U.S. DEPARTMENT OF STATE
BACKGROUND NOTES: BOLIVIA
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
Area: 1.1 million sq. km. (425,000 sq. mi.); about the size of Texas
and California. Cities: Capital--La Paz (administrative--pop.
713,400); Sucre (judicial--131,800). Other cities--Santa Cruz
(697,000), Cochabamba (407,800).
Terrain: High plateau (altiplano), temperate and semitropical valleys,
and the tropical lowlands.
Climate: Varies with altitude--from humid and tropical to semi-arid and
Nationality: Noun and adjective--Bolivian(s).
Population: 6.95 million (1992 census). Annual growth rate: 2%.
Ethnic groups: 56% indigenous (primarily Aymara and Quechua) and mixed,
Religions: Predominantly Roman Catholic.
Languages: Spanish (official); Quechua, Aymara.
Education: Years compulsory--ages 7-14. Literacy--20%.
Health: Infant mortality rate (1992)--92/1,000.
Work force: 3.6 million. Industry and commerce--22%. Services
Independence: August 6, 1825.
Branches: Executive--president and cabinet. Legislative--bicameral
Congress. Judicial--five levels of jurisdiction, headed by Supreme
Subdivisions: Nine departments.
Major political parties: Nationalist Revolutionary Movement (MNR),
Nationalist Democratic Action (ADN), Movement of the Revolutionary Left
(MIR), Conscience of the Fatherland (CONDEPA), Free Bolivia Movement
(MBL), Civic Solidarity Union (UCS).
Suffrage: Universal adult.
GDP (1993): $7.1 billion.
Annual growth rate (1993): 4%.
Per capita income (1993): $1,017.
Natural resources: Tin, natural gas, petroleum, zinc, tungsten,
antimony, silver, lead, gold, iron (lithium, potassium, and borax are
not yet exploited).
Agriculture (17% of GDP): Products--potatoes, corn, sugarcane, rice,
wheat, coffee, beef, barley, and quinine. Arable land--27%.
Industry: Types--manufacturing, commerce, extraction of minerals and
hydrocarbons, textiles, food processing, chemicals, plastics, mineral
smelting, and petroleum refining.
Trade (1993): Exports--$630 million. Products--natural gas, tin, zinc,
coffee, silver, tungsten. Major markets--Latin American Integration
Association (ALADI), U.S., European Union. Imports--$1.1 billion.
Products--machinery and transportation equipment, consumer products,
construction and mining equipment. Major suppliers--ALADI, U.S., Japan,
Official exchange rate: 4.67 Bolivianos=U.S.$1.
Bolivia's ethnic distribution is estimated to be 56% indigenous Aymara
and Quechua peoples and mestizo, and 42% European (primarily Spanish).
Among the limited number of foreign residents are about 700 Japanese and
Okinawan families who emigrated to Bolivia after World War II and
settled in the Santa Cruz area. A small Mennonite community resides in
the same region. A number of immigrants recently have come from the
Bolivia is the least-developed country in South America. About two-
thirds of its people, many of whom are subsistence farmers, live in
poverty. Population density ranges from less than one person per square
kilometer in the southeastern plains to about 10 per square km. (25 per
sq. mi.) in the central highlands. Bolivia's high mortality rate
prevents the annual population growth rate from exceeding 2%.
La Paz is at the highest elevation of the world's capital cities--3,600
meters (11,800 ft.) above sea level. The fastest-growing major city is
Santa Cruz, the commercial and industrial hub of the eastern lowlands.
Almost 95% of Bolivians are Roman Catholic, although a number of
Protestant denominations are also represented. Many Indian communities
interweave pre-Columbian and Christian symbols in their religious
practices. About half of the people speak Spanish as their first
language. About 90% of the children attend primary school, but often
for a year or less. The literacy rate is low in many rural areas.
The cultural development of what is present-day Bolivia is divided into
three distinct periods: pre-Columbian, colonial, and republican. The
pre-Columbian period produced important archeological ruins, gold and
silver ornaments, and ceramics and weavings of the great Aymara
civilization at Tiahuanacu. The later Inca conquest of the highlands
left important ruins at Samaipata and Incallajta. The Quechua (or Inca)
culture originated a beautiful style in ceramics and weavings that has
The Spanish brought their own tradition of religious art which, in the
hands of local Indian and mestizo builders and artisans, developed into
a rich and distinctive style of architecture, painting, and sculpture
known as "Mestizo Baroque." The colonial period produced not only the
paintings of Perez de Holguin, Flores, Bitti, and others but also the
works of skilled, but unknown, stonecutters, goldsmiths, and
silversmiths. An important body of baroque music of the period was
Bolivian artists of stature in the 20th century include Guzman de Rojas,
Arturo Borda, and Maria Luisa Pacheco. Marina Nunez del Prado is an
internationally known sculptor.
