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Bolivia is South America’s poorest nation and the most indigenous nation in all of the Americas. Appreciated by foreign tourists for its striking geography – impossibly high plains, deep Amazon Basin jungles and tranquil colonial cities – Bolivia has also recently become known as Ground Zero in Latin America’s rising struggle against a market model imposed from abroad.

Bolivia’s 500-year history since the arrival of the Spaniards is a tale of rich natural resources stolen by foreign empires. Cerro Rico, a small hill full of silver just outside the city of Potosi that was mined by Indian and slave labour, almost single-handedly bankrolled the Spanish empire for three centuries. Once the silver was gone, tin mining was responsible for roughly half the nation’s gross domestic product until the 1970s. Violent conflicts between governments and heavily unionized miners were a staple of national life, as were revolving-door presidencies and coups that were often more frequent than the changes of the season.

The collapse of the tin industry coincided by chance with the rise of cocaine consumption in the rich world and in the 1980s Bolivia became a major international source for the coca leaf, the root ingredient of cocaine. Long an indigenous sacrament and a staple for workers and peasants (chewing the leaf curbs hunger), coca became the new tin.

That in turn made Bolivia a prime target for the US ‘War on Drugs’. Under a law imposed by the US in the waning days of the Reagan Administration, the Bolivian army began destroying coca crops. Thousands were jailed, accused of drug-related activity, including many innocents. By the end of the 1990s the jails were full and 90 per cent of the coca crop had been destroyed.

Bolivia has also been one of Latin America’s prime test labs for ‘neoliberal’ economic reforms. Under heavy pressure from the World Bank and the IMF, a succession of governments privatized state enterprises, relaxed labour laws and reduced public spending.

As the new century dawned, so did a series of civic uprisings. In Cochabamba, the country’s third-largest city, local citizens rebelled in 2000 against a World Bank-imposed privatization of the local public water system, leased off to the US engineering behemoth, Bechtel. Angry over steep increases in water prices, Cochabambinos shut down their city for a week and forced Bechtel out of the country.

In February 2003 the IMF coerced Bolivia into adopting a deficit-reduction package that proposed deep cuts in public spending and substantial tax increases for the working poor. A rebellion led by the national police forced a rollback of the package but left more than 30 dead.

In October 2003 Bolivia was ablaze again with a nationwide rebellion, this time in opposition to a plan to export natural gas through Chile to California. President Gonzalo Sànchez de Lozada, a staunch US ally and chief promoter of the pro-market reforms, responded with brutal repression. Following more than 70 deaths, Sànchez de Lozada was forced out of the country.

Bolivia’s new President, Carlos Mesa (the former Vice President and before that a respected TV journalist) faces a host of tough issues. The nation’s social and indigenous movements are calling for an end to US-forced coca eradication, for constitutional reform and for government measures to address grinding poverty. The US, World Bank and IMF are pressing the Government to stay the neoliberal course.

Political conflict aside, Bolivia remains a country filled with colourful weavings, spectacular sunsets and an Andean indigenous culture that remains remarkably intact. Llama f?tuses can still be found hanging in the large outdoor markets and many children are taught their culture’s traditional dances even as they learn to walk. Even as it becomes slowly more integrated into global culture and economics, Bolivia still has a chance of protecting its indigenous soul.

Fact file

Monetary unit
Main exports
Human Development Index
Last profiled March 1991

At a glance

Country profile: Star rating: 

  • Income distribution
  • Life expectancy
  • Position of women
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  • Literacy
  • Sexual minorities
  • NI Assessment (Politics)