The history and present position of the external debt of Bolivia

 No. E 95 67003 This report is not to be published nor may it be quoted as representing the Bank'li views. INTERNA TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT THE HISTORY AND PRESENT POSITION OF THE EXTERNAL DEB T OF BOLIVIA July 15, 1950 Economic Department Prepared by: James J. Lynch  TEE HISTORY AKD PRESENT POSITION OF THE EXT;mR1:ItIL DEBT OF BOL IVIA Ta~:~~ of Contents §ummary L Detailed Descr~.1Jtion of the External D9bt and Its Service Requirements II. Bistor1gal Revia'" of External Loans III. Causes and Course of Previous Defaults a) Causes of Defaults b) . Course of Defaults c) Final Adjustment of the External Debt of :Bolivia. Appendix I Estimated Interest and Amortization Payments on External Debt of Bolivia Appendix II - Price Rapge of Bolivian Dollar Bonds in New York f>farket Appendix III Credits to Bolivia from Argentina Economic Department James J. Lynch THE HISTORY AI{D PR~SE}~ POSITION OF THE EXTERN.:U. DE3'I' OF BOLIVIA Summary Eolivia1s external debt, at the end of 1949, is estimated at approxi- mately $106 million,V including loans authorized but not yet disbursed. a) External Debt Outstandiqg - The estimated external debt outstanding December 31, 1949 ''ias $87.6 million, plus $16.1 million a.uthorized by the ExpoTt-Import Bank but not yet 11tilized, and a $1.4 million commercial bank loan not yet dravm. It is assumed in the amortization tables that the un- utilized funds will be dra1;m do'-"m gradUc"llly: $4 million in 1950, none in 1951. $4 million in 1952 ~nd 1953 and the remainder in 1954. The debt outstanding on December 31. 1949 includes publicly-held external dollar bonds estimated at $62 million. and based on the aSSlli~ption that the present debt plan under discussion in the Bolivian Congress will be put into operation retroactively as of January 1, 1950. Export-Import Baru~ loans ($34.7 million at the end of 1949) represent most of the remaining debt. These loans include $18.6 million which had been disbursed and $16.1 million in authorized funds. There is [1,lso a small loan of $1 million from the R.F.C., and loans of $4 million from The Bankers Trust Co. of lJe\1 York and $4.1 million from the r.~anufacturers Trust Co. b) Current Service Items - Tote,l interest and amortization payments on the exter~~1 debt are estimated to amount to around $6 million for the year 1950, of which $1.4 million is interest and $4.6 million amortization. 11 Excluding certain ob1:i,gations to Argentina on uhich full information is lacking. For details see Appendix III.  - 2 - all in U.S. dollars. Estimated payments include $1.5 million for servicing the dollar bonds under the proposed new debt adjustment plan; the remaining payments are for the Export-Import Bank and the commercial ba~~ loans. Total service charges remain slightly below the $6 million level through 1954. In 1955 they rise to $6 million when amortization payments on the Export-Import loan increase materially. From this point they increase gradually to a peak in 1958 of $7 million. dropping sharply to $5.8 million in 1959. $4.8 million in 1960 and down to $4 million by 1961. From that point on there is a gradual decline to $3.6 million in 1965. follo\'led by a sharp drop in 1966 to ¥1.7 million and to about $1 million in 1970. I. Detailed Descriution of the External Debt and Its Service Requirements The major portion of the external debt of Bolivia consists of pub11cly- issued, privately-held, dollar bonds nO'lll