Bolivia History

Bolivia was inhabited by the ancient Aymará civilization, who lived on Lake Titicaca. Later, this civilization was conquered by the Incas, who were themselves conquered by the Spanish in 1538. Throughout the country’s colonial history, it was known as Upper Peru. Simon Bolivar led the country to independence in 1825. In its early years, independent Bolivia was ruled by a succession of caudillos (military dictators) who tried, with mixed success, to integrate the country’s three disparate regions – the central region, the eastern Andes and the Altiplano – into a national entity.

Wars with three neighboring countries followed, namely the 1879–83 War of the Pacific, against Peru (with whom Bolivia had been briefly confederated in the 1830s), Chile and later the 1928 Chaco Wars against Paraguay – a result of which Bolivia lost the Atacama coastal strip and became landlocked. The one positive effect of the wars was that the rule of the caudillos was challenged by a rising mercantile class, whose prosperity was rooted in the mining industries, then under steady development. In 1953, Chile declared the port of Arica ‘free’ and has allowed Bolivia certain privileges in its use. The issue was never fully settled – until 1992, when Peru agreed to allow Bolivia free use of the port of Ilo for 100 years. (The facility is subject to conditions about which the Bolivians are not entirely happy.)

Domestically, Bolivia has entered an unprecedented era of political stability, ending a record of military coups and recurrent internal strife that was little short of ludicrous – there were 192 coups in the 156 years from independence to 1981; an average of one every 10 months. Much of the credit is due to President Victor Paz Estenssoro – the grand old man of Bolivian politics had held the presidency between 1952–56 and 1960–64. He was elected again in August 1985, at the head of a loose coalition of both left- and right-wing parties. By the time Paz Estenssoro ceded office to Jaime Paz Zamora in August 1989, rampant hyper-inflation (an estimated 14,000 per cent in 1985) had been dramatically cut after initial unrest over the government’s strict austerity program. Paz Estenssoro had been the candidate of one of Bolivia’s five main political parties, the Movimiento Nacional Revolucionario (MNR). The other four are the right-wing Acción Democrática Nacionalista (ADN), the Movimiento de la Izquierda Revolucionaria (MIR), the Unión Cívica Solidaridad (UCS) and Conciencia de Patria (CONDEPA).

Both the ADN and the MNR, sometimes in coalition, have enjoyed control of the presidency and the national assembly. The most recent presidential election, in June 2002, returned the MNR’s Gonzalo Sanchez de Lozada as president, his party dominating both houses of Congress. However, a police revolt stemming from multiple fractious factors, such as economic recession and longstanding ethnic tensions, nearly toppled the government of President Lozada, who eventually resigned - following further bloody demonstrations - in 2003. Carlos Mesa assumed presidency and, for a while, seemed the man for the job of quieting this turbulent country. However, he resigned in June 2005 after a surge of protests swept the country. The protests were triggered in May when Congress approved an increase in taxes on foreign gas companies. Demonstrators, drawn mainly from Bolivia's indigenous majority and left-wing groups, claimed that these rises were not enough and were asking for nationalization of Bolivia's primary - one might say only - source of wealth: energy reserves, namely, oil. There were also cries for constitution re-writes so that more power was distributed to the indigenous peoples. La Paz was at a virtual standstill with road blockades catalysing exhausts in fuel supplies and rising prices. Matters have subsided somewhat since Mesa's resignation (although protests weren't really specifically aimed at Mesa), and the appointment of interim President, Eduardo Rodriguez, although the country and government still remain on tenterhooks.

Irrespective of the complexion of the government, the most important domestic issue for the government for the last decade has been the US-sponsored ‘war on drugs’ – coca and its products, in the case of Bolivia – which is widely unpopular in a country where coca is considered to be both a traditional product and a valuable cash crop. The government had originally announced that all coca plantations would be eradicated by the end of 2002. This was always highly unlikely and the government eventually conceded 12,000 hectares (approximately 50 sq miles) of plantation for ‘traditional’ purposes. However, since the economic crisis in Argentina and Brazil, which has affected Bolivia badly, impoverished farming communities are making strong demands to be allowed to grow coca once again. The Lozada government faces a difficult balancing act between two determined parties; the American administration (which controls most of the purse strings) and an increasingly restless population.

Other important foreign policy issues for Bolivia are the development of regional cooperation, principally concerned with trade and economic harmonization and – on a bilateral level – Bolivia’s persistently problematic relations with Chile.

Government
The bicameral congress is the legislature. This is made up of the 27-member Senate and 130-member Chamber of Deputies. Both the Congress and the president, who is Head of State and wields executive power with a Cabinet of Ministers, are directly elected for terms of four years.

Economy
Bolivia has the second-lowest per capita income in Latin America. Economic growth of 4% was estimated in 2005. Agriculture employs nearly half the working population, although it suffers from relatively low productivity. The main cash crops are timber, soya, sugar and coffee, while beef and hides are valuable export earners.

There is also a substantial illegal trade in coca, the plant source for cocaine, which provides a livelihood for many peasants – its economic value is thought to be approximately US$1 billion annually.

Bolivia has large mineral deposits, especially of tin – of which it is one of the world’s leading producers. Oil and gas deposits serve to meet much of the country’s energy needs and are increasingly valuable export commodities. Reliance on primary products has made Bolivia vulnerable to fluctuations in world commodity prices.

In 2005, the G8 announced a US$2 billion debt-forgiveness plan over the next few decades that should help reduce some fiscal pressures on the government.


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