Library of Congress – Federal Research Division Country Profile: Bolivia, January 2006 

COUNTRY PROFILE: BOLIVIA 

January 2006 

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COUNTRY 

Formal Name: Republic of Bolivia (República de Bolivia).

Short Form: Bolivia. 

Term for Citizen(s): Bolivian(s). 

Capitals: La Paz (executive) and Sucre (judicial). 

Major Cities: Santa Cruz (1.3 million inhabitants), Cochabamba (900,000), El Alto (830,000), 

La Paz (810,000), and Sucre (225,000), according to 2005 projections. 

Independence: Led by “El Libertador,” Simón Bolívar Palacios, Bolivia gained complete 

independence from Spanish and Peruvian control in 1825. Despite nearly 200 coups and countercoups, Bolivia has maintained its autonomy since independence. 

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Public Holidays: The following are Bolivia’s federal holidays: New Year’s Day (January 1), 

Carnival (two days, variable dates in February or March), Good Friday (variable date in March 

or April), Labor Day (May 1), Corpus Christi (variable date in May or June), Independence Day 

(August 6), All Saints’ Day (November 1), Christmas (December 25). Each of Bolivia’s nine 

departments also has a holiday celebrating its inception. 

Flag: The Bolivian flag is divided into three equal, horizontal bands of red, 

yellow, and green. The Bolivian coat of arms is centered in the middle 

yellow band. 

HISTORICAL BACKGROUND 

Pre-colonial and Colonial Era: Advanced Indian societies inhabited the Andes region of South 

America long before the arrival of Europeans. Ruins of these societies, especially the Tiwanaku 

civilization, dot the high-altitude Bolivian countryside, serving as reminders of the first great 

Andean empire. Tiwanakan dominance lasted until 1200, when the regional kingdoms of the 

Aymara subsequently emerged as the most powerful of the ethnic groups living in the densely 

populated region surrounding Lake Titicaca. Power struggles continued until 1450, when the 

Incas incorporated upper Bolivia into their growing empire. Based in present-day Peru, the Incas 

instituted agriculture and mining practices that rivaled those put in place many years later by 

European conquerors. They also established a strong military force and centralized political 

power. Despite their best efforts, however, the Incas never completely controlled nomadic tribes 

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of the Bolivian lowlands, nor did they fully assimilate the Aymara kingdoms into their society. 

These internal divisions doomed the Inca Empire when European conquerors arrived. 

Francisco Pizarro and his fellow Spanish conquistadors first glimpsed the “New World” in 1524. 

Visions of a land of gold led to aggressive colonization. Even without the arrival of the 

Europeans, the Inca Empire was floundering. Pizarro enjoyed stunning initial success in his 

military campaign against the Incas. After initial defeats, the Incas rallied some resistance 

against the Europeans. But in 1538, the Spaniards defeated Inca forces near Lake Titicaca, 

allowing penetration into central and southern Bolivia. Although Indian resistance continued, 

Spanish imperialists pushed forward, founding La Paz in 1549 and Santa Cruz de la Sierra 

(hereafter, Santa Cruz) in 1561. In the region then known as Upper Peru, the Spaniards found the 

mineral treasure chest they had been searching for. Potosí had the Western world’s largest 

concentration of silver. At its height in the sixteenth century, Potosí supported a population of 

more than 150,000, making it the world’s largest urban center. In the 1570s, Viceroy Francisco 

de Toledo introduced a coercive form of labor, the mita, which required Indian males from

highland districts to spend every sixth year working in the mines. The mita, along with 

technological advances in refining, caused mining at Potosí to flourish. 

Breakdown of Colonial Authority: In the early eighteenth century, the mining industry entered 

a prolonged period of decline, as evidenced by the eclipsing of Potosí by La Paz. After 1700, 

only small amounts of bullion were shipped from Upper Peru to Spain. In the mid-eighteenth 

century, Spanish control over South America began to weaken. In 1780 the Inca descendant, 

Túpac Amaru II, led nearly 60,000 Indians against the Spaniards near the Peruvian city of Cuzco. 

Spain put down the revolt in 1783 and executed thousands of Indians as punishment, but the 

revolt illustrated the precarious nature of Spanish colonial rule in the Andes. 

The invasion of the Iberian Peninsula in 1807 by Napoleon Bonaparte and its aftermath further 

undermined Spain’s authority. Although many elites in Upper Peru stayed loyal to Spain, others 

began to seek independence. On May 25, 1809, radical criollos of Upper Peru led one of Latin 

America’s first independence revolts. Although defeated, the radicals set the stage for more 

successful rebellions. After July 1809, Spain never again fully controlled Upper Peru. The region 

became the battleground for a seven-year struggle between royalist troops from Peru and the 

forces of the independent Argentine Republic. By 1817 the royalists, based in Lima, had 

suppressed Argentina’s independence fighters seeking to wrest Bolivia from Spanish control. It 

proved to be only a temporary victory. In 1820 conflict reemerged in Upper Peru among three 

groups: loyalists, who accepted the direction of the Spanish Cortes; rebels, led by Simón Bolívar 

Palacios; and Conservative Party criollos, led by General Pedro Antonio de Olañeta, who refused 

to join either royalist forces or the rebel war effort. Bolívar’s victory over royal troops at the 

Battle of Ayacucho in 1824, followed by the assassination of Olañeta by his own men on April 1, 

1825, brought to an end Spanish rule in Upper Peru. 

Early Republic: Bolívar left the inhabitants of Upper Peru to determine the details of their own 

independence, transferring authority to General Antonio José de Sucre Alcalá. In August 1825, a 

constituent assembly convoked by Sucre rejected attachment to either Peru or Argentina and 

passed a resolution of independence. In an attempt to placate Bolívar’s reservations regarding the 

country’s fitness for self-rule, the new nation became known as the Republic of Bolivia. 

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Bolívar served five months as Bolivia’s first president before being succeeded by Sucre in 

January 1826. The new country faced many challenges, including numerous boundary disputes 

with its neighbors, a moribund silver mining industry, lack of foreign credit, and conflict with the 

Roman Catholic Church. In 1828 Sucre was forced from office by an invading Peruvian army

seeking to reunite the two territories. The ousted president redeemed himself by defeating a 

Peruvian force at the Battle of Tarqui in February 1829. In May Sucre was succeeded as 

president by Andrés de Santa Cruz y Calahumana (1829–39), who forged a voluntary political 

union of Peru and Bolivia in the short-lived Peru-Bolivian Confederacy (1836–39). Santa Cruz’s 

tenure ended in January 1839 with the defeat of the Peru-Bolivian Confederacy by a Chilean 

expeditionary force at the Battle of Yungay. 

Mid-nineteenth-century Bolivia was beset by political instability and the rule of authoritarian 

strongmen, economic stagnation, and a growing sense of geographic isolation. During the 

authoritarian government of Manuel Isidoro Belzú Humérez (1848–55), for example, the country 

endured 42 attempted coups. In an effort to gain access to the main routes of transoceanic trade, 

in 1867 Bolivia ceded more than 100,000 square kilometers of territory to Brazil in exchange for 

riverine access to the Atlantic Ocean. 

War of the Pacific and Aftermath: An ongoing dispute between Bolivia and Chile over the 

mineral-rich coast of the Atacama Desert resulted in the War of the Pacific. A tentative peace, 

established in 1874, proved temporary. In 1879 Bolivia, in alliance with Peru, declared war 

against Chile, which had previously landed troops in the contested area. Chile won a decisive 

victory, forcing Bolivia from the entire coastal area in 1880. In 1904 Bolivia officially ceded the 

coastal territory to Chile under the Treaty of Peace and Friendship. In the most traumatic episode 

in its history, Bolivia’s path to the Pacific Ocean was lost. More than a century later, the 

perceived injustice of Bolivia’s landlocked status remains a prevailing theme in Bolivian 

nationalist sentiment. 

From 1880 to the 1920s, Bolivia recovered from its defeat while simultaneously witnessing the 

rebirth of silver mining and the growth of the tin industry. Politically, the Conservative Party 

dominated national politics until its overthrow by the Liberal Party in the “Federal Revolution”

of 1899. A new political force, the Republican Party, came to power through a bloodless coup in 

1920, but the Great Depression of the early 1930s cut short Bolivia’s economic recovery. 

