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Bolivia's Great Depression

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Sunny Sandhu

on 2 October 2014

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Transcript of Bolivia's Great Depression

Causes of the Great Depression
-Economic- Dependence on the tin industry in Bolivia caused the Great Depression to have a greater impact in Bolivia. Tin was the reason for Bolivia's continued wealth throughout the 1920s, and also their major export. Decrease in the need for tin in ore products also caused the Great Depression to have a larger effect, than it would have had. The tonnage of tin exported by Bolivia decreased from 52,000 to 47,300 in just one year from 1928 to 1929.

-Political- The Republican government of Bolivia caused many of their economic and social problems. Under their control, parties were split up, therefore losing power. As tin demand went down, as well as their income, the Republican leaders began to rely on foreign loans to keep Bolivia afloat. One deal with the United States, known as the Nicolaus loans, involved a $33 million dollar loan to Bolivia. Deals such as this angered the Bolivian people, mainly because it gave the US absolute control over their tax collections.

-Social- Social unrest between the government and creole elites and indigenous peoples of Brazil caused many more arguments and issues in the Great Depression.
Effects of the Great Depression
-Economic-Prices in tin continued to drop, after the Depression. As a result of this, many tin mines had to be shut down in Bolivia.

-Economic- Drop of trade by nearly 25%, after the Great Depression, due to loss of demand overseas of Bolivia's natural resources.

-Economic- Bolivia's dependence on other countries to both import supplies, as well as buy their exports took a major toll. Right before the crash of 1929, The United States and Singapore provided over 50% of all imports (33% and 16.98%, repectively) and the UK bought 77.22% of all exports, so when those countries were taken down by the Depression, Bolivia was taken with it.
Responses
-Social- Due to the increasing number of revolts after the Great Depression, president of Bolivia, Hernando Siles Reyes was in need of peace. In order to do this, he organized the National Crusade in favor of Indians.

-Political- Hernando Siles Reyes, the president of Bolivia, had been having trouble running the country for a couple years, when the Depression hit. Deep in debt (over $33 million), and desperate to fix his problems, in 1930 he tried to break the constitutional rule forbidding re-election by resigning, and running again. For this, he was overthrown, and the Republican government was out of power. A military junta took over at this point, until 1932, at which Salmanca was nominated and elected to be president.

-Political- Because of the continued hardships, due to the Great Depression, the Bolivian governement was constantly looking for a way out of their economic depression. After their loss of the War of the Pacific in 1879, Bolivia no longer had any access to any ocean for trade. In order to gain this back, Bolivia decided they were willing to fight for the Paraguay River and Chaco region around it, that had been disputed over for decades. Going in to the Chaco War in 1932, Bolivia was very confident, considering they had a population 3 times as large as Paraguay (880,000 vs. 2,150,000), but they did not recognize Paraguay's advantages that included attrition strategies and a homogenous army makeup. Bolivia had an army of 90% indigenous peoples who were not necessarily inclined to fight, considering the majority of their people lived in the highlands and Andes regions, as well as they had been mistreated for decades by this very government. Despite the high command's decision to end the war, President Salmanca continued on, only to be arrested and overthrown by Jose Salzano. Soon after, an armistice was written by a coalition of neutral countries. Bolivia, however, lost 65,000 lives and injured over 35,000 in the process of war, out of their population of right under 3 million.
Impact on Society
-Frustrated by Hernando Siles Reyes promises of new, radical reform programs, and lack of implementation, workers and students continued to riot. They seemed to be tired of his inconsistent rule and failure to better their lives.

-Indigenous people continued to be treated as less than worthy of being called Bolivian.
"Cure"
-Bolivia secured its rise out of the Great Depression by the discovery of oil and the nationalizing of Standard Oil Company (USA) in these discoveries.

-There was also a social welfare oriented constitution put into place in order to ensure this situation could be helped in the future.
Sources
1. www.econlib.org
2. www.fsmitha.com
3. www.countrystudies.com
4. Packets
GOAL!
Bolivia's Great Depression
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