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Bolivia: Political and Economic Developments and Implications for U.S. Policy

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Congressional rept.

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Bolivia is one of the poorest countries in Latin America with an ethnically diverse population. It has a long history of political instability that persists to this day. Its weak political institutions, geographic and ethnic cleavages, and an active indigenous population have interacted to produce political polarization over such important issues as the future of oil and gas exploration and production, coca eradication programs, and calls for regional autonomy and constitutional reform from some parts of the country. Political protests in 2003 led to the resignation of President Gonzalo Sanchez de Lozada, fifteen months after he was elected. Succeeding him was his former vice president, Carlos Mesa, a popular former television journalist. The focus of the 2003 protests was the continued economic marginalization of the poorer segments of society, especially in response to government budget cutbacks and proposals to raise taxes. President Mesa, after an initial reprieve, was unable to unite the disparate political forces. In response to continuing street protests that at times paralyzed the country, he resigned in June 2005. Despite these challenges, the country has made some social and economic progress over the last several decades. U.S. interest in Bolivia centers on its role as a coca producer, and its relationship to Colombia and Peru, the two other major coca- and cocaine-producing countries. Some observers have criticized this focus for neglecting economic and social development issues, but the State Department defends it as necessary to promote licit economic development and democracy. Bolivia has the second-largest natural gas reserves in Latin America after Venezuela. The Bolivian government has plans to export gas to the United States and Mexico, necessitating the construction of a pipeline to a coastal port of a neighboring country.

Subject Categories:

  • Economics and Cost Analysis
  • Government and Political Science
  • Geography

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