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Background: Bolivia, named after independence fighter Simon BOLIVAR, broke away from Spanish rule in 1825; much of its subsequent history has consisted of a series of nearly 200 coups and counter-coups. Comparatively democratic civilian rule was established in the 1980s, but leaders have faced difficult problems of deep-seated poverty, social unrest, and drug production. Current goals include attracting foreign investment, strengthening the educational system, continuing the privatization program, and waging an anti-corruption campaign.
Government type: republic
Capital: La Paz (seat of government); Sucre (legal capital and seat of judiciary)
Currency: 1 boliviano ($B) = 100 centavos

Geography of Bolivia

Location: Central South America, southwest of Brazil
Geographic coordinates: 17 00 S, 65 00 W
Map references: South America
total: 1,098,580 sq. km
land: 1,084,390 sq. km
water: 14,190 sq. km
Land boundaries:
total: 6,743 km
border countries: Argentina 832 km, Brazil 3,400 km, Chile 861 km, Paraguay 750 km, Peru 900 km
Coastline: 0 km (landlocked)
Climate: varies with altitude; humid and tropical to cold and semiarid
Terrain: rugged Andes Mountains with a highland plateau (Altiplano), hills, lowland plains of the Amazon Basin
Elevation extremes:
lowest point: Rio Paraguay 90 m
highest point: Nevado Sajama 6,542 m
Natural resources: tin, natural gas, petroleum, zinc, tungsten, antimony, silver, iron, lead, gold, timber, hydropower
Land use:
arable land: 2%
permanent crops: 0%
permanent pastures: 24%
forests and woodland: 53%
other: 21% (1993 est.)
Irrigated land: 1,750 sq. km (1993 est.)
Natural hazards: cold, thin air of high plateau is obstacle to efficient fuel combustion, as well as to physical activity by those unaccustomed to it from birth; flooding in the northeast (March-April)
Environment – current issues: the clearing of land for agricultural purposes and the international demand for tropical timber are contributing to deforestation; soil erosion from overgrazing and poor cultivation methods (including slash-and-burn agriculture); desertification; loss of biodiversity; industrial pollution of water supplies used for drinking and irrigation.
Environment – international agreements:
party to:  Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Nuclear Test Ban, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands
signed, but not ratified:  Environmental Modification, Marine Dumping, Marine Life Conservation, Ozone Layer Protection
Geography – note: landlocked; shares control of Lago Titicaca, world’s highest navigable lake (elevation 3,805 m), with Peru

People of Bolivia

Bolivia’s ethnic distribution is estimated to be 56%-70% indigenous people and 30%-42% European and mixed. The largest of the approximately three dozen indigenous groups are the Aymara, Quechua, and Guarani. There are small German, former Yugoslav, Asian, Middle Eastern, and other minorities, many of whose members descend from families that have lived in Bolivia for several generations.

The great majority of Bolivians are Roman Catholic (the official religion), although Protestant denominations are expanding strongly. Many indigenous communities interweave pre-Columbian and Christian symbols in their religious practices. About half of the people speak Spanish as their first language. Approximately 90% of the children attend primary school but often for a year or less. The literacy rate is low in many rural areas.

The cultural development of what is present-day Bolivia is divided into three distinct periods: pre-Columbian, colonial, and republican. Important archaeological ruins, gold and silver ornaments, stone monuments, ceramics, and weavings remain from several important pre-Columbian cultures. Major ruins include Tiwanaku, Samaipata, Incallajta, and Iskanwaya. The country abounds in other sites that are difficult to reach and hardly explored by archaeologists.

Bolivia has rich folklore. Its regional folk music is distinctive and varied. The devil dances at the annual carnival of Oruro are one of the great folkloric events of South America, as is the lesser known carnival at Tarabuco.

Population: 8,857,870 (July 2005 est.)
Age structure:
0-14 years:  38.46% 
15-64 years:  57.07% 
65 years and over:  4.47%
Population growth rate: 1.76%
Birth rate: 27.27 births/1,000 population 
Death rate: 8.2 deaths/1,000 population 
Net migration rate: -1.45 migrant(s)/1,000 population 
Infant mortality rate: 58.98 deaths/1,000 live births 
Life expectancy at birth:
total population:  64.06 years
male:  61.53 years
female:  66.72 years 
Total fertility rate: 3.51 children born/woman 
noun: Bolivian(s)
adjective: Bolivian
Ethnic groups: Quechua 30%, Aymara 25%, mestizo (mixed white and Amerindian ancestry) 30%, white 15%
Religions: Roman Catholic 95%, Protestant (Evangelical Methodist)
Languages: Spanish (official), Quechua (official), Aymara (official)
definition: age 15 and over can read and write
total population: 83.1%
male: 90.5%
female: 76% (1995 est.)

History of Bolivia

BOLIVIA’S WEALTH OF NATURAL wonders, colorful Indian traditions, and enigmatic ancient ruins make it one of the world’s most unusual countries. The “Tibet” of South America, Bolivia is traversed by three massive Andean ranges, which include four of the world’s highest eternally snow-topped mountains, towering to heights up to 6,550 meters (Sajama). Although the country is landlocked, it has Lake Titicaca, lying half in Bolivia and half in Peru, the world’s second largest inland sea and highest navigable lake (3,810 meters above sea level), as well as one of the deepest (370 meters).

Bolivia is a land of sharp contrasts with climatic conditions ranging from arctic to tropical. It is divided into three distinct ecozones: the bleak, windswept, Tibetan-like plateau or “high plain” called the Altiplano (3,600 meters high) separating two generally parallel Andean cordilleras; the intermediary valley region (often referred to somewhat loosely by travel writers as the yunga, meaning warm valleys), which consists of both the eastern temperate high valleys and the only valley that Bolivians call the Yungas, the steep semitropical valley northeast of the city of La Paz; and the eastern tropical flat lowlands, which make up about 70 percent of the country, including part of the vast, semiarid Chaco region in the south. The first two of these ecozones constitute the highlands.

The central range, or Cordillera Real, forms a magnificent snowcapped backdrop for La Paz, which is the seat of government. No other major city in the world can boast of a higher, more immense mountain overlooking it than La Paz’s Illimani (6,322 meters). Although La Paz is centered at the bottom of a deep, bowl-shaped canyon (protected from the chilly Altiplano winds), the city is 3,557 meters high, whereas rival Santa Cruz, the fastest-growing large city in the eastern lowlands and Bolivia’s second-largest city, is only 416 meters in elevation.

The poorest country in South America in the late 1980s (per capita income was US$640 in 1987), Bolivia also had some of the lowest health and other social indicators in Latin America, but it did not suffer from one common Third World problem, namely, overpopulation. Although larger than France and Spain combined, Bolivia had only about 7 percent of their total population (or fewer than 7 million inhabitants), one of the lowest population densities in the Western Hemisphere. The nation’s population had more than doubled, however, since 1950, and its distribution, slightly more rural than urban, was highly uneven, with most of the people living in the highlands. The urban population was concentrated in only six main highland cities and Santa Cruz. (Bolivia’s projected population of nearly 10 million in 2000 was expected to be more urban than rural.)

With 55 percent of its population Indian, Bolivia has the proportionately highest Indian population of any country in Latin America, although Guatemala and Peru both have larger numbers of Indian inhabitants. Nevertheless, the country was sharply divided in its ethnic composition, languages, and modes of living in 1989. The two principal highland Indian groups, the Quechua and Aymara, constituted 30 percent and 25 percent of the population, respectively. Cholo or mestizos (those of mixed blood) made up at most 30 percent. The Quechua and the Aymara traditionally had not intermarried and had always kept their languages, physical characteristics, and many social traditions distinct, thereby adding to the country’s deep regional and social cleavages. (In addition, very few of either group ever learned Spanish.) The two groups also inhabited different areas: the Aymara lived mainly in the northern part of the Altiplano and Yungas, and the Quechua lived in the two north-south mountain ranges east of the Altiplano and in the temperate valleys. Whites (mostly descendants of Spaniards) constituted less than 15 percent of the population. Although they inhabited the same cities, the whites had little in common with the Indians.

The Quechua, once part of the great Inca Empire (Tiahuantinsuyo) centered in Cuzco (Cusco) in present-day Peru, were valley people in pre-Incan times who adopted the language of the conquering Incas. The origins of the Aymara have remained somewhat obscure. The Aymara and the few surviving members of the Puquina-speaking Uru and Chipaya tribes, which the Aymara once oppressed, still ply Lake Titicaca in totor reed boats, as they have for almost a millennium. Archaeologists generally have held that the Aymara emerged as a distinct group about A.D. 1100 and that their ancestors were part of the great Aymara-speaking Tiwanakan Empire (or possibly only the Kolla Indians, who constituted its work force) that was centered at Tiwanaku (Tiawanaco) at the southern end of Lake Titicaca.

Bolivia’s largely unknown Tiwanakan prehistory is as alien as the Altiplano’s topography. The origins of the Tiwanakans and their sudden disappearance have remained shrouded in mystery, myth, and controversy. Early Spanish chroniclers found that the Aymara lacked an ancestral memory or written record of the Tiwanakans. The Tiwanakans appeared as an already robust culture in at least 600 B.C. (although some archaeologists date them back to around 1500 B.C.) and developed through at least five distinct stages over nearly two millennia, until becoming a lost civilization around A.D. 1200. During the culture’s final centuries, when it flourished, its religious influence extended throughout the Pacific Andean region as far north as Ecuador. According to archaeologists, much of the later Quechua-speaking Incan civilization was based on inherited Tiwanakan culture and technology.

Tiwanaku was the sun-worshiping empire’s lofty ceremonial and administrative center, located on what was then an island in Lake Titicaca. Over the centuries, the lake has receded, leaving the ruins some twenty kilometers from its shore (the ruins of at least one other ancient city have been discovered submerged). Tiahuanaco occupied an area of almost six square kilometers and had a population ranging from 20,000 to 100,000. The site, although still only partially excavated, contains some of the most impressive prehistoric ruins in the Western Hemisphere. Its immense, open-sky stone edifices, such as the temple of Akapana and Palace of the Sarcophagi, are constructed on enormous foundations and contain polished walls. Pyramidal temples include the Sun Temple of Kalasasaya with its striking Calendar Gate, or Gateway of the Sun (Puerta del Sol), and another estimated to have been as large as Egypt’s Great Pyramid. The walls of these once brightly painted temples were adorned with gold-covered sculptured bas-reliefs. Over the centuries since the Spaniards arrived and began to systematically destroy the site, using it as a quarry, the ruins have been vandalized to such an extent that only the heaviest megalithic vestiges remain.

The Tiwanakan culture was as advanced in many respects as that of the ancient Egyptians. The Tiwanakans built an extensive system of roads, terraced mountain slopes, and huge raised terraces surrounded by deep, stone-block irrigation canals that made what is today a barren, dry region into fertile agricultural land for growing highly nutritious crops, such as a grain called quinoa (their sacred “mother grain”). Their buildings contained carved stone pipes for plumbing and were constructed of geometrically cut stone blocks linked with copper pins and clamps so tightly that mortar was unnecessary. The Tiwanakans used timber-built vessels to ferry andesite stone slabs weighing more than sixty tons forty-eight kilometers across the lake from quarries at the extinct volcano Kayappia, measured and cut them meticulously, and ground and burnished them smooth. Thousands of workers transported red sandstone blocks weighing up to 160 tons from a quarry tem kilometers away by dragging them along an embankment covered with wet clay. Tiwanakan sculptors adorned their large pillar-like statues of the Sun God (Kon-Tiki Viracocha) and priest-kings and other slabs with an elaborately developed, but as yet undeciphered, iconography. Artisans created exquisite golden ornaments and ceramics, the latter containing brilliant colors and sculptured figures.

Investigators have postulated various theories to explain the mysterious disappearance of the Tiwanakan civilization. Some authors have speculated that the Aymara-speaking, warlike Kollas liquidated the Tiwanakans. Incan legend also spoke of a tribe from the Coquimbo Valley in Peru that attacked and massacred the bearded white men in a battle on an island in Lake Titicaca; only Kon-Tiki and a few others escaped and fled west. Some scientists have hypothesized that a dramatic drop in the water level of Lake Titicaca could have debilitated the Tiwanakans and made them vulnerable to attack by hostile tribes. Archaeologist Alan L. Kolata has determined that Tiwanaku’s irrigation fields were no longer functional by A.D. 1000, possibly as a result of a severe drought lasting for decades. In any event, there seems to be general agreement that the scattered megalithic remnants of uncompleted projects provide evidence that Tiwanakan life came to an abrupt end. From 1200 to 1438, the Kollas assimilated the peoples who had lived under the Tiwanankan Empire. Thus, the Kollas are presumed to have inherited elements of the vanished culture, such as some stone-building skills, but not the more advanced aspects of the civilization.

The Incas of Peru emerged shortly after the collapse of the Tiwanakans and reached an equally advanced level of civilization during their relatively brief history of several hundred years. Incan legends also gave accounts of bearded white men who came from the shores of Lake Titicaca and brought them civilization and then went to the Pacific Coast and disappeared overseas. The Incas worshiped Viracocha Inca and the sun and built sun temples on the Island of the Sun in Lake Titicaca. Architectural similarities with Tiwanakan culture included the trapezoidal shapes of doors and window openings and the masterfully cut and interlocked walls of large stone blocks.

In the late fifteenth century, the Incas, after meeting stubborn resistance, finally brought the Kollas under their control. According to legend, the Incas were awed by the then still magnificent ruins of Tiwanaku, which they found occupied by the Aymara. Nevertheless, the Incas kept their distance from the site as if it were taboo. They imposed only their religion on the Aymara and allowed them to keep their social traditions and language. The relatively brief Incan culture in Kollasuyo (present-day Bolivia) produced beautiful ceramics and brightly colored rectangular pack cloths (ahuayo), styles that still characterize the work of the Quechua and Aymara. Incan outposts extended to the fringes of the eastern escarpment (east of Cochabamba), as evidenced by the important ruins of Incallacta and possibly Samaipata, although whether the latter, a colossal fortress carved out of solid rock on a mountaintop, is actually Incan or Tiwanakan has been disputed.

When Francisco Pizarro arrived in Tumbes (in present-day Peru) in 1532, the Incas thought he was Viracocha Inca returning. After conquering the Incas, the conquistadors systematically destroyed the Incan and other “backward” Indian cultures, including most of an estimated seventy species of exotic Incan crops, such as quinoa, that are only now being rediscovered and reintroduced around the world. For almost three centuries, the Spaniards exploited the rich silver mines of what they called Upper (Alto) Peru or Charcas (present-day Bolivia). They subjected the mainly Aymara Indians on the Altiplano and the Quechua Indians in the temperate valleys to a system of feudal peonage in the mines and textile mills (obraje) and on the haciendas, denying them even the right to learn to read and write their own languages.

