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COUNTRY PROFILES


PROFILE

Country Facts

Full Name: Estado Plurinacional de Bolivia (Plurinational State of Bolivia)
Area: 1.28 million sq km (425,000 sq miles)
Population: 10 million (2010)
Constitutional Capital: Sucre (population: 132,000) Seat of Government: La Paz
People: Indigenous, primarily Aymara, Quechua, and Guarani, Mestizo
Language(s): Under the 2009 Constitution, all 36 Indigenous tongues are official languages, as well as Spanish
Religion(s): Roman Catholic (95%), Protestant (Evangelical Methodist)
Currency: Boliviano
Major political organisations: Movimiento al Socialismo (MAS);
Government: Democracy with elections held every five years. The 2009 State Constitution provides for an executive and a legislature consisting of a 36-member Senate and 130-member Chamber of Deputies.
Head of State: Juan Evo Morales Ayma
Foreign Minister: David Choquehuanca
Membership of international groupings/organisations: Bolivia holds membership of the UN; WTO; G-11; G77; Organisation of American States (OAS); Andean Community (CAN); Latin American Integration Association (ALADI); Rio Group; MERCOSUR (associate membership); Inter-American Developmental Bank (IADB); IMF, IMF, UNASUR (Union of South American Nations)

Did You Know?

Bolivia has not only has the highest capital city in the world La Paz (3,640m), but also the highest navigable lake, Titicaca (3,805m). British construction workers brought soccer to Bolivia in the 19th century. One of the clubs they founded, Always Ready, still exists today.

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HEALTH

In the 2010 UN Human Development Report, Bolivia ranked 95th in the Human Development Indicator (HDI), with an HDI value of 0.643. Bolivia has a population of 10 million, 66% of which live in urban areas. The average life expectancy is now 66.3 years. UNDP figures show that infant mortality has fallen dramatically from 89 deaths before the age of one per 1000 live births in 1989 to 50 per 1000 in 2008. Only 65% of mothers receive medical attendance during labour and the maternal mortality rate of 229 maternal deaths per 100,000 live births is the second highest in Latin America and the Caribbean after Haiti.. The adult literacy rate is 90.7% and a national program for reading and writing ‘Yo Si Puedo’ (Yes I Can) was implemented in 2006. In December 2008 the President declared Bolivia free from illiteracy.

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ECONOMY

Basic Economic Facts

GDP: $17.76 bn (2009)
GDP per head: $1736 (2008)
Annual Growth: 3.4% (2010)
Inflation: 7.18% (2010)
Unemployment: 6.5% (Government figure for 2010)
Major Industries: Natural gas, mining and agriculture
Major trading partners: United States, Japan, Brazil, Chile, Peru, Argentina, EU

Despite being one of Latin America’s poorest countries Bolivia is rich in natural gas and minerals and in agricultural potential. Bolivian macroeconomic figures are strong, with foreign reserves at record levels and a healthy balance of payments surplus, due to high commodity prices over the past few years. However, this strength has not generated much confidence in the economy. Domestic and foreign investment levels are both low, and there is a worry that the economy is too dependent on primary commodities such as natural gas and minerals.

Government has followed a policy of taking natural resources back into State control. On 1 May 2006, President Morales announced the nationalisation of the hydrocarbons industry: in reality foreign companies have signed new contracts with the government, giving the government company YPFB control of the resources and increasing the tax take. In 2007 hydrocarbons revenues accounted for 11.3% of the total GDP and the export of gas accounted for nearly half of all Bolivia’s exports.

The Bolivian Government has signed major contracts with the Argentine Government, requiring the construction of a new gas pipeline to Northern Argentina, and has also re-negotiated prices for part of their contract with Brazil. However, the lack of large investments in the sector and in particular the lack of exploration has raised question marks over Bolivia’s supply capability. The productive capacity of the sector is almost at full utilisation and without any new investment, exports of natural gas are likely to decrease. Bolivia has thus far been unable to project, overseas, an image of potential stability in terms of supply, nor has it been able to secure foreign investor confidence to further develop the gas fields. A new plan has been put forward which envisages producing 100 000 barrels per day by 2015 but again, investment will need to be secured in order to develop capacity and new markets.