The Chaco War: In 1932 a border dispute again turned into full-fledged war. Bolivia and 

Paraguay both claimed the Chaco region⎯a largely undeveloped area that had been the site of 

some oil discoveries. A series of border incidents led to broken diplomatic relations and then 

war. President Daniel Salamanca (1931–34) believed that the Bolivian army, trained by Germans 

and well armed, would overwhelm the smaller Paraguayan force. In actuality, Paraguay won all 

the major battles of the three-year war and drove Bolivian forces nearly 500 kilometers back into 

the Andes. Opponents of the war overthrew Salamanca in 1934, but it was too late to change the 

outcome. Bolivia suffered nearly 65,000 deaths and lost the Chaco region. 

World War II and Postwar Governments: Following the humiliating defeat of the Chaco War, 

and in the midst of the global economic depression of the early 1930s, Bolivian governments 

looked inward in their efforts to promote economic development. After coming to power in 1936 

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through a military coup, Colonel David Toro Ruilova (1936–37) introduced a program of 

“military socialism.” Among other measures, Toro nationalized the holdings of U.S.-owned 

Standard Oil. Although Toro fell victim to a military coup in 1937, subsequent leaders continued 

many of his statist economic policies. During World War II, Bolivia repaired relations with the 

United States and compensated Standard Oil for losses incurred in the nationalization. In the 

early postwar era, which coincided with the beginning of the Cold War, Bolivia reaffirmed its 

alliance with the United States and embraced the cause of anticommunism. Domestically, 

Conservative-led governments sought to stem the growth of the left and contain growing labor 

unrest. However, they failed to reverse the inflationary economic policies that were inflicting 

severe hardship on much of the population. 

The Bolivian Revolution, 1952–64: The Nationalist Revolutionary Movement (Movimiento 

Nacionalista Revolucionario⎯MNR) ushered in Bolivia’s nationalist “revolution” on April 9, 

1952, when it launched an armed takeover of La Paz by mine workers in collaboration with 

disaffected elements of the National Police. Movement leader Víctor Paz Estenssoro assumed the 

presidency after a brief struggle. Begun as populist opposition party in the wake of the Chaco 

War, the MNR was a loose coalition of mine workers, Indian subsistence farmers, and middleclass mestizos. Once in power, the MNR moved quickly to establish its populist credentials, 

decreeing universal suffrage, nationalizing mining and export industries, and reapportioning 

large tracts of farmland among Indian smallholders. Initially, the MNR governments garnered 

multi-class support, but rampant inflation and declining farm productivity resulting from

inadequate capital investment in agriculture held back economic growth. In 1964 Paz Estenssoro 

ran for and won re-election, only to be deposed by armed forces members concerned over the 

threat of Cuban-style revolutionary violence in the Andes. Although fundamental changes 

remained in place, many observers on the left lamented that the Bolivian revolution remained as 

yet “unfinished.” 

Military Rule, 1964–82: The army takeover of the government in 1964 ushered in a prolonged 

period of authoritarian military rule. Throughout the 1960s and 1970s, successive military 

governments focused on maintaining internal order, modernizing the mining sector, and 

vigorously defending Bolivian sovereignty. Espousing a program of “revolutionary nationalism,” 

General Alfredo Ovando Candía (co-president, May 1965–January 1966; president, January–

August 1966, 1969–70) outlined the “Revolutionary Mandate of the Armed Forces.” According 

to Ovando, the only way to end Bolivia’s underdevelopment was to allow, and encourage, the 

military to manage the economy and intervene in domestic politics. In October 1967, the armed 

forces scored a major victory when a Bolivian ranger battalion captured Argentine revolutionary 

Ernesto “Che” Guevara and a small band of guerrillas in the remote Villagrande region. The 

guerrilla band, dispatched from Havana, had tried unsuccessfully to incite a peasant rebellion 

among Bolivia’s majority Indian population. 

The 1970s were dominated by the figure of General Hugo Banzer (president, 1971–78). During 

its first few years, Banzer’s populist military government enjoyed the support of the MNR and 

oversaw rapid economic growth, driven largely by heavy demand for Bolivia’s commodity 

exports. By 1974, however, the governing coalition had splintered, and labor unrest intensified as 

the economy experienced a slowdown. These events prompted the military regime to resort to 

greater repression to maintain political control. 

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In the late 1970s, Bolivia’s military regime came under pressure from the United States and 

Europe to liberalize and restore civilian democratic rule. With international pressure and 

opposition from civilian groups mounting, General Banzer announced a presidential election for 

1980. However, two subsequent coups in the midst of congressional and presidential elections 

delayed the transition schedule. In September 1982, the military finally handed over the 

government to a civilian administration led by Hernán Silas Zuazo (president, 1982–85) of the 

Democratic and Popular Unity (Unidad Democrática y Popular—UDP) coalition. 

Economic Crisis and the “Pacted Democracy”: In the early 1980s, Bolivia faced the most 

severe economic crisis of the preceding three decades. The economy was beset by chronic 

balance of payments and fiscal deficits and a foreign debt of nearly US$3 billion. The Siles 

Zuazo government attempted to address Bolivia's economic crisis by negotiating several 

tentative stabilization programs with the International Monetary Fund (IMF). However, during 

the first half of 1985, the international tin market collapsed and Bolivia’s inflation reached an 

annual rate of more than 24,000 percent. As the crisis intensified, the opposition forced Siles 

Zuazo to give up power through a new round of elections held in July 1985. 

The 1985 presidential race became a head-to-head contest between former military dictator

Banzer and MNR founder Paz Estenssoro. After luring the left-wing Movement of the

Revolutionary Left (Movimiento de la Izquierda Revolucionaria—MIR) with promises of state 

patronage, Paz Estenssoro was elected president of Bolivia for the fourth time since 1952. 

Abandoning his left-wing allies and his own populist past, Paz Estenssoro decreed one of the 

most austere economic stabilization packages ever implemented in Latin America. Hailed as the 

New Economic Policy (Nueva Política Económica—NPE), the decree aimed at ending Bolivia's

record-setting hyperinflation and dismantling many of the large and inefficient state enterprises 

that had been created by the revolution. Although successful in ending hyperinflation, the NPE 

brought about a sharp reduction in real wages for workers and temporarily increased the 

country’s already high levels of poverty. 

In the political realm, Paz Estenssoro and Banzer negotiated a formal power-sharing agreement, 

the Pact for Democracy, creating a mechanism to overcome the fragmentation of the political 

party system and allowing the government to push forward with its austerity measures. The pact 

played an important role in resolving other political impasses during the 1989 and 1993 

presidential elections, in which no single candidate could claim a majority of the vote. The 

coalition government of President Jaime Paz Zamora (1989–93) provided continuity with the 

market reform policies of its predecessor and oversaw a modest economic recovery, aided by a 

rebound in the tin market and the discovery of vast reserves of natural gas. 

The 1993 presidential election saw Paz Estenssoro’s former planning minister and prominent 

businessman Gonzalo Sánchez de Lozada receive a plurality of the vote on the MNR ticket. 

Sánchez de Lozada represented a new generation of MNR leaders firmly committed to the 

modernization of Bolivia with the aid of private capital investment from abroad. In a policy 

known as “capitalization,” private capital and expertise were attracted to the hydrocarbons 

sector. In exchange for 30-year operating contracts, foreign investors doubled the capital of state 

energy companies and embarked on aggressive gas exploration. As a consequence of renewed 

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investment, known natural gas reserves increased almost fivefold by 2000, and the Bolivian state 

received more than US$500 million per year in royalties. 

The 1997 elections saw the return of Hugo Banzer to the presidency as a civilian. Despite his 

campaign promises to halt privatization, Banzer continued most of the economic policies of his 

predecessor. The retired general also embarked on a campaign to halt the illicit export of coca, 

the primary ingredient of cocaine, and a cause for concern in the United States. Coca farming has 

existed in parts of Bolivia since Inca times, but it took on increased importance and spread to 

new areas of the country as the international drug trade expanded during the 1980s and 1990s. 

Pressure from the United States to curb coca production led the Banzer administration to 

implement the Dignity Plan, an aggressive program of crop eradication by the Bolivian armed 

forces. Although temporarily successful in its limited aims of eradicating coca fields, the Dignity 

Plan increased rural poverty and sparked a new generation of social protest movements among 

the largely indigenous coca farmers (cocaleros) of the Chapare region. 