Bolivia has rich folklore. Its regional folk music is distinctive and
varied. The devil dances at the annual carnival of Oruro are one of the
great folkloric events of South America, as is the lesser known carnival
People probably have been inhabiting the Andean region since about
20,000 BC. Between 100 BC and AD 900, an advanced culture developed at
the southern end of Lake Titicaca. This culture, centered around
Tiahuanacu, developed complex agricultural and irrigation techniques.
It spread to surrounding areas and formed the Aymara empire. In about
1450, the Quechua-speaking Incas entered the area of modern highland
Bolivia and added it to their empire. They controlled the area until
the Spanish conquest in 1525.
During most of the Spanish colonial period, this territory was called
"Upper Peru" or "Charcas" and was governed from Lima. The principal
cities were Chuquisaca (modern Sucre) and Potosi. Bolivian silver mines
produced much of the Spanish empire's wealth, and Potosi, site of the
famed Cerro Rico ("Rich Mountain"), was for many years the largest city
in the Western Hemisphere. As Spanish royal authority weakened during
the Napoleonic wars, sentiment against colonial rule grew. Independence
was proclaimed in 1809, but 16 years of struggle followed before the
establishment of the republic, named for Simon Bolivar, on August 6,
Independence did not bring stability. For nearly 60 years, coups and
short-lived constitutions dominated Bolivian politics. Bolivia's
weakness was demonstrated during the War of the Pacific (1879-83), when
it lost its seacoast and the adjoining rich nitrate fields to Chile.
An increase in the world price of silver brought Bolivia a measure of
relative prosperity and political stability in the late 1800s. During
the early part of the 20th century, tin replaced silver as the country's
most important source of wealth. Political parties that reflected the
interests of the mine owners ruled until the 1930s with few outbreaks of
Living conditions of the Indians, who constituted most of the
population, remained deplorable. Forced to work under primitive
conditions in the mines and in nearly feudal status on large estates,
they were denied access to education, economic opportunity, or political
Bolivia's defeat by Paraguay in the Chaco War (1932-35) marked a turning
point. Great loss of life and territory discredited the traditional
ruling classes, while service in the army produced stirrings of
political awareness among the Indians. From the end of the Chaco War
until the 1952 revolution, the emergence of contending ideologies and
the demands of new groups convulsed Bolivian politics.
The Nationalist Revolutionary Movement (MNR) emerged as a broadly based
party. Denied its victory in the 1951 presidential elections, the MNR
lead the successful 1952 revolution. Under President Victor Paz
Estenssoro, the MNR introduced universal adult suffrage, carried out a
sweeping land reform, promoted rural education, and nationalized the
country's largest tin mines.
Twelve years of tumultuous rule left the MNR divided. In 1964, a
military junta overthrew President Paz Estenssoro at the outset of his
third term. The 1969 death of President Rene Barrientos, a former
member of the junta elected President in 1966, led to a succession of
weak governments. Alarmed by public disorder, the military, the MNR,
and others installed Col. (later Gen.) Hugo Banzer Suarez as President
in 1971. Banzer ruled with MNR support from 1971 to 1974. Then,
impatient with schisms in the coalition, he replaced civilians with
members of the armed forces and suspended political activities. The
economy grew impressively during Banzer's presidency, but demands for
greater political freedom undercut his support. His call for elections
in 1978 plunged Bolivia into turmoil once again.
Elections in 1978, 1979, and 1980 were inconclusive and marked by fraud.
There were coups, counter-coups, and caretaker governments. In 1980,
Gen. Luis Garcia Meza carried out a ruthless and violent coup. His
government was notorious for human rights abuses, narcotics trafficking,
and economic mismanagement.
After a military rebellion forced out Garcia Meza in 1981, three other
military governments in 14 months struggled with Bolivia's growing
problems. Unrest forced the military to convoke the Congress elected in
1980 and allow it to choose a new chief executive. In October 1982--22
years after the end of his first term of office (1956-60)--Hernan Siles
Zuazo again became President. Severe social tension, exacerbated by
economic mismanagement and weak leadership, forced him to call early
elections and relinquish power a year before the end of his
In 1985 elections, the Nationalist Democratic Action Party (ADN) of Gen.