Imported African slaves died off so rapidly doing the strenuous high-altitude mining work and the Indians feared them so much that they were used mainly for domestic work in the silver-mining city of Potosí, for many years the richest and largest city in the Americas (160,000 residents in 1660). African slaves, however, became an Aymara-speaking subculture in the Yungas, which they colonized for coca cultivation. Chewing coca leaves (supposedly the exclusive right of the Incan elite in pre- Columbian times) enabled the Aymara to cope with the hardships of mining by numbing their senses to the cold and deadening their appetites.

After becoming an independent republic in 1825 under the presidency of its liberator and namesake, Simón Bolívar Palacio, Bolivia proved difficult to govern and hold together; its heterogeneous, illiterate population lacked any sense of national self-identity or patriotism. Regional rivalries that antedated independence remained rife. Because the Indians remained culturally and physically isolated and illiterate, most of them probably were unaware that they lived in a country called Bolivia until well into the twentieth century. The distinctive heritage of architecture, painting, and sculpture left by the Spaniards was of little use to the Indian masses, whose daily life was a struggle to survive. Furthermore, Bolivia was 2.2 million square kilometers, or more than twice its present size. During its first 110 years, the nation lost approximately half of its territory in wars and controversial bilateral deals. The most traumatic loss resulted from the War of the Pacific (1879-83), in which Chile seized Bolivia’s seacoast and rich nitrate fields in the Atacama Desert.

Bolivia has suffered from the rule of numerous despotic and incompetent caudillos during its history as an independent nation. None was crueler and more depraved and ignorant than General Mariano Melgarejo Valencia (1864-71), whose many victims included the conspiratorial General Manuel Isidoro Belzú Humérez (1848-55), murdered on being received in the presidential office after returning from exile. Melgarejo, a mining baron, squandered the country’s treasury on his mistress, ceded an immense rubber- farming territory to Brazil in exchange for the right to use the Amazon River as a waterway, and initiated the government’s seizure and sale of Indian communal lands. Belzú’s frequently quoted valedictory, however, that “Bolivia is totally incapable of being governed,” created an enduring stereotype. In Belzú’s era, moreover, Bolivia’s caudillos were so busy fighting for power among themselves that they had little time or energy left to govern the country effectively.

A number of exceptional leaders also have governed from the Palacio Quemado, or Burnt Palace (the unofficial name given the rebuilt Palace of Government after it was burned by a mob in 1875). In 1983 the La Paz newspaper Última Hor polled thirty-nine prominent Bolivians in various professions on which seven presidents they considered “most significant.” The final list (in chronological order) consisted mostly of historical figures: General Antonio José de Sucre Alcalá (1825-28), General Andrés de Santa Cruz y Calahumana (1829-39), Belzú, Melgarejo (who received a record fifteen negative votes, as well as two positive ones), Aniceto Arce Ruíz (1888-92), Ismael Montes Gamboa (1904-09 and 1913-17), and Víctor Paz Estenssoro (1952-56, 1960-64, and 1985- 89). Those garnering the most favorable votes were Santa Cruz and Paz Estenssoro (thirty-three and thirty-two, respectively). The next highest-rated president, Belzú, curiously garnered twenty- one favorable ballots and no negative ones, despite having ruled Bolivia with a reign of terror.

Other well-regarded nineteenth-century leaders included José María Linares Lizarazu (1857-61) and General José Ballivián y Segurola (1841-47). Linares had widespread support when he seized power as the first civilian president but lost it as he became dictatorial. Ballivián, although widely popular, resigned after tiring of putting down insurrections. His urbane and European- educated son, Adolfo Ballivián (1873-74), seemed to have the potential of becoming an outstanding president and probably would have changed Bolivia’s involvement in the War of the Pacific had a mortal illness not forced him to resign suddenly. Elected to the office (unlike his father), Adolfo Ballivián briefly restored honesty, tolerance, and liberty to government.

During the period of Conservative Party rule (1880-99), silver- mining magnates, such as Gregorio Pacheco Leyes (1884-88) and Arce Ruíz, followed the precedent set by Melgarejo of occupying the presidency, but did so legally. During the relatively stable Liberal Party era (1899-1920), when the tin industry boomed, the three tin-mining moguls–Simón I. Patiño, a Bolivian chol who became one of the world’s richest men; Carlos Aramayo, a Bolivian; and Mauricio Hochschild, an Austrian-born Argentine– intervened in politics more indirectly by employing politicians and lawyers to represent the oligarchy’s interests. The mining and landowning elite kept the mine laborers and landless peasant migrants in a system of neofeudal peonage called pongaj and intensified the despoilment of the Indian communities of their ancestral land.

The disastrous war with Paraguay, the Chaco War (1932-35), cost Bolivia 65,000 lives, hundreds of millions of dollars, and most of its vast Chaco territory. Although the Chaco was nearly uninhabitable, it was of strategic importance as Bolivia’s only access to the Atlantic Ocean, by way of the Paraguay River. By discrediting the traditional oligarchy because of its inept civilian and military leadership, the Chaco War served as a turning point in Bolivia’s military, political, and cultural life. It opened the way for a series of coups by reformist military officers, none of whom fared well in office, the creation of new political groups, and political activism by the Indians. The Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario–MNR) emerged as Bolivia’s first party of the masses.

Economic decline and social unrest during the post-World War II years came to a head in the form of the 1952 Revolution led by the MNR’s Paz Estenssoro and Hernán Siles Zuazo (1956-60 and 1982-85). One of Latin America’s three most significant agrarian revolutions of the century and the least violent of the three, it was aimed at the 6 percent of the landowners who fully controlled 92 percent of all cultivated land in the republic. In addition to sweeping land reform measures, including an end to the pongaj system, it returned to the Indians most of the land on the Altiplano taken from them in the past. The 1952 Revolution also resulted in civilian government, universal suffrage, and primary education in rural areas. It thus increased identification by the Indian peasants (campesinos) with the national society rather than simply their isolated village or hacienda. Moreover, the 1952 Revolution destroyed the mining interests by nationalizing the tin mines and creating the Mining Corporation of Bolivia (Corporación Minera de Bolivia–Comibol) and Bolivian Labor Federation (Central Obrera Boliviana–COB). After the first years, however, the 1952 Revolution, dubbed by political scientist James M. Malloy as the “uncompleted Revolution,” lost its momentum; land reform in the highlands soon stagnated, and a new elite emerged.

In 1964 the military, having been rebuilt by the MNR government with United States assistance, reverted to its old ways of staging coups and remained in power for most of the next eighteen years. During that period, ten military dictators held office, and some relied heavily on the army to suppress labor protests by miners and peasants. In October 1967, the army defeated an ill- fated attempt by Cuba’s Ernesto “Che” Guevara to start a Cuban- style revolution in the politically apathetic Bolivian countryside. The news that the charismatic Cuban revolutionary hero, who had not been seen in public for two years, was leading an insurgency in Bolivia received worldwide publicity; his capture and summary execution earned Bolivia the enmity of the international left (the military officer in charge of the counterinsurgency operation was later assassinated in Paris).

In 1979-80 the country enjoyed a brief respite from military rule under Lidia Gueiler Tejada, the country’s first woman president, whom the National Congress (hereafter, Congress) appointed for a one-year mandate. Siles Zuazo, leader of the Nationalist Revolutionary Movement of the Left (Movimiento Nacionalista Revolucionario de Izquierda–MNRI), who had been democratically elected in 1980, was supposed to succeed Gueiler, but General Luis García Meza Tejada (1980-81) staged a bloody military coup in July 1980.

García Meza seized power with the help of cocaine traffickers and European mercenaries recruited by Klaus Barbie, longtime resident and former Gestapo chief in Lyons. As García Meza’s internal security adviser, Barbie gave his paramilitary unit, The Newlyweds of Death (Los Novios de la Muerte), free rein to practice neo-Nazi tactics of arbitrary arrests, torture, and disappearances. The regime’s brutal repression and deep involvement in cocaine trafficking isolated the country internationally and discredited and demoralized the Bolivian military, compelling it to oust García Meza and allow a transition to democracy.

The optimism engendered by the return to civilian rule under Siles Zuazo soon turned to widespread discontent and nationwide strikes called by the COB because the virtually bankrupt Siles Zuazo government failed to salvage the foundering economy. As the government printed money to cover growing budget deficits, inflation skyrocketed out of control, at one point reaching an accumulated rate of about 24,000 percent, Latin America’s first recorded hyperinflation. For the most part, barter replaced the money economy. As a result of a 60 percent drop in the price of tin in late 1985, mining, which had dominated the Bolivian economy since colonial times, decreased radically. The Siles Zuazo government also alienated the United States by opening close relations with Cuba and criticizing United States policies toward Latin America.

Having failed completely to stabilize the economy, Siles Zuazo cut short his term of office by one year so that presidential and congressional elections could be held in July 1985. Paz Estenssoro’s third presidency (1985-89) was notable not only for being completed without a military coup but also for his successful, albeit economically harsh, efforts to bring hyperinflation under control and to restore a measure of economic and political stability, as well as good relations with the United States. Acting on the advice of a Harvard professor and several Chilean economists, Paz Estenssoro quickly applied orthodox free-market policies to cure Bolivia’s sick economy, which was choking from decades of state intervention. He implemented an austere stabilization program, the New Economic Policy (Nueva Política Económica–NPE), which slashed the government’s budget deficit, imposed a wage freeze and a tenfold increase in the price of gasoline, eliminated all price subsidies, laid off thousands of workers at inefficient state- owned companies, including three-quarters of the miners employed by Comibol (about four-fifths of its work force), liberalized trade, allowed the peso to float against the United States dollar, and loosened disclosure requirements for the Central Bank (Banco Central). He also enacted a state of siege to deal with the resulting labor unrest.

In a remarkable accomplishment, the government reduced inflation to nearly zero within weeks of the NPE. Other fiscal achievements included cutting the budget deficit from 36 percent of the gross domestic product to 4 percent, retiring more than US$600 million of the country’s burdensome foreign debt through an innovative buy-back and debt-equity swap program, and modernizing the complex, ineffective tax system. Bolivia enjoyed exceptional price stability during the rest of the decade, with inflation running at an annual rate of only 6 percent in late 1989.

The 1989 presidential elections, although characterized by widespread apathy, were peaceful, widely regarded as fair, and free of any threat of military intervention. As such, they affirmed Bolivia’s progression along the democratic path and growing political maturity. According to political scientist Eduardo A. Gamarra, the key political question in 1989 was governability. In the first round in May, Jaime Paz Zamora, the social democratic candidate of Bolivia’s center-left Movement of the Revolutionary Left (Movimiento de la Izquierda Revolucionaria–MIR), placed third behind Hugo Banzer Suárez (1971-78), candidate of the right-of-center Nationalist Democratic Action (Acción Democrática Nacionalista–ADN), and the MNR’s Gonzalo Sánchez de Lozada. Because no candidate received a majority in the May elections, it once again fell on Congress to choose the president from among the three principal candidates.

Paz Zamora and his longtime political adversary, Banzer, who had once jailed Paz Zamora for six months, joined forces in an unlikely alliance, called the Patriotic Accord, thereby outmaneuvering front-runner Sánchez de Lozada of the MNR in the congressional lobbying. Congress subsequently chose Paz Zamora to be the country’s seventy-sixth president. It also selected Banzer’s running mate, Christian Democrat Luis Ossio Sanjinés, to be vice president. Many Bolivians, remembering Paz Zamora’s tumultuous record as vice president in 1983, initially viewed with anxiety and uncertainty the prospect of the one-time revolutionary assuming the presidency. On receiving the presidential sash and medal of 1825 from his uncle, Paz Estenssoro, in August 1989, Paz Zamora vowed to maintain a free- market economy, develop agriculture and small and medium-size industries, and continue the NPE. Paz Estenssoro was Bolivia’s first democratically elected head of state to complete his term of office in twenty-five years and to turn over power to an elected successor. Considering that Paz Zamora was Bolivia’s third successive democratically elected president and that almost half of Bolivia’s governments had been de facto military regimes, this democratic trend was no small accomplishment.

Despite its exaggerated image as one of Latin America’s most unstable and violent countries, Bolivia appeared at the end of 1989 to have decidedly put two of its traditional maladies–coups and inflation–behind it. Furthermore, Bolivia was relatively free of the rampant terrorism, insurgency, and criminal violence that afflicted the larger Andean nations of Colombia and Peru. With the main exception of the García Meza period, its politics in the twentieth century were not exceptionally violent. Only three presidents–Pedro Blanco Soto (1828-29), Augustín Morales Hernández (1871-72), and Gualberto Villarroel López (1943-46)– all of whom were military men who had seized power, were assassinated while in office (the deranged Morales by his own nephew).

Among the formidable challenges confronting Bolivia’s new democratic government in the 1990s was the export-dependent economy, which was stagnant and prone to crises. Despite Paz Estenssoro’s considerable economic achievements, agricultural production was down, the unemployment rate was running at about 22 percent, and the terms of trade had declined by almost 50 percent since 1985. Bolivia’s growth prospects were constrained by its dependence on Argentine payments for a large share of its export revenues, poorly diversified exports, low domestic savings, and high levels of foreign debt. In addition, Argentina had run up more than US$250 million in arrears for its purchases of Bolivian natural gas, causing havoc in Bolivia’s balance of payments and fiscal accounts. Nevertheless, the economy grew by 2.2 percent in 1987 and 2.8 percent in 1988, spurred by a resurgent mining sector, which accounted for 44 percent of the country’s export income in 1988.

In mid-November 1989, Paz Zamora responded to his country’s first crisis, a strike by the 80,000 state teachers who were supported by the COB, by the usual method of imposing a state of siege (which banned strikes, public meetings, and demonstrations for ninety-days), arresting more than 850 union members, and banishing some 150 of them to internal exile. The teachers were demanding a special wage bonus of US$100 to supplement their meager monthly wage of about US$45. He brought the troublesome strike to an end the following spring, however, by offering them a 17 percent pay increase and paying them an already negotiated annual bonus.

Growing national security, social, and economic threats from cocaine trafficking and addiction also confronted the Paz Zamora government. About one-third of the work force of 1.6 million in 1989 was engaged in an underground subsistence economy based mainly on coca cultivation and contraband and estimated to be larger than the formal economy. The coca/cocaine industry posed a dilemma for Bolivia, the world’s second largest source of cocaine, because of the trade-off between its economic benefits and its political, social, and cultural costs. On the one hand, exports of unrefined coca paste and cocaine generated an annual income of US$1.5 billion, of which some US$600 million remained within the country in 1989. The cocaine industry had become Bolivia’s biggest employer, employing some 500,000 people in the production of coca and the transportation, sale, and manufacture of cocaine, according to Cochabamba’s Institute of Social and Economic Studies. The majority of the dismissed Comibol workers entered the coca trade, many of them joining the Chapare region’s approximately 200,000 workers and peasants involved in cutting and burning the rain forest and in growing coca bushes, whose leaves were processed into coca paste and cocaine.