Regionalism, Identity Politics, and the “Crisis of Governance”: New social movements 

founded on regionalism and ethnic identity emerged as a major force in Bolivian politics during 

the latter part of the Banzer administration. The discovery of vast reserves of natural gas in the 

late 1990s provoked a heated controversy over ownership of natural resources and the extent to 

which Bolivia should pursue “neo-liberal” economic policies favorable to foreign capital 

investment. The debate pitted the natural gas-rich eastern province of Santa Cruz against social 

movements that drew much of their support from the poorer communities of central and western 

Bolivia. Encompassing a variety of groups, such as shantytown dwellers, indigenous 

communities, and cocaleros, the social movements claimed to represent Bolivians who had 

suffered discrimination and exclusion from the country’s mainstream political and economic 

institutions. Common themes among the social movements were a strong anticapitalist bias and 

an affinity for socialism, nationalism (as expressed in anti-U.S. and anti-Chilean sentiment), and 

a deep-seated suspicion of foreign corporations involved in Bolivian joint ventures and 

privatizations. The social movements distinguished themselves from political parties by

encouraging disruptive forms of protest, such as road blockades and occupations of government 

buildings. A key incident that galvanized opposition to the government was the so-called “water 

war,” in which the social movements in the city of Cochabamba vigorously disputed the 

concession of a commercial waterworks contract to the Bechtel Corporation on the grounds that 

the poor would be deprived of universal access to water. 

In May 2001, President Banzer resigned from office because of a terminal illness. A caretaker 

administration under Vice President Jorge Quiroga completed Banzer’s term and laid the 

groundwork for the 2002 elections. The May 2002 presidential elections became a contest 

between former president Sánchez de Lozada and Evo Morales, an Aymara Indian and cocalero

leader who headed the ticket of the Movement Toward Socialism (Movimiento Al Socialismo—

MAS) party. In the bitterly fought race, Sánchez de Lozada prevailed by a slight margin. 

Sánchez de Lozada’s second administration sought a continuation of his controversial 

capitalization program. However, the water war initiated a period of intense conflict between the 

social movements and the government, limiting the latter’s ability to implement its policies. 

During 2002 and 2003, the government was increasingly challenged by the disruptive activities 

of the social movements. In September 2003, violent protests erupted in response to the 

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government’s plan to institute an income tax and to export liquefied natural gas to the United 

States by means of a pipeline through Chile. Approximately 80 demonstrators were killed in 

clashes with troops deployed to break up blockades of the highways. In October, mobs from the 

nearby shantytown of El Alto occupied and sacked government buildings in La Paz. In order to 

quell the violence, Sánchez de Lozada resigned and handed over the government to Vice 

President Carlos Mesa Gisbert. 

Mesa’s appointment as president temporarily eased the crisis but failed to resolve the dispute 

between the supporters and opponents of a foreign corporate role in the extraction and sale of 

natural gas. Mesa attempted to defuse the crisis by submitting the gas question to the public in a 

national referendum. The July 2004 referendum handed Mesa a tactical victory by approving the 

export of gas, albeit under greater state controls than originally anticipated. Despite a promising 

start, Mesa’s administration was brought down in June 2005 by a new wave of road blockades 

and large-scale protests in La Paz. With the threat of a violent escalation looming, as well as talk 

of secession by the eastern provinces, Congress agreed on Eduardo Rodríguez Veltze, then 

serving as president of the Supreme Court, as interim president. Sworn in on June 10, 2005, 

Rodríguez immediately called for a special national election in December 2005. 

The December 2005 elections were widely anticipated as an opportunity for Bolivians to end the 

“crisis of governance.” In addition to the presidential, senatorial, and congressional races, 

Bolivians also would be voting for the first time for nine departmental governors (prefects). The 

prefectural elections were expected to produce a significant decentralization of political power—

one of the few initiatives on which a majority of Bolivians could agree. The presidential contest 

became a two-candidate race between Evo Morales of the leftist MAS and former President 

Jorge “Tuto” Quiroga of the conservative Social Democratic Power (Poder Democrático y 

Social—Podemos) coalition. Despite concerns that neither candidate would win a clear-cut 

mandate, Morales was elected with 53.7 percent of the vote, becoming the first president of 

Indian ethnicity in Bolivia’s history as well as the first majority president since the revolution. A 

high turnout of more than 80 percent of eligible voters lent added legitimacy to the results. The 

MAS’s strong showing in the presidential race and in the Chamber of Deputies was 

counterbalanced by opposition control of the Senate and of a majority of the prefectures. In early 

2006, the Morales administration’s prospects for addressing Bolivia’s myriad challenges were 

not yet known. Bolivia remained deeply divided by contending ethnic, class, and regional 

loyalties that would severely test the new administration’s capacity to forge a national consensus 

on fundamental economic and political issues. 

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GEOGRAPHY 

Location: Bolivia is located in Central South America, surrounded 

by Brazil to the north and east, Argentina and Paraguay to the south, 

and Peru and Chile to the west. 

Size: Bolivia has a land area of 1,098,580 square kilometers—an area 

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about three times the size of Montana. Bolivia ceded significant tracts of its territory through 

wars and negotiations. Its present size has been fixed since 1938. Bolivia is the fifth largest 

country in South America. 

Land Boundaries: Bolivia has been landlocked since 1884. It shares borders with Argentina 

(832 kilometers), Brazil (3,400 kilometers), Chile (861 kilometers), Paraguay (750 kilometers), 

and Peru (900 kilometers). 

Disputed Territory: Although treaties have officially resolved Bolivia’s nineteenth-century 

border disputes, Bolivia continues to fight for a sovereign corridor to the Pacific through the 

Atacama Desert region it lost to Chile in the War of the Pacific. 

Length of Coastline: None. 

Maritime Claims: None. 

Topography: Dramatic elevation changes distinguish Bolivian topography. La Paz, at 3,600 

meters above sea level, is the world’s highest capital city. The country is split into three 

topographical regions: the Andes and arid highlands of the west, the semi-tropical valleys in the 

middle third of the country, and the tropical lowlands of the east. Bolivia’s high plateau, or 

altiplano, is located between the two major Andean mountain ranges⎯the Cordillera Occidental

and the Cordillera Oriental. The altiplano is arid in the south but served by Lake Titicaca in the 

north. The country’s highest mountain peak, Mt. Illiamani, southeast of La Paz, is more than 

6,000 meters high. The lower, eastern slopes of the Cordillera Oriental, known as the Yungas, 

compose the semi-tropical region of the country. Rivers, plentiful in this region, drain into the 

Amazon Basin. By contrast, the Bolivian lowlands in the east, including the Chaco region, face 

semiarid conditions. Although forests cover nearly half of the country, the ample plains are used 

for cattle grazing and, in less inhabited regions, for coca cultivation. 

Principal Rivers: Bolivia has more than 14,000 kilometers of navigable rivers. The Beni, 

Chapare, Desaguadero, Guaporé, Mamoré, Paraguay, and Pilcomayo form the country’s major 

waterways. Plans have been finalized to widen and deepen the Paraguay River in order to 

improve access to the Atlantic. 

Climate: Bolivia’s extreme range of elevations gives the country a wide range of climates. 

Additionally, the El Niño weather phenomenon (occurring every three to seven years) affects 

Bolivia’s climate. Generally speaking, the mountains of the southwest experience the coldest and 

driest weather. Conditions get warmer and wetter as one travels farther east. The Amazon Basin 

in the northeast floods during the rainy season while the plains region experiences extended 

droughts. The average temperature in the altiplano in the west, extending from Lake Titicaca 

south to the borders with Chile and Argentina, is 8° C. Because the country is south of the 

equator, Bolivia’s winter falls in the middle of the calendar year. 

Natural Resources: Bolivia’s large tin deposits have shaped the country’s recent economic 

history. Bolivia also has other mineral wealth, including large quantities of antimony, gold, iron, 

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natural gas, petroleum, tungsten, and zinc. Bolivia’s dense forests support a burgeoning timber 

industry, and its rivers produce hydropower. 

Land Use: According to the Ministry of Agriculture, only 15 percent of Bolivia’s land is suitable 

for agriculture. Of that arable land, just 12 percent is currently in use, with an additional 10 

percent used for animal grazing. In the agricultural sector, Bolivia has focused on increasing 

yields through the use of new technology rather than on expanding agricultural acreage. 