amo'Lmting to $56.3 million. If all of these securities are turned in under the present proposed permanent debt settlement plan, the total principal amount will be $62 million. The differ- enee betvleen these hro ($5.6 million) arises from the proposed issuance of new bonds in full settlement of about $82.3 million of unp<'tid, accu..mulated, interest arrears from 1930-31 through December 1949. The remaining portion of the debt, ,p44.1 million, is made up of a $1 million R.F.C. loan, $35 million in Export-Import Bank loans of which $16.1 million was unutilized as of December 31, 1949. and commercial baru< loans of $8.4 million.  - 3 - Details of the individual issues are listed below: External Debt of Boliviall (in thousands of dollars) Outstanding Outstanding Out standi tig (incl. repatriated (exel. repatriated under new Dollnr Bonds bonds) bonds) debt plans Bolivia 6%. 1917-1940 1,296) 8%. 1922-4. 1947 22.072) (no details available) 7%. 1927-1958 14,000) 7/c. 193 8- 1969 22,690) 770. 1930-19.50 8.59) Total Dollar Bonds 60.917 .56.27efo/ 61.90tJ} U.S. Government Debt Export-Imnort Bank Disbursed 12/31/lI-9 18.564 Undisbursed 12/31/49 (for co~leting the Cochabamba-Santa Cruz road) 16.070 R.F.C. J./ 1,033 Total U.S. Government Debt 3.5.7.57 3.5.7.57 Bank L"lans Bankers Trust (authorized $.5 million. 1948) 4.000 Manufacturers Trust - Disbursed 3.000 Undisbursed 1.3.50 Total Bank Loane 8.3.50 8.350 GRAND TOTAL $100.}S5 $106,013 li Excludes an 800 million Argentine peso (then equivalent to U~S. $190 million) loan v,hich ''las authorized in 1947 by Argentina to be made to Bolivia under a trade, ~payment and financial treaty. In July 1948 Argentina was reported to have granted a further loan of 10 million pesos (U.S. $2.4 million) for the maintenance of historic monuments. At present there is no information indicating 1t,hether any or all of this has been drawn down. It is believed that a very limited amount, if any, has been used. ~/ Under th~ proposed debt plan bondholders will receive par for par in ne'" bonds plus a $100 bond for each present ;~1.000 bond for interest arrears. This will bring the total of bonds to be issued under the plan to $61,905,800. 3../ l~ot included in table of IlEstimated Interest and Amortization Payments."  - 4- If the present debt settlement ulan is put into operation, ~11 of the above five issues of dollar bonds (056.3 million) will be exchanged for a new issue on which interest of lfo will be paid in 1950 with a gradual rise in coupons to 1-1/2,2 and finally 3% by 1955*. It is estimated that a sinking fund, which rises to l~ of the principal amount outstanding after the sixth year of the issuance of the new bonds,and operating through purchases in the market at prices of about 40, should result in complete payment of all of this dollar bonded debt by the end of 1966. Service Payments The total debts, of $91.6 million** disbursed plus the unuti1ized $12 million of Export-Import Bank funds (after drawing do'!m 4 million as of January 1. 1950) and $1.4 million unutilized portion of Manufacturers Trust loan, call for interest and amortization payments, all in U.S. dollars, as follows: Outstanding Amortization Total 1950 91,6301/ 4.614 1,395 6,009 1951 84,742 3,898 1,454 5.352 1952 81,244 3,709 1,768 5,477 1953 79,414 2,890 1,820 4,710 1954 78,278 3.964 2,017 5.981 1955 73,008 4,155 1,882 6,037 1956 67,461 3, 98L~ 2,169 6.153 1957 61,706 4,332 1,972 6,}04 1958 55,472 5,31l" 1,7L}2 7,056 1959 48,111 4,}57 1.489 5,8h6 1960 41,549 3,469 1,291 4.760 1965 12,802 3.202 405 3,607 1970 941 941 25 966 Note; For details see Appendix I. * For further details see Page 6 (c). *. Excludes the $1 million R.F.C. loan. 1/ Excludes short-term loans noted previously.  - 5- II. Historical Review of External Loans In 1874 and 1875. Bol ivia defaul ted on ti'ro-thirds of the principal payment on the Manderin-Marnori 6% Raihray Loan of 1872 I for which "bonds 'VTere issued to the amount of 1,1,652,000. Interest payments due July i975 and Janu::l.ry 1876 were not paid. In January 1877 Bolivia fUrther defaulted on sink- ing fund payments. In t,farch 1877, an adjustment was effected '.'Iith the cottntry's creditors on the "basis of 1,47.6s for each 1,100. After 1900 most of the external financing took place in the United states. There were, hovlever, some sterling loans after 1900; the first. in 1908, amounted to 1,500.000 and was sold in Paris for the yur~ose of carrying out a currency reforn instituted in 1904; in 1910 a loan amounting to 1,1,500,000 was issued in Paris and in 1913 another anoltnting to 1,1 million was also issued in Paris. The proceeds of the loan of 1910 were used for the esta"blishment of the Banco de la Hadon Boliviano and the loan of 1913 was used for construction of a railroad from Atocha to La Quiaca. These three loans 'IIlere either redeemed or refundod by the issuance of dollar "bonds. From 1877 to 1917 foreign service payments VIera met promptly. The financing in the United States consisted mainly of four loans issued from 1917 to 1928 in amounts totalling $68.4 mi11ion1 ( with interest rates at 6. 7, and 8%. These 10a118 ,."rere stated to oe for the construction of roads. railways and tram\'I9.Ys, sanitary facilities, and for the retirement of inde"btedness. The usual match oonds were issued amounting to $2 million in exchange for a monopoly granted in April 1930 t '.'Then a contract extending for 20 years, was concluded with the Union Al1uf.1ettiere S.A. of 3russels (a subsidiary of the Swedish Match Co.) granting the company the exclusive right to import, manu- facture and sell matches in :Bolivia. 17 Two undervlritten by the Chase JlTational Bank in 1917 and 1922 and totalling $31.4 million and tvlO by Dillon Reed & Co. 1927. 1928 for $37.0 million. For price range 1929 - 1950 see Appendix II.  - 6 - III. Causes and Course of Previous Defaults a) Causes of Defaults The \'lorld-wide economic depression, which set in towards the middle of 1929. resulted in a sharp decrease in the demand for tin \'1hich represented about 75~ of Bolivia1s total exports. Tin prices fell from a high of $1,405 per ton of metal in 1927 to $480 in January 1932. This, along \iith a decline in prices of other minerals. notably silver and copper, brought about the default on the external debts. A special finance commission sent by the Republic of Bolivia to New York to work out an arrangement with the bondholders issued the following statement~ 'tOwing to the current world-wide business depression, the general revenues of the Republic of Bolivia and the revenues pledged to secure its bonds have been temporarily reduced to such an extent that the Republic is not in a position at this time to meet the payments which become due on January 1, 1931, to the holders of the 1927 external 7% bonds. The inability of the Republic to pay the interest on its bonds ($61.5 million) at this time has been occasioned solely by the unprecedented fall in the value of exports and by the unusual reduction in the price of tin and other metals, from which the