Banzer won a plurality of the popular vote, followed by former President
Paz Estenssoro's MNR and former Vice President Jaime Paz Zamora's
Movement of the Revolutionary Left (MIR). But in the congressional run-
off, the MIR sided with MNR, and Paz Estenssoro was chosen for a fourth
term as President.
When Paz Estenssoro took office in 1985, he faced a staggering economic
crisis. Economic output and exports had been declining for several
years. Hyperinflation had reached an annual rate of 24,000%. Social
unrest, chronic strikes, and unfettered operation by drug dealers were
In four years, Paz Estenssoro's administration achieved an economic and
social stability that remains the envy of Bolivia's neighbors. The
military stayed out of politics, and all major political parties
publicly and institutionally committed themselves to democracy. Human
rights violations, which badly tainted some governments earlier in the
decade, were not a problem.
However, Paz Estenssoro's remarkable accomplishments were not won
without sacrifice. The collapse of tin prices in October 1985, coming
just as the government was moving to nationalize its mismanaged mining
company, forced the government to lay off over 20,000 miners. The
highly successful shock treatment that restored Bolivia's financial
system also led to some unrest and temporary social dislocation.
President Jaime Paz Zamora took office August 6, 1989, following the
fairest elections in recent Bolivian history. Since no candidate
received a majority of votes, under the constitution, the Congress voted
to determine who would be president. In negotiations preceding the
vote, Paz Zamora negotiated with the second-place finisher, Gen. Banzer,
to share the leadership. Paz Zamora's center-left MIR assumed the
presidency and half the ministries. Banzer's center-right ADN gained
control of the National Political Council (CONAP), in addition to its
Paz Zamora was a moderate, center-left president whose political
pragmatism in office outweighed his Marxist origins. Having seen the
destructive hyper-inflation (24,000%) of the Siles Zuazo administration,
he continued the neo-liberal economic reforms begun by Paz Estenssoro,
codifying some of the reforms. Paz Zamora took a fairly hard line
against domestic terrorism, personally ordering the December 1990 attack
on terrorists of the Nestor Paz Zamora Committee (CNP--named after his
brother who died in the 1970 Teoponte insurgency) and authorizing the
early 1992 crackdown against the Tupac Katari Guerrilla Army (EGTK).
Paz Zamora's regime was less decisive against narcotics trafficking.
The government broke up a number of trafficking networks but issued a
1991 surrender decree giving lenient sentences to the biggest narcotics
kingpins. Also, his administration was extremely reluctant to
vigorously eradicate illegal coca. It did not sign an updated
extradition treaty with the U.S., although one trafficker was extradited
to the U.S. in 1992. (In early 1994, the Bolivian Congress investigated
Paz Zamora's personal ties to major trafficker Isaac Chavarria; Paz
Zamora then retired from politics.)
The 1993 elections continued the tradition of open, honest elections and
peaceful democratic transitions of power. Gonzalo "Goni" Sanchez de
Lozada's MNR defeated Gen. Banzer's ADN/MIR coalition by a 34% to 20%
margin and was selected as President by the Congress.
GOVERNMENT AND POLITICAL CONDITIONS
Since assuming office in August 1993, Sanchez de Lozada has pursued an
aggressive economic and social reform agenda. He has relied heavily on
successful entrepreneurs-turned-politicians like himself and on fellow
veterans of the Paz Estenssoro administration (during which Sanchez de
Lozada was planning minister). There have been some political
difficulties, however, within Sanchez de Lozada's MNR party, his
coalition, and the sectors most affected by his reforms, e.g., labor.
There was considerable labor-instigated social unrest in parts of
Bolivia in early 1994.
The 1967 constitution provides for traditional executive, legislative,
and judicial powers. The traditionally strong executive, however, tends
to overshadow the Congress, whose role is generally limited to debating
and approving legislation initiated by the executive. The judiciary
consists of the Supreme Court and departmental and lower courts.
Bolivia's nine departments have limited autonomy, although departmental
officials have been appointed by the central government for many years.
Since July 14, 1985, Bolivian cities and towns have been governed by
elected mayors and councils. The most recent municipal elections took
place in December 1993.
