The proposed loan of at least $12 million from Venezuela will help fund a military installation near Brazil to fight drug trafficking as well as quarters for a battalion of engineers who will improve and build roads to an ecological reserve on the Peruvian border, the minister said.
"Our military posts on the borders do not include armaments ... we are a people of peace," San Miguel said.
The rightist opposition to President Evo Morales, and neighbours Chile, Paraguay and Peru, have expressed alarm at Bolivia's closer military ties with Venezuela, whose President Hugo Chavez is using oil money to try to build an anti-US alliance in Latin America.
San Miguel said that a bilateral agreement he signed with Venezuelan Defence Minister Raul Baduel was about exchanging visions and ideas without intervening in each others affairs.
"The objective is not to assault any neighbouring countries or defend ourselves from anyone," the official Bolivian news agency ABI said in a report on the agreement.
Under the accord, Venezuela agreed to help with road and infrastructure improvement in Bolivia and military training and technical expertise, San Miguel said.
Paraguayan Foreign Minister Ruben Ramirez met with his Bolivian counterpart David Choquehanca in Asuncion and said: "Minister Choquehanca has assured me that there are not plans to establish any military base on the border with our country."
Bolivian officials have said military aid from Venezuela would also go to developing a port managed by Bolivia's navy to transport oil seeds on the Paraguay and Parana rivers.
Ramirez said Bolivia had explained its plans for new developments at the Quijarro port on a river 125 miles (200 km) north of the border with Paraguay was an infrastructure project with commercial goals.
Defence experts say Chavez has agreed to lend Bolivia $49 million for defence spending, approximately one-third of Bolivia's typical annual defence budget.
San Miguel did not confirm that amount and said Bolivia will use Venezuelan aid over the next five years for small posts, for up to 20 people, combining immigration, customs, police and army operations.
San Miguel said Paraguay and Peru's defence ministers will visit Bolivia soon to clear up concerns, and that he will visit Chile in November to meet with his counterpart there.
He said Chile's concern over a small military post on the border to protect water resources was overstated. "There is no reciprocal threat in our border with Chile," he said.
Copyright Reuters, 2006