Environmental Factors: A land-use survey conducted in 2001 revealed a 6 percent loss of 

primary forest over the previous two decades. Even with this encroaching desertification, 

however, forests still cover more than 50 percent of Bolivian territory. Bolivia’s history of slashand-burn agriculture, overgrazing, and industrial pollution has caused significant concern among 

environmentalists. Soil erosion, made worse by seasonal flooding, and contaminated water 

supplies are Bolivia’s most pressing environmental problems. The National Service for Protected 

Areas, established in 1998, currently manages 21 protected areas. 

Time Zone: Bolivia operates four hours behind Greenwich Mean Time (GMT). 

SOCIETY 

Population: In 2004 Bolivia had an estimated population of nearly 9.3 million, with an annual 

population growth rate of 2.4 percent. Bolivia has low population density, only 8.5 people per 

square kilometer. In terms of geographic settlement, 42 percent of Bolivians live in the altiplano

region in the west, followed by 30 percent in the eastern plains region and 29 percent in highland 

valleys in the central part of the country. Urbanization is low but rising. The urban population of 

the country is increasing at a rate of 3.6 percent annually, mostly as a result of the migration of 

rural residents to cities. In 2004 about 62 percent of Bolivians lived in cities, including 40 

percent in cities with more than 200,000 inhabitants. La Paz, located in the altiplano, and Santa 

Cruz, in central Bolivia, are the most densely populated cities. Oruro, located in the altiplano 

southeast of La Paz, is Bolivia’s fastest growing urban area. 

Demography: Bolivia has a young and ethnically diverse population. Statistics show that 35 

percent of the population is younger than 15, nearly 60 percent is 15–64, and only 4 percent is 65 

and older. Experts estimate Bolivia’s birthrate at nearly 23.8 births per 1,000. The infant 

mortality rate stands at 53 deaths per 1,000 live births and the child mortality rate at 66 deaths 

per 1,000 live births, while the overall death rate is 7.6 deaths per 1,000. Life expectancy in 

Bolivia, 65.5 years on average, is shorter than in most other South American countries. 

Ethnic Groups and Languages: Ethnically, Bolivia is not dominated by any single group of 

people. In a survey conducted in 2001, the National Statistics Institute found the following 

breakdown: mestizo (mixed race), 30 percent; Quechua, 28 percent; Aymara, 19 percent; and 

European, 12 percent. The remaining 11 percent come from a collection of ethnicities. Spanish is

spoken by 87 percent of the population. Quechua (34 percent) and Aymara are the other 

prominent languages. 

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Religion: The Roman Catholic Church has a dominant presence in Bolivia. An estimated 95 

percent of Bolivians are Roman Catholic. The remaining 5 percent are Protestant. Bolivia’s 

constitution mandates religious freedom, and the government has no record of suppressing any 

religious groups. However, some Catholic priests are supported by government pensions, in 

exchange for land that the church ceded to the government in the past. Only Roman Catholic 

religious instruction is provided in the country’s public schools, but students are not required to 

attend religious sessions. 

Education and Literacy: In education, as in many other areas of Bolivian life, a divide exists 

between Bolivia’s rural and urban areas. Rural illiteracy levels remain high, even as the rest of 

the country becomes increasingly literate. This disparity stems partly from the fact that many 

children living in rural areas are forced to contribute economically to their family households and 

thus are much less likely to attend school. On average, children from rural areas attend school for 

4.2 years, while children in urban areas receive an average of 9.4 years of education. A gender 

divide also exists. Females, on average, receive about 1.5 years less schooling than males. The 

female illiteracy rate is 19.6 percent while that for males is 7.4 percent. The country’s illiteracy 

level as a whole, 13–14 percent, is higher than in other South American countries. 

The problems with Bolivian education are not necessarily attributable to lack of funding. Bolivia 

devotes 23 percent of its annual budget to educational expenditures, a higher percentage than in 

most other South American countries, albeit from a smaller national budget. A comprehensive, 

seven-year plan of education reform has made some significant changes. Initiated in 1994, the 

plan decentralized educational funding in order to meet diverse local needs, improved teacher 

training and curricula, and changed the school grade system. Resistance from teachers’ unions, 

however, has slowed implementation of some of the intended reforms. 

Health: In terms of key health indicators, Bolivia ranks nearly last among the Western 

Hemisphere countries. Only Haiti scores consistently lower. Bolivia’s child mortality rate of 66 

per 1,000 live births is the worst in South America. Proper nourishment is a constant struggle for 

many Bolivians. Experts estimate that 7 percent of Bolivian children under the age of five and 23 

percent of the entire population suffer from malnutrition. 

Bolivians living in rural areas lack proper sanitation and medical services, rendering many 

helpless against still potent diseases such as malaria (in tropical areas) and Chagas’ disease. 

Statistics indicate that only 20 percent of the rural population in Bolivia has access to safe water 

and sanitation. The prevalence of human immunodeficiency virus/acquired immune deficiency 

syndrome (HIV/AIDS) in Bolivia appears to be low, around 0.1 percent of the population. 

Between 1984 and 2002, only 333 cases of AIDS were reported to United Nations officials. 

Bolivia’s health care system is in the midst of reform, funded in part by international 

organizations such as the World Bank. The number of physicians practicing in Bolivia has 

doubled in recent years, to about 130 per 100,000 citizens, a comparable ratio for the region. 

Current priorities include providing basic health care to more women and children, expanding 

immunization, and tackling the problems of diarrhea and tuberculosis, which are leading causes 

of death among children. As a percentage of its national budget, Bolivia’s health care 

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Library of Congress – Federal Research Division Country Profile: Bolivia, January 2006 

expenditures are 4.3 percent, also on a par with regional norms. However, its annual per capita 

spending of US$145 is lower than in most South American countries. 

Welfare: Among developing nations, as defined by the United Nations (UN), Bolivia ranks 

twenty-seventh according to the Human Poverty Index. Overall, Bolivia ranked 114 out of 175 

on the UN Human Development Index in 2002. Despite efforts at reform, Bolivia’s economic 

development has been continually hindered by political unrest, a lack of economic 

diversification, and the extremely profitable, but internationally condemned, illegal drug trade. 

By some estimates, nearly 65 percent of Bolivians live in poverty. That number rises to 80 

percent when considering only Bolivia’s rural population. Annually, the World Bank designates 

up to US$150 million to bolster Bolivia’s economy and infrastructure. 

Bolivia first implemented a social security program in 1959. Workers aged 65 years or older who 

retire from jobs in the “formal” sector of the economy receive a pension from the Bolivian 

government. However, in 1997 Bolivia followed the trend of other Latin American countries and 

privatized the system. Currently, Bolivian formal-sector workers are required to deposit 10 

percent of their salary into a private social insurance program. Employers contribute an 

additional 2 percent of the worker’s regular salary. Except for those workers who retired under 

the previous system, there is no guaranteed minimum old-age pension, but any unused 

accumulated capital is payable to an heir on the death of the insured. In addition to retirement, 

Bolivia has social welfare to help those disabled, both long-term and short-term, and women who 

become pregnant. Limited funds are also available to aid the unemployed, underemployed, and 

families in need of assistance, but it is likely that stated benefits differ from actual payments. 

ECONOMY 

Overview: Bolivia’s economic history reveals a pattern of a single-commodity focus. From

silver to tin to coca, Bolivia has enjoyed only occasional periods of economic diversification. 

Political instability and difficult topography have constrained efforts to modernize the 

agricultural sector. Similarly, relatively low population growth coupled with low life expectancy 

has kept the labor supply in flux and prevented industries from flourishing. Rampant inflation 

and corruption also have thwarted development. The mining industry, especially the extraction of 

natural gas and zinc, currently dominates Bolivia’s export economy. 

Gross Domestic Product (GDP): Bolivia had an estimated GDP of US$22.3 billion in 2004, 

with a growth rate from the previous year of 3.7 percent. 

Government Budget: Bolivia experienced a budget deficit of about US$500 million in 2004. 

Expenditures were nearly US$2.8 billion while revenues amounted to only about US$2.3 billion. 

Inflation: Inflation has plagued, and at times crippled, the Bolivian economy since the 1970s. At 

one time in 1985, Bolivia experienced an inflation rate of more than 20,000 percent. Fiscal and 

monetary reform reduced the inflation rate to single digits by the 1990s, and in 2004 Bolivia 

experienced a manageable 4.9 percent rate of inflation. 

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Library of Congress – Federal Research Division Country Profile: Bolivia, January 2006 

Agriculture, Forestry, and Fishing: Agriculture, forestry, and fishing accounted for 14 percent 

of Bolivia’s gross domestic product (GDP) in 2003, down from 28 percent in 1986. Combined, 

these activities employ nearly 44 percent of Bolivia’s workers. Most agricultural workers are 

engaged in subsistence farming⎯the dominant economic activity of the highlands region. 

