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October 2, 2019
Bolivia: An Overview
Bolivia is a landlocked South American nation of 11.2
Figure 1. Bolivia at a Glance
million people (see Figure 1). Since 2006, under populist
President Evo Morales, Bolivia’s first indigenous president,
the country has become more stable and prosperous.
Governance standards have weakened, however, especially
those involving accountability, transparency, and separation
of powers. Relations with the United States have been
strained for more than a decade, particularly since President
Morales expelled the U.S. ambassador in 2008.
Background
Chronic instability, poverty, corruption, regional conflicts,
and deep ethnic and regional cleavages have stymied
Bolivia’s development. Bolivia won independence from
Spain in 1825 but experienced frequent military coups and
Sources: CRS Graphics, International Monetary Fund (IMF), Central
periods of authoritarian rule for much of its history. The
Intelligence Agency (CIA), Instituto Nacional de Estadísticas (INE),
country reestablished democratic civilian rule in 1982.
Global Trade Atlas (GTA).
The lack of sovereign access to the ocean is a source of
Political Conditions
lingering resentment in Bolivia. After the War of the Pacific
Since 2006, President Morales and the MAS, which has
with Chile (1879-1883), Bolivia lost its territory along the
two-thirds majorities in both legislative chambers, have
Pacific coast and has had to ship its exports through
transformed Bolivia. Morales has decriminalized coca
Peruvian or Chilean ports. Bolivia has rights of access to
cultivation outside of traditional zones where it was always
the Peruvian port of Ilo, but it no longer has tariff-free
legal, increased state control over the economy, used
access to the Chilean port of Arica. Bolivia lost access to
natural gas revenue to expand social programs, and enacted
the Atlantic Ocean by way of the Paraguay River and
a new constitution (2009) favoring indigenous peoples’
surrounding territory because of the Chaco War with
rights and autonomy. Previously underrepresented groups,
Paraguay (1932-1935). Bolivia and Paraguay are currently
including the indigenous and women, have increased their
revisiting Bolivia’s access to the Atlantic Ocean.
representation at all levels of government. Indigenous
people now comprise more than 50% of the Bolivian
Bolivia’s population is among the most ethnically diverse in
Congress; there is also gender parity in that body.
South America. In the 2012 census, some 41% of the
population self-identified as indigenous (Quechua or
Many analysts assert that although the political system has
Aymara). The rest of the population is comprised of people
been more stable, representative, and participative under
of mixed white and indigenous descent, white, and African
Morales than in the past, democracy remains weak. Bolivia
descent. Bolivian indigenous peoples benefitted from the
has remained “partly free” in Freedom House’s annual
National Revolution of 1952, which led to land reform and
Freedom in the World reports, scoring lowest on issues
expanded suffrage. Nevertheless, they remained
related to due process and judicial independence. The
underrepresented in the political system prior to Morales’s
Morales government has launched judicial proceedings
government and affected by poverty and inequality.
against many opposition politicians and dismissed hundreds
of judges. It also has restricted freedom of the press.
Many of Bolivia’s indigenous communities consider the
coca leaf (also used to make cocaine) sacred and use it for
Concerns about democracy in Bolivia have increased as
traditional and licit purposes. Opposition to forced coca
President Morales has sought to remain in office. In 2017,
eradication policies backed by the United States led to the
Bolivia’s Constitutional Tribunal removed constitutional
rise of coca growers’ trade unions and a related political
limits on reelection. The decision overruled a 2016
party, the Movement Toward Socialism (MAS). In 2005,
referendum in which voters rejected a constitutional change
years of protest against leaders perceived to have governed
to allow Morales to serve another term.
on behalf of the elite led to the election of Evo Morales, the
president of the coca growers’ union and a self-identified
In January 2019, President Morales won his party’s primary
person of Aymara descent.
and began to campaign for a fourth presidential term. His
main opponents are former President Carlos Mesa (2003-
2005), standing for the Citizen Community Alliance party,
and Oscar Ortíz, a senator from Santa Cruz standing for the
“Bolivia Says No” party.
https://crsreports.congress.gov
Bolivia: An Overview
Many pollsters predict that Morales is likely to win
accused the ambassador of fomenting opposition to his
reelection, albeit not in the first round. Corruption,
government, a charge the State Department rejected.
insecurity, and a perceived slow response to recent fires in
the Amazon have damaged Morales’s popularity. He still
U.S. bilateral assistance to Bolivia began to decline in
enjoys the advantages of incumbency, a strong party
FY2007 and was cut completely by FY2013. President
machinery, and a divided opposition. Many observers also
Morales expelled the U.S. Agency for International
predict that the MAS will maintain a simple majority in the
Development (USAID) from the country in 2013 for
Congress. If no candidate wins 50% of the vote or over
allegedly conspiring with the opposition; USAID denied the
40% of the vote with more than a 10-point margin of
charge. The State Department subsequently ended its
victory on October 20, 2019, a runoff is to be held on
antidrug programs in Bolivia due to a lack of adequate
December 15, 2019. The Organization of American States
bilateral cooperation. Although Bolivia now receives most
(OAS) is monitoring the election.