On the other hand, the cocaine industry enabled cocaine traffickers–nationals and foreigners alike–to threaten the national sovereignty and institutions with occasional acts of terrorism and increases in corruption at all levels of public institutions. Other by-products of the cocaine business included increased coca-paste addiction among Bolivia’s skyrocketing numbers of abandoned children, decreased production of relatively unprofitable traditional food crops, and a widening income disparity between the wealthy minority and the poor, who constituted the overwhelming majority. Moreover, Bolivia, known for centuries for its minerals–first silver and then tin–had become synonymous with cocaine.

In the late 1980s, Bolivia’s coca/cocaine industry dominated relations with the United States, the principal cocaine-consuming country. One of the most difficult challenges facing Paz Zamora was complying with a controversial coca eradication law in order to continue to qualify for United States economic aid. Although Bolivia was attempting, with United States support, to implement a program combining cocaine interdiction and coca eradication and substitution, its efforts were hampered by strong resistance from the increasingly militant and politically powerful peasant unions of coca growers, inadequate enforcement, constant expansion of coca fields, and corruption. Coca production actually increased by more than 20 percent in 1988, according to the United States Department of State.

Bolivia ruled out other more drastic eradication methods, such as repression of the coca farmers or herbicidal spraying of coca fields. A more effective approach than using coercive methods against the coca-growing small farmers, in the view of social scientist Kevin Healy, would be, in addition to reducing world demand for cocaine, to provide agricultural price supports for the otherwise unprofitable substitute crops, such as bananas, coffee, and cocoa.

In March 1990, the United States Department of State reported that progress in antinarcotics operations in 1989 was uneven and that coca eradication in Bolivia again had failed to keep pace with new production. It found, however, that the situation had begun to improve during the last quarter of the year as a result of the Paz Zamora government’s cooperation with the United States in preparing for the Andean Summit in mid-February 1990, its stepped up coca-eradication efforts, and its decision to allow the United States to extradite notorious cocaine trafficker Luis Arce Gómez.

During the first five months of 1990, moreover, the Paz Zamora government appeared to have stemmed the annual trend of expanding production. With coca production no longer profitable for many small farmers in the Chapare because of a drastic drop in the price of coca paste, the farmers reportedly had eradicated more than 3,200 hectares of the region’s estimated 54,000 hectares of coca plants, more than in all of 1989. Chapare coca farmers were beginning to substitute alternative crops, such as fruit and spices. Coca’s precipitous, albeit temporary, fall from bonanza- to-bust status in Bolivia was attributed largely to a combination of Colombia’s crackdown on major drug traffickers and the Paz Zamora government’s vigorous enforcement of its policy to destroy coca-paste laboratories and crack down on wholesale buyers of coca paste.

Bolivia’s move away from a cocaine-based economy was expected to have significant economic costs. The Paz Zamora government estimated in early 1990 that US$627 million would be needed for crop substitution and rural development over the 1990-95 period. Without substantial assistance, the prospects that coca farmers could earn a living by producing alternative crops without a guaranteed market were uncertain at best. During his official visit to Washington in May 1990, Paz Zamora appealed for a major increase in financial aid to help extract the Bolivian economy from the cocaine business. In addition to financing the operations of Bolivia’s antinarcotics police and the Bolivian operations of the United States Drug Enforcement Administration (DEA), the United States provided US$78 million in development aid and economic support in the 1990 fiscal year. A small Peace Corps program was reestablished in Bolivia in March 1990.

Chapare coca farmers were not the only inhabitants of the eastern lowlands making their complaints known in 1990. In September more than 700 Indians representing ten tribes in Beni Department staged a 643-kilometer “march for dignity and territory” from Trinidad to La Paz. The Indians were protesting the destruction of the 560,000 hectares of the Chimane Forest that the government legally handed over to logging companies in 1987. In addition to ruining the forest’s flora and fauna, the Indians claimed that the loggers were threatening their culture. Critics faulted the logging companies for not reforesting, as required by Bolivian law. The government attempted to strike a balance between the interests of the Indians and loggers by offering to rezone the logging region, but not to revoke all timber rights.

Paz Zamora’s continuation of his predecessor’s successful free- market policies, as well as the new government’s success in taming Bolivia’s inflation, settling its foreign debts, and adopting pro-business and pro-foreign investment policies, persuaded the Paris Club creditor countries to grant the country a special debt-rescheduling package in March 1990. The government also hoped to increase GDP growth from 1989’s meager 2 percent to 5 percent per year. To that end, it planned, under a five-year program, to sell off 100 of its 157 state-owned companies and use the estimated US$500 million in revenues for health, education, and public works.

In addition to its privatization program, the Paz Zamora government began to encourage foreign investment. In 1989 it opened a stock exchange in Bolivia and rewrote the Investment Law and Mining and Hydrocarbons codes to make them more favorable to foreign investment. Bolivia also joined with four other South American countries–Argentina, Brazil, Paraguay, and Uruguay–in a joint effort to call the attention of the world’s investors, business people, and lending agencies to investment opportunities in the region. In the first quarter of 1990, a number of foreign companies expressed interest in joint-venture projects to tap Bolivia’s vast mineral reserves, and several signed on to such undertakings. By September, however, Paz Zamora had had to retreat from his neoliberal, economically orthodox program under pressure from COB unions that had staged strikes and mobilized popular support against privatization of “strategic” state companies and foreign mining contracts.

The question of “governability” under the Paz Zamora government was put to the test in December 1990 when the country’s fledgling democratic system experienced what the daily La Razó somewhat hyperbolically described as its “worst political crisis” in a struggle over separation of powers. Quintessentially Bolivian, the constitutional crisis arose over the seemingly minor matter of the state’s overturning a 15 percent increase in the levy a company was expected to pay on beer sales. On the initiative of the Paz Zamora administration’s parliamentary majority in the lower house, Congress suspended eight of the twelve members of the Supreme Court of Justice on grounds of incompetence. In response, the opposition MNR charged that the impeachment proceedings were a Kangaroo court and intended to concentrate all three state powers in the hands of Paz Zamora and his political partners. Ironically, the president of the Supreme Court of Justice called on the military to intervene. The spectacle, which Paz Zamora dismissed as “a tempest in a teacup,” tarnished the international image of Bolivia’s new democracy. On the positive side, however, the military’s inaction seemed to reaffirm the democratic system. Indeed, the armed forces commander, General Jorge Moreira Rojas, appealed to government and opposition politicians to remain calm “for the good of the image of Bolivian democracy.”

In one area at least, Bolivia’s economy made a better impression of stability in 1990 with an annual inflation rate well below 15 percent, the lowest in Latin America. In other areas, however, economic prospects were less encouraging. A study found that during the 1980s the informal sector of the economy increased 10 percent, to 55 percent of all jobs, while unemployment increased drastically and real wages sharply. Growth of GDP in 1990 was expected to be less than 2.5 percent. Moreover, some observers expected 1991 to be a year of conflict between the workers and the administration as a result of higher fuel prices and the government’s intention to proceed with plans to privatize most state-run enterprises and to allow foreign companies to develop natural resources.

Historical Setting

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.


The Bolivian highlands, permanently settled for at least 21,000 years, were part of the culture of Andean South America before the arrival of the Spaniards. The records are fragmentary but suggest that agriculture started about 3000 B.C. and that the production of metal, especially copper, began 1,500 years later.

By 600 B.C., the first great Andean empire had emerged on the high plateau between the mountains known as the Altiplano. This empire, the Tiahuanacan, was centered near the southeastern side of Lake Titicaca and included urban centers around the lake, as well as enclaves in different ecological zones from the eastern valleys to the Pacific Coast. Tiahuanaco was a great center of trade and religion, and the impact of its culture spread far beyond the boundaries of present-day Bolivia. Apparently, the Tiahuanacan Empire was established through colonization rather than through conquest. Its rapid expansion after 1000 and sudden collapse around 1200 are still poorly understood.

The collapse of Tiahuanacan influence resulted in the rise of seven regional kingdoms of the Aymara, the most powerful states located in the densely populated area around Lake Titicaca. The Aymara, a belligerent people who lived in fortified hilltop towns, had an extraordinary ability to adapt to the unique climatic conditions of the region and increased their food supply through irrigation and the process of freezing and drying crops. By maintaining colonists in the semitropical valleys on the eastern slopes of the Andes and on the Pacific Coast, they were able to produce both tropical and highland crops. Their basic social unit was the ayllu, a kinship group or clan that organized work and distributed land among its members.

The Aymara completely dominated the Uru, another major ethnic group in the pre-Columbian southern Andes. Although the Uru might have preceded the Aymara in the region, by the twelfth century they were poor fishermen and landless workers.

The Aymara, however, were not able to contain the expansion of the Quechua, the third major ethnic group. After the collapse of the Tiahuanacan Empire, a Quechua-speaking state emerged in the area around Cuzco (in present-day Peru). In the early fifteenth century, the Quechua, who became known as the Incas when they adopted the name of their rulers, were the most powerful group in the northern highlands. As the Aymara kingdoms in the south became weaker in the second half of the fifteenth century, the Incas began to conquer them.

The Bolivian highlands became known as the Kollasuyo, a densely populated area with great economic and mineral wealth that constituted one of the four administrative units of the Inca Empire. The highest official of the Kollasuyo was responsible only to the Inca (the emperor) and supervised a group of provincial governors, who in turn controlled members of the Aymara nobility. Under a draft system called the mita, the Incas forced local Indians in the Kollasuyo to work in the mines or on construction projects or to serve in the armies, compensating them fully for their labor. Despite their goal of extreme centralization, the Incas did not fundamentally change the organization of the Aymara kingdoms, which remained relatively autonomous. Many local chiefs kept many of their former powers and were, in general, reinforced by Inca authority. They were also able to retain their culture, their local religion, and their language. The regional nobility, although forced to send their children to Cuzco for education, continued to hold private property. Moreover, the system of sending colonists to the eastern valleys and the coast was tolerated under Inca rule.

In 1470, however, several Aymara kingdoms rebelled against Inca rule. The Incas completely defeated two states and pacified the region by sending mitimas, Quechua-speaking colonists, to Aymara territory, especially to the southern valleys and to the more central valley regions where Cochabamba and Sucre were later founded. By the beginning of the sixteenth century, the Incas had fully established their rule over the Kollasuyo. In the 1980s, the legacy of this resettlement policy could be seen in the predominance of Quechua speakers in many areas of Bolivia.

The Incas failed, however, to conquer the nomadic tribes in the eastern Bolivian lowlands. The remains of Incan fortresses there are evidence of this failure and suggest that the Incas could subdue only those cultures that were primarily based on agriculture. Thus, the Indian groups of the eastern two-thirds of Bolivia preserved their ways of life to a great extent, even after the Spanish conquest.


Conquest and Settlement

Francisco Pizarro, Diego de Almagro, and Hernando de Luque led the Spanish discovery and conquest of the Inca Empire. They first sailed south in 1524 along the Pacific Coast from Panama to confirm the legendary existence of a land of gold called “Biru.”

Because the rapidly expanding Inca Empire was internally weak, the conquest was remarkably easy. After the Inca Huayna Capac died in 1527, his sons Huascar and Atahualpa fought over the succession. Although Atahualpa defeated his brother, he had not yet consolidated his power when the Spaniards arrived in 1532, and he seriously misjudged their strength. Atahualpa did not attempt to defeat Pizarro when he arrived on the coast in 1532 because the Incan ruler was convinced that those who commanded the mountains also controlled the coast. When Pizarro formed alliances with Indians who resented Inca rule, Atahualpa did not modify the Inca ceremonial approach to warfare, which included launching attacks by the light of the full moon. On November 16, 1532, Pizarro took Atahualpa prisoner during their first encounter and later executed him, even after payment of a ransom equivalent to half a century of European production of gold and silver. One year later, Cuzco fell.

Despite Pizarro’s quick victory, Indian rebellions soon began and continued periodically throughout the colonial period. In 1537 Manco Inca, whom the Spanish had established as a puppet emperor, rebelled against the new rulers and restored a “neoInca ” state. This state continued to challenge Spanish authority even after the Spanish suppressed the revolt and beheaded Túpac Amaru in the public square of Cuzco in 1572. Later revolts in the Bolivian highlands were usually organized by the elders of the community and remained local in nature, the exception being the great rebellion of Túpac Amaru II in the eighteenth century.

During the first two decades of Spanish rule, the settlement of the Bolivian highlands–now known as Upper (Alto) Peru or Charcas–was delayed by a civil war between the forces of Pizarro and those of Almagro. The two conquistadors had divided the Incan territory, with the north under the control of Pizarro and the south under that of Almagro. Fighting broke out in 1537, however, when Almagro seized Cuzco after suppressing the Manco Inca rebellion. Pizarro defeated and executed Almagro in 1538 but was himself assassinated three years later by former supporters of Almagro. Pizarro’s brother Gonzalo assumed control of Upper Peru but soon became embroiled in a rebellion against the Spanish crown. Only with the execution of Gonzalo Pizarro in 1548 did Spain succeed in reasserting its authority; later that year, colonial authorities established the city of La Paz, which soon became an important commercial and transshipment center.

Indian resistance delayed the conquest and settlement of the Bolivian lowlands. The Spanish established Santa Cruz de la Sierra (hereafter, Santa Cruz) in 1561, but the Gran Chaco, the colonial name for the arid Chaco region, remained a violent frontier throughout colonial rule. In the Chaco, the Indians, mostly Chiriguano, carried out unrelenting attacks against colonial settlements and remained independent of direct Spanish control.

The Economy of Upper Peru

Spain immediately recognized the enormous economic potential of Upper Peru. The highlands were rich in minerals, and Potosí had the Western world’s largest concentration of silver. The area was heavily populated and hence could supply workers for the silver mines. In addition, Upper Peru could provide food for the miners on the Altiplano.

Despite these conditions, silver production fluctuated dramatically during the colonial period. After an initial fifteen-year surge in production, output began to fall in 1560 as a result of a severe labor shortage caused by the Indian population’s inability to resist European diseases. Around the same time, Potosí’s rich surface deposits became depleted, which meant that even more labor would be required to extract silver. The labor shortage was addressed by Francisco de Toledo, the energetic viceroy (the king’s personal representative) of Peru, during a visit to Upper Peru in the 1570s. Toledo used the preColumbian mita to extract forced labor for the mines at Potosí from some sixteen districts in the highlands, which were designated as supplying mita. Adult males could be required to spend every sixth year working in the mines. Henceforth, Potosí mining depended on the mita as well as on a labor system in which relatively free men worked alongside those who were coerced. Toledo also regulated the mining laws, established a mint at Potosí, and introduced the mercury amalgam process. Adoption of the amalgam process was particularly important, according to Herbert S. Klein, in that it eliminated Indian control over refining.

