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Updated January 28, 2021
Bolivia: An Overview
Bolivia is a landlocked South American nation of 11.7
levels of government. In foreign policy, Morales aligned
million people (see Figure 1). From 2006 to 2018, Bolivia
Bolivia with Hugo Chávez of Venezuela in taking a hostile
became more stable and prosperous under President Evo
stance toward the United States. In 2008, he expelled the
Morales, its first indigenous president. Bolivia also
U.S. Ambassador for allegedly fomenting opposition to his
experienced backsliding in measurements of governance. In
government, charges the State Department said were false.
November 2019, Morales resigned after an election marred
by irregularities and sustained protests. Luis Arce,
Figure 1. Bolivia at a Glance
Morales’s former finance minister, took office a year later,
after winning 55% of the vote in October 2020 elections in
which his Movement Toward Socialism (MAS) also
maintained a legislative majority. President Arce faces
many challenges, including how to address the Coronavirus
Disease 2019 (COVID-19) pandemic and how to manage
relations with the United States.
Background
Chronic instability, poverty, corruption, and deep ethnic
and regional cleavages have stymied Bolivia’s
development. Bolivia won independence from Spain in
1825, experiencing frequent military coups and periods of
authoritarian rule for much of its history. The country
Sources: CRS Graphics, International Monetary Fund (IMF), Central
reestablished democratic civilian rule in 1982.
Intel igence Agency (CIA), Instituto Nacional de Estadísticas (INE),
Trade Data Monitor (TDM).
Bolivia’s population is among the most ethnically diverse in
South America. In the 2012 census, some 41% of the
Under Morales, Bolivia ranked “partly free” in Freedom
House’s annual
population self-identified as indigenous (Quechua or
Freedom in the World reports, scoring
Aymara). The rest of the population is of European, mixed
lowest on issues related to due process and judicial
European and indigenous, or African descent. Bolivian
independence. The government launched judicial
indigenous peoples benefitted from the National Revolution
proceedings against opposition politicians, dismissed
of 1952, which led to land reform and expanded suffrage.
hundreds of judges, and restricted freedom of the press.
Nevertheless, they remained underrepresented in the
Concerns increased after the Constitutional Tribunal ended
political system prior to Morales’s government and
constitutional limits on reelection in 2017, essentially
disproportionally affected by poverty and inequality.
overruling a 2016 referendum in which voters rejected
allowing Morales to run for a fourth term. In November
Cultivation of the coca leaf remains a contentious issue in
2019, Morales resigned and went into exile amid
Bolivia and in Bolivian-U.S. relations. Many of Bolivia’s
nationwide protests against a disputed October first-round
indigenous communities consider the coca leaf s acred and
election in which he had claimed victory.
use it for traditional, licit purposes (the leaf also is used to
make cocaine). Opposition to years of U.S.-backed forced
Many Bolivians criticized the authoritarianism of the
coca eradication policies led to the rise of coca growers’
interim government that took over after Morales’s
trade unions and a related political party, the Movement
resignation. Led by Jeanine Áñez, formerly a conservative
Toward Socialism (MAS). In 2005, years of protest against
senator, the interim government rolled back MAS policies,
leaders perceived to have governed on behalf of the elite led
used violence to suppress protesters, and prosecuted former
to the election of Morales, president of the coca growers’
MAS officials. Áñez suspended community-based coca
union and a self-identified person of Aymara descent.
control and adopted a drug policy aimed at achieving a
“drug free” Bolivia. The interim government struggled to
Political Conditions
address COVID-19, and a corruption scandal prompted the
Morales and the MAS transformed Bolivia. Morales
health minister to resign.
decriminalized coca cultivation outside of traditional zones
2020 Elections and Prospects for Arce’s Presidency
where it had been legal, increased state control over the
economy, used natural gas revenue to expand social
The October 2020 elections proved to be a referendum on
programs, and enacted a new constitution (2009) favoring
the legacy of Morales and the MAS. In contrast to the chaos
the rights and autonomy of indigenous peoples. Previously
of the 2019 elections, a new Supreme Electoral Tribunal
underrepresented groups increased their representation at al
administered a process that international election observers
deemed generally free and fair. Contrary to pollsters’
https://crsreports.congress.gov
Bolivia: An Overview
predictions, Luis Arce avoided a runoff election by winning
ONDCP asserts potential cocaine production rose 20%
54% of the vote, 25% more than his nearest rival, former
from 2018 to 2019. Despite concern about the uptick, many
president Carlos Mesa. Arce benefitted from divisions
observers recommend U.S. officials work with the new
among the opposition. The MAS maintained majorities in
government to combat these trends without unduly
the Senate and the Chamber of Deputies.
punishing coca farmers.
