Learn about the history and issues of Bolivia.
THE HISTORY OF THE REPUBLIC OF Bolivia reflects both its pre-Columbian and its colonial heritage. The ruins of Tiahuanaco testify to the first great Andean empire. Bolivians still speak the languages of the Aymara kingdoms and of their Quechua conquerors; the society remains predominantly Indian and rural, and only a minority is monolingual in Spanish. Nevertheless, Spain also left its imprint in the political, economic, and social spheres. During 300 years of colonial rule, Spain imposed its institutions on the colony and concentrated on mineral exports, which are still the backbone of the Bolivian economy. Using forced Indian labor, local entrepreneurs extracted the mineral wealth--the silver deposits at Potosí were the largest in the Western world--and shipped it to Spain in accord with the prevailing mercantilist practices.
After Bolivia received independence from Spain in 1825, political instability became endemic. Rivalries among caudillos resulted in numerous coups and countercoups. Despite attempts at reform by the nation's first three presidents, the economy did not recover from the disruptions caused by the wars of independence; taxes paid by the Indians were the main sources of income for the governments.
The War of the Pacific (1879-80), in which the country lost its access to the sea to Chile, had a profound impact on Bolivia. Civilian governments replaced the erratic caudillo rule, and for fifty years Bolivia enjoyed relative political stability. The economy improved with the dramatic rise of tin as the main source of wealth. Because Bolivians, rather than foreigners, dominated the tin-mining industry, the former made most political decisions. As a result, the parties in power--the Conservative Party, Liberal Party, and Republican Party--were remarkably alike in that they were primarily interested in the development of the mining sector. Increasing democratization benefited the middle class but still excluded the Indians.
The devastating defeat suffered by Bolivia at the hands of Paraguay in the Chaco War (1932-35) discredited the traditional leadership and brought the military back to politics. Between 1936 and 1939, military governments tried to reform the country from above with a program of "military socialism" that included social justice and the control of the country's natural resources. In 1937 they nationalized the Standard Oil holdings, the first such step taken in Latin America. Although they failed because they were inconsistent in their rule and unable to marshal popular support, these governments were important because they facilitated the formation of a number of new parties that, despite differences, agreed on the need to limit the power of the tin magnates.
Although members of the Conservative Party attempted to stop the growing trend toward reform in the 1940s, they could not contain the popular discontent. Unrest in the countryside increased, and the middle class resented the government's inability to deal with economic stagnation and increasing inflation. The unifying force in the opposition was the Nationalist Revolutionary Movement, a primarily middle-class party that became more radical as it integrated the militant ideology and demands of the workers.
Bolivia's 1952 Revolution, led by the Nationalist Revolutionary Movement, was a turning point in the country's history. The government decreed universal suffrage without literacy or property requirements, an action that increased the electorate from some 200,000 to 1 million voters. It nationalized the mines of the three great companies--Patiño, Hochschild, and Aramayo-- and distributed land to the campesinos under a far-reaching agrarian reform. The revolution remained incomplete and lost momentum, however, when the government's policies produced a virtual bankruptcy of the economy. In exchange for massive assistance from the United States and the International Monetary Fund, the government agreed to cut social spending. This action produced renewed labor unrest and eroded support for President Víctor Paz Estenssoro (1952-56, 1960-64, and 1985-89). The government then made the fateful decision to rebuild the Bolivian armed forces, which had been purged and decimated in 1952. During the early 1960s, the military became the arbiters in Bolivian politics as widespread anarchy convinced many that only the armed forces could restore order. As a result, a military coup in 1964 led by General René Barrientos Ortuño and General Alfredo Ovando Candia had widespread support.
The military governments in power after 1964 varied in their ideological outlook. The armed forces were divided by personal ambitions, generational differences, and regional interests and lacked the corporate identity of a modern military. Barrientos's conservative rule, for example, encouraged foreign investment and suppression of the left, whereas the "Revolutionary Nationalist" governments of Ovando and Juan José Torres González nationalized United States holdings and courted the workers, peasants, and students. Another conservative, Colonel Hugo Banzer Suárez (1971- 78), was forced out because of growing opposition and pressure from the United States to reestablish democracy. The attempt at a transition to democracy after 1978 failed at first because no single party achieved a majority in three elections, and alliances of various groups could not break the deadlock. Military coups, including one led by the ruthless and corrupt General Luis García Meza Tejada (1980-81), overthrew civilian interim presidents. Only in 1982 did the military return the country to democratic government.
Facing a corporate-led threat to one of the basic building blocks of life-- water-- indigenous and non-indigenous Bolivians in Cochabamba were successful in stopping the privatization of the local water supply- including everything from local wells to falling rain, by a multinational consortium headed by San Francisco's Bechtel Corporation in April of 2000. The privately-owned water would have cost Bolivian families up to 50% of the average national wage per month.
As if the raindrops didn't matter, French water company Suez followed Bechtel's path to private profits, and communities in El Alto successfully evicted the company in 2005, retaining the right to publicly administer their access to water.
As Bolivians continue to place public good ahead of corporate greed, social movements seek to redistribute ownership of the country's natural gas reserves, the second largest of the continent behind Venezuela. Successive ex-presidents Gonzalo Sanchez de Lozada and Carlos Mesa each sought to pass new gas laws turning the country's large natural gas reserves over to private interests. However, Bolivians mobilized against high utility prices and rejected the corporate model in favor of public management, taking to the streets and bringing a dramatic, democratic end to both the Lozada and Mesa administrations.
Recapturing the right to make their own decisions about local development, the Bolivian Landless Workers' Movement and others have reclaimed land rights and jobs while indigenous communities have untangled cultural traditions from the complex US drug war, aimed at eliminating coca plantations. The coca farmworkers, or cocaleros, have joined the country's other social movements in demanding a new, more equitable model of development and policy makers are forced to recognize indigenous customs of traditional coca leaf consumption.
Source: U.S. Library of Congress
Natural Gas 
Read more about one of Bolivia's most precious resources.