The MAS have also nationalised the largest tin mine (Huanuni), the largest telecommunications network (ENTEL) and 4 of the largest petrol groups. These were previously privatised by the Sanchez de Lozada regime, which sparked protests as Bolivian’s felt they were not reaping the benefits of exploiting their natural resources. On 1 May 2010, President Morales announced the nationalisation of the electricity network, including Guracachi and Corani.

Mining is a major part of the Bolivian Economy, producing large quantities of tin, zinc and other is a major part of the Bolivian Economy, producing large quantities of tin, zinc and other minerals for the global market. When market prices for these primary materials were high the sector boomed and employment increased in the mines. With the global financial crisis the mining industry suffered as prices and demand for primary materials and commodities fell, but the recent upturn has once again seen record minerals exports and workers returning to the mining sector. Bolivia is estimated to have the world’s largest reserves of lithium, which enjoy the potential for major economic exploitation on the back of growing demand for lithium batteries (e.g. for electric cars).

Through membership to the Community of Andean Nations (CAN), Bolivia enjoys trade benefits with the EU. The EU is the second largest trading partner for Bolivia (after the US), is a leading investor in the region and accounts for a significant share of FDI. Under the General System of Preference CAN is granted preferential treatment to the EU market with reduced tariffs, without any expectation for this treatment to be reciprocated. The main CAN exports include mining, agriculture and agro-industry products, and the main CAN imports are machinery, chemical products and transport machinery. The Government has withdrawn from the International Centre for the Settlement of Investment Disputes, the World Bank investment dispute settlement mechanism, and has started to denounce those bilateral investment treaties not compatible with the 2009 Constitution.

Although President Morales has made it a priority to reduce dependence on external assistance, and is keen to rely more on Bolivia’s domestic resources including its record reserves for development purposes, Bolivia will remain highly dependent on foreign aid until it can introduce viable structural changes, strengthen productive capacity, and develop its substantial natural resources.

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HISTORY

Bolivia became part of the Quechua-speaking Inca Empire around 1450 but was subsequently conquered by the Spanish in 1525. During the colonial era, the area was known as 'Upper Peru' or 'Charcas', ruled by the Spanish Viceroy of Lima. In this period, Bolivian silver mines were responsible for much of the Spanish Empire's wealth. Potosi, site of the famed Cerro Rico (the 'Rich Mountain'), was the largest city in the Americas for many years. Independence was proclaimed in 1809, but 16 years of struggle against the Spanish authorities followed before the establishment of the Republic, named after Simon Bolivar, on 6 August 1825. The post-independence period saw Bolivia dominated by 60 years of instability, coups and new constitutions. Its internal weakness was aptly demonstrated by the loss of its strategically important sea coast and rich mineral fields to Chile following the war of the Pacific (1879-83). Following this setback, Bolivia enjoyed relative stability and prosperity aided by high global demand for silver. However, as supplies dwindled, tin replaced it as the most important source of Bolivian wealth by the early 20th century.

There have been democratically elected governments in Bolivia since 1982 following decades of political instability and military coups. Since then, the military have played no significant part in Bolivian politics, but political instability has continued to slow the country's development. As a result, over recent years there has been a gradual rejection of traditional political parties and a swing towards the left, especially after the resignation of Sanchez de Lozada.

Former President Sanchez de Lozada ‘Goni’ resigned and left the country in October 2003 amid nationwide protests. The protests highlighted the mounting discontent by large portions of Bolivia’s population at being excluded from the decision making process and from natural resource revenues. The period around Goni’s resignation is referred to as Black October when during protests security forces killed at least 67 people and wounded hundreds more. As of yet nobody has received compensation and the Bolivian government is calling for Goni’s extradition back to Bolivia for justice to be done over the massacre.

2005 saw further political instability with the resignation of President Carlos Mesa, who had himself taken over from Goni. The then President of the Supreme Court, Eduardo Rodriguez Veltze, was appointed by Congress as Constitutional President of Bolivia, with a specific mandate to hold general elections within 6 months. Elections took place on 18 December 2005. Evo Morales won the presidential election with some 53.7% of the valid vote (although voting in Bolivia is obligatory, 21.72% of the voting population either did not vote or cast null/blanc votes). He was re-elected in December 2009 with 63% of the vote under a new electoral system declared free and fair by observers.

