RL32580
Bolivia: Political and Economic Developments and Implications for U.S. Policy
January 25, 2006
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Summary
In the past few years, Bolivia has experienced extreme political unrest resulting in the country having three presidents since 2003 and the election of a fourth at the end of 2005. All recent Bolivian presidents have been unable to resolve continuing discord over issues relating to the exploitation of Bolivia's natural resources, coca eradication programs, indigenous rights, and the extent of power sharing between the central government and the country's nine departments. Evo Morales, elected on December 18, 2005, was inaugurated on January 22, 2006. Bolivia is one of the poorest countries in Latin America, with a sizeable and active indigenous population, a long history of coca cultivation, and weak political institutions. Despite these challenges, the country has made some social and economic progress over the past 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. On December 18, 2005, a record 85% of the Bolivian electorate voted in elections that were deemed to be free and fair. Evo Morales, an indigenous leader of the leftist Movement Toward Socialism (MAS) party, won a convincing victory in the presidential election with 54% of the votes as compared to 29% for former president Jorge Quiroga of the rightist Social and Democratic Power Party and 8% for cement magnate Samuel Doria Medina of the center-right National Unity Front (UN). The MAS won control of the lower chamber of the Bolivian Congress, 12 of 27 seats in the Senate, and two of the country's nine governorships. President Morales has taken some positions that could complicate U.S. relations with Bolivia. Morales, a former leader of the coca growers union, has resisted U.S. counternarcotics policy in the region and vowed to decriminalize coca growing. Morales has also pledged to nationalize Bolivia's oil and gas sector, but has assured investors that his government will not confiscate foreign assets. 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 in the Andes. 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. The other potential U.S. interest in Bolivia involves its natural gas reserves, which are the second-largest in Latin America, after Venezuela. For additional information, see CRS Report RL32337, Andean Counterdrug Initiative (ACI) and Related Funding Programs: FY2005 Assistance, by Connie Veillette; CRS Report RL33163, Drug Crop Eradication and Alternative Development in the Andes, by Connie Veillette and Carolina Navarrete-Frias; and CRS Report RL32770, Andean-U.S. Free Trade Negotiations, by M. Angeles Villarreal. This report will be updated as events warrant.