Republic derives a large percentage of its revenue through taxation." In consequence of the decline in \'lorld prices for its products, Bolivia's exports dropped from $51.1 million in 1929 to $19.7 million in 1931. Tot·9.l Government budgetary receipts declined from SO million bolivianos in 1929 to 28 million in 1931, or to an amount only slightly in excess of the required service pa.yments on the e:dernal debt. An analysis of the Bolivian budget clearly indicates the large portion required to pay public debt. In the 1928 and 1929 budget, about 40% (18 to 31 million bolivianos) of the total expenditures (l}5 to 54 million bolivianos) were required to meet the public debt alone. It has been estimated that during the 1928~31 period the minimum expenditures of the  - 7 - government, excluding public debt expenditures. approximated 22 million bolivianos. In the 1931 budget of 28 million bolivianos, the public debt service called for 6.4 million bolivianos of which 4 million bolivianos, about $1.7 million at par of exchange, allowed for only partie,l payment on the external debt. This small amount of expenditure for ~ublic debt reflects the default on the external public debt, since the interest payments alone on the outstanding external debt amounted to $4.5 million and total service $5.8 million. If the same amount !k9.d been allocated in 1931 for the debt service as in 1930. there 1tlould have been left only about 10 million bolivianos for running the government. As a final blow to the country's financial position, the Chaco War with Paraguay started in June of 1932, producing a demand for domestic and foreign exchange funds at the depth of the world-wide depression. Govern- ment expenditures, previously at 10i'! levels, were enormously exr..cnded by Chaco War needs, resulting in an increased deficit in the gover~~ent budget, which rose from 9 million bolivianos in 1931 to 136 million bolivianos in 1935. in spite of increases in government revenue after 1932. The deficit was largely financed through th.e :Bolivian Central Bank. Gold and foreign exchange reserves 'l'Jere reduced to half their 1929 high level by the end of 1931 and, because of continuing "r1thdra\'Tals of foreign exchange, had declined almost to the vanishing point by the end of 1931 }. The result, therefore, of the decline in general business, plus the Chaco War expenditures, was exhaustion of foreign excr~nge 1/ and gold holdings which weakened the boliviano on the foreign exchange market and expansion of the internal debt which operated to inflate domestic circulation. 11 This decline took place even though tin exporters delivered 48% of their tin export receipts to the Central Bank of Bolivia.  - 8 - After 1939 due to purchases of minerals, particularly by the U.S. to carryon the operations of World War II, Bolivia acquired a considerable amount of foreign exchange and gold. b) Course of Defaults The four publicly-offered dollar bonds, mentioned elsewhere, were serviced consistently from time of issue to early 1931 ,.,.hen default took place on both interest and amortization payments. No service payments have been made since that time although in the summer of 1942, in connection with agreements for purchasing ttUlgsten and raw rubber plus an extension of credit by the U.S. Government, infornal discussions bet\1een the Foreign Bondholders Protective Council aHd the "Bolivian lifinister of Fimmce indicated the likeli- hood of a start being made on payments at that time. However, Bolivia made no payment