The second problem, the exhaustion of the high-content surface ores, required technological innovations. Hydraulic power took on increased importance because of the construction of large refining centers. By 1621 a system of artificial lakes with a storage capacity of several million tons provided a steady supply of water for refineries. With the labor and technological problems resolved, silver mining flourished. By the middle of the seventeenth century, silver mining at Potosí had become so important that the city had the largest population in the Western Hemisphere, approximately 160,000 inhabitants.

The end of the seventeenth-century boom, however, was followed by a major decline in the mining industry. The exhaustion of the first rich veins required deeper and more expensive shafts. The rapid decrease of the Indian population as a result of disease and exploitation by the mita also contributed to the reduction in silver output. After 1700 only small amounts of bullion from Upper Peru were shipped to Spain.

Kings from the Bourbon Dynasty in Spain tried to reform the colonial economy in the mid-eighteenth century by reviving mining. The Spanish crown provided the financial support necessary to develop deeper shafts, and in 1736 it agreed to lower the tax rate from 20 to 10 percent of the total output. The crown also helped create a minerals purchasing bank, the Banco de San Carlos, in 1751 and subsidized the price of mercury to local mines. The foundation of an academy of metallurgy in Potosí indicated the crown’s concern with technical improvements in silver production. The attempts to revive the mining sector in Upper Peru were only partially successful, however, and could not halt the economic collapse of Potosí at the beginning of the nineteenth century. Nevertheless, mining remained critical to the economy of Upper Peru because food supplies sent from the valleys to mining centers on the Altiplano influenced agricultural production.

Farming at first took place on encomiendas. The crown granted a small number of conquistadors the right to the labor and produce of Indians living on the encomienda, and by the 1650s there were some eighty-two encomiendas in Upper Peru. Encomenderos tended to monopolize agricultural production, control the cheap Indian labor, and collect the tribute that the Indians had to pay to the crown. Because encomenderos were difficult to control and abused their laborers, however, the crown tried repeatedly to bring Indians under its direct jurisdiction and control.

In the second half of the sixteenth century, agricultural production shifted from encomiendas to large estates, on which Indians worked in exchange for the use of land. Cochabamba became a major producer of corn and wheat, and the valleys produced coca leaves in increasing amounts during colonial rule.

In addition to mining and agricultural production, Indian tribute (alcabala) became an increasingly important source of income for the crown despite Indian migration to avoid payment. An early effort to collect tribute from Indians by moving them into villages or indigenous communities (comunidades indígenas) was unsuccessful because of resistance from both encomenderos and Indians. But by the late eighteenth century, an increase in the Indian population, the extension of tribute payments to all Indian males (including those who owned land), and a relative decline in income from the mines combined to make alcabala the second largest source of income in Upper Peru. Tribute payments also increased because Spanish absolutism made no concessions to human misfortune, such as natural disasters. The Indian tribute was increased by 1 million pesos annually.

State, Church, and Society

The longevity of Spain’s empire in South America can be explained partly by the successful administration of the colonies. Spain was at first primarily interested in controlling the independent-minded conquerors, but its main goal soon became maintaining the flow of revenue to the crown and collecting the tribute of goods and labor from the Indian population. To this end, Spain soon created an elaborate bureaucracy in the New World in which various institutions served as watchdogs over each other and local officials had considerable autonomy.

Upper Peru, at first a part of the Viceroyalty of Peru, joined the new Viceroyalty of Río de la Plata (whose capital was Buenos Aires) when it was created in 1776. The viceroy was aided by the audiencia (council), which was simultaneously the highest court of appeal in the jurisdiction and, in the absence of the viceroy, also had administrative and executive powers. The wealth of Upper Peru and its remoteness from Lima convinced the authorities in Lima to create an audiencia in the city of Chuquisaca (present-day Sucre) in 1558. Chuquisaca had become particularly important as Potosí’s administrative and agricultural supply center. The jurisdiction of the audiencia, known as Charcas, initially covered a radius of 100 “leagues” (179,600 hectares) around Chuquisaca, but it soon included Santa Cruz and territory belonging to present-day Paraguay and, until 1568, also the entire district of Cuzco. The president of the audiencia had judicial authority as well as administrative and executive powers in the region, but only in routine matters; more important decisions were made in Lima. This situation led to a competitive attitude and the reputation of Upper Peru for assertiveness, a condition reinforced by the economic importance of the region.

Spain exercised its control of smaller administrative units in the colonies through royal officials, such as the corregidor, who represented the king in the municipal governments that were elected by their citizens. By the early seventeenth century, there were four corregidores in Upper Peru.

In the late eighteenth century, Spain undertook an administrative reform to increase revenues of the crown and to eliminate a number of abuses. It created an intendancy system, giving extensive powers to highly qualified officials who were directly responsible to the king. In 1784 Spain established four intendancy districts in Upper Peru, covering the present-day departments of La Paz, Cochabamba, Potosí, and Chuquisaca.

The Spanish crown at first controlled the local governments indirectly but centralized procedures as time went on. At first, Viceroy Francisco de Toledo confirmed the rights of local nobles and guaranteed them local autonomy. But the crown eventually came to employ Spanish officials, corregidores de indios, to collect tribute and taxes from the Indians. Corregidores de indios also imported goods and forced the Indians to buy them, a widely abused practice that proved to be an enormous source of wealth for these officials but caused much resentment among the Indian population.

With the first settlers in Upper Peru came the secular and regular clergy to begin the conversion of the Indians to Christianity. In 1552 the first bishopric in Upper Peru was established in La Plata; in 1605 La Paz and Santa Cruz also became bishoprics. In 1623 the Jesuits established the Royal and Pontifical Higher University of San Francisco Xavier of Chuquisaca, Upper Peru’s first university.

Indian reaction to colonial rule and conversion to Christianity varied. Many Indians adapted to Spanish ways by breaking with their traditions and actively attempting to enter the market economy. They also used the courts to protect their interests, especially against new tribute assessments. Others, however, clung to their customs as much as possible, and some rebelled against the white rulers. Local, mostly uncoordinated, rebellions occurred throughout colonial rule. More than 100 revolts occurred in the eighteenth century alone in Bolivia and Peru.

Although the official Incan religion disappeared rapidly, the Indians continued their local worship under the protection of local Indian rulers. But as Christianity influenced the Indians, a new folk-Catholicism developed, incorporating symbols of the indigenous religion. Whereas early Indian rebellions were anti-Christian, the revolts at the end of the sixteenth century were based in messianic Christian symbolism that was Roman Catholic and anti-Spanish. The church was tolerant of local Indian religions. In 1582, for example, the bishop of La Plata permitted the Indians to build a sanctuary for the dark Virgen de Copacabana on the shores of Lake Titicaca (Copacabana has been a traditional Aymara religious center ever since).

The conquest and colonial rule were traumatic experiences for the Indians. Easily susceptible to European diseases, the native population decreased rapidly. The situation of the Indians worsened in the eighteenth century when Spain demanded higher tribute payments and increased mita obligations in an attempt to improve the mining output.

These profound economic and social changes and the breakup of native culture contributed to the increasing addiction of Indians to alcohol. Before the Spanish arrived, the Incas had consumed alcohol only during religious ceremonies. Indian use of the coca leaf also expanded, and, according to one chronicler, at the end of the sixteenth century “in Potosí alone, the trade in coca amounts to over half a million pesos a year, for 95,000 baskets of it are consumed.”

Increasing Indian discontent with colonial rule sparked the great rebellion of Túpac Amaru II. Born José Gabriel Condorcanqui, this educated, Spanish-speaking Indian took the name of his ancestor, Túpac Amaru. During the 1770s, he became embittered over the harsh treatment of the Indians by the corregidores de indios. In November 1780, Túpac Amaru II and his followers seized and executed a particularly cruel corregidor de indios. Although Túpac Amaru II insisted that his movement was reformist and did not seek to overthrow Spanish rule, his demands included an autonomous region. The uprising quickly became a full-scale revolt. Approximately 60,000 Indians in the Peruvian and Bolivian Andes rallied to the cause. After scoring some initial victories, including defeating a Spanish army of 1,200 men, Túpac Amaru II was captured and killed in May 1781; nonetheless, the revolt continued, primarily in Upper Peru. There, a supporter of Túpac Amaru II, the Indian chief Tomás Catari, had led an uprising in Potosí during the early months of 1780. Catari was killed by the Spaniards a month before Túpac Amaru II. Another major revolt was led by Julián Apaza, a sexton who took the names of the two rebel martyrs by calling himself Túpac Catari (also spelled Katari). He besieged La Paz for more than 100 days. Spain did not succeed in putting down all of the revolts until 1783 and then proceeded to execute thousands of Indians.

In the late eighteenth century, a growing discontent with Spanish rule developed among the criollos (persons of pure Spanish descent born in the New World). Criollos began to assume active roles in the economy, especially in mining and agricultural production, and thus resented the trade barriers established by the mercantilist policies of the Spanish crown. In addition, criollos were incensed that Spain reserved all upperlevel administrative positions for peninsulares (Spanish-born persons residing in the New World).

The Enlightenment, with its emphasis on reason, questioning of authority and tradition, and individualistic tendencies, also contributed to criollo discontent. The Inquisition had not kept the writings of Niccolò Machiavelli, Benjamin Franklin, Thomas Paine, Jean-Jacques Rousseau, John Locke, and others out of Spanish America; their ideas were often discussed by criollos, especially those educated at the university in Chuquisaca. At first the criollos of Upper Peru were influenced by the French Revolution, but they eventually rejected it as too violent. Although Upper Peru was fundamentally loyal to Spain, the ideas of the Enlightenment and independence from Spain continued to be discussed by scattered groups of radicals.


Struggle for Independence

The invasion of the Iberian Peninsula in 1807-08 by Napoleón’s forces proved critical to the independence struggle in South America. The overthrow of the Bourbon Dynasty and the placement of Joseph Bonaparte on the Spanish throne tested the loyalty of the local elites in Upper Peru, who were suddenly confronted with several conflicting authorities. Most remained loyal to Spain. Taking a wait-and-see attitude, they supported the Junta Central (Central Junta) in Spain, a government in the name of the abdicated Ferdinand VII. Some liberals eagerly welcomed the reforms of colonial rule promised by Joseph Bonaparte. Others supported the claims of Carlota, Ferdinand’s sister, who governed Brazil with her husband, Prince Regent John of Portugal. Finally, a number of radical criollos wanted independence for Upper Peru.

This conflict of authority resulted in a local power struggle in Upper Peru between 1808 and 1810 and constituted the first phase of the efforts to achieve independence. In 1808 the president of the audiencia, Ramón García León de Pizarro, demanded affiliation with the Junta Central. The conservative judges of the audiencia were influenced, however, by their autocratic royalist philosophy and refused to recognize the authority of the junta because they saw it as a product of a popular rebellion. On May 25, 1809, tensions grew when radical criollos, also refusing to recognize the junta because they wanted independence, took to the streets. This revolt, one of the first in Latin America, was soon put down by the authorities.

On July 16, 1809, Pedro Domingo Murillo led another revolt by criollos and mestizos (those of mixed European and Indian ancestry) in La Paz and proclaimed an independent state in Upper Peru in the name of Ferdinand VII. The loyalty to Ferdinand was a pretense used to legitimize the independence movement. By November 1809, Cochabamba, Oruro, and Potosí had joined Murillo. Although the revolt was put down by royalist forces sent to La Paz by the viceroy of Peru and to Chuquisaca by the viceroy of Río de La Plata, Upper Peru was never again completely controlled by Spain.

During the following seven years, Upper Peru became the battleground for forces of the independent Argentine Republic and royalist troops from Peru. Although the royalists repulsed four Argentine invasions, guerrillas controlled most of the countryside, where they formed six major republiquetas, or zones of insurrection. In these zones, local patriotism would eventually develop into the fight for independence.

By 1817 Upper Peru was relatively quiet and under the control of Lima. After 1820 the Conservative Party criollos supported General Pedro Antonio de Olañeta, a Charcas native, who refused to accept the measures by the Spanish Cortes (legislature) to conciliate the colonies after the Liberal Party revolution in Spain. Olañeta, convinced that these measures threatened royal authority, refused to join the royalist forces or the rebel armies under the command of Simón Bolívar Palacio and Antonio José de Sucre Alcalá. Olañeta did not relinquish his command even after the Peruvian royalists included him and his forces in the capitulation agreement following their defeat in the Battle of Ayacucho in 1824, the final battle of the wars of independence in Latin America. Olañeta continued a quixotic war until Sucre’s forces defeated his forces, and he was killed by his own men on April 1, 1825, in a battle that effectively ended Spanish rule in Upper Peru.

Construction of Bolivia: Bolívar, Sucre, and Santa Cruz

In 1825 Bolívar, first president of what became known as Bolivia, transferred authority over Upper Peru to his lieutenant, Sucre (1825-28), who called a constituent assembly in Chuquisaca to determine the future of the region. Almost all delegates wanted an independent Upper Peru and rejected attachment to Argentina or Peru. On August 6, 1825, the assembly adopted a declaration of independence. Five days later, the assembly, hoping to placate Bolívar’s reservations about the independence of Upper Peru, resolved to name the new nation after him.

The new Republic of Bolivia, created in the territory that had formed the audiencia of Charcas, faced profound problems. The wars of independence had disrupted the economy. The entire mining industry was in decline because of destruction, flooding, and abandonment of mines. Lack of investment and scarcity of labor contributed to a sharp drop in silver production. Agricultural production was low, and Bolivia had to import food, even staples consumed by the Indian population. The government had serious financial difficulties because of the huge military expenditures and debt payments to Peru as compensation for the army of liberation. All these problems were aggravated by the isolation of the new republic from the outside world and the difficulties of securing its borders.

Bolívar entered La Paz triumphantly on August 8, 1825. During his brief rule of less than five months, he issued a flood of decrees, resolutions, and orders reflecting his ideas about government. He declared the equality of all citizens and abolished the tribute payments, replacing them with a “direct contribution” (contribución directa) that amounted to less than half of the previous payments. Bolívar also decreed a land reform to distribute land, preferably to Indians, and tried to reduce the influence of the Roman Catholic Church in politics. Most of his decrees could not be implemented during his short tenure, but they were included in the constitution he wrote for Bolivia after his departure in January 1826.

