Contents

• Introduction
• Political and Economic Background
• 2025 Elections and the Paz Administration
• Economic Context
• Foreign Policy and Relations with China, Russia, and Iran
• U.S.-Bolivia Relations
• Trade and Investment Ties
• Counternarcotics Issues
• U.S. Foreign Assistance and Other Support

Summary

Bolivia is a centrally located, landlocked country in South America. The country experienced multiple military coups and periods of authoritarian rule through the 19^th and 20^th centuries, most recently reestablishing democratic civilian rule in 1982. Despite the country's significant mineral and hydrocarbon resources, civilian governments have grappled with challenging economic conditions. These governments also have faced frequent political turbulence, at times stemming from popular opposition to government policies, including those related to development of the country's natural resources.

After 20 years of nearly continuous governance under the leftist Movimiento al Socialismo (MAS) party, national elections in 2025 resulted in the inauguration of Rodrigo Paz of the center-right Partido Demócrata Cristiano (PDC) party as president in November 2025. Paz has pledged, among other goals, to reorient Bolivia's policies to address deteriorating economic conditions and initiate a rapprochement in U.S.-Bolivia relations. President Paz's election signals a break from a previous political era dominated by former president and MAS founder Evo Morales (2006-2019), a coca-growers union leader and Bolivia's first leader of Indigenous descent, who oversaw far-reaching social and economic reforms.

Bilateral relations between the United States and Bolivia were strained under successive MAS governments. The two countries have not exchanged ambassadors since 2008, after former President Morales expelled the then-U.S. Ambassador for allegedly conspiring against Morales's administration. Bolivia's change in government could facilitate increased bilateral cooperation in areas of mutual interest that have declined under previous administrations, including counternarcotics and trade and investment issues. U.S. officials and some Members of Congress have expressed support for improved bilateral relations with the Paz administration.

Bolivia was among the top recipients of U.S. bilateral aid to Latin America until U.S. aid levels began declining following President Morales's election in 2006. As U.S.-Bolivia relations deteriorated, so did U.S. bilateral aid to Bolivia, which included funding for counternarcotic efforts; programs to promote economic development, especially for Indigenous groups; and programs to prevent infectious diseases and strengthen health care provision. U.S. bilateral aid to Bolivia ended in FY2013.

The 119^th Congress may seek to shape U.S.-Bolivia relations and U.S. policies toward the Paz administration through the use of legislative and oversight tools, including monitoring issues of congressional concern such as counternarcotics efforts and considering potential U.S. aid appropriations and authorizing legislation. Congress also may consider legislative proposals to enhance U.S.-Bolivia trade and investment ties, including potential measures to jointly develop supply chains of minerals deemed critical to U.S. economic and national security interests. Members of Congress also may be interested in monitoring the influence of China, Russia, and Iran in Bolivia.

Introduction

Bolivia is a centrally located, landlocked country in South America that includes mountainous Andean highlands in the west and tropical lowlands in the east (see Figure A-1). According to Bolivia's 2024 census, nearly 40% of Bolivia's population of 11.4 million identify with at least 1 of 36 constitutionally recognized Indigenous and minority groups, the largest of which are the Quechua and Aymara people.¹ Political instability, poverty, and ethnic and regional divides have impeded Bolivia's development despite considerable mineral and hydrocarbon resources.

After 20 years of nearly continuous governance under the leftist Movimiento al Socialismo (MAS) party, national elections in 2025 resulted in the inauguration of Rodrigo Paz, of the center-right Partido Demócrata Cristiano (PDC) party, as president on November 8, 2025. Paz has pledged, among other goals, to address economic instability in Bolivia and initiate a rapprochement in U.S.-Bolivia relations. Some Members of Congress have expressed support for improved bilateral relations with the Paz administration.² The 119^th Congress may assess the implications of Bolivia's new government for U.S. interests and may consider legislative and oversight options for shaping Trump Administration policies toward Bolivia.