Agricultural production in Bolivia is complicated by both the country’s topography and climate. 

High elevations make farming difficult, as do the El Niño weather patterns and seasonal 

flooding. Bolivia’s agricultural GDP continues to rise but has attained only a rather modest 

average growth rate of 2.8 percent annually since 1991. 

Bolivia’s most lucrative agricultural product continues to be coca, of which Bolivia is currently 

the world’s third largest cultivator. The Bolivian government, in response to international 

pressure, has worked to restrict coca cultivation for the use of producing cocaine. However, 

eradication efforts have been hampered by the lack of a suitable replacement crop for rural 

communities that have cultivated coca for generations. Since 2001, Bolivia’s leading legal 

agricultural export has been soybeans. Additionally, cotton, coffee, and sugarcane have been 

viable exports for Bolivia. For domestic consumption, corn, wheat, and potatoes are the crops of 

choice of Bolivian farmers. 

Despite its vast forests, Bolivia has only a minor timber industry. In 2003 timber accounted for 

only 3.5 percent of export earnings. The Forestry Law of 1996 imposed a tax on sawn timber and 

consequently cut Bolivian timber exports significantly. The tax was used to establish the Forestry 

Stewardship Council, which has been only minimally successful in forest restoration efforts and 

eliminating illegal logging. With increased efficiency, Bolivia could likely expand the 

profitability of its forest resources, while still protecting them from overexploitation. 

Bolivia has a small fishing industry that taps the country’s freshwater lakes and streams. The 

annual catch averages about 6,000 tons. 

Mining and Minerals: Mining continues to be vital to Bolivia’s economy. The collapse of the 

world tin market in the 1980s led to a restructuring of the industry. The state dramatically 

reduced its control and presently operates only a small portion of mining activities. Small-scale 

operations, often with low productivity, employ many former state miners. Natural gas has 

supplanted tin and silver as the country’s most valuable natural commodity. A discovery in 1997 

confirmed a tenfold gain in Bolivia’s known natural gas reserves. Finding markets to utilize this 

resource, both domestically and internationally, has been slowed by a lack of infrastructure and 

conflicts over the state’s role in controlling natural resources.

Although the world tin market has reemerged, Bolivia now faces stiff competition from

Southeast Asian countries producing lower-cost alluvial tin. Gold and silver production has 

increased dramatically over the past decade. Annually, as of 2002 Bolivia extracted and exported 

more than 11,000 kilograms of gold and 461 tons of silver. Additionally, Bolivia has increased 

zinc production, extracting more than 100,000 tons each year. Other metals excavated include 

antimony, iron, and tungsten. 

Industry and Manufacturing: Annually, manufacturing has accounted for approximately 18 

percent of Bolivia’s gross domestic product since 1995. Most industry is small-scale, aimed at 

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Library of Congress – Federal Research Division Country Profile: Bolivia, January 2006 

regional markets rather than national operations. Inadequate credit options and competition from

the black market have kept Bolivia’s manufacturing sector from developing fully. Leading 

manufactured goods in Bolivia include textiles, clothing, non-durable consumer goods, 

processed soya, refined metals, and refined petroleum.

Energy: Bolivia is energy self-sufficient. The country’s energy needs are relatively small but 

growing consistently. Bolivia uses oil for the majority of its power needs, followed by natural 

gas. The country has large reserves of both. Bolivia’s energy sector changed significantly when 

the government allowed privatization in the mid-1990s. International companies quickly invested 

in Bolivian energy sources, particularly in natural gas, and made Bolivia into a player in the 

world energy market. 

The exportation of Bolivian energy resources, while potentially lucrative economically, has been 

politically hazardous. President Gonzalo Sánchez de Lozada ultimately resigned over his plan to 

export natural gas to the United States and Mexico in 2003. Subsequent politicians have been 

hesitant to act decisively even though Bolivia’s economy could readily use an export boost. On 

June 6, 2005, President Carlos Mesa offered his resignation to the Bolivian Congress after 

months of demonstrations by Bolivia’s Indian population calling for renationalizing the natural 

gas and oil sectors. Mesa had increased taxation on foreign companies while still encouraging 

their investment in Bolivian energy development. 

Bolivia has estimated oil reserves of 441 million barrels, the fifth largest in South America. The 

country’s natural gas reserves total 27.6 trillion cubic feet according to Bolivian government 

figures, ranking Bolivia behind only Venezuela in terms of proven natural gas reserves in South 

America. Additionally, Bolivia produces more electricity with its nine power companies than it 

can consume. In 2002 Bolivia generated 4.1 billion kilowatt-hours of electricity but consumed 

only 3.8 billion kilowatt-hours. 

Services: The services industry in Bolivia remains undeveloped. Inhabiting one of the poorest 

countries in South America, Bolivians have weak purchasing power. The retail sector suffers 

from weak demand and competition with a large black market of contraband goods. U.S. 

companies such as McDonald’s and Domino’s have pulled out of Bolivia in recent years. 

Banking and Finance: Banking in Bolivia has long suffered from corruption and weak 

regulation. However, a series of reforms initiated by the 1993 Banking Law and subsequent acts 

are gradually improving Bolivia’s banking sector. Bolivia has a Central Bank and nine private 

banks. Consolidation occurred following reforms, lowering the number of private banks in 

Bolivia from 14 in 1995 to nine in 2003. Foreign participation and investment in Bolivian banks 

are allowed.

About 90 percent of Bolivian bank deposits are held in U.S. dollars. The Bolivian government is 

trying to change this situation by taxing dollarized accounts while exempting boliviano accounts 

from the tax. As recently as 2002, 27 percent of all loans were non-performing, leading most 

foreign investors to focus their resources in the somewhat-safer venue of corporate lending. Most 

bank lending in 2003 went to manufacturing (24 percent), followed by property services (18 

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Library of Congress – Federal Research Division Country Profile: Bolivia, January 2006 

percent) and trade and retail (16 percent). Bad debt remains at a historically high level. Further 

reforms are necessary, including the pending act to introduce a deposit guarantee system. 

Bolivia’s stock market expanded in 1998 to include corporate bonds, along with the money 

market and government bond options that had existed previously. The privatization of Bolivia’s 

social security program has bolstered the stock market. 

Tourism: Bolivia’s spectacular vistas and natural attractions have not been enough to transform

the country into a major tourist destination because of its political instability and lack of firstclass accommodations. Still, Bolivia’s tourist industry has grown gradually over the past 15 

years. In 2000 Bolivia attracted 306,000 tourists, compared with 254,000 in 1990. Tourist 

revenue peaked at US$179 million in 1999. Tourism in Bolivia declined following the 

September 11, 2001, attack on the United States, as was the case across North and South 

America. 

Labor: The economic downturn of the late 1990s, coupled with privatization and austerity 

efforts led by President Mesa, resulted in significant unemployment. Although the Bolivian 

government does not keep unemployment statistics, outside experts estimate unemployment to 

be between 8 and 10 percent of the population. Underemployment of Bolivia’s workforce of 

nearly 4 million is also widespread. As a result of the lack of formal employment opportunities, 

nearly 65 percent of the urban workforce was self-employed in 2002. 

Labor unions have a strong history in Bolivia. Many workers in the formal sector belong to 

unions. The larger unions, such as the Bolivian Labor Federation and the Trade Union Federation 

of Bolivian Mine Workers, have been successful in rallying workers to countless strikes and 

work stoppages. Nevertheless, working conditions for most Bolivian workers are difficult. 

Foreign Economic Relations: Bolivia was a founding member of the Andean Group, a South 

American organization designed to promote trade among Bolivia, Colombia, Ecuador, Peru, and 

Venezuela. Subsequently renamed the Andean Community (Comunidad Andina—CAN), the 

organization has succeeded in increasing intra-South American trade. Trade among member 

countries rose from US$3.6 billion in 1991 to US$10.3 billion in 2003. Bolivia also belongs to 

the Common Market of the South (Mercado Común del Sur—Mercosur). Bolivia became an 

associate member in 1997 in order to open investment opportunities with the founding Mercosur 

countries (Argentina, Brazil, Paraguay, and Uruguay), as well as other Mercosur associate 

members (Chile, Colombia, Ecuador, Peru, and Venezuela). Bolivia conducted more than US$1 

billion in trade with Mercosur countries in 2003. As a result of negotiations initiated in 1999 on a 

possible South American Free Trade Area (SAFTA), the two groups announced in December 

2004 that they would merge, creating a South American Community of Nations patterned after 

the European Union. 