Principal Government Officials
President--Gonzalo SANCHEZ DE LOZADA
Vice President--Victor Hugo CARDENAS
Minister of Foreign Affairs--Antonio ARANIBAR
Ambassador to the U.S.--Andres PETRICEVIC
Ambassador to the UN--Edgar CAMACHO Omiste
Ambassador to the OAS--Carlos CASSAP
Bolivia maintains an embassy in the U.S. at 3014 Massachusetts Ave., NW,
Washington, DC 20008 (tel. 202-483-4410); consulates in Los Angeles, San
Francisco, Miami, New Orleans, and New York; and honorary consulates in
Atlanta, Chicago, Cincinnati, Houston, Seattle, St. Louis, and San Juan.
Gross domestic product (GDP) reached around $7 billion in 1993, with a
per capita GDP of about $1,000. This is one of the lowest per capita
rates in Latin America, an indication of Bolivia's relative poverty.
Other indications can be seen in Bolivia's illiteracy rate, about 20% of
the adult population, and in the infant mortality rate, about 92 per
1,000 live births. Only 9% of children starting school complete high
school. Bolivia also has very limited infrastructure, with only about
1,000 miles of paved highways. There are no fully paved roads to any of
the neighboring countries, although external loans have been pledged to
pave the routes to the Chilean and Peruvian borders.
The economic growth experienced since 1986 is the result of a series of
market-oriented economic reforms that were initiated in 1985 to stop
inflation and economic decline. Hyperinflation stopped almost
immediately and private sector confidence in the economy was restored.
Deposits in the commercial banks grew from only $50 million in 1985 to
nearly $2 billion by 1993.
A 1993 banking law allows banks to hold deposits and make loans in
foreign currencies. Other laws passed in the early 1990s governing
foreign investment, the mining industry, the hydrocarbons industry, and
the environment have all locked into place market-oriented policies and
have encouraged private investment. Foreign investors are accorded
national treatment, and foreign ownership of companies enjoys virtually
no restrictions in Bolivia.
Agriculture accounts for about 17% of GDP, with the amount of land
cultivated by modern farming techniques increasing rapidly in the Santa
Cruz area, where weather allows for two crops a year and soybean is the
major cash crop. The extraction of mineral and hydrocarbons accounts
for another 8% of GDP. Bolivia is self-sufficient in oil and exports
natural gas to Argentina. Manufacturing represents only 16% of GDP.
The Government of Bolivia remains heavily dependent on foreign
assistance to finance development projects. At the end of 1993, the
government owed almost $3.8 billion to its foreign creditors. About
$1.6 billion of this amount was owed to other governments, with the
balance owed to multilateral development banks. Most of the payments to
other governments have been rescheduled on four separate occasions since
1987 through the Paris Club mechanism. External creditors have been
willing to do this because the Bolivian Government has generally
achieved the monetary and fiscal targets set by IMF programs since 1987.
The current IMF program, which consists of soft balance-of-payments
loans from the enhanced structural adjustment facility as the government
achieves certain targets, was extended until May 31, 1994. The
government is in the process of negotiating another agreement with the
Rescheduling agreements granted by the Paris Club have allowed the
individual creditor countries to apply very soft terms to the
rescheduled debt. As a result, some countries have forgiven substantial
amounts of Bolivia's bilateral debt.
The Bolivian Government continues to pay its debts to the multilateral
development banks on time and to receive soft loans. Since 1986, loan
disbursements have slightly exceeded repayments each year.
From a low of $570 million in 1987, exports rose, then fell again to
$630 million in 1993. Export earnings have been hurt by lower prices
for most minerals and for Bolivia's natural gas. When the original 20-
year gas purchase contract by the Argentine Government expired in 1992,
the price of the gas fell by two-thirds. Bolivia plans to export gas to
Brazil and northern Chile, but there is no financing for the
construction of pipelines.
Imports have grown quickly, reaching $1.1 billion in 1993. This growth
has been caused by the gradual reduction of tariffs to a flat 10%
(except for capital equipment, which has a 5% rate) and the economic
recovery. Only 19% of registered imports in 1993 were consumer
products, with machinery and intermediate products making up the
balance. This suggests substantial new investment which will translate
to new exports in the future. Nonetheless, trade deficits of around
$500 million, as in 1992 and 1993, are not sustainable.
Bolivia's trade with its neighboring countries is growing, in part,
because of several preferential trade agreements. Bolivia is a member
of the Andean Pact and has free trade with the other member countries
(Peru, Ecuador, Colombia, and Venezuela). Bolivia also has bilateral
agreements with Brazil, Chile, Argentina, Paraguay, and Uruguay that
eliminate or reduce tariffs on lists of products. The Andean Trade
Preference Act (ATPA) allows most Bolivian products to enter the U.S.
free of duty on a unilateral basis. Tariffs have to be paid on clothing
and leather products only.