and, until June of 1943, no further steps were taken to re-install interest and amortization payments on Bolivia's external debt until the debt adjustment plan outlined belo1rl was taken. c) Final Adjustment of the External Debt of Bolivia In late 1948, the president of Bolivia sent to Congress a bill designed to illlJ?lement a previously announced plan of external debt adjustment. Under the proposed plan, worked out bet1tTeen officials of Bolivia and representatives of the Foreign Bondholders Protective Council Incorporated of }:Jew York, holders of Bolivia 6s of 1940, 78 of 1958, 7s of 1969 and 8s of 194·7 (amounting to $56,278,000) \'Tould be offered $1,100 of neto] bonds for each $1,000 bond held, and claims to all interest arrears. Interest rates on the new bonds were set at 1% for 1949 and 1950, 1-1/2~ for 1951-52; 2% for 1953-54; and. 3% for 1955 and thereafter. During the first six years, the total service provision ,-Tould be $1,500,000 annually 1rlith amounts not required for interest being devoted to retirement of bonds; beginning January  - 9- 1, 1955, the annual service pa~1nents would equal 4% of the total principal of all bonds stamped or issued in acceptance of the offer. The net effect of this debt adjustment plan is to settle back interest amounting to around U.S. $77 million for $5.6 million. On a per bond basis, it calls for the settlement on the 7% bonds of $100 for back interest of $1,190. It should also be pointed out. however, that the back interest adjustment is less than is indicated above, since the new bonds will be purchased in the market at prices ranging possibly from 20 to 40. This plan has not been put into operation and, therefore, the old bonds are still in default, but it is reported that both congressional bodies may pass laws putting the above plan into operation. soon after they reconvene in August of 1950.  kopendix I: ESij;r;.IAT'.u'JJ mT:",K.·,ST iJID .A:fJrO~\'TIZATI01J FAYlCNTS ON :JXT7"'1UJ.AL DEBT OF BOLIVIA (::;:::-.:)ressed in thousands of U.S. dollars) I:iil.ga 1 DO'- ,. AJ;' ' LJ..J -'o-ms ':\..J:J .1' Y :D:J?OJ.T-IHPORT :it'UTII LO.Al:rs Amount Payments Disbursed ~ortion - 12l21[42 :Undisbursed 'i)ortion - 12/31ZlJ9 Year AmotUlt P@,.vments Amount Payments out- Amort i- In- out- Amort i- In- out- Amorti- In- Total Total Total standi:gg zD-tion terel?t standing: zation terest standing: zation terest 19.50 61,906 881 619 1 •.500 18,6.54 1,733 70.5 2,l.!-38 4,070 71 71 19.51 .57,501 925 575 1,500 16,921 1,096 666 1,762 4,070 7 213 220 1952 5~,876 707 793 1,.500 1.5,82.5 1,12.5 622 1,747 8,063 7 3.53 360 1953 50,048 749 751 1,500 14,700 1,264 577 1,841 12,056 7 492 499 19.54 47,052 5.59 941 1,500 13,437 1,587 522 2,109 16,049 948 .554 1,502 1955 45,188 596 904 1,500 11,849 1,741 457 2,198 15,101 948 .521 1..469 19.56 43,201 1,180 1,296 2,476 10,107 1,856 386 2,242 14,1.53 948 487 1,435 1957 40,2.50 1,269 1,207 2,476 8,252 2,11.5 311 2,/1-26 13,204 948 454 1,402 1958 37,079 1,364 1,112 2,476 6,137 3,002 209 3,211 12,256 948 421 1,369 1959 33,668 1,466 1,010 2,476 3,135 1,943 91 2t 0--:4 _, 11,308 948 388 1.336 1960 30,004 1,576 900 2,476 1,192 945 37 982 10,353 948 354 1,302 1961 26,063 1,694 782 2,476 247 247 5 252 9,412 941 321 1,262 1962 21,827 1,821 6.55 2,476 8,471 941 288 1,229 1963 17,274 . 