Imports: Bolivian imports of goods and services were valued at about US$2.1 billion in 2004. 

The import of consumer goods increased for the first time since 2002. By sector, Bolivia 

imported mostly intermediate goods, followed by industrial, capital, and consumer goods. 

Leading sources of Bolivian imports include Brazil, Argentina, the United States, and Chile. 

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Library of Congress – Federal Research Division Country Profile: Bolivia, January 2006 

Exports: Bolivian exports of goods and services in 2004 stood at more than US$2.1 billion 

compared with US$1.9 billion in 2003. Increased production of hydrocarbons, especially natural 

gas, led Bolivia’s trade upturn in 2004. A 20-year supply contract with Brazil for natural gas, 

ending in 2019, has provided the necessary capital to increase production. In 2004 export 

revenues for natural gas topped US$619 million. Bolivia also exported significant quantities of 

petroleum. Beyond hydrocarbons, other significant exports included zinc, soya, iron ore, and tin. 

In 2001 Brazil overtook the United States as Bolivia’s primary export outlet. Switzerland, 

Venezuela, and Colombia are also important export partners. Bolivia has actively sought to 

foster economic connections in South America after long relying on the United States as its 

primary trade partner. 

Trade Balance: Bolivia had an estimated trade surplus of more than US$340 million in 2004. 

This figure represents a marked change in Bolivia’s economic balance sheet. Bolivia reached a 

peak trade deficit of US$888 million in 1998 before increased hydrocarbon exports radically 

altered the situation. 

Balance of Payments: Bolivia had a large negative balance of payments for 2002⎯US$317 

million. However, this situation has been remedied by the vast increase in export revenue. 

Estimates for the balance of payments for 2004 show a record surplus of US$126 million. 

External Debt: Bolivia’s external debt totaled an estimated US$5.7 billion in 2004. The 

International Monetary Fund has assisted Bolivia in paying down this debt. In 1995 the United 

States, among other countries, reduced Bolivia’s debt by two-thirds. 

Foreign Investment: Foreign investment in Bolivia was buoyed in 1995 by privatization. 

Investment in mining and natural gas extraction increased, as did investment in the banking 

sector. However, the economic decline of the late 1990s, along with political unrest, caused 

foreign investors to pull out of Bolivia once again. In 2000 foreign investors contributed US$736 

million to the Bolivian economy. In 2002 this total fell to US$676 million. 

Foreign Aid: Bolivia depends on foreign aid to fund its improvement projects and to service its 

large external debt. In 1998 the World Bank and International Monetary Fund awarded Bolivia a 

debt-relief package worth US$760 million. Bolivia also has received relief under the World 

Bank’s Heavily Indebted Poor Countries program, which, if Bolivia meets all checkpoints, will 

total US$1.2 billion by 2011. In 2004 the United States designated more than US$150 million for 

assistance to Bolivia. 

Currency and Exchange Rate: Bolivia’s currency is the boliviano (BOB). The exchange rate in 

January 2006 was about 8 bolivianos per US$1. 

Fiscal Year: Calendar year. 

15
TRANSPORTATION AND TELECOMMUNICATIONS

Overview: Bolivia’s extreme terrain and elevation changes make cross-country transportation 

difficult. Flooding and landslides also cause problems. Because Bolivia is landlocked, the oceans 

offer no aid in moving commodities, and export costs are higher for Bolivia than for most other 

countries in South America. 

Roads: Bolivia has more than 60,000 kilometers of roads. Only 4,000 kilometers of that total, 

however, are paved. A transportation improvement plan calls for the country to double the length 

of paved roads by 2006. Ongoing improvement projects include a highway between Santa Cruz 

and the Brazilian border at Puerto Suárez and another between La Paz and the Brazilian border at 

Guayaramerín. 

Railroads: Bolivia’s railroad network extends nearly 4,300 kilometers. However, rather than one 

unified network, separate networks exist in the eastern lowlands and the western highlands. The 

eastern network connects the Santa Cruz region with both Argentina at La Quiaca and Brazil at 

Corumbá. The western network connects with Chilean rail centers. Currently, plans exist for a 

railroad connecting Santa Cruz and Cochabamba. The feasibility and funding for this 

improvement are under debate. The Bolivian government owned the country’s largest railroad 

company, Empresa Nacional de Ferrocarriles, until 1995, when it was capitalized. 

Ports: The river port Puerto Aguirre, at the border with Brazil on the Paraguay River, functions 

as Bolivia’s primary outlet to international waters. In addition, Bolivia has free port privileges in 

Argentina (Rosario), Brazil (Belém, Corumbá, Porto Velho, and Santos), Chile (Arica), 

Paraguay, and Peru (Ilo). 

Inland Waterways: Bolivia has more than 14,000 kilometers of navigable rivers. The Paraguay 

River functions as the country’s primary conduit for trade. 

Civil Aviation and Airports: Bolivia has more than 1,000 airports spread throughout its 

territory. Only 16 of these airports, however, have paved runways. The vast majority are rural 

airstrips. La Paz (El Alto) and Santa Cruz (Viru-Viru) are home to the country’s two 

international airports. Two airlines dominate domestic travel in Bolivia. Lloyd Aéreo Boliviano 

services most of Bolivia’s major towns. The state ceded control of the airline in 1995, and now 

private investors control part of the company. Aerosur, based in Santa Cruz, serves as the 

country’s other dominant air service provider. Because La Paz is at such a high elevation, large 

airliners cannot take off from there at full capacity. Most flights from the capital city stop over in 

Santa Cruz for more passengers or cargo before proceeding to their final destination. 

Pipelines: Bolivia has more than 9,000 kilometers of pipelines, with the majority being used to 

transport natural gas. Bolivia has 4,860 kilometers of pipeline for natural gas, 2,457 kilometers 

for oil, 1,589 kilometers for refined products, and 47 kilometers for liquid petroleum gas. Some

experts maintain that inadequate infrastructure, including pipelines, has prevented Bolivia from

taking full economic advantage of its natural resources. Bolivia currently has cross-border 

natural gas pipelines into Argentina and Brazil. 

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Telecommunications: The telecommunications industry has expanded and diversified since 

privatization in 1995. The Empresa Nacional de Telecomunicaciones (known as Entel) was 

purchased by an Italian company and subsequently expanded and improved to offer better 

service across the country. In 2001 the telecommunications market opened for full competition, 

and one company (Viva) created a separate network to challenge Entel’s holdings. Although 

Entel still dominates the market, service, quality and price all have improved to benefit the 

consumer since 1993. Nevertheless, bureaucratic difficulties still confront many Bolivians trying 

to establish new telephone service. 

Bolivia’s telecommunications development, in comparison with other South American countries, 

is still relatively limited. Bolivia has 63 fixed telephone lines and 94 cellular subscribers per 

1,000 people. Only 2 percent of Bolivians, compared with 3.6 percent regionally, have access to 

a personal computer. Bolivia has only 21 Internet users per 1,000 people, compared with 76 in 

Peru, for example. Nevertheless, access to the Internet and the number of Internet users have 

grown significantly each year. From 2001 to 2002, the number of Internet users in Bolivia 

increased from 180,000 to 270,000. 

GOVERNMENT AND POLITICS 

Political System: Bolivia is a unitary democratic republic, empowered by the revised 

constitution of 1994. Similar to the United States, Bolivia has executive, legislative, and judicial 

branches of government. The directly elected president serves a five-year term and appoints an 

executive cabinet. Traditionally, the president has been a strong executive, responsible for 

foreign diplomacy, setting economic policy, and commanding the armed forces, among other 

duties. The president cannot be reelected to successive terms. 

The bicameral Congress consists of a 27-member Senate and a 130-member Chamber of 

Deputies and is limited to debating and approving legislation initiated by the executive. Congress 

meets annually for a session of 90 working days. At the request of the executive or a majority of 

its members, Congress may expand its annual session to 120 days or convene extraordinary 

sessions to debate specific legislation. Each of the nine departments elects three senators. About 

one-half of the members serving in the Chamber of Deputies are directly elected, while the other 

representatives gain their seats through indirect party nominations. All members of Congress 

serve five-year terms. 