Political and Economic Background

Bolivia has experienced multiple military coups and periods of authoritarian rule since declaring independence from Spain in 1825. The country most recently reestablished democratic civilian rule in 1982. Subsequent civilian governments have grappled with challenging economic conditions and frequent political turbulence stemming from popular opposition to government policies, including those related to natural gas development.³

During three presidential terms from 2006 to 2019, former president and MAS founder Evo Morales, a coca-growers union leader and Bolivia's first leader of Indigenous descent, oversaw far-reaching social and economic reforms. Morales enacted a new constitution (2009) that sought to protect Indigenous groups' rights and increase state control over the economy. Morales also used natural gas revenue to expand social programs and finance infrastructure projects. At the same time, the Morales administration pursued judicial proceedings against some of its political opponents, dismissed hundreds of judges, and restricted press freedom, drawing criticism from the U.S. government and prompting concerns from some observers about rising authoritarianism.⁴

In 2019, Morales resigned amid public protests following allegations of fraud in the October 2019 national elections. Right-leaning opposition senator Jeanine Áñez led an interim administration (2019-2020) amid political unrest and subsequent allegations of human rights abuses.⁵ In October 2020, Bolivia held national elections that observers assessed as generally free and fair, resulting in the election of MAS candidate Luis Arce, a former finance minister under Morales. Although President Arce (2020-2025) pledged to unify the country, various factors, including a rift within MAS driven by tensions between former allies Arce and Morales and deteriorating economic conditions, largely impeded President Arce's agenda.

2025 Elections and the Paz Administration

In 2025 national elections, the Bolivian electorate voted to end two decades of MAS governance amid concerns about rising inflation and fuel scarcity.⁶ In August 2025 legislative elections, right-of-center parties won majorities in the 130-member chamber of deputies and the 36-member senate (see Figure A-2). MAS representation was reduced from majorities in both chambers to two members in Bolivia's chamber of deputies.

In the concurrent presidential election, center-right PDC senator Rodrigo Paz and former president Jorge "Tuto" Quiroga (2001-2002) of the right-wing Alianza Libre party were elected to compete in an October 2025 presidential runoff election, while Morales' candidacy had been barred by court rulings. Paz—whose platform of "capitalism for all" appeared to resonate with voters looking for an alternative between MAS and traditional right-leaning opposition parties—obtained nearly 55% of the runoff vote to secure a five-year term (see Figure A-3).⁷ Former president Morales—who faces criminal charges related to an alleged relationship he had with a minor in 2015—has remained a fugitive in Bolivia's Chapare province (see Figure A-1), where his supporters reportedly have shielded him from arrest.⁸

Paz will likely require the support of other centrist and right-leaning parties to forge a majority in Bolivia's congress and advance his legislative agenda (Figure A-2). President Paz's administration has pledged to stabilize Bolivia's economy, allocate a greater share of national resources to subnational governments, and pursue structural reforms to promote private-sector-led growth.⁹ To these ends, the Paz administration announced in late November 2025 that it would engage the Bolivian congress to reduce government spending by 30% in 2026 and eliminate some taxes.¹⁰ The Paz administration also has reportedly pledged to phase out fuel subsidies, which could alleviate pressure on government finances but may risk sparking public unrest.¹¹

Another stated priority of the Paz administration is to pursue anti-corruption and institutional reforms. In late November 2025, President Paz announced the closure of the justice ministry as part of an effort he asserted would depoliticize Bolivia's judiciary.¹² U.S. officials have periodically expressed concerns about the politicization of the legal system under successive Bolivian administrations, including in 2021 after Bolivian authorities arrested former President Áñez on charges related to orchestrating a coup against Morales in 2019.¹³ In November 2025, Áñez was released after Bolivia's supreme court annulled her sentence.¹⁴ Former President Arce, however, was arrested in December 2025 on corruption charges stemming from his time as economy minister in the Morales administration.¹⁵

Economic Context

Despite mineral and hydrocarbon resources, Bolivia faces several economic challenges that worsened under the Arce administration. Revenue from natural gas exports—a key economic driver and source of foreign exchange—has declined since 2022, due in part to decreased investment under the current state-led model, according to the U.S. International Trade Administration.¹⁶ Shortages of gasoline and U.S. dollars have contributed to rising inflation. According to the International Monetary Fund (IMF), annual economic growth slowed from 3.1% to 0.7% between 2023 and 2024; the IMF projects growth of 0.6% in 2025.¹⁷

Although Bolivia possesses nearly 24% of total estimated non-U.S. lithium resources, the lithium sector has developed slowly.¹⁸ Domestic opposition and a court order have stalled roughly $2 billion in proposed lithium agreements between the state-owned Bolivian lithium company and state-owned firms from Russia and the People's Republic of China (PRC, or China).¹⁹ The Paz administration reportedly pledged to review the contracts after President Paz, as president-elect, suggested that the agreements lack transparency.²⁰