Despite his efforts at reform, Bolívar was outspoken about his doubts as to the ability of Bolivians to govern themselves. He was careful to avoid recognizing Bolivia’s independence, always referring to the country as Upper Peru and signing his decrees as dictator of Peru. Only in January 1826, when he turned the country over to Sucre, did he promise that the Peruvian legislature would approve Bolivia’s independence.

Sucre succeeded Bolívar in January 1826 and continued to rule by decree. He was formally installed as Bolivia’s first elected president after the General Constituent Assembly convened in May and elected him. During his three-year rule, the government tried to solve its grave financial problems, which were aggravated by the lack of foreign credit. Sucre reformed the existing tax structure in an effort to finance public expenditures and tried to revive silver mining by attracting foreign capital and technology. In one of the most radical attacks on the church anywhere in Latin America, he confiscated church wealth in Bolivia and closed down many monasteries. The Roman Catholic Church in Bolivia never recovered the powerful role that it had held. Import duties and taxes on the internal movement of goods were also important sources of state revenue. In addition, Sucre reestablished tribute payments in an attempt to solve the country’s financial crisis.

Sucre’s attempts at reform were only partially successful because Bolivia lacked the administration to carry them out. Many Conservative Party criollos turned away when his reforms threatened to challenge the economic and social patterns of the colonial past. As opposition increased, the local nationalist elite came to resent the leadership of their Venezuelan-born president. The invasion of Bolivia by the Peruvian general Agustín Gamarra and an assassination attempt in April 1827 led to Sucre’s resignation in 1828. Sucre left the country for voluntary exile, convinced that “the solution was impossible.” Given troop command by Bolívar, however, Sucre routed General Gamarra’s much larger force (8,000) in a decisive battle at Tarqui on February 27, 1829.

Despite the fall of his government, Sucre’s policies formed the basis for the ten-year rule of Andrés de Santa Cruz y Calahumana (1829-39), the first native-born president, who was sworn into office in May 1829 after a series of short-term rulers. Santa Cruz, a mestizo, had a brilliant military career fighting for independence in the armies of Bolívar. His close connection with Bolívar had led to a short interlude as the president of Peru in 1826. It also made him a strong candidate to become Bolivia’s new president after Sucre’s resignation.

Santa Cruz created a relatively stable economic, social, and political order in Bolivia. In an attempt to overcome Bolivia’s isolation, Santa Cruz opened the port of Cobija on the Pacific Coast. He also devalued the silver currency to finance government activities, instituted protective tariffs in support of the local cotton cloth (tucuyo) industry, and reduced the mining tax, thereby increasing mining output. In addition, Santa Cruz codified the country’s laws and enacted Latin America’s first civil and commercial codes. The Higher University of San Andrés in La Paz was also founded during his rule. Although Santa Cruz approved a democratic constitution, he ruled virtually as a dictator and did not tolerate opposition.

Santa Cruz continued his political ambitions in Peru while president of Bolivia. He established the Peru-Bolivia Confederation in 1836, justifying his act with the threat of Chile’s expansion to the north. This threat, together with the constant turmoil in Peru and repeated attempts by Gamarra to invade Bolivia, had made Sucre’s military intervention in a Peruvian civil war in 1835 a matter of life and death for Bolivia. After winning a number of battles in Peru, Santa Cruz reorganized that country into two autonomous states–Northern Peru and Southern Peru–and joined them with Bolivia in the PeruBolivia Confederation with himself as protector. The potential power of this confederation aroused the opposition of Argentina and, above all, Chile; both nations declared war on the confederation. Although Santa Cruz repelled an attack by Argentina, he failed to stop the Chilean expansion into the disputed territories on its northern frontier. His decisive defeat by Chilean forces in the Battle of Yungay in January 1839 resulted in the breakup of the confederation and ended the career of Bolivia’s ablest nineteenth-century president. Santa Cruz went into exile in Ecuador.


Bolivia was characterized for the forty years after 1839 by a chaotic political situation and a declining economy. The country relied on taxes paid by the Indians as its main source of income. Although some of the government’s leaders during this period tried to reform the country, most fit the description of caudillos bárbaros (barbaric caudillos), a term used by Bolivian writer Alcides Arguedas for inept and corrupt rulers.

Santa Cruz was succeeded in June 1839 by General José Miguel de Velasco Franco (1828, 1829, and 1839-41), who tried to control the political intrigues and maneuvering between the supporters and opponents of Santa Cruz. After failing to repel yet another invasion by Gamarra, Velasco was overthrown. Gamarra was killed in November 1841 near La Paz in the Battle of Ingavi, in which General José Ballivián y Segurola defeated the Peruvian forces and ended Peruvian expansionism.

Ballivián y Segurola (1841-47) is remembered for restoring relative calm to the nation between 1842 and 1847. Reversing Santa Cruz’s protectionist policies, Ballivián y Segurola encouraged free trade. He also promoted the colonization of the Beni. Nonetheless, the main income continued to come from the taxes paid by rural Indians. These included not only a head tax but also a tax on coca leaves, which were consumed almost exclusively by the Indian population. Although nearly 90 percent of all Bolivians lived in rural areas according to the 1846 census, agriculture generated little revenue. Most haciendas stagnated, and only the collection of chinchona bark (for the production of quinine) and coca leaves increased in the valleys.

After the overthrow of Ballivián y Segurola in 1847, Manuel Isidoro Belzú Humérez (1848-55) emerged as the most powerful figure in Bolivia. Unlike his predecessors, Belzú sought the support of the masses. In order to gain the backing of the Indians, he started a campaign against the aristocratic landowners, seized their land, and incited the Indians to destroy the homes of the landowners. He also hoped to get the support of the artisans who had been hurt by the free-trade policies of Ballivián y Segurola by restricting the role of foreign merchants in Bolivia and limiting imports.

Belzú’s effort succeeded in one sense because he fended off forty-two coup attempts during his rule. “Tata” Belzú, as he was called by the Indians (like the head of the ayllu in preColumbian times), has been seen as the precursor of Andean populism. Attempting to stir the masses in demagogic speeches, Belzú completely alienated the Bolivian establishment with his reign of terror. As efforts to overthrow him increased, he resigned in 1855 and left for Europe.

José María Linares Lizarazu (1857-61), a member of the elite that had opposed Belzú, overthrew Belzú’s son-in-law, General Jorge Córdova (1855-57), and became the first civilian president. Linares reversed Belzú’s protective policies and encouraged free trade and foreign investment, mainly from Britain and Chile. During his presidency, mining output increased because of technological innovations, such as the steam engine, and the discovery of huge nitrate deposits in the Atacama Desert (in present-day Chile).

Although the mining sector improved, it failed to stimulate agricultural production, and most haciendas continued in a relative state of stagnation. This malaise contributed to the survival of campesino communities during the nineteenth century, despite repeated assaults on their common landholdings by various governments. But the tax burden on the Indians resulted in campesino revolts in Copacabana.

The overthrow of Linares by a military coup in 1861 initiated one of the most violent periods in Bolivian history, under General José María Achá Valiente (1861-64). Achá is remembered for the “murders of Yáñez,” the massacre of seventy-one Belzú supporters (Belcistas), including General Córdova, ordered by Colonel Plácido Yáñez, the military commander in La Paz, in 1861.

In late 1864, General Mariano Melgarejo Valencia (1864-71) seized the presidency and became the most notorious of Bolivia’s caudillos. Relying primarily on the military, he remained in power for more than six years despite his mismanagement, drunkenness, and corruption, as well as constant intrigues against him. Hoping to improve the economy by opening up the country to foreigners, Melgarejo signed a series of treaties with Chile and Peru for free trade. In an 1867 treaty with Brazil to secure water rights to the Atlantic Ocean, he ceded 102,400 square kilometers of territory, hoping to break Bolivia’s isolation.

Melgarejo started a formidable assault on Indian communal land, ostensibly in order to improve agricultural production. He decreed that the Indians were the owners of their parcels only if they paid a large fee within sixty days. If they failed to do so, their land would be auctioned off. The resulting sales increased the size of the haciendas, and massive Indian uprisings against his rule became more violent. Opposition against Melgarejo mounted in all sectors of society as the term melgarejismo came to signify amoral militarism; in 1871 he was overthrown and later murdered in Lima.

Agustín Morales Hernández (1871-72) continued Melgarejo’s ruling style, despite his promise of “more liberty and less government.” Morales was assassinated, however, by a nephew in 1873. Two presidents with high integrity, Tomás Frías Ametller (1872-73) and General Adolfo Ballivián (1873-74), did not last long because of constant intrigues. Under their rule, Bolivia opened the port of Mollendo in Peru, which reduced the country’s isolation by connecting the Altiplano by train and steamship on Lake Titicaca to the Pacific Coast. But in 1876 Hilarión Daza Groselle (1876- 79) seized power and became another military caudillo, as brutal and incompetent as Melgarejo. He faced many insurrections, a massive demonstration by artisans in Sucre, and widespread opposition. Hoping to gather the support of nationalist Bolivians to strengthen his internal position, Daza involved his country in the disastrous War of the Pacific.


War of the Pacific

The War of the Pacific resulted from a dispute between Bolivia and Chile over sovereignty of the mineral-rich coastal area of the Atacama Desert. In the mid-1860s, the two nations had come to the brink of war because of disagreement over their boundaries. In 1874 Chile agreed to fix the border at 24° south latitude in return for Bolivia’s promise not to increase taxes on Chilean nitrate enterprises for twenty-five years. But in 1878, Daza imposed a slight increase on export taxes. Chile immediately objected, and when Daza refused to revoke the tax hike, Chile landed troops on February 14, 1879. Bolivia, in alliance with Peru, declared war on Chile on March 1, but Bolivia’s troops in the coastal territory were easily defeated, in part because of Daza’s military incompetence. Driven from office by a popular revolt, Daza fled to Europe with a sizable portion of Bolivia’s treasury. The attempt of General Narciso Campero Leyes (1880-84) to come to the aid of Peru, Bolivia’s ally in the war, was unsuccessful, and the combined armies were defeated by Chile in 1880. Having lost its entire coastal territory, Bolivia withdrew from the war. It ceded the territory officially to Chile twentyfour years later, in 1904, under the Treaty of Peace and Friendship.

The War of the Pacific was a turning point in Bolivian history. Bolivian politicians were able to rally Bolivians by blaming the war on Chilean aggression. Bolivian writers were convinced that Chile’s victory would help Bolivia to overcome its backwardness because the defeat strengthened the “national soul.” Even today, Bolivia has not relinquished the hope of regaining an outlet to the Pacific Ocean.

After the war, a vigorous debate among civilian elites spawned the development of new political parties. Mining entrepreneurs, who had become the most important economic group in the country because of increasing production, created the Conservative Party (Partido Conservador). Conservatives favored reaching a quick peace settlement with Chile that would include indemnification for lost territories and enable Bolivia to construct a railroad for mining exports. The Liberal Party (Partido Liberal) denounced the pacifism of the Conservatives. It also resented the economic dependence of the mining sector on Chilean and British capital and hoped to attract United States investment. Despite these differences, both parties were primarily interested in political and economic modernization, and their ideological outlooks were similar. Civilian politicians reorganized, reequipped, and professionalized the discredited armed forces and tried to subject them to civilian control. Still, both Conservatives and Liberals initially supported military candidates for the presidency. The governments in power from 1880 to 1920–elected by a small, literate, and Spanish-speaking electorate–brought Bolivia its first relative political stability and prosperity.

Reconstruction and the Rule of the Conservatives

The Conservatives ruled Bolivia from 1880 until 1899. General Campero completed his legal term in office and presided over free elections in 1884 that brought to power Gregorio Pacheco Leyes (1884-88), one of Bolivia’s most important mine owners. After Pachecho’s term, however, fraudulent elections resulted repeatedly in Liberal revolts. Although the Liberal Party was allowed to participate in the National Congress (hereafter, Congress), it had no chance to win a presidential election.

Under the Conservatives, the high world price of silver and increased production of copper, lead, zinc, and tin combined to create a period of relative prosperity. The Conservative governments encouraged the mining industry through the development of a rail network to the Chilean coast. The growth of commercial agriculture, such as the development of Bolivia’s natural rubber resources, also contributed to an apparently stronger economy. Agricultural production in the highlands increased as the haciendas expanded in some regions.

Aniceto Arce Ruíz (1888-92), although elected legally, was an autocrat who managed to stay in power only through repression. His main economic accomplishment was to extend the AntofagastaCalama Railroad to Oruro. The extension of the railroad drastically reduced the cost of transporting minerals to the Pacific Coast. Economic growth was skewed, however, as railroads that were built to export minerals started to bring imported wheat from Chile; in 1890 Chilean wheat was cheaper in La Paz than wheat from Cochabamba. The open economy also hurt local industry. The expansion of the haciendas at the expense of the free Indian communities resulted in numerous uprisings and forced many Indians to work for their landlords or to migrate to the cities. As a result of this migration, the census of 1900 noted an increase of the mestizo population, but Bolivia remained a predominantly Indian and rural nation, in which the Spanishspeaking minority continued to exclude the Indians.

The Liberal Party and the Rise of Tin

In 1899 the Liberal Party overthrew the Conservatives in the “Federal Revolution.” Although the Liberals resented the long rule of the Conservatives, the main reasons for the revolt were regionalism and federalism. The Liberal Party drew most of its support from the tin-mining entrepreneurs in and around La Paz, whereas Conservative governments had ruled with an eye on the interests of the silver mine owners and great landowners in Potosí and Sucre. The immediate cause of the conflict was the Liberal demand to move the capital from Sucre to the more developed La Paz.

The Federal Revolution differed from previous revolts in Bolivia in that Indian peasants actively participated in the fighting. Indian discontent had increased because of the massive assault on their communal landholdings. The campesinos supported the Liberal leader, José Manuel Pando, when he promised to improve their situation.

Pando, however, reneged on his promises and allowed the assault on Indian land to continue. The government suppressed a series of campesino uprisings and executed the leaders. One of these revolts, led by Pablo Zárate Willka, was one of the largest Indian rebellions in the history of the republic. It frightened whites and mestizos, who once again successfully isolated the Indians from national life.

Like their Conservative predecessors, the Liberals controlled the presidential elections but left the elections for the Congress relatively free. They also continued to professionalize the Bolivian military, with the aid of a German military mission. President Ismael Montes Gamboa (1904-09 and 1913-17) dominated the Liberal era.