Bolivia’s judicial system consists of a Supreme Court, district (or superior) courts in each of the 

nine departments, and provincial and local courts to try minor cases. The 12 Supreme Court 

justices, nominated by the president and confirmed by the Congress, serve non-renewable 10-

year terms. The Supreme Court is divided into four chambers of three justices each, with two 

chambers dealing with civil cases, another dealing with criminal cases, and the fourth with 

administrative, social, and mining cases. The superior courts hear appeals of lower-court 

decisions and review the application of Bolivian law. The Supreme Court hears only cases 

involving exceptional circumstances. A Constitutional Tribunal handles appeals on constitutional 

issues. Both the superior courts and the Supreme Court have the right to alter the sentences or 

negate the decisions of lower courts. Although the judiciary is meant to be independent of 

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outside influence, political pressure and judicial corruption have long been present in Bolivia. 

Reforms in 1998 added several components to the judicial system in an effort to curtail 

corruption, including an independent judicial council to oversee and investigate the conduct of 

judges and a public defender program. 

Administrative Divisions: In 1989 the Congress divided Bolivia into its present administrative 

form, consisting of nine departments. In descending order of population size, the departments 

are: La Paz, Santa Cruz, Cochabamba, Potosí, Chuquisaca, Oruro, Tarija, Beni, and Pando. 

Provincial and Local Government: Bolivia’s nine regional departments are divided into 94 

provinces, which are further divided into 312 municipalities. The highest executive authority in a 

department is the prefect—roughly comparable to a state governor in the United States. As a 

result of constitutional reforms ratified in 1995, in December 2005 the nine departmental prefects 

were directly elected by voters, replacing the previous system of presidential appointment of 

prefects. Sub-prefects administer provinces. Bolivian towns and cities directly elect mayors and 

municipal councils. Municipal elections occur every five years. 

Judicial and Legal System: Bolivia’s legal system is based on Spanish law and the Napoleonic 

Code. The 1999 penal code also incorporated the customary law of indigenous peoples. The 

implementation of the Code of Criminal Procedures (CCP) in May 2002 improved Bolivia’s 

court system. Members of the Judicial Technical Police, lawyers, law students, judges, and 

nongovernmental organization (NGO) representatives have received training in the new CCP, 

emphasizing the protection of legal and human rights. With the goal of rooting out corruption, 

the CCP changed the criminal justice system from a closed, written system to one with open, oral 

trials. Additionally, the Public Ministry Law, enacted in March 2002, introduced the role of 

prosecutor in the Bolivian legal system. Rather than the judge leading the investigation against a 

defendant, prosecutors now conduct the state’s inquiry. 

In misdemeanor cases, a defendant appears in the lower courts before only a judge. In felony 

cases, two judges and a jury of three citizens decide the defendant’s fate. Defendants have the 

right to an attorney, to remain silent, to due process, and to a presumption of innocence, among 

others rights. In practice, these rights are often ignored. Nevertheless, the new transparency 

brought with the CCP has made the rights of the defendant somewhat easier to defend. 

Electoral System: Since 1982, Bolivian elections have produced largely peaceful exchanges of 

political power. Elections for national and municipal offices are held every five years. Universal 

and compulsory suffrage exists in Bolivia (at age 21, or age 18 if married), but citizens must 

produce documentation in order to vote. Electoral judges serve in each department in order to 

rule on contested voter eligibility and other election discrepancies. Election fraud historically has 

plagued Bolivia, and accusations of fraud are a part of the Bolivian electoral system. 

Politics and Political Parties: Bolivia has a fragmented political party system, as evidenced by 

the multitude of parties represented in the Congress. Support for the traditionally dominant 

parties⎯the Nationalist Revolutionary Movement (Movimiento Nacionalista 

Revolucionario⎯MNR), Nationalist Democratic Action (Acción Democrático 

Nacionalista⎯ADN), and Movement of the Revolutionary Left (Movimiento de la Izquierda 

18
Revolucionaria⎯MIR)⎯has declined since the 1980s. In their place, a plethora of single-interest 

parties have arisen. Regional and ethnic loyalties have replaced national coalitions. This 

development has led to a series of alliances among seemingly disparate political parties. For 

example, in 2002 four presidential candidates each received more than 15 percent of the vote, led 

by Gonzalo Sánchez de Lozada with 23 percent. This result triggered a runoff between Sánchez 

de Lozada and the second-place candidate, Evo Morales. Sánchez de Lozada prevailed in this 

contest, but only by securing the support of his former rivals and forming an impossible-tomaintain four-party coalition. The power sharing required in such a political atmosphere has 

severely curtailed the effectiveness of the Congress. Patronage is divided among the parties to 

such an extent that bureaucratic efficiency also is compromised. 

Carlos Mesa, a political independent, resigned from the presidency on June 6, 2005, as a result of 

massive public demonstrations in La Paz and out of frustration over Bolivia’s deadlocked 

political system. Eduardo Rodríguez succeeded Mesa on an interim basis, and a special national 

election was held in December 2005. Bolivians went to the polls in December 2005 to elect a 

president, both houses of Congress, and the nine departmental prefects. The top presidential 

candidates were Jorge “Tuto” Quiroga, former president and leader of the conservative ADN 

party, now associated with the Social Democratic Power (Poder Democrático y Social—

Podemas) coalition; Evo Morales, indigenous leader of the leftist Movement Toward Socialism

(Movimiento al Socialismo—MAS) party; and wealthy businessman Samuel Doria Medina of 

the centrist National Unity (Unidad Nacional—UN) party. 

Evo Morales won the December 2005 presidential election in a landslide victory with 53.7 

percent of the vote, thus making him the first ethnic Indian president in Bolivia’s history and the 

first president elected by a majority since the 1952 revolution. The controversial indigenous 

leader campaigned on a platform of nationalizing the hydrocarbons sector and ending a coca 

eradication program supported by the United States. The MAS’s strong showing in the 

presidential race and in the Chamber of Deputies was counterbalanced by opposition control of 

the Senate and of a majority of the nine prefectures. 

Mass Media: Bolivia has nearly 200 privately owned television stations, but because rural 

regions of the country have few televisions and television reception is poor in many areas of the 

country, radio remains an important news disseminator. At last count, Bolivia had more than 480 

radio stations, most of which were regional in scope. Bolivia also has eight national newspapers, 

in addition to many local ones. Of the national papers, four are based in La Paz, three in Santa 

Cruz, and one in Cochabamba. Most Bolivians continue to get their news from newspapers and 

radio broadcasts. 

The Bolivian constitution protects freedom of the press and speech. Most newspapers take 

antigovernment positions. Both state-owned and privately owned radio stations operate without 

government censorship. Some restrictions do exist, however. The Penal Code demands jail time

for those persons found guilty of slandering, insulting, or defaming public officials. In particular, 

the president, vice president, and ministers are protected by the Penal Code. Those charged with 

violating press standards are brought before the independent La Paz Press Tribunal. 

19
Foreign Relations: Bolivia traditionally has had strong ties to the United States. Economically, 

the United States has been a long-standing consumer of Bolivian exports and a partner in 

development projects. Bolivia is heavily dependent on foreign aid. The country receives about 

US$500 million each year from 18 foreign institutions, including about US$150 million from the 

United States. In 1991 the United States forgave more than US$350 million owed by Bolivia to 

the U.S. Agency for International Development and the U.S. Department of Agriculture. 

Presently, about one-third of U.S. aid to Bolivia is earmarked for anti-drug trafficking programs. 

More recently, Bolivia has attempted to strengthen its ties with neighboring South American 

countries. A bilateral agreement for natural gas exports with Argentina in 2004 represented a 

significant step in overcoming past hostilities to establish a mutually beneficial relationship. 

Bolivia’s diplomatic relationship with Chile remains strained, simmering still from the loss of

Bolivia’s entire coastline to Chile in the late nineteenth century. Diplomatic relations between 

the two countries, reestablished briefly between 1975 and 1978, have been broken off at the 

ambassadorial level. 

Membership in International Organizations: Bolivia is a member of the United Nations and 

many of its affiliated organizations. Regionally, Bolivia belongs to the Amazon Pact, Andean 

Community, Latin American Integration Association, Organization of American States, 

Common Market of the South (Mercosur), and Rio Group. Bolivia is also a member of the 

International Monetary Fund, International Parliamentary Union, International 

Telecommunications Satellite Organization, Non-Aligned Movement, World Health 

Organization, and World Trade Organization. 