Foreign Policy and Relations with China, Russia, and Iran

Previous MAS governments sought to deepen relations with China, Russia, Venezuela, and certain fellow developing countries. Bolivia joined the PRC's Belt and Road Initiative in 2018 and was accepted as a "partner nation" of the BRICS group—a bloc of emerging economies—in January 2025.²¹ The Paz administration reportedly seeks to maintain ties with Russia and the PRC, which surpassed Brazil as Bolivia's top total goods trade partner in 2024, while balancing efforts to strengthen relations with the United States and other democratic countries.²² In his November 2025 inauguration speech, President Paz appeared to pledge a shift in Bolivia's foreign policy alignment, stating that the "new Bolivia" would open itself to the world.²³ Following Paz's electoral victory, nine Western Hemisphere countries, including the United States, jointly announced that they "stand ready to support" the new Bolivian administration's efforts to stabilize and grow the economy, reinforce democratic institutions, and deepen regional and international engagement.²⁴ In a clear break with previous MAS administrations, the Paz administration reportedly has sought to support the Venezuelan political opposition and distance itself from the authoritarian regimes of Cuba, Nicaragua, and Venezuela.²⁵

Previous MAS governments also sought to strengthen diplomatic and security ties with Iran. In July 2023, Bolivia reportedly signed a defense and security agreement with the government of Iran.²⁶ In the conference report (H.Rept. 118-301) accompanying the National Defense Authorization Act for Fiscal Year 2024 (P.L. 118-31), the 118^th Congress required the Secretary of Defense to submit a report assessing Iranian military assistance to Bolivia, Brazil, and Venezuela. Some analysts have posited that Iran's influence in Bolivia may wane under the Paz administration.²⁷

U.S.-Bolivia Relations

U.S. Secretary of State Marco Rubio stated that Paz's victory "marks a transformative opportunity for both nations" and that the United States "stands ready to partner with Bolivia on shared priorities," including immigration, investment, and security issues.²⁸ U.S. Deputy Secretary of State Christopher Landau attended President Paz's November 2025 inauguration, and the two announced several new bilateral initiatives aimed at promoting shared economic prosperity, advancing people-to-people ties, and collaborating on public security.²⁹ According to media outlets, Deputy Secretary Landau and President Paz announced that the two countries would reestablish diplomatic relations at the ambassador level; the United States and Bolivia have not exchanged ambassadors since 2008 after former President Morales expelled the then-U.S. Ambassador for allegedly conspiring against Morales's administration.³⁰

In a joint statement, the chairman and the ranking member of the U.S. Senate Foreign Relations Committee announced, "Bolivia and the United States share significant diplomatic, economic and security interests, and it is our hope that this election will serve as a starting point to deepen those connections."³¹ Congress may monitor the Trump Administration's approach to U.S.-Bolivia relations as Congress assesses whether or how to shape U.S. aid, security, or trade policy to Bolivia through legislation, appropriations, oversight, or other measures.

Trade and Investment Ties

Bolivia is not a major U.S. trade and investment partner. In 2024, the total value of U.S.-Bolivia goods trade amounted to about $932.8 million, with the United States running a $72.9 million trade deficit.³² Top U.S. exports to Bolivia included petroleum oils; civilian aircraft, engines, and parts; and communications equipment, including smartphones. Top U.S. imports from Bolivia included unwrought tin, Brazil nuts, and quinoa. According to the State Department's 2025 Investment Climate Statement report, "There is no significant foreign direct investment ... from the United States in Bolivia," in part due to "economic uncertainty and interventionist policies" that impede the investment climate. The report noted that the investment climate may change, however, as Bolivia's incoming presidential administration "will have a mandate for investor-friendly reforms."³³ In November 2025, Deputy Secretary Landau announced several measures to enhance U.S. investment in Bolivia, including that the U.S. International Development Finance Corporation (DFC) and the U.S. Export-Import Bank would seek "new trade and investment opportunities in Bolivia."³⁴

From 1991 through 2008, Bolivia received U.S. trade preferences under the Andean Trade Preference Act (ATPA; Title II of P.L. 102-182), although former President George W. Bush suspended Bolivia's ATPA benefits in 2008 due to a lack of counternarcotics cooperation.³⁵ Most U.S. goods imports from Bolivia are subject to U.S. tariffs. Beginning in April 2025, President Trump has invoked the International Emergency Economic Powers Act of 1977 (IEEPA; 50 U.S.C. §§1701 et seq.) to impose country-specific tariffs on global trading partners, after declaring that a lack of reciprocity in trade relationships posed a national emergency.³⁶ In July 2025, the Trump Administration increased tariffs on most U.S. imports from Bolivia from 10% to 15%.³⁷ Congress may examine any shifts in the Administration's U.S. trade policy with Bolivia while considering congressional and executive authorities over U.S. tariff policy.³⁸ Congress also could assess whether to address U.S. trade policy with Bolivia through legislation, including reauthorization of lapsed trade preference programs like ATPA.