Liberal administrations gave priority to the settlement of border disputes. Bolivia’s inability to protect and integrate the frontier with Brazil had led to the encroachment of Brazilian rubber gatherers. In 1900 they began an active secessionist movement in the eastern province of Acre and after three years of small-scale fighting won annexation by Brazil. In the Treaty of Petropolis in 1903, Bolivia relinquished its claims to 191,000 square kilometers of Acre territory in return for two areas on the Madeira and the Paraguay rivers totaling 5,200 square kilometers, the equivalent of US$10 million, and the use of a railroad to be constructed around the rapids of the Madeira in Brazilian territory. In 1904 Bolivia finally concluded a peace treaty with Chile under which it officially ceded Bolivia’s former territory on the coast in return for indemnification of US$8.5 million, less the value of the Bolivian section of a new railroad that Chile would construct from La Paz to the Pacific Coast at Arica. The payment was used to expand the transportation system in Bolivia. By 1920 most major Bolivian cities were connected by rail.

Liberal governments also changed the seat of government and the nature of church-state relations. The presidency and the Congress were moved to La Paz, which became the de facto capital, but the Supreme Court of Justice remained in Sucre. Liberal presidents canceled the special privileges officially granted to the Roman Catholic Church. In 1905 they legalized public worship by other faiths, and in 1911 they made civil marriage a requirement.

Perhaps the most significant development of the Liberal era was the dramatic rise of Bolivian tin production. Since the colonial period, tin had been mined in the Potosí region; nonetheless, Bolivia historically lacked the transportation system necessary to ship large quantities of tin to European markets. The extension of the rail link to Oruro in the 1890s, however, made tin mining a highly profitable business. The decline in European tin production also contributed to the Bolivian tin boom at the beginning of the twentieth century. With the development of huge mines in southern Oruro and northern Potosí, La Paz eclipsed Potosí as the mining industry’s financial and service center.

Tin production in Bolivia came to be concentrated in the hands of Bolivian nationals, although the regimes encouraged foreign investment. At first, foreign interests and Bolivians with foreign associations took the major share. This changed, however, when Bolivian tin-mining entrepreneurs realized that smelters in competing countries depended on Bolivian tin. Simón Patiño was the most successful of these tin magnates. Of poor mestizo background, he started as a mining apprentice. By 1924 he owned 50 percent of the national production and controlled the European refining of Bolivian tin. Although Patiño lived permanently abroad by the early 1920s, the two other leading tin-mining entrepreneurs, Carlos Aramayo and Mauricio Hochschild, resided primarily in Bolivia.

Because taxes and fees from tin production were critically important to national revenues, Patiño, Aramayo, and Hochschild exercised considerable influence over government policy. Unlike the silver-mining entrepreneurs of the Conservative period, the tin-mining magnates did not directly intervene in politics but employed politicians and lawyers–known as the rosca –to represent their interests.

The tin boom also contributed to increased social tensions. Indian peasants, who provided most of the labor for the mines, moved from their rural communities to the rapidly growing mining towns, where they lived and worked in precarious situations. Bolivia’s First National Congress of Workers met in La Paz in 1912, and in the following years the mining centers witnessed an increasing number of strikes.

Liberal governments at first did not face any serious opposition because the Conservative Party remained weak after its overthrow in 1899. By 1914, however, opposition to political abuses and the loss of national territory led to the formation of the Republican Party (Partido Republicano). Republican support increased when mineral exports declined because of the crisis in international trade before World War I, and agricultural production decreased because of severe droughts. In 1917 the Republicans were defeated at the polls when José Gutiérrez Guerra (1917-20), the last Liberal president, was elected. But the long rule of the Liberals, one of the most stable periods in Bolivian history, ended when the Republicans seized the presidency in a bloodless coup in 1920.

The Republican Party and the Great Depression

The advent of the Republican Party did not at first indicate any profound change in Bolivian politics. Fernando Díez de Medina, a Bolivian writer, commented on the change: “Twenty years of privilege for one group ends, and ten years of privilege for another begins.” The 1920s, however, was also a period of political change. New parties emerged as the Republican Party split into several factions. One major opposing branch was led by Bautista Saavedra Mallea, who had the support of the urban middle class, and the other was led by the more conservative Daniel Salamanca Urey (1931-34). A number of minor political parties influenced by socialist or Marxist thought also emerged.

During Republican rule, the Bolivian economy underwent a profound change. Tin prices started to decline in the 1920s. After peaking in 1929, tin production declined dramatically as the Great Depression nearly destroyed the international tin market. This decline was also caused by the decrease in the tin content of ore and the end of new investment in the mines in Bolivia. As economic growth slowed, Republican presidents relied on foreign loans. Saavedra (1920-25) and Hernando Siles Reyes (1926-30) borrowed heavily in the United States to finance major development projects, despite opposition by Bolivian nationalists to the favorable terms for the lender. The so-called Nicolaus loan aroused national indignation because it gave the United States control over Bolivia’s tax collections in return for a private banking loan of US$33 million.

During the 1920s, Bolivia faced growing social turmoil. Labor unrest, such as the miners’ strike in Uncia in 1923, was brutally suppressed. But the unrest reached new heights of violence after the drastic reduction of the work force during the Great Depression. Indian peasants continued to rebel in the countryside, although they had been disarmed and their leaders had been executed after participating in the overthrow of the Conservative Party in 1899. Now, for the first time, the Indians found support for their cause among the elite. Gustavo Navarro, who took the name Tristan Marof, was Bolivia’s most important Indianist. He saw in the Inca past the first successful socialism and the model to solve rural problems. As Indian uprisings continued during Liberal rule, Siles Reyes promised to improve their situation and organized the National Crusade in Favor of Indians.

The social legislation of the Republican governments was weak, however, because neither Saavedra nor Siles Reyes wanted to challenge the rosca. Siles Reyes’s four years of inconsistent rule and unfulfilled promises of radical changes frustrated workers and students. In 1930 he was overthrown when he tried to bypass the constitutional provision forbidding reelection by resigning in order to run again. A military junta ruled until March 1931, when Salamanca (1931-34) was elected as a coalition candidate.

Although he was an esteemed economist before taking office, Salamanca was unable to suppress social unrest and to solve the severe economic problems caused by the Great Depression. Criticism of his administration mounted in all sectors of Bolivian society. Initially reluctant to enter into an armed conflict with Paraguay, he nevertheless led Bolivia into war, a move supported by the military and traditional groups.

The Chaco War

The origin of the war was a border dispute between Bolivia and Paraguay over the Chaco. This vast area was largely undeveloped except for some minor oil discoveries by Standard Oil in Bolivia and Royal Dutch Shell in Paraguay. The Chaco, which Bolivia traditionally regarded as a province (Gran Chaco), became more significant to Bolivia after the latter lost its Pacific Ocean outlet to Chile. Bolivia hoped to gain access to the Atlantic Ocean with an oil pipeline across the Chaco to the Paraguay River. Despite mediation attempts by various countries, the increased number of border incidents led the military high commands of Bolivia and Paraguay to believe in the inevitability of war.

Salamanca used one of the border incidents to break diplomatic relations with Paraguay and increase Bolivia’s military budget, even though the country had severe economic problems. Convinced that Bolivia’s better-equipped, German-trained troops, which outnumbered the Paraguayan army, could win the war, Salamanca went to war in 1932.

The war raged for the next three years. The Bolivians were defeated in all major battles, and by the end of 1934 they had been driven back 482 kilometers from their original positions deep in the Chaco to the foothills of the Andes. Serious strategic errors, poor intelligence, and logistical problems in reaching the distant battle lines contributed to the losses. In addition, the morale of the Bolivian troops was low, and the highland Indians could not adapt to the extreme climate in the low-lying Chaco. Despite the high command’s decision to end the war, Salamanca was determined to continue at all costs. In 1934, when he traveled to the Chaco to take command of the war, Salamanca was arrested by the high command and forced to resign. His vice-president, José Luis Tejada Sorzano, who was known to favor peace, was accepted as president (1934-36).

Salamanca’s overthrow was a turning point in the Chaco War. The Paraguayan troops were stopped by new, more capable Bolivian officers, who fought closer to Bolivian supply lines. On June 14, 1935, a commission of neutral nations (Argentina, Brazil, Chile, Colombia, Peru, and the United States) declared an armistice; a definite settlement was finally reached in 1938. Bolivia lost the Chaco but retained the petroleum fields, which Paraguay had failed to reach. Both countries suffered heavy losses in the war. In Bolivia alone, an estimated 65,000 people were killed and 35,000 wounded or captured out of a population of just under 3 million.

The humiliating disaster of the Chaco War had a profound impact in Bolivia, where it was seen as dividing the history of the twentieth century “like a knife.” The traditional oligarchy was discredited because of its inept civilian and military leadership in the war. Unable to deal with growing criticism, its members blamed the loss of the war on the low potential of the Bolivians and saw the earlier pessimistic assessment in Arguedas’s famous novel Pueblo Enfermo (A Sick People) confirmed.

After the war, a group of middle-class professionals, writers, and young officers questioned the traditional leadership. This group, which came to be known as the “Chaco Generation,” searched for new ways to deal with the nation’s problems. It resented the service of the rosca on behalf of the tin-mining entrepreneurs and criticized Standard Oil, which had delivered oil to Paraguay clandestinely through Argentine intermediaries during the war. The Chaco Generation was convinced of the need for social change. Gustavo Navarro, now more radical than during the 1920s, raised the famous slogan “land to the Indians, mines to the state.” The military, which came to power in 1936, tried to bring about change with popular support.


Radical Military Government

On May 17, 1936, Colonel David Toro Ruilova (1936-37) overthrew Tejada in a military coup. Because the officer corps wanted to avoid a civilian investigation of the military’s wartime leadership, military backing for the coup came from all ranks. The main backers, however, were a group of younger officers who wanted to bring profound change to Bolivia. Toro, the leader of this group, hoped to reform the country from the top down. His program of “military socialism” included social and economic justice and government control over natural resources. He also planned to set up a corporate-style political system to replace the democratic system established in 1825.

Toro attempted to get civilian support with far-reaching social legislation and nominated a print worker as the first labor secretary in Bolivia. He also nationalized the holdings of Standard Oil without compensation and called for the convening of a constitutional congress that would include the traditional parties, as well as new reformist groups and the labor movement.

Toro was unable, however, to enlist lasting popular support. A group of more radical officers resented his reluctance to challenge the rosca, and they supported a coup by Colonel Germán Busch Becerra (1937-39) in 1937. A new constitution, promulgated in 1938, stressed the primacy of the common good over private property and favored government intervention in social and economic relations. It also legally recognized the Indian communities and included a labor code. In 1939 Busch challenged the interests of the mine owners for the first time by issuing a decree that would prevent the mining companies from removing capital from the country. None of his policies, however, resulted in significant popular and military support, and they completely alienated the conservative forces. Frustrated by his inability to bring about change, Busch committed suicide in 1939.

Despite the weakness of the Toro and Busch regimes, their policies had a profound impact on Bolivia. Reformist decrees raised expectations among the middle class, but when they failed to be implemented, they contributed to the growth of the left. The constitutional convention gave the new forces for the first time a nationwide platform and the possibility of forming alliances. The military socialist regimes also prompted the conservatives to join forces to stem the growth of the left.

The Rise of New Political Groups

After a few months under the provisional presidency of General Carlos Quintanilla Quiroga (1939-40), the chief of staff during the Busch regime, the government changed hands again. General Enrique Peñaranda Castillo (1940-43) was elected president in the spring of 1940. Peñaranda’s support came from the traditional parties, the Liberals, and the two wings of the Republicans, who had formed a concordancia to stem the growth of the movement toward reform.

The trend toward reform, however, could not be halted, and a number of new groups gained control of the Congress during Peñaranda’s presidency. These groups, although very different in their ideological outlooks, agreed on the need to change the status quo. They included the Trotskyite Revolutionary Workers Party (Partido Obrero Revolucionario–POR), which had already been formed in 1934, as well as the Bolivian Socialist Falange (Falange Socialista Boliviana–FSB), founded in 1937 and patterned on the Spanish model. The Leftist Revolutionary Party (Partido de Izquierda Revolucionaria–PIR) was founded in 1940 by a coalition of radical Marxist groups.

The most important opposition to the concordancia came from the Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario–MNR). The first party with widespread support in Bolivian history, the MNR had a membership that included intellectuals and both white-collar and blue-collar workers. It was founded in 1941 by a small group of intellectual dissidents from the middle and upper classes and represented persons from a wide range of political persuasions who were united by their discontent with the status quo. Among its leaders were Víctor Paz Estenssoro, a professor of economics; Hernán Siles Zuazo, the son of former President Siles Reyes; and several influential writers. The party’s program included nationalization of all of Bolivia’s natural resources and far-reaching social reforms. Its antiSemitic statements resulted not only in the imprisonment of MNR leaders but also in charges by the United States government that MNR was under the influence of Nazi fascism.

As the leader of the congressional opposition, the MNR denounced Peñaranda’s close cooperation with the United States and was especially critical of his agreement to compensate Standard Oil for its nationalized holdings. The MNR members of the Congress also began an investigation of the massacre of striking miners and their families by government troops at one of the Patiño mines in Catavi in 1942. MNR influence with the miners increased when Paz Estenssoro led the congressional interrogation of government ministers.

The MNR had contacts with reformist military officers, who were organized in a secret military lodge named the Fatherland’s Cause (Razón de Patria–Radepa). Radepa was founded in 1934 by Bolivian prisoners of war in Paraguay. It sought mass support, backed military intervention in politics, and hoped to prevent excessive foreign control over Bolivia’s natural resources.

In December 1943, the Radepa-MNR alliance overthrew the Peñaranda regime. Major Gualberto Villarroel López (1943-46) became president, and three MNR members, including Paz Estenssoro, joined his cabinet. The MNR ministers resigned, however, when the United States refused recognition, repeating its charge of ties between the MNR and Nazi Germany. The ministers returned to their posts in 1944, after the party had won a majority in the election and the United States had recognized the government. Villarroel’s government emphasized continuity with the reformist regimes of Toro and Busch. Paz Estenssoro, who served as minister of finance, hoped to get popular support with a budget that emphasized social spending over economic development. But the salary increase for miners did not bring about their consistent backing of the government and only managed to strengthen the ties between the MNR and miners.

The Villarroel government also tried for the first time to get the support of the campesinos. In 1945 it created the National Indigenous Congress to discuss the problems in the countryside and to improve the situation of the peasants. However, most of the social legislation, such as the abolition of the labor obligation of the campesinos to their landlords, was never put in effect.

Villarroel was overthrown in 1946. He had been unable to organize popular support and faced opposition from conservative groups and increasing political terrorism that included murders of the government’s opponents. Rivalry between the MNR and the military in the governing coalition also contributed to his downfall. In 1946 mobs of students, teachers, and workers seized arms from the arsenal and moved to the presidential palace. They captured and shot Villarroel and suspended his body from a lamppost in the main square, while the army remained aloof in the barracks.

