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Summary

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 S�nchez 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. The final spark, which immediately preceded S�nchez de Lozada's resignation, was his plan to export natural gas to Mexico and the United States via a port in Chile, a historic adversary of Bolivia. 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. Eduardo Rodriguez, head of the Supreme Court, has assumed the presidency on an interim basis, promising to call for early elections by the end of the year, ahead of the scheduled date of August 2007. Despite these challenges, the country has made some social and economic progress over the last several decades. Coca cultivation has decreased from its peak production years in the 1990s, but is still a source of conflict between the government and coca growers. While political institutions are considered weak, changes in government that took place in 2003 and 2005 occurred according to constitutional provisions. 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, which have generated considerable controversy, to export gas to the United States and Mexico, necessitating the construction of a pipeline to a coastal port of a neighboring country. For additional information, see CRS Report RL32337, Andean Counterdrug Initiative (ACI) and Related Funding Programs: FY2005 Assistance, by Connie Veillette. This report will be updated as events warrant.

Related Reports:
• RL32580

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