meter-gauge railway, once completed by EFE in 1948 or 1949, will open a new trans-Andine railway link through Brazil, Bolivia, and Chile. Valenzuela also spoke regarding the construction of Petrochile's twelve-inch natural gas pipeline from Tarija to the Pacific Ocean. Originally planned to reach the sea at the port of Mejillones, the route was shifted slightly in Chile to go to the city of Antofagasta, where natural gas may be supplied to the new synthetic fuel plant being constructed with German assistance. Once this pipeline enters service in August 1941, it will allow much more extensive private investment in the Bolivian gas fields, which are currently under-utilized due to transport issues.
Finally, Valenzuela and General Duartes spoke together about the growth of small-scale financial institutions to aid poor Bolivians through the dispersal of "micro-loans". Duartes addressed a number of ways that these institutions may reach out to the poor or extremely poor members of Bolivian society, permitting them to escape the destructive financial dependence on local high-interest moneylenders by building a financial reserve and encouraging the adoption of insurance. Among his observations from the last three to five years of observations, Valenzuela suggested that attempts to cap interest rate ceilings against traditional moneylenders has hurt the poor more than help, and caused similar damage to the "micro-finance" institutions operating in the same areas. He also observed that for these small-scale lending groups to provide true economic growth, they ought to be carried out with funds of local, rather than international, origin. Valenzuela also cautioned against involving the government too closely in such institutions beyond enabling their legitimate operation, pointing out that the groups most successful in working with poverty-stricken communities were set up by Catholic and Protestant charities, which have sought to provide a more "full-spectrum" manner of engaging with the poor, serving both as the lender and as a savings bank, with a higher focus on the savings aspect. Valenzuela noted that he is assembling notes about the financial reconstruction of Bolivia with the intent to publish a major study on the issue.
Following the end of this session, Duartes, Duran and Valenzuela accepted questions from the audience.