The “Sexenio,” 1946-52

The six years preceding the 1952 Revolution are known as the sexenio. During this period, members of the Conservative Party tried to stem the growth of the left, but they ultimately failed because they could not halt the economic decline and control the growing social unrest. Enrique Hertzog Garaizabal (1947-49), who was elected president in 1947 after the interim rule of a provisional junta, formed a coalition cabinet that included not only the concordancia but also the PIR. He hoped to retain the backing of the Conservative Party forces by not increasing taxes, but he tried also to gain labor support, relying on the PIR to mobilize the workers.

The labor sector did not cooperate with the government, however, and the PIR became discredited because of its alliance with the conservative forces. In 1946 the workers endorsed the Thesis of Pulacayo, in which the miners called for permanent revolution and violent armed struggle for the working class. As the labor sector became more radical, the government resorted more and more to oppression, and confrontations increased. The dismissal of 7,000 miners and the brutal suppression of yet another uprising in Catavi in 1949 made any cooperation between the government and the workers impossible.

The MNR emerged as the dominant opposition group. Although most of its leaders, including Paz Estenssoro, were in exile in Argentina, the party continued to be represented in the Chamber of Deputies and the Senate. During the sexenio, the party, despite its predominantly middle-class background, repeatedly took the side of the workers and adopted their ideology. The MNR also came to support the defense of Indian rights, as violence in the countryside increased when the promises given at the National Indigenous Congress were not fulfilled.

The MNR’s attempts to gain power during the sexenio were unsuccessful. Its 1949 coup attempt failed, although with the support of the workers and some military officers it succeeded in gaining control of most major cities except La Paz. The MNR’s attempt to gain power by legal means in 1951 also failed. In the presidential election of May 1951, the MNR’s Paz Estenssoro, who remained in exile in Argentina, ran for president and Siles Zuazo ran for vice president, both on a platform of nationalization and land reform. With the support of the POR and the newly formed Bolivian Communist Party (Partido Comunista de Bolivia — PCB), the MNR won with a clear plurality. The outgoing president, however, persuaded the military to step in and prevent the MNR from taking power. Mamerto Urriolagoitia Harriague (1949-51), who had succeeded the ailing Hertzog in 1949, backed a military junta under General Hugo Ballivián Rojas (1951-52). Under Ballivián, the government made a last futile attempt to suppress the growing unrest throughout the country.

By 1952 the Bolivian economy had deteriorated even further. The governments of the sexenio had been reluctant to increase taxes for the upper class and to reduce social spending, resulting in high inflation. The tin industry had stagnated since the Great Depression, despite short revivals during World War II. Ore content had declined, and the richer veins were depleted, increasing tin production costs; at the same time, tin prices on the international market fell. A disagreement with the United States over tin prices halted exports temporarily and caused a decline in income that further hurt the economy. The agricultural sector lacked capital, and food imports had increased, reaching 19 percent of total imports in 1950. Land was unequally distributed–92 percent of the cultivable land was held by estates of 1,000 hectares or more.

The social unrest that resulted from this economic decline increased during the last weeks before the 1952 Revolution, when a hunger march through La Paz attracted most sectors of society. The military was severely demoralized, and the high command called unsuccessfully for unity in the armed forces; many officers assigned themselves abroad, charged each other with coup attempts, or deserted.

By the beginning of 1952, the MNR again tried to gain power by force, plotting with General Antonio Seleme, the junta member in control of internal administration and the National Police (Policía Nacional). On April 9, the MNR launched the rebellion in La Paz by seizing arsenals and distributing arms to civilians. Armed miners marched on La Paz and blocked troops on their way to reinforce the city. After three days of fighting, the desertion of Seleme, and the loss of 600 lives, the army completely surrendered; Paz Estenssoro assumed the presidency on April 16, 1952.


Radical Reforms

The “reluctant revolutionaries,” as the leaders of the multiclass MNR were called by some, looked more to Mexico than to the Soviet Union for a model. But during the first year of Paz Estenssoro’s presidency, the radical faction in the party, which had gained strength during the sexenio when the party embraced the workers and their ideology, forced the MNR leaders to act quickly. In July 1952, the government established universal suffrage, with neither literacy nor property requirements. In the first postrevolutionary elections in 1956, the population of eligible voters increased from approximately 200,000 to nearly 1 million voters. The government also moved quickly to control the armed forces, purging many officers associated with past Conservative Party regimes and drastically reducing the forces’ size and budget. The government also closed the Military Academy (Colegio Militar) and required that officers take an oath to the MNR.

The government then began the process of nationalizing all mines of the three great tin companies. First, it made the export and sale of all minerals a state monopoly to be administered by the state-owned Mining Bank of Bolivia (Banco Minero de Bolivia — Bamin). Then it set up the Mining Corporation of Bolivia (Corporación Minera de Bolivia — Comibol) as a semiautonomous enterprise to run state-owned mines. On October 31, 1952, the government nationalized the three big tin companies, leaving the medium-sized mines untouched, and promising compensation. In this process, two-thirds of Bolivia’s mining industry was turned over to Comibol.

A far-reaching agrarian reform was the final important step taken by the revolutionary government. In January 1953, the government established the Agrarian Reform Commission, using advisers from Mexico, and decreed the Agrarian Reform Law the following August. The law abolished forced labor and established a program of expropriation and distribution of the rural property of the traditional landlords to the Indian peasants. Only estates with low productivity were completely distributed. More productive small and medium-sized farms were allowed to keep part of their land and were encouraged to invest new capital to increase agricultural production. The Agrarian Reform Law also provided for compensation for landlords to be paid in the form of twenty-five-year government bonds. The amount of compensation was based on the value of the property declared for taxes.

During the first years of the revolution, miners wielded extraordinary influence within the government. In part, this influence was based on the miners’ decisive role in the fighting of April 1952. In addition, however, armed militias of miners formed by the government to counterbalance the military had become a powerful force in their own right. Miners immediately organized the Bolivian Labor Federation (Central Obrera Boliviana–COB), which demanded radical change as well as participation in the government and benefits for its members. As a result, the government included three pro-COB ministers in the cabinet and accepted the demand for fuero sindical, the legally autonomous status that granted the COB semisovereign control over the workers of Bolivia. The MNR regime gave worker representatives veto power in all Comibol decisions and allowed for a cogovernment in mine administration. The government also established special stores for the miners, increased their salaries, and rehired fired workers.

The peasants also exerted a powerful influence. At first, the government was unable to control the occupation of land by the peasants. As a result, it could not enforce the provisions of the land reform decree to keep medium-sized productive estates intact. But the MNR eventually gained the support of the campesinos when the Ministry of Peasant Affairs was created and when peasants were organized into syndicates. Peasants were not only granted land but their militias also were given large supplies of arms. The peasants remained a powerful political force in Bolivia during all subsequent governments.

The Unfinished Revolution

Although these major steps were never reversed, observers have regarded the revolution as unfinished because it lost momentum after the first years. The divisions within the MNR seriously weakened its attempt to incorporate the support of the Indian peasants, the workers, and the middle class for the government. In 1952 the MNR was a broad coalition of groups with different interests. Juan Oquendo Lechín led the left wing of the party and had the support of the labor sector. Siles Zuazo represented the right wing and had the backing of the middle class. Paz Estenssoro was initially the neutral leader. Because the majority of the MNR elite wanted a moderate course and the left wing demanded radical change, the polarization increased and led eventually to the destruction of the MNR in 1964.

The country faced severe economic problems as a result of the changes enacted by the government. The nationalization of the mines had a negative effect on the economy. The mines of Comibol produced at a loss because of the lack of technical expertise and capital to modernize the aging plants and nearly depleted deposits of low-grade ore. Declining tin prices on the world market contributed to the economic problems in the mining sector. Nevertheless, workers in the management of Comibol increased salaries and the work force by nearly 50 percent.

The decline of agricultural production contributed to the rapidly deteriorating economy during the first years of the revolution. Although anarchy in the countryside was the main reason for the decrease in production, the peasants’ inability to produce for a market economy and the lack of transport facilities contributed to the problem. The attempt to increase agricultural production by colonizing the less densely populated valleys was not successful at first. As a result, the food supply for the urban population decreased, and Bolivia had to import food.

High inflation, primarily caused by social spending, also hurt the economy. The value of the peso, Bolivia’s former currency, fell from 60 to 12,000 to the United States dollar between 1952 and 1956, affecting primarily the urban middle class, which began to support the opposition.

The bankrupt economy increased the factionalism within the MNR. Whereas the left wing demanded more government control over the economy, the right wing hoped to solve the nation’s problems with aid from the United States. The government had sought cooperation with the United States as early as 1953, a move that had given the United States influence over Bolivia’s economy. Because of United States pressure, the Bolivian government promised to compensate the owners of nationalized tin mines and drew up a new petroleum code, which again allowed United States investments in Bolivian oil.

During the presidency of Siles Zuazo (1956-60 and 1982-85), who won the election with 84 percent of the vote, United States aid reached its highest level. In 1957 the United States subsidized more than 30 percent of the Bolivian government’s central budget. Advised by the United States government and the IMF, the Siles Zuazo regime then in power reduced inflation with a number of politically dangerous measures, such as the freezing of wages and the ending of the government-subsidized miners’ stores.

Siles Zuazo’s stabilization plan seriously damaged the coalition between the MNR and the COB. The COB called immediately for a general strike, which threatened to destroy an already disrupted economy; the strike was called off only after impassioned appeals by the president. But the conflict between the government and the miners’ militias continued as the militias constantly challenged the government’s authority. Siles Zuazo faced not only labor unrest in the mines but also discontent in the countryside, where peasant leaders were competing for power. In an effort to quell the unrest, he decided to rebuild the armed forces.

During the Siles Zuazo administration, the strength of the armed forces grew as a result of a new concern for professionalism and training, technical assistance from the United States, and an increase in the size and budget of the military. In addition, the military’s role in containing unrest gave it increasing influence within the MNR government.

Although the stabilization plan and the strengthening of the armed forces were resented by Lechín’s faction of the party, the first formal dissent came from Walter Guevara Arze and the MNR right wing. Guevara Arze, who had been foreign minister and then minister of government in the first Paz Estenssoro government, split from the MNR to form the Authentic Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario Auténtico–MNRA) in 1960, when his presidential hopes were destroyed by Paz Estenssoro’s candidacy. Guevara Arze charged that the MNR had betrayed the revolution, and he posed a formidable opposition in the presidential election of 1960.

Conflicts within the MNR increased during Paz Estenssoro’s second term (1960-64). Together with the United States and the Federal Republic of Germany (West Germany), Paz Estenssoro endorsed the “Triangular Plan,” which called for a restructuring of the tin-mining industry. The plan demanded the end of the workers’ control over Comibol operations, the firing of workers, and a reduction in their salaries and benefits; it was strongly opposed by the COB and Lechín’s MNR faction.

In 1964 Paz Estenssoro decided to run again for president, using a revision of the 1961 Constitution that would allow for a consecutive term, and he forced his nomination at a party convention. Lechín, who had hoped to become the presidential candidate, broke away to form the National Leftist Revolutionary Party (Partido Revolucionario de la Izquierda Nacional–PRIN). With his support in the MNR dwindling and opposition from the labor sector mounting, Paz Estenssoro accepted General René Barrientos Ortuño as vice presidential candidate. Because most opposition groups abstained, Paz Estenssoro was reelected with the support of the military and the peasants. Paz Estenssoro had come to rely increasingly on the military, whose role as a peacekeeper had made it an arbiter in politics. But this support was to prove unreliable; the military was already planning to overthrow him. Moreover, rivalry among peasant groups often resulted in bloody feuds that further weakened the Paz Estenssoro government.

During its twelve-year rule, the MNR had failed to build a firm basis for democratic, civilian government. Increasing factionalism, open dissent, ideological differences, policy errors, and corruption weakened the party and made it impossible to establish an institutional framework for the reforms. Not even the peasants, who were the main beneficiaries of the revolution, consistently supported the MNR.


The Presidency of Barrientos

On November 4, 1964, Barrientos (president, 1964-65; copresident, May 1965-January 1966; and president, 1966-69) and General Alfredo Ovando Candia occupied the presidential palace and declared themselves copresidents. But as the crowd, which had gathered outside the palace, persisted in shouting its preference for the more charismatic Barrientos, Ovando allowed Barrientos to assume the formal title alone, while he occupied the post of commander in chief of the armed forces.

Barrientos insisted that his assumption of power was not a counterrevolutionary move and promised to restore the revolution to its “true path,” from which the MNR had deviated during its twelve-year rule. Nevertheless, his government continued many of the policies of the second Paz Estenssoro administration, including the IMF stabilization plan and the Triangular Plan. The emphasis on reducing social costs remained in effect. In May 1965, the army forced Barrientos to accept Ovando as his copresident as a sort of reward for suppressing an uprising by miners and factory workers.

The economy improved during the Barrientos regime at a growth rate averaging 6.5 percent per year. The rise of tin prices resulted in the first profit for Comibol in 1966 and contributed to increased production in the medium-sized mines that had remained in private hands. Barrientos encouraged the private sector and foreign investment and gave Gulf Oil Company permission to export petroleum and natural gas from Bolivia.

In 1966 Barrientos legitimized his rule by winning the presidential election. He formed the Popular Christian Movement (Movimiento Popular Cristiano–MPC) as his base of support. Although the MPC was not very successful, he won the election with a coalition of conservative politicians, the business community, and the peasants.

Barrientos’s efforts to build support in the countryside succeeded at first with the signing in February 1964 of the Military-Peasant Pact (Pacto Militar-Campesino). Under the agreement, the campesino militias agreed to adopt an antileftist stance and to subordinate themselves to the army. But his attempt to impose taxes on peasants resulted in a violent response and loss of support in rural areas.

Determined to keep the labor sector under control, Barrientos took away most of the gains it had achieved during the MNR’s rule. He placed Comibol under the control of a military director and abolished the veto power of union leaders in management decisions. The president also cut the pay of the miners to the equivalent of US$0.80 a day and reduced the mining work force and the enormous Comibol bureaucracy by 10 percent. Finally, he destroyed the COB and the mine workers’ union, suppressed all strike activity, disarmed the miners’ militias, and exiled union leaders. Military troops again occupied the mines, and in 1967 they massacred miners and their families at the Catavi-Siglo XX mines.

But Barrientos could not completely silence the labor sector; miners led the growing opposition to his rule. The various groups opposing his rule joined in denouncing Barrientos’s selling of natural resources to the United States under favorable terms. They resented his invitation to United States private investment in Bolivia because he offered greater privileges to foreign investors. The defection of Barrientos’s close friend and minister of interior, Colonel Antonio Arguedas, to Cuba after his announcement that he had been an agent for the United States Central Intelligence Agency (CIA) aroused national indignation. The military also resented the key role of United States officers in the capture and killing of Ernesto “Che” Guevara in 1967 in Bolivia, where he had tried to start a guerrilla movement.