1,958 518 2,476 7,529 941 25.5 1,196 1964 12,415 ?,104 372 2,L~76 6,588 941 223 1,164 1965 7,155 2.261 215 2,476 .5,647 941 190 1,131 1966 1,501 601 45 646 4,706 941 1.56 1,097 1967 3,76.5 941 124 1,065 1968 2,824 941 91 1,032 1969 1,882 941 58 999 1970 941 941 25 966  A-pc)enrli::c I; :=-'STlJiLJ\TJJD UTT:mST AND AMORTIZATION PATItreNTS ON EXT:'JUTAL D:l3T OF :BOLIVIA - Oontinued (Exoressed in thousands of U. S. dollars) --- _~M!.A 2 :B';!.l:r.f~J.1S TRUST LOAl~ M.Al'flT.FACTUH...:"JRS TRUST LOAlJ GRAIID TOTAL Amount ?a.yp.ents Amount Payments Amount Payments Year out- Amort i- In- m t 1 out- Amorti- In- Ttl out- In- Amort i- _st.:mding zlition ter.e_!:1t J.:O a standing zfJ,tion ter~st stand~zation 0 a terest Total 1950 4,000 2,000 gJ J/ 2,000 3,000 JI 91,630 4,614 1,395 6,009 1951 2,000 l,OOO J/ 1,000 4',350 870 J./ 870 84,742 3,898 1,454- 5,352 1952 1,000 1,000 JI 1,000 3. 4 80 870 J./ 870 81,244 3~709 1,768 5t~'77 1953 2,610 870 JI 870 79,414 2,890 1.820 4,710 1954 1,740 870 J./ 870 78,278 3,964- 2,017 5~981 1955 870 870 jJ 870 73,008 4~155 1~882 6,037 1956 67,461 3~984 2,169 6~153 1957 61,706 4.332 1,972 6,304 1958 55,472 5,314 1,74-2 7.056 1959 48,1114,357 1,489 5~846 1960 L~1,549 3,469 1,291 4,760 1961 35,722 2,882 1,108 3,990 1962 30,298 2,762 943 3,705 1963 24,803 2,899 773 3,672 1964 19,003 3,045 595 3,640 1965 12,802 3,202 405 3,607 1966 6,201 1,542 201 1,743 1967 3,765 941 124 1,065 1968 2,824 941 91 1,032 1969 1,882 941 58 999 1970 941 941 25 966 !I It was assumed that the dollar bonds \'lOuld settled as fo11o\'Is: Interest Et 1;; in 1950-1, 1 1/2% in 1952-3, 2~ in 1954-5 and thereafter. Annuity for interest and amortization of $1,500,000 from 1950-1955 and of 4% of the total bonds issued in 1956 and thereafter until all bonds are retired. It was assumed that bonds would be bought in the market at the fol10\IIing prices: 20 in 1950-1, 25 in 1952-:-3, 30 in 19.5Lr-5 and 40 thereafter. ?J Includes $1,000,000 due on 12/31/49 but paid in January 1950 out of the proceeds of the loan from Hanufacturers Trust-. Ji The interest rate on the loans from Hanufacturers Trust and Eanlters Trust are not Imo\m. However,if it is assumed th2.t the rate is 4~~ the interest charges on both loans together \...rould amount to the following: 1950- ~;240.000t 1951 - ~)2l4tOOO, 1952 - C1 79.000, 1953 - $104.000, 1954 - Q70,000, 1955 - 035,000.  AFiEIIDIX II Price Bange of :Bolivian Dollar :Bonds in Ne'V, York Market 1928 - 1950 8% - 12l~Z zZf - 1258 zZf - 1262 6~ - 1240 1928 - H 108 9·3-1/2 98-1/4 - L 97-1/2 89-1/4 85-1/8 1929 - H 104 95 92 - L 87 70 64-3/4 1930 - H 100 85-3/4 84 - L 35 31-3/4 29-7/8 1931 - H 55 38-3/4 36 - L In Default 6-1/2 5-1/2 5 1932 - H 10 9-1/2 8-1/2 n 2 - L II 3-1/4 2-1/8 1933 - H 1.5 13-1/2 13-1/4 -L II 11 4 3-1/2 3-1/4 1934 - H 11-3/4 10-1/2 10-1/2 - L II II 6 5-1/4 .5-1/8 193.5 - H 9-1/2 8 8-1/4 -L II II .5-1/8 4 4 1936 - H 16-1/2 9-1/2 9-3/4 20 II -L II 6-7/8 .5-1/8 .5-1/8 5 1937 - H 13-5/8 14-1/2 14 17 II n 3-7/8 - L 3-5/8 3-5/8 5 1938 - H .5-1/2 .5-3/8 .5-1/8 6 II 11 - L 3-1/4 3-1/8 3-1/8 3-1/4 1939 - H 1j,-3/4 4-1/4 4-1/4 6 - L II II 2 2 2-.5/8 2-1/2 1940 - H .5-3/8 4-1/2 4-1/2 4-3/4 11 II - L 2-1/2 2-5/8 2-5/8 2-1/2  .Al'PE1:IDIX II (cont'd) 8% - 1242 2~ - 1258 2~ - 1262 6~ - 1240 1941 - H 6-1/Z 5-1/Z 5-1/Z 11-1/Z - L In Default 3-1/Z 3-1/4 3-1/8 5-1/2 194Z - H 13-7/8 13 13 18 - L II n 6 6 11 7 19l }3 - H ZO 18 18-5/S lS-7/S - L " " lZ-1/8 11-1/8 11-1/S 12 1944 - H 15-1/2 14-1/Z 14-1/Z 14-3/4 - L " II 10-1/4 9-5/8 9-5/8 10 19L~5 - H 15-3/4 14-1/2 14-1/2 14-1/4 - L II II 10-1/Z 10 10 9-3/4 1946 - H 15-1/4 14-1/4 14-1/4 14 II -L " 7-1/4 6-1/Z 6-1/2 6-3/4 1947 - H 7-1/4 7-1/4 7-1/4 7-1/4 - L " II 5-1/2 4-1/2 4-1/2 4-3/4 1948 - H 12-1/2 12-1/4 12-1/4 12-1/S -L " " 5-1/Z 4-5/S 4-5/S 4-3/ 4 1949 - H 15-3/8 15-3/8 15-3/8 15-3/S II - L " 9-1/4 9-1/4 9-1/4 9-1/4 1950 - H (Through r.1ay) 14-5/8 14-5/8 14-5/S lL~-5 /8 - L In Default 13-1/8 13-1/S 13-1/S 13-1/S  APPE;'1D IX I I I Credits to Bolivia from Argentina The five-year Argentina-Bolivia trade and financial agreement ,,!hich "lent into effect October 23. 