BBC News Country Timeline: Bolivia (http://news.bbc.co.uk/hi/english/world/americas/newsid_1218000/1218814.stm)

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INTERNATIONAL RELATIONS

Bolivia-Chile Relations

Bolivia has full diplomatic relations with all its neighbours except for Chile. Bolivia's relationship with Chile is influenced by its desire to regain sovereign access to the sea (lost during the War of the Pacific 1879-83 with Chile). In 1978 diplomatic relations with Chile were formally severed during then President Hugo Banzer's administration and have never been fully re-established. Both sides, however, continue to have representation at Consul-General level. Since his inauguration, President Morales has again called on Chile's new President to grant Bolivia sovereign access to the Pacific.. On 23 March 2011 President Morales declared that Bolivia would prepare a case against Chile on access to the sea to be presented to the International Court of Justice.

Community of Andean Nations (CAN)

Bolivia is a member of the Andean Community, along with Colombia, Ecuador and Peru. On 17 June 2002 the Andean Community adopted the Lima Agreement establishing the 'Andean Charter for Peace and Security, Limitation and Control of External Defence Expenditure'. The Charter opens the way for a common Andean security policy and the creation of an Andean Peace Zone. The charter also includes an undertaking to limit expenditure on external defence. In June 2007, new negotiations started between the EU and CAN for the formation of an Association Agreement. The agreement covers political relations, trade and aid and was due to come into effect in late 2008. Differences between the CAN members make it a difficult process, and Bolivia is no longer involved in negotiations.

South American Community of Nations (UNASUR)

The constitution of UNASUR was signed on 23 May 2008 and joined the two trading blocs CAN and MERCOSUR together with Chile, Guyana and Suriname into a new system of integration designed to unite the countries of South America. Based on a shared history UNASUR aims to build a South American Identity and citizenship, similar to that of the European Union, in the political, economic, social, environmental and energy spheres. The South American Parliament will be based in Cochabamba.

Bolivia–US Relations

There is some anti-US feeling in parts of Bolivia and differing ideologies. Despite these differences there still remain ties in trade and aid. Relations worsened when the American Ambassador was expelled from Bolivia in September 2008 for allegedly conspiring against democracy. However the Bolivian government has not presented evidence to support this claim. In October 2008, the DEA were also expelled, accused of supporting the opposition against MAS. The relationship remains tense, with MAS officials calling in early 2011 for the expulsion of USAID. The Bolivian government claims that it wishes to relaunch their relationship with the US under the Obama administration and negotiations to that effect are ongoing.

Bolivian–Venezuelan Relations

Presidents Morales and Chavez have close political ties. They share similar antineoliberal, anticolonial ideology and have shifted their countries politically towards the left. Similarities also occur in their shared desire to fulfil the ideals of Simon Bolivar in creating a united South America, and against US involvement in the region. Chavez has provided funding and support for the MAS government.

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GEOGRAPHY

Bolivia is land-locked in Central South America, bordered by Peru (900km) and Chile (861km) to the west, Brazil (3,400km) to the north and east and Paraguay (750km) and Argentina (832km) to the south. Straddled by the Andes, it is a land of gaunt mountains, cold desolate plateaux and semi-tropical lowlands in an area the size of Spaon and France together. Bolivia shares control of Lake Titicaca, the world's highest navigable lake (elevatioin 3,805m), with Peru. Sucre, in the south of the cuontry, is the legal capital. The political capital and centre of government is La Paz, situation to the west, which at 3,640m is the highest capital city in the world.

BOLIVIAN SOCIETY

Bolivia is one of the poorest and least developed Latin American countries.; 32% of the population lives in extreme poverty. In a May 2005 survey two thirds of Bolivians said they would emigrate if given the opportunity. Deep divides exist in Bolivia between the East and the West, between the city and country, and there are regional disparities in the distribution of wealth. In the GINI index, which measures the inequality of wealth distribution, Bolivia has a high coefficient of 57.2%. The indigenous people in the highlands were historically marginalised due to lack of access to public services.