Major International Treaties: Bolivia is a party to many significant treaties, including 

international agreements on biological weapons, chemical weapons, copyright, human rights, 

intellectual property, nuclear weapons non-proliferation, and torture. In the environmental arena, 

Bolivia is a party to the following agreements: Biodiversity, Climate Change (including the 

Kyoto Protocol), Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, 

Marine Dumping, Ozone Layer Protection, Ship Pollution, Tropical Timber 83 and 94, and 

Wetlands. 

NATIONAL SECURITY 

Armed Forces Overview: Although its political history has been dominated by military coups, 

Bolivia’s armed forces are relatively small and undeveloped. Bolivia currently has secure 

borders and few international threats, in comparison with previous times in its history. Efforts to 

reform and modernize the Bolivian armed forces have been suppressed as a result of the need to 

retain the support of the military establishment and because of more pressing political and civil 

issues. In spite of its weakness on the world scale, the Bolivian military historically has been the 

only institution that can maintain law and order in the country. 

Foreign Military Relations: Bolivia receives military aid from the United States for its 

continuing fight against illicit drug production and trade. Bolivia and the United States have 

conducted joint training exercises, and Bolivia has received training funds through the 

20
International Military Education and Training (IMET) program. Military relations with regional 

neighbors remain stable, but tensions between Peru and Chile have the potential to unbalance the 

military equilibrium currently governing South America. Bolivia opposes most Chilean interests 

as a result of lingering resentment over the War of the Pacific (1879–80). 

External Threats: Since losing territory to Chile and Paraguay through military conflict in the 

early twentieth century, Bolivia has remained relatively safe from international threats. Internal 

riots and resistance represent a much more significant threat to Bolivian stability than do external 

threats. 

Defense Budget: In 2004 Bolivia devoted US$132 million to military expenditures. Bolivia 

ranks near the bottom third of world countries in terms of both military spending and military 

expenditures as a percentage of GDP. 

Major Military Units: Bolivia has three military services⎯the army, air force, and navy. The 

army has the majority of the military manpower, with 25,000 troops of the 31,500 in the Bolivian 

armed forces. The army is divided into six military divisions and includes a presidential guard 

infantry unit. The army still includes five horse-riding cavalry groups, along with one motorized 

cavalry group, one assault cavalry group, two airborne regiments, two mechanized infantry 

regiments, three motorized infantry regiments, six artillery regiments, six engineer battalions, 

and 21 infantry battalions. The 3,000-member air force is organized in two fighter squadrons; 

other squadrons are devoted to helicopters, weapons training, survey, air defense, and transport. 

Bolivia’s navy has 3,500 personnel, 1,700 of whom are marines. Without ocean access, Bolivia’s 

navy focuses on the country’s rivers and Lake Titicaca. Six naval districts cover the country. One 

battalion of marines operates in each of the six districts. 

Major Military Equipment: Much of Bolivia’s military equipment is outdated. The army

inventory includes 36 SK–105 Kuerassier light tanks, 24 Cascavel reconnaissance vehicles, and 

59 armored personnel carriers. In terms of artillery, the army has 75-, 105-, and 122-millimeter 

towed guns. Additionally, the army has 81-millimeter and 107-millimeter mortars. Bolivia’s air 

force makes use of an aged fleet of planes. Presently, it has 37 combat aircraft and 16 armed 

helicopters. Bolivia’s fighter squadrons fly 18 AT–33AN fighter jets and 19 PC–7s. For transport 

and surveillance, a collection of Cessnas, Learjets, Saberliners, and King Air aircraft are used. 

Bolivia’s naval fleet consists of 60 riverine and 18 support craft. 

Military Service: Military service is voluntary unless enlistments fail to meet government 

quotas, which has been the case in recent history. More than half (20,000) of Bolivia’s active 

troops are conscripted. Males become eligible for voluntary service at 18 but may be conscripted 

as young as 14. According to one estimate, nearly 40 percent of military personnel are less than 

18 years of age. Active members of the armed services serve for periods of one year. 

Paramilitary Forces: Bolivia’s paramilitary force is larger than its armed forces. More than 

31,000 national police officers and 6,000 narcotics police officers serve Bolivia’s citizenry. The 

national police force is divided into nine brigades, two rapid response regiments, and 27 frontier 

units. Political instability and frequent civil unrest have made the paramilitary forces vital to 

Bolivia’s well-being. 

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Foreign Military Forces: In the 1980s, the U.S. military collaborated with Bolivian forces to 

attempt to eradicate drug production. Public outcries against the presence of U.S. military forces, 

however, led to the withdrawal of U.S. forces. Currently, no foreign forces reside in Bolivia. 

Military Forces Abroad: Bolivia plays a limited role in international peacekeeping. In 2004 

Bolivia sent 207 troops the Democratic Republic of the Congo to participate in peacekeeping 

operations. Additionally, Bolivia sent observers to United Nations operations in Côte d’Ivoire, 

East Timor, Haiti, Liberia, Serbia and Montenegro, and Sierra Leone. 

Police: Bolivia has a national police force of 31,000 officers that is responsible for internal 

security and maintaining law and order. Unlike in most Latin American countries, the Bolivian 

police force always has been responsible to the national government rather than to state or local 

officials. The 1950 Organic Law of Police and Carabineers officially separated the police from

the military. Frequently, however, the national police call upon the military for assistance in 

quelling riots and civil protests. 

Internal Threat: Bolivia has internal conflicts stemming from a variety of sources. Coca 

farmers resisting government efforts at crop eradication frequently have resorted to protest and 

violence against national police forces. In 2003 coca farmers and Bolivian troops clashed 

repeatedly, leaving more than 60 dead. Similarly, indigenous groups have organized in 

opposition to the perceived injustice of exporting natural gas for the primary benefit of large 

companies. And more generally, Bolivia’s long-term poverty has produced instability and a rift 

between rural and urban communities. Although democratic participation is present in Bolivia, 

the fragmented political parties frequently serve as instigators of internal divisions rather than as 

functional outlets for varying opinions. 

Terrorism: Bolivia is a signatory to the Inter-American Convention Against Terrorism and the 

Asunción Declaration of 2003, which unites Latin American countries to fight alongside the 

Colombian government against terrorism and drug trafficking. Despite its meager military 

budget, Bolivia has been one of the United States’ most reliable South American partners in the 

war on terrorism. Bolivia has shared financial information with the United States regarding 

suspected terrorists in the country. In 2004 Bolivia established a counterterrorism coordination 

unit to bring together police, military, and diplomatic leaders.

Bolivia’s efforts to eradicate the coca industry have been modestly successful. Increased pressure 

on coca farmers, however, has resulted in heightened domestic conflict and opened new 

possibilities for cooperation with terrorist organizations. Bolivia’s varied topography and porous 

borders make the country a possible haven for terrorist groups. However, no major terrorist 

actions have taken place on Bolivian soil, and there is no evidence of the presence of 

international terrorist organizations in the country. 

Human Rights: Bolivia is in accord with general human rights standards. It affords its citizens 

freedom of the press, speech, religion, and assembly. Those accused of committing crimes in 

Bolivia enjoy the right to a trial by jury and to legal representation. Although the judiciary 

operates independently, low pay makes many judges susceptible to bribes. Prisoners do not enjoy 

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equal treatment. Those with money are able to buy larger cells and more food than those without 

access to funds. 

Bolivians enjoy the right to vote in regular political elections and to assemble for political 

protests. Oftentimes, however, political protests have devolved into violence, and military and 

police forces have used violent measures to restore order. Bolivian political parties range from

extreme conservative to extreme liberal, and citizens are unrestricted in joining the political party 

of their choice. Additionally, Bolivian workers have the right to unionize. About 25 percent of 

workers employed in the formal work sector belong to unions. A minimum wage and workweek 

standards exist, but enforcement has proved difficult. 

Abuse of women and children is widespread and often unreported in Bolivia. Family violence, 

when reported, results in only a few days in jail and a small fine. The punishment for rape has 

become more severe in recent years. Those convicted of rape, including statutory rape, face 

significant jail time. However, a victim must press charges in order for rape to be a crime. 

Economic scarcity has led to human trafficking and child labor in Bolivia. Prostitution is legal in 

Bolivia, but many Bolivian women are taken against their will to other countries and forced to 

work in prostitution for little compensation. Children are often trafficked for labor. The Bolivian 

government, in cooperation with the United Nations, is working to curb abuse of Bolivian 

women and children both within Bolivia and abroad. 

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