President Arce is an economist who worked in Bolivia’s
U.S. bilateral assistance to Bolivia began to decline in
central bank prior to serving as minister of finance. He has
FY2007 and was cut completely by FY2013. President
pledged to govern in a conciliatory fashion, but clashes
Morales expelled the U.S. Agency for International
between his government and eastern, opposition-led
Development (USAID) from the country in 2013 for
provinces could occur. The findings of an Inter-American
allegedly conspiring with the opposition; USAID denied the
Commission on Human Rights investigation into two
charge. The State Department then ended its antidrug
massacres in 2019 is likely to ignite tensions if former Áñez
programs in Bolivia due to a lack of adequate cooperation.
officials are cited for abuses. Intra-party disputes between
Bolivia has since received most foreign aid from the
hard-line and moderate MAS factions also could occur,
European Union (EU). Civil society groups in Bolivia
particularly if Morales, back from exile, seeks to exert
receive small amounts of U.S. regional and global funds.
undue influence over the government.
In January 2020, President Trump waived restrictions on
Economic Conditions
U.S. FY2020 assistance to Bolivia, citing such aid as in the
During Arce’s tenure as finance minister, Bolivia’s
U.S. national interest. USAID provided $5 million in
economic growth averaged almost 4.5% annually,
election-related assistance, donated 200 ventilators and
according to the International Monetary Fund (IMF). Arce
related technical assistance to help address COVID-19, and
channeled earnings from Bolivia’s natural gas export boom
provided $900,000 in health assistance. As of August 2020,
to fund social programs and wage increases that helped
the State Department also had provided at least $900,000 in
reduce poverty from 60% in 2006 to 34.5% in 2018. He
COVID-19-related funds. Whether the U.S. government
also created a sovereign wealth fund to help Bolivia
will waive FY2021 aid restrictions or designate Bolivia as a
weather economic downturns. A December 2018 IMF
country making adequate efforts to meet its international
report expressed concerns about Bolivia’s rising debt,
counternarcotics obligations remains unclear. Given the
declining reserves, and poor investment climate.
government’s December 2020 announcement that it is
returning to Morales-era drug policies, such a designation
The Bolivian economy is in crisis. The COVID-19
seems unlikely.
pandemic, which has caused 10,100 deaths thus far, has
weakened demand for Bolivia’s gas exports. Global gas
Bolivia receives trade benefits as a beneficiary country of
prices also have declined. Poverty and unemployment have
the U.S. Generalized System of Preferences. In 2019, two-
risen, but the government lacks funding for social programs
way trade totaled $1 billion, according to U.S. figures.
and public investments. Arce may need to attract new
Bolivia’s largest exports to the United States are tin, silver,
foreign investment to help develop Bolivia’s natural
gold, tungsten, and quinoa; its primary imports are civilian
resources, including lithium deposits. The IMF forecast an
aircraft and parts, as well as petroleum oils.
economic decline of 7.9% in 2020. Arce is implementing
monthly cash transfers funded by the World Bank. He also
The United States and Bolivia have had opposing
vowed to raise taxes on the wealthy, govern austerely, and
geopolitical orientations. The Arce government has pledged
renegotiate Bolivia’s debts.
to work with the Biden Administration and the EU; at the
same time, Bolivia likely will maintain relations with China
U.S.-Bolivian Relations
and Russia. Arce reestablished relations with Cuba,
U.S.-Bolivian relations are likely to remain challenging,
Venezuela, and Iran, which the Áñez government had
given tension in relations under Morales. U.S. officials have
ended.
vowed to work with President Arce on shared interests, but
differences over drug policy and geopolitics could prove
Issues for Congress
difficult to overcome. With limited bilateral trade and
Members of the 116th Congress expressed concerns about
investment ties, the possibility of a resumption in U.S.
the situation in Bolivia in resolutions and letters to the
foreign assistance could encourage cooperation.
Administration. The Senate approved S.Res. 35 in April
2019, expressing support for democratic principles in
Each year since 2007, the U.S. President has identified
Bolivia. S.Res. 447, agreed to in the Senate in January
Bolivia as a major drug-producing country that failed to
2020, expressed support for the prompt convening of new
meet its obligations under international counternarcotics
elections. The explanatory statement accompanying the
agreements; such designations have triggered foreign aid
Consolidated Appropriation Act, 2021 (P.L. 116-260),
restrictions. President Trump issued this year’s designation
states that no assistance was requested and none was
on September 16, 2020. While noting continued cultivation
provided in the agreement for lethal assistance for Bolivia.
above domestic limits, the designation praised the Áñez
Some Members of Congress have congratulated Arce on his
government’s interdiction efforts and cooperation on
victory and expressed hope for improved bilateral relations;
extraditions. According to the U.S. Office of National Drug
others have concerns about the return of a socialist
Control Policy (ONDCP), coca cultivation in Bolivia rose
government in Bolivia.
from 26,000 hectares in 2006 to 42,180 hectares in 2019.
https://crsreports.congress.gov
Bolivia: An Overview
Clare Ribando Seelke, Specialist in Latin American
Affairs
IF11325
Disclaimer
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https://crsreports.congress.gov | IF11325 · VERSION 6 · UPDATED