Bolivia has a large number of indigenous people, with 36 different indigenous groups existing, each having their own language. The main communities are Aymara, Quechua and Guarani. The European Bolivians are mainly of Spanish descent and a small community of AfroBolivians also exists. The majority of people consider themselves of indigenous heritage or ‘Mestizo’ (of mixed race), showing the diverse ethnicity in Bolivian society. Catholicism is the country’s main religion, although Protestant and Evangelist denominations are increasing. There still remains a strong belief in the traditional indigenous religions involving natural gods and spirits, the most well known being Pachamama (Mother Earth). Often indigenous beliefs are mixed with traditional religions.

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TRADE AND INVESTMENT

Trade and Investment with the UK

Bolivia is a small market for the UK. Exports for 2010 totalled £15.5 million. The UK's main exports were beverages, industrial equipment and power generating equipment. The main imports to the UK from Bolivia are fruit and vegetables, furniture, clothing and non-ferrous metals. Total imports from Bolivia to the UK in 2010 totalled£14.6 million.

There are a number of large British companies operating in Bolivia, particularly in the hydrocarbons sector. British investments in Bolivia are estimated to be worth US$800 million. The UK/Bolivia Investment Promotion and Protection Agreement (IPPA) has been in place since 1990. A Double Taxation Agreement came into effect in April 1997.

UK Trade & Investment Country Profile: Bolivia (http://www.uktradeinvest.gov.uk/ukti/bolivia)

UK Development Assistance

The UK’s development assistance is channelled through multilateral donors, such as the European Union, and the World Bank, and through UK Non-Governmental Organisations. Our Embassy in La Paz also funds specific projects in Bolivia.

Department for International Development (DFID) (http://www.dfid.gov.uk)

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POLITICS

President Morales and his political grouping, the MAS (Movement Towards Socialism), is a democratic socialist movement promoting a higher level of state involvement. President Morales states that MAS is leading a democratic and cultural revolution against colonialism, imperialism and neoliberalism.

After a referendum on 25 January 2009, a new constitution (CPE) was approved with 61% of the vote. The new constitution, which came into force on 7 February 2009, aims towards a new and better future for Bolivia. President Morales was reelected for a further five-year term on 9 December 2009 with 63% of the vote, and his government is now approving legislation to fully bring into force the Constitution.

Bolivia is the world’s third largest producer of coca. Coca leaf plays an important role in Bolivian politics, and there is much debate between its traditional uses and its involvement in the illegal cocaine industry. Coca is the sacred leaf of the Aymara people and it is often chewed to help with altitude, when working in mines and used in tea, medicine and some food stuffs.

However, the coca leaf is also the principal ingredient of cocaine and there are increasing numbers of drugs operations, confiscations and drug related arrests. The government’s coca strategy legally allows up to 12 000 hectares of coca growth but the 2009 UNODC coca monitoring survey showed that some 30 900 hectares were being cultivated. The Bolivian drugs police FELCN confiscated 28 tons of cocaine in 2010, compared to 23 tons in 2009, over 25 tons in 2008, 17 tons in 2007 and 14 tons in 2006. Bolivia expelled US Drugs Agency DEA from the country in 2008. The US however remains ready to work with Bolivia, and supports eradication and alternative development through its Narcotics Affairs Section (NAS).

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HUMAN RIGHTS

Bolivia's recent human rights performance has attracted little adverse attention from NGOs and others. There has been a growth in confrontations between various groups wanting greater control of local resources. Violent incidents surrounding the fight for autonomy have also occurred, the most violent being the confrontations in Pando in September 2008, where an estimated 18 people were killed. There have also been recent concerns about government moves against the media, and attacks on journalists. Incidents of lynching were reported in 2010. In March 2010 four police officers were killed in the town of Uncia near Potosi following a dispute with the local community. There are also problems with child labour in the mines and sugar fields. Although women are legally entitled to equal rights, in reality they still face discrimination in the work place and the legal system, as well as incidences of domestic violence.

Bolivian society is predominantly Indigenous or Mestizo (mixed race) making indigenous rights an important issue. Indigenous groups have generally suffered poverty, racism and marginalisation. Indigenous people in the highlands suffer limitations to their political, civil and economic rights due to a lack of access to public services and a weak institutional framework. The MAS government places great importance on indigenous rights and has put a lot of effort into fully integrating indigenous groups into Bolivian society and public services, like health, education and the justice systems. The new constitution establishes the rights of indigenous people and all 36 indigenous languages have been made official.

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Last Updated: April 2011

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