The death of Barrientos in a helicopter crash on April 27, 1969, initially left control in the hands of his vice president, Luís Adolfo Siles Salinas (1969). Real power, however, remained with the armed forces under its commander in chief, General Ovando, who took power on September 26, 1969, in a coup that was supported by reformist officers.

Revolutionary Nationalism: Ovando and Torres

Ovando (copresident, May 1965-January 1966, and president, January-August 1966 and 1969-70) annulled the elections scheduled for 1970, dismissed the Congress, and appointed a cabinet that included independent reformist civilians who had opposed the policies of Barrientos. Ovando hoped to gain civilian and military support with a program of “revolutionary nationalism,” which he had outlined in the “Revolutionary Mandate of the Armed Forces.” Revolutionary nationalism reflected the heritage and rhetoric of the military reformist regimes of the past, as well as the spirit of the 1952 Revolution. It also showed the influence of the Peruvian government of General Juan Velasco Alvarado. Many Bolivian officers believed that the military had to intervene in politics to lead the country toward reform because civilian governments had failed in that undertaking. They were convinced that it was in the main interest of the armed forces to end underdevelopment, which they saw as the cause of insurgency. The military would therefore fight on the internal frontiers against social injustice and economic dependence.

Despite highly popular measures, such as the nationalization of the holdings of the North American-owned Gulf Oil Company, Ovando failed to gain popular support. Popular enthusiasm over the nationalization was short lived. Disagreement over compensation, a boycott of Bolivian crude oil on the international market, and a general downturn in the economy became divisive factors. Even though Ovando legalized the COB and withdrew troops from the mining camps, lasting worker support for the regime was not ensured. Frustrated expectations, broken promises, and the massacre of miners by the military in Catavi in 1967 had radicalized the workers, who now refused to cooperate with the military government.

While the left became radicalized, the right became weary of Ovando’s vacillating statements, which included the suggestion that private property be abolished. Even when Ovando moved right during the last months of his regime, he was unable to enlist the support of the conservative groups in the country because this move only emphasized his weakness.

Ovando’s reform program also polarized the military. Reformist officers, concerned about the decline in popular support for the military since the Barrientos regime, shifted their support to the more radical General Juan José Torres González (1970-71), whom Ovando had dismissed as his commander in chief; the right backed General Rogelio Miranda. The chaos surrounding the overthrow of Ovando highlighted the division in the armed forces. Military officers demanded the resignation of Ovando and Miranda after a failed coup attempt by the latter on October 5, 1970. A triumvirate, formed on October 6, failed to consolidate support. On October 7, as the country moved toward civil war after the COB had declared a general strike, General Torres emerged as the compromise candidate and became president of Bolivia.

The main feature of Torres’s presidency was a lack of authority. Rather than taking the initiative on policies, Torres primarily reacted to pressure from different groups. His minister of interior, Jorge Gallardo Lozada, labeled the Torres government the “ten months of emergency.”

Torres hoped to retain civilian support by moving to the left. He nationalized some United States property, such as the wasteprocessing operation of the Catavi tin mines and the Matilde zinc mine, and he ordered the Peace Corps, a United States program, out of Bolivia. While limiting United States influence in Bolivia, Torres increased cooperation with the Soviet Union and its allies in the economic and technical sectors.

Because of his lack of a clear strategy and political experience, however, Torres soon succeeded in alienating all sectors of Bolivian society. He found it very difficult to organize groups on the left because they confronted him with demands that he could not meet, such as giving them half of all cabinet seats. The workers, students, and parties of the left wanted a socialist state and saw the Torres government only as a step in that direction. In June 1970, the Torres regime established the Popular Assembly (Asamblea Popular) in an attempt to form an alternative popular government. Consisting mainly of representatives of workers’ and peasants’ organizations, the Popular Assembly was intended to serve as a base for the radical transformation of society. However, the left remained divided by ideological differences and rivalry for leadership. They could not agree on controversial issues dealing with full worker participation in state and private enterprises, the creation of armed militias, and the establishment of popular tribunals having legal jurisdiction over crimes against the working class. No consensus was achieved, and many delegates, resenting the lack of power to enforce the resolutions and running short of funds, returned home prematurely. The Popular Assembly did, however, succeed in weakening the government by creating a climate in which popular organizations acted independently from the state.

Torres’s hope of placating conservative opposition by avoiding radical change did not win him the support of the right, especially of the powerful business community. Conservative groups unified in their opposition because they saw a chance for a political comeback in alliance with rightist officers. The military, in turn, became increasingly polarized because of their discontent with Torres’s chaotic leadership. Torres had cut the defense budget to free money for education and allowed civilian interference in strictly military matters. He often premitted military disobedience to go unpunished. The last step of institutional decay was a manifesto written during the last weeks of the Torres regime by a group of junior officers who questioned military authority. It resulted in widespread military support for the coup on August 21, 1971, by Colonel Hugo Banzer Suárez, the former Military Academy commander whom Torres had exiled.

The Banzer Regime

Colonel Hugo Banzer (1971-78), a highly respected officer who had repeatedly attempted to overthrow the Torres regime, ruled for six years, the longest continuous presidential term in recent Bolivian history. Banzer’s presidency was characterized by relative political stability and unprecedented economic growth. At first he was supported by the Nationalist Popular Front (Frente Popular Nacionalista–FPN), an alliance between the MNR under Paz Estenssoro, who was allowed to return from exile in Lima, and the FSB under Mario Gutiérrez. Both parties had been enemies until the chaos of the Torres regime gave them a chance for a political comeback in league with conservative elements in the armed forces.

During the first years of the Banzer presidency, the economy improved rapidly. Exports tripled between 1970 and 1974 because of increased production of petroleum, natural gas, and tin, which was then refined in Bolivian smelters. The production of cotton in the Santa Cruz area in eastern Bolivia also tripled between 1970 and 1975.

Despite this economic growth, Bolivia reverted to the repression of earlier regimes. The new minister of interior, Colonel Andrés Sélich, ordered a massive crackdown on the left, abolishing labor unions and closing the universities. The government brutally suppressed a general strike against the devaluation of the Bolivian peso in 1972. In 1974 price increases for basic goods and control of food prices resulted in roadblocks by peasants in the Cochabamba Valley and their subsequent massacre by the military.

The governing alliance disintegrated almost immediately when the MNR and the FSB split. They proved an unreliable support for Banzer because only small factions remained in the FPN. The armed forces were also divided, and various factions tried to overthrow the regime. On June 5, 1974, younger officers belonging to the Generational Group (Grupo Generacional) and led by General Gary Prado Salmón attempted a coup, demanding that Banzer legitimize his rule. It failed, however, as did another on November 7 that was supported by military, MNR, and FSB elements in Santa Cruz.

The November 7, 1974, coup has been called an auto-golpe (selfmade coup) because it gave Banzer a reason to rule without civilian interference. Influenced by the Brazilian model, he announced the complete reorganization of the Bolivian political system and the formation of a “new Bolivia” under military rule. Banzer hoped to keep the support of the business community, the mine owners, the agricultural entrepreneurs in Santa Cruz, and the growing number of loyal bureaucrats.

The government, however, soon began to face serious problems. The “economic miracle” turned out to be a myth, the production of petroleum declined sharply, and Comibol produced at a loss, despite high mineral prices, because it was subsidizing other state agencies. Cotton production also declined when world prices fell.

The stability of the Banzer regime was superficial because the military remained divided by personal rivalry, ideological differences, and a generational gap. Growing civilian opposition was centered in the labor sector, despite the renewed military occupation of the mines. Radical students and the progressive sector of the Roman Catholic Church became spokespersons for the oppressed groups; the peasants also criticized the government.

External factions contributed to the weakening of the Banzer regime as well. The negotiation with Chile for an outlet to the sea had raised hopes in 1974. When an agreement between Banzer and General Augusto Pinochet Ugarte failed because of the opposition of Chilean nationalists, Banzer’s position was weakened. After Jimmy Carter assumed the United States presidency in 1976, the United States pressured Banzer to hold elections.

In 1977, with opposition from civilian groups and the military mounting and pressure from the United States increasing, Banzer announced a presidential election for 1980, hoping to remain in control, but labor unrest and hostility to his regime forced him to set the date for 1978. However, General Juan Pereda Asbún, Banzer’s handpicked candidate, carried out a coup in July 1978 after the National Electoral Court annulled the elections because of widespread fraud by Pereda’s supporters. Although Bolivia continued under military rule, the 1978 election marked the beginning of Bolivia’s traumatic transition to democracy during the following four years.

Transition to Democracy

Between 1978 and 1980, Bolivia was constantly in a state of crisis. The fragmentation of political forces made it impossible for any party to dominate. In the three elections held during this period, no party achieved a majority, and alliances of various groups could not break the deadlock. Social unrest increased as peasants began to agitate again on a large scale for the first time since their rebellion in the late colonial period. The Bolivian workers were more radical than ever, and in 1979, during the COB’s first congress since 1970, they vehemently protested the economic austerity measures dictated by the IMF.

The division in the armed forces and the increasing visibility of paramilitary groups reflected the institutional decay of the military. A civilian investigation into human rights violations committed during the Banzer regime further demoralized the officer corps.

General Pereda did not call for elections, despite his promise to do so, and he was overthrown in a bloodless coup in November 1978 by General David Padilla Arancibia (1978-79), who was supported by the younger institutionalist faction of the military. He saw the main role of the military as the defense of the country rather than political intervention and announced elections for 1979 without naming an official government candidate. Electoral reforms simplified voter registration, and 90 percent of the electorate chose among eight presidential candidates in honest elections.

When none of the main candidates gained a majority, the Congress appointed former MNRA head Guevara Arze as interim president on August 8, 1979. This first civilian regime since the brief term of Siles Salinas in 1969 was overthrown, however, by a bloody coup under Colonel Alberto Natusch Busch in November. When Natusch stepped down after two weeks because of intense civilian opposition and only limited military support, as well as United States diplomatic action to prevent recognition of the Natusch government, another interim president was appointed. Lidia Gueiler Tejada (1979-80), head of the Chamber of Deputies and a veteran MNR politician, became the first woman president of Bolivia. In 1980 Gueiler presided over elections in which the parties of the left gained a clear majority of the vote. Siles Zuazo and his Democratic and Popular Unity (Unidad Democrática y Popular–UDP) coalition alone got 38 percent of the votes; the Congress was certain to name him president on August 6, 1980.

The process was disrupted on July 17, 1980, however, by the ruthless military coup of General Luis García Meza. Reportedly financed by cocaine traffickers and supported by European mercenaries recruited by Klaus Barbie, former Gestapo chief in Lyons, the coup began one of the darkest periods in Bolivian history. Arbitrary arrest by paramilitary units, torture, and disappearances–with the assistance of Argentine advisers– destroyed the opposition. Government involvement in cocaine trafficking resulted in international isolation for Bolivia. Cocaine exports reportedly totaled US$850 million in the 1980-81 period of the García Meza regime, twice the value of official government exports. The “coca dollars” were used to buy the silence or active support of military officers. But García Meza, who failed to gain support in the military, faced repeated coup attempts and was pressured to resign on August 4, 1981.

The ruthlessness, extreme corruption, and international isolation of the García Meza government completely demoralized and discredited the military; many officers wanted to return to democracy. However, President General Celso Torrelio Villa (1981- 82), who had emerged as a compromise candidate of the military after García Meza’s resignation, was reluctant to call for elections. In July 1982, after yet another attempt by the García Meza clique to return to power, he was replaced by General Guido Vildoso Calderón (1982), who was named by the high command to return the country to democratic rule. On September 17, 1982, during a general strike that brought the country close to civil war, the military decided to step down, to convene the 1980 Congress, and to accept its choice as president. Accordingly, Siles Zuazo assumed the presidency on October 10, 1982.

Bolivia Economy

Economy – overview: Bolivia, long one of the poorest and least developed Latin American countries, has made considerable progress toward the development of a market-oriented economy. Successes under President SANCHEZ DE LOZADA (1993-97) included the signing of a free trade agreement with Mexico and joining the Southern Cone Common Market (Mercosur), as well as the privatization of the state airline, telephone company, railroad, electric power company, and oil company. His successor, Hugo BANZER Suarez has tried to further improve the country’s investment climate with an anticorruption campaign. Growth slowed in 1999, in part due to tight government budget policies, which limited needed appropriations for anti-poverty programs, and the fallout from the Asian financial crisis. In 2000, major civil disturbances in April, and again in September and October, held down overall growth to 2.5%.
GDP: purchasing power parity – $20.9 billion (2000 est.)
GDP – real growth rate: 2.5% (2000 est.)
GDP – per capita: purchasing power parity – $2,600 (2000 est.)
GDP – composition by sector:
agriculture:  16%
industry:  31%
services:  53% (1999 est.)
Population below poverty line: 70% (1999 est.)
Household income or consumption by percentage share:
lowest 10%: 2.3%
highest 10%: 31.7% (1990)
Inflation rate (consumer prices): 4.4% (2000 est.)
Labor force: 2.5 million
Unemployment rate: 11.4% (1997) with widespread underemployment
revenues: $2.7 billion
expenditures: $2.7 billion (1998)
Industries: mining, smelting, petroleum, food and beverages, tobacco, handicrafts, clothing
Industrial production growth rate: 4% (1995 est.)
Electricity – production: 3.625 billion kWh (1999)
Electricity – production by source:
fossil fuel:  56.61%
hydro:  41.6%
nuclear:  0%
other:  1.79% (1999)
Electricity – consumption: 3.377 billion kWh (1999)
Electricity – exports: 4 million kWh (1999)
Electricity – imports: 10 million kWh (1999)
Agriculture – products: soybeans, coffee, coca, cotton, corn, sugarcane, rice, potatoes; timber
Exports: $1.26 billion (f.o.b., 2000 est.)
Exports – commodities: soybeans, natural gas, zinc, gold, wood
Exports – partners: United Kingdom 16%, United States 12%, Peru 11%, Argentina 10%, Colombia 7% (1998)
Imports: $1.86 billion (f.o.b., 2000 est.)
Imports – commodities: capital goods, raw materials and semi-manufactures, chemicals, petroleum, food
Imports – partners: United States 32%, Japan 24%, Brazil 12%, Argentina 12%, Chile 7%, Peru 4%, Germany 3% (1998)
Debt – external: $6.6 billion (2000)
Economic aid – recipient: $588 million (1997)
Currency: 1 boliviano ($B) = 100 centavos

Map of Bolivia