In 1993, the U.S. exported $216 million of merchandise to Bolivia and
imported $191 million, according to the U.S. Department of Commerce.
The U.S. accounts for about 30% of Bolivia's exports and 20% of its
imports. Bolivia's major exports to the U.S. are tin, gold, jewelry,
and wood products. Its major imports from the United States are
computers, vehicles, wheat, and all sorts of machinery.
Bolivia traditionally has maintained normal diplomatic relations with
all hemispheric states except Chile. Relations with Chile, strained
since Bolivia's defeat in the War of the Pacific (1879-83) and its loss
of the coastal province of Atacama, were severed from 1962 to 1975 in a
dispute over the use of the waters of the Lauca River. Relations were
resumed in 1975 but broken again in 1978 over the inability of the two
countries to reach an agreement that might have granted Bolivia a
sovereign access to the sea. In the 1960s, relations with Cuba were
broken following Castro's rise to power but resumed under the Paz
Estenssoro administration in 1985.
Sanchez de Lozada's administration pursues an active foreign policy,
which has a heavy economic component. He visited the U.S. even before
assuming office and has concentrated in the region on thawing
historically cool relations with Chile and Paraguay. Bolivia has become
more active in the OAS, the Rio Group, and in MERCOSUR (Southern Cone
Common Market), where it is an observer. Like other leaders in the
region, Sanchez de Lozada aims to participate in the North American Free
Trade Agreement (NAFTA). In addition, he promotes Bolivia's policies on
sustainable development and the empowerment of indigenous peoples as
models for the hemisphere.
Bolivia strongly backed efforts by the United States to implement UN
Security Council Resolution 940, designed to facilitate the departure of
Haiti's de facto authorities from power. Bolivia agreed to contribute
personnel to the Multinational Force, which restored the democratically
elected Government of Haiti in October 1994.
Bolivia is a member of the UN and some specialized agencies and related
programs; Organization of American States (OAS); Andean Pact; INTELSAT;
Non-Aligned Movement; International Parliamentary Union; Latin American
Integration Association (ALADI); General Agreement on Tariffs and Trade
(GATT); Rio Treaty; Rio Group; MERCOSUR (observer status); Uruguay,
Paraguay, Bolivia (URUPABOL--restarted in 1993).
In 1991, the U.S. Government forgave all of the debt owed to the U.S.
Agency for International Development ($341 million) as well as 80% (or
$31 million) of the amount owed to the Department of Agriculture for
food assistance. Increased U.S. assistance since the late 1980s has
been on a grant basis and aims to make Bolivia less dependent on the
U.S. economic and development assistance reached $110 million in FY
1994, in addition to another $42 million for military and
The major issue in bilateral relations is illegal narcotics control.
Bolivia produces 30%-40% of the world's coca and is second only to
Colombia in production of cocaine. For generations, the traditional
practice of chewing coca leaves served to alleviate the rigors of life
on the altiplano, but during the past decades, an increasing percentage
of coca cultivation has been diverted to the illegal market for the
production of cocaine. The corruption and disregard for law that
accompanied the growth of the illegal trade have made narcotics
trafficking not only a major domestic but an international problem for
Bolivia. The U.S. Andean strategy announced in February 1990 started
cooperative programs in Bolivia and with neighbors Peru and Colombia to
help combat the menace of narcotics production and trafficking. The
Sanchez de Lozada administration has continued bilateral cooperation on
counternarcotics issues and has begun to tackle related domestic
corruption in the court and political systems.
Principal U.S. Officials
Ambassador--Curtis W. Kamman
Deputy Chief of Mission--David B. Dlouhy
Political Counselor--W. Lewis Anselem
Economic Counselor--Paul B. Larsen
Consul General--Jeanne Schulz
Director, USAID Mission--Carl Leonard
Public Affairs Officer, USIS--John S. Williams
Defense Attache--Col. Terry Obermiller, USAF
Commander, U.S. Military Group--Col. Claude Shelverton, USA
The U.S. embassy is located at Avenida Arce #2780, La Paz (tel. 591-2-
430251). There are consular agents in the cities of Santa Cruz (tel.
591-3-330725) and Cochabamba (tel. 591-42-43216).
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