1947. provided, among other things. for; 1) a revolving loan of 50 million pesos to Bolivia. 2) a 100 million peso investment by Argentina for development programs in Bolivia, and Argentina's purchase of 600 million pesos worth of 3-3/4%. 25 year Bolivian obligations for public works. These credits were equivalent to about $188 million. Argentina and 301ivia later concluded payments agreement to sU]?1:>lement the above trade and credit aGreement and. to lay the form of Argentina1s credit to Bolivia. In addition to the commercial credit of 50 million pesos, Argentina's credit will aggregate 750 million pesos for public works, railroads, road construction, develop- ment of mineral and oil deposits, etc. Of this total, 60 million pesos ''lere reported placed in late 1948 in Ar~:,;el1tina in the form of e, 50 million peso loan and a 10 million peso loan taken up by the govern- ment IS lombarding ir_stitutions. In late 1949 Argentina passed resolutions implementing commercial treaties of 1947 as follows: "Three decrees of July 25, 1949, im:plemented certain p:;.~ovisions of the Bolivian-Argentine Commercial Treaty of Ma~ch 26, 1947, accord~ng to a despatch of August 11, from the American Embassy at La Paz. Supreme Resolu.tion N0.34038 authorizes the 3anco Central to lend the Bolivian Government 42,000,000 bolivianos for the use of the Joint Economic Development Society. Under the terms of the Treaty, the Society is to administer loans totalling up to 100,000.000 Argentine pesos to be made by Argentina for the development in Bolivia of industries ,'Thich 1iTould assist the Bolivian self-sufficiency program and eventually, in some case s, produce exportable surplus for sale ill the Argentine market.  APPEIIDIX I II (cont I d) SUpreme Resolution No.34039 authorizes the Banco Centra.l to utilize funds in the Rotating Credit of 50,000,000 Argentine pesos which, by the Treaty of 1947. Argentina is pledged to adVance to equalize the balance of trade "rith Bolivia. :Hot more than 25.000,000 Argentine pesos of this credit may be utilized in anyone yea.r. Bolivia's power to use the Rotating Credit ''!ill apparently expire February 28. 1953. SUpreme Resolution No.3404l authorizes the Banco Central to issue licenses during the present year in the total amount of $1,330,000 for imports (almost entirely ra\'! \'1001 for Bolivia's Textile mills) from Argentina to be paid for \,lith the Rotating Credit," Joint Commission Established liThe establishment of the Joint Argentine-Bolivian Commission lIrhich will fm-lOtion dually as the Joint Economic Development Society and the Joint Com.luission for Public \vorks vJaS announced following an organizational meeting held in the :Bolivian Foreign Office on June 9 according to a despatch of June 13. 19Lr9 from the American Embassy at La Paz. The ne'll! joint oommissions ,·Till presumably have charge of plannil"'.g and directing expenditures provided under the Argentine-Bolivian Oommercial Treaty of March 26, 1947. 11 1;0 recent information sho'\tTing the status of the above loans ha'S! been received by the Bank. It will be necessary to get detailed information on these loans in order to clarify the total external debt position.