The Paz administration's foreign policy shift could facilitate U.S. investment to develop the country's lithium resources, a mineral deemed critical for energy technologies by several U.S. agencies.³⁹ Some observers caution that factors such as Bolivia's regulatory environment and depressed global lithium prices could slow the sector's development.⁴⁰ Some Members of Congress have introduced legislation aimed at securing U.S. access to critical mineral supply chains free of PRC influence, for instance, through international cooperation (e.g., S. 429, S. 2550/H.R. 4391) and prioritization of critical-mineral-related projects for DFC assistance (e.g., S. 2839, H.R. 5299). Congress may consider directing the U.S. Department of the Interior or another U.S. agency to assess potential challenges of and opportunities for developing secure lithium supply chains in Bolivia and determining whether to support, amend, or reject the aforementioned and other legislative proposals aimed at developing secure lithium supply chains abroad.

Counternarcotics Issues

Cultivation of the coca leaf, the core component of cocaine, has been a contentious issue in U.S.-Bolivia relations. Bolivia's Indigenous peoples consider the coca leaf sacred and use it for traditional, licit purposes. Opposition to long-standing U.S.-backed coca eradication policies helped lead to the rise of coca growers' trade unions and the MAS party in the 1990s. As president, Morales decriminalized coca cultivation outside of traditional zones where it had been illegal and, in 2008, expelled the U.S. Drug Enforcement Agency (DEA).⁴¹ While coca cultivation was decriminalized outside of traditional zones, cocaine and drug trafficking remained illegal in Bolivia, and some U.S.-Bolivia law enforcement agencies cooperated during the Arce administration.⁴² To counter drug trafficking and other activities linked to organized crime in Bolivia, the Paz administration has pledged renewed cooperation with international partners, including the DEA.⁴³

Each year since 2008, the U.S. President has designated Bolivia as a major drug-producing country that has "failed demonstrably" to meet its obligations under international counternarcotics agreements, most recently in September 2025.⁴⁴ President Trump issued a determination finding that U.S. assistance to Bolivia "is vital to the national interests of the United States," waiving the application of certain U.S. foreign assistance restrictions generally triggered by the designation. According to the UN Office on Drugs and Crime's 2025 World Drug Report, coca cultivation in Bolivia increased nearly 22% to about 31,000 hectares from 2019 to 2023, above the Bolivian government's 22,000-hectare official cultivation limit.⁴⁵ Annual seizures of cocaine also increased by roughly 115% from 2023 to 2024.⁴⁶

Some Members of the 119^th Congress have introduced legislation to assess and address threats related to drug trafficking and organized criminal activity in Latin America (e.g., H.R. 1915). Congress may consider other legislation, including targeted sanctions, to address specific Bolivia-based threats. Congress also may consider whether and how to appropriate funds to support U.S. executive agencies involved in counternarcotics efforts in Bolivia and the wider region.

U.S. Foreign Assistance and Other Support

U.S. bilateral aid to Bolivia began to decline in FY2007 and ended in FY2013 due to bilateral tensions under the Morales administration. Morales expelled the U.S. Agency for International Development for allegedly conspiring with the political opposition. In 2013, the State Department ended its antidrug programs in Bolivia, citing a lack of cooperation from government counterparts. As recently as FY2023 (latest year available), U.S. funding for Bolivia has continued through some international organizations and regional programs, for instance, to assist Venezuelan refugees and migrants.⁴⁷ Congress may determine U.S. aid levels and objectives for Bolivia as it concludes action on the appropriations process for FY2026 and future years.

Appendix. Geography and Politics of Bolivia

Figure A-1. Map of Bolivia

Sources: Figure created by CRS using data from U.S. Department of State, Database of Global Administrative Areas, and Esri. Notes: La Paz is Bolivia's seat of government. Sucre is Bolivia's constitutional capital.

Figure A-2. Bolivia's Legislative Assembly Following 2025 General Elections

Source: Figure created by CRS using data from Bolivia's electoral authority, Órgano Electoral Plurinacional. Notes: Percentages do not sum to 100% because of rounding.

Figure A-3. Bolivia's 2025 Presidential Election Results (second-round election results by department)

Source: Figure created by CRS using data from Bolivia's electoral authority, Órgano Electoral Plurinacional. Notes: LIBRE = Libertad y Democracia; PDC = Partido Demócrata Cristiano. Percentages and shading correspond to the proportion of the winning candidate's vote share in each of Bolivia's nine departments.

Footnotes