of its foreign aid from the European Union (EU), civil
society groups in Bolivia continue to receive small amounts
On the foreign policy front, President Morales aligned his
of U.S. regional and global funds.
country with Hugo Chávez of Venezuela vis-à-vis the
United States while also continuing cooperation with
Since 2007, U.S. presidents have identified Bolivia as a
Europe and neighboring countries. In 2006, Bolivia joined
major drug-producing country that had failed meet its
Chávez’s Bolivarian Alliance for the Americas. Bolivia,
obligations under international counternarcotics
along with Cuba and Nicaragua, is one of the few countries
agreements. President Trump issued this year’s designation
in the region that remains loyal to Chávez’s successor,
on August 8, 2019. The designation is due, in part, to a law
Nicolás Maduro. Morales has voted against OAS
that Bolivia enacted in 2017 to expand the amount of coca
resolutions condemning the situation in Venezuela.
permitted to be cultivated beyond what an EU-funded study
estimated as necessary for satisfying its traditional coca
Economic Conditions
demand.
Bolivia’s economic performance has been relatively strong
under the Morales Administration. According to the
Coca cultivation has slightly increased since Morales
International Monetary Fund (IMF), economic growth
assumed office. According to the U.S. Office of National
averaged almost 4.5% from 2006 to 2018. Although growth
Drug Control Policy, coca cultivation in Bolivia rose from
is slowing due to lower prices for its natural gas and
roughly 26,500 hectares in 2006 to 31,000 hectares in 2017.
mineral exports, Bolivia has created a sovereign wealth
The State Department’s 2019 International Narcotics
fund to help it weather economic downturns. The IMF
Control Strategy report estimated a decline in both coca
forecasts 4% growth for 2019, which is still among the
cultivation and potential cocaine production in Bolivia from
highest rates in the region.
2016 to 2017. As a comparison, estimated coca cultivation
in Colombia rose from 157,000 hectares in 2006 to a record
Sustained growth, combined with wage increases and
209,000 hectares in 2017.
expanded social programs, has helped to reduce poverty
and inequality in Bolivia. According to government
Bolivia receives trade benefits as a beneficiary country of
estimates, poverty fell from 60% in 2006 to 34.6% in 2018.
the U.S. Generalized System of Preferences (GSP), but the
According to the U.N. Economic Commission on Latin
Trump Administration is reviewing Bolivia’s eligibility due
America and the Caribbean, income inequality also
to concerns over worker rights issues. In 2018, two-way
declined by 20% from 2007 to 2017. Despite this progress,
trade totaled $1.1 billion, according to the U.S. Department
per capita income remains low by regional standards. In
of Commerce. Bolivia’s largest U.S. exports are tin, silver
addition, Bolivia’s agricultural sector, which employs a
bullion, tungsten, and quinoa; its primary U.S. imports are
third of all workers, is vulnerable to drought and flooding.
civilian aircraft and parts, food preparations, petroleum oils,
insecticides, and compressors.
In a December 2018 report, the IMF expressed concerns
about Bolivia’s rising debt, declining reserves, and poor
Issues for Congress
investment climate. Since Morales took office, Bolivia has
Congress has had limited oversight interest in Bolivia over
withdrawn from the World Bank’s International Centre for
the past decade, as the country no longer receives bilateral
the Settlement of Investment Disputes and abrogated
U.S. foreign assistance and is not the primary source
bilateral investment treaties. These moves have reduced
country for U.S.-bound cocaine from South America.
foreign investment, which economists assert is needed to
Congressional concern about Bolivia has increased over the
develop existing mines and gas fields and discover new
past year, however, as President Morales has pursued a
ones. Bolivia has received investment from China,
fourth term and blocked efforts to resolve the Venezuela
however, and President Morales is seeking additional
crisis. S.Res. 35, approved in April 2019, expresses concern
investment from Russia, Iran, India, and Turkey.
over efforts to circumvent term limits in Bolivia and calls
on the government to allow electoral bodies to “administer
U.S.-Bolivian Relations
the October 2019 election in adherence with international
U.S.-Bolivian relations have deteriorated under the Morales
democratic norms.” Congress also is monitoring Bolivia’s
administration. Although Bolivia and the United States
eligibility for GSP benefits.
have not formally severed diplomatic or consular relations,
they have not exchanged ambassadors since President
Clare Ribando Seelke, Specialist in Latin American
Morales expelled the U.S. ambassador in 2008. Morales
Affairs
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Bolivia: An Overview
IF11325
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