Between 1960 and 1964, the United States increased its aid to Bolivia under the Alliance for Progress by 600%, giving 205 million USD in economic aid and 23 million USD in various loans. The first 35 Peace Corps volunteers arrived in early 1962. The increase in world tin prices also helped to stabilize Bolivia’s economy, which had been near collapse during the first revolutionary presidency of Estenssoro. Between 1961 and 1965 the Bolivian GNP rose by average 5.7% annually. As successive Presidential terms were allowed by the Constitutional amendments of 1961, Estenssoro decided to run for the third term. The leftist vice-president Juan Lechin, who himself wanted to run for president in 1964, was forced to resign as vice-president and then sent as ambassador to Italy by Esstenssoro. On December 5, 1963 left wing supporters of Lechin resigned from the government. By this time Lechin split from the MNR and formed Revolutionary Party of the Nationalist Left as the leader of party's right wing Wálter Guevara had already done in 1959 by establishing Authentic Revolutionary Party. When Estenssoro jailed several militant labour activists, miners in Catavi mines responded by seizing a group of hostages, including four US citizens. The crisis was resolved after Lechin’s mediation. This event marked a break in alliance between the Estenssoro’s MNR and miners, which had begun in 1942. The Bolivian army, which had been rebuilt and increased in size during recent years, provided an alternative power base to Estenssoro. After some hesitation, air force general Barrientos was picked by Estenssoro as his running mate for the May 1964 elections, and army became more involved in the politics. During the next six months internal unrest steadily increased, as miners went on strike and rioted. Various politicians, including Lechin, asked Barrientos to intervene. In late October Estenssoro asked the army to quell a miner uprising near Oruro. After armed clashes between the army and miners on October 28, Barrientos and Ovando decided to strike and launched their coup in November 3.
The Coup
The coup began early on November 3, when troops of the Ingavi regiment rebelled in La Paz. By the evening all the major military units had backed the coup and on in the afternoon of November 4 Estenssoro with his family was exiled to Lima, as Barrientos and Ovando established their junta. Some sporadic clashes between worker's militia and army were reported, but they soon subsided. It was Ovando who publicly announced formation of the junta but by the evening of the 4th the more popular and constitutionally acceptable vice-president Barrientos emerged as the leader.
After the Coup
As Estenssoro with his US supported economic policies had alienated radical miners, and with his third term other MNR politicians, former MNR leaders Lechin and Guevara supported the coup, with Guevara becoming the Foreign Minister in 1967. One week after the coup Barrientos demanded that miner and worker militias surrender the weapons that they had had since the Revolution of April 9, 1952. Prolonged conflicts with miners followed. In order to reduces the losses of state-owned mines, miner's salaries were reduced by 50%. César Lora, leader of the miners from Siglo XX mine, was killed on July 29, 1965. By the end on 1965 a united leftist opposition People’s Democratic Council was formed.
Co-presidency
Barrientos lacked sufficient authority to have himself quickly elected President, so on May 7, 1965 he announced indefinite postponement of September elections and concentrated on eliminating his leftist opponents. He sent troops to take over state owned mines of COMIBOL and deported his former supporter Juan Lechin. The armed clashes with miners created an open split between Barrientos and Ovando, who withdrew troops from some of the occupied mines. On May 26, 1965 Ovando was installed as co-President and commander in chief of armed forces along with Barrientos in an effort to prevent split in the ruling junta and armed forces between leftist and rightist elements. During 1966 Barrientos received covert financial aid from the USA, which was caused by the fact that public office holders had to resign from their office 180 days before the elections. Barrientos followed this rule and this left him without means to pursue an election campaign. During this time Ovando was the President of Bolivia. Elections were held in July 1966, and Barrientos, as the Presidential candidate of the Front of the Bolivian Revolution won with 67% of vote and was officially inaugurated on August 6, 1966.
The officially released data shows, that covert USA expenditures in Bolivia between fiscal year 1963 and fiscal year 1965 were as follows: fiscal year 1963— $337,063; fiscal year 1964—$545,342; and fiscal year 1965—$287,978. Most of it went to support the center and right wings of the ruling MNR party. Already after the coup, CIA allegedly contributed 600,000 USD to Barrientos election campaign in 1966 and Gulf Oil Corp. donated additional 460,000 USD between 1966-69.
