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PROFILE Official Name: Geography People Government Economy (1998) PEOPLE Bolivia is one of the least-developed countries in South America. About
two-thirds of its people, many of whom are subsistence farmers, live in poverty.
Population density ranges from less than one person per square kilometer in the
southeastern plains to about 10 per square km. (25 per sq. mi.) in the central
highlands. Bolivia's high mortality rate restricts the annual population growth
rate to around 1.96% (1999). La Paz is at the highest elevation of the world's capital cities--3,600
meters (11,800 ft.) above sea level. The adjacent city of El Alto, at 4,200
meters above sea level, is one of the fastest-growing in the hemisphere. Santa
Cruz, the commercial and industrial hub of the eastern lowlands, also is
experiencing rapid population and economic growth. 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. The Spanish brought their own tradition of religious art which, in the hands
of local indigenous and mestizo builders and artisans, developed into a rich and
distinctive style of architecture, painting, and sculpture known as
"Mestizo Baroque." The colonial period produced not only the paintings
of Perez de Holguin, Flores, Bitti, and others but also the works of skilled,
but unknown, stonecutters, woodcarvers, goldsmiths, and silversmiths. An
important body of native baroque religious music of the colonial period was
recovered in recent years and has been performed internationally to wide acclaim
since 1994. Bolivian artists of stature in the 20th century include, among
others, Guzman de Rojas, Arturo Borda, Maria Luisa Pacheco, and Marina Nunez del
Prado. 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. HISTORY During most of the Spanish colonial period, this territory was called
"Upper Peru" or "Charcas" and was under the authority of the
Viceroy of Lima. Local government came from the Audiencia de Charcas located in
Chuquisaca (La Plata--modern Sucre). Bolivian silver mines produced much of the
Spanish empire's wealth, and Potosi, site of the famed Cerro Rico--"Rich
Mountain"--was, for many years, the largest city in the Western Hemisphere.
As Spanish royal authority weakened during the Napoleonic wars, sentiment
against colonial rule grew. Independence was proclaimed in 1809, but 16 years of
struggle followed before the establishment of the republic, named for Simon
Bolivar, on August 6, 1825. Independence did not bring stability. For nearly 60 years, coups and
short-lived constitutions dominated Bolivian politics. Bolivia's weakness was
demonstrated during the War of the Pacific (1879-83), when it lost its seacoast
and the adjoining rich nitrate fields to Chile. An increase in the world price
of silver brought Bolivia a measure of relative prosperity and political
stability in the late 1800s. During the early part of the 20th century, tin
replaced silver as the country's most important source of wealth. A succession
of governments controlled by the economic and social elites followed
laissez-faire capitalist policies through the first third of the century. Living conditions of the indigenous peoples, who constituted most of the
population, remained deplorable. Forced to work under primitive conditions in
the mines and in nearly feudal status on large estates, they were denied access
to education, economic opportunity, or political participation. Bolivia's defeat
by Paraguay in the Chaco War (1932-35) marked a turning point. Great loss of
life and territory discredited the traditional ruling classes, while service in
the army produced stirrings of political awareness among the indigenous people.
From the end of the Chaco War until the 1952 revolution, the emergence of
contending ideologies and the demands of new groups convulsed Bolivian politics. The Nationalist Revolutionary Movement (MNR) emerged as a broadly based
party. Denied its victory in the 1951 presidential elections, the MNR lead the
successful 1952 revolution. Under President Victor Paz Estenssoro, the MNR
introduced universal adult suffrage, carried out a sweeping land reform,
promoted rural education, and nationalized the country's largest tin mines. It
also committed many serious violations of human rights. Twelve years of tumultuous rule left the MNR divided. In 1964, a military
junta overthrew President Paz Estenssoro at the outset of his third term. The
1969 death of President Rene Barrientos, a former member of the junta elected
President in 1966, led to a succession of weak governments. Alarmed by public
disorder, the military, the MNR, and others installed Col. (later General) Hugo
Banzer Suarez as President in 1971. Banzer ruled with MNR support from 1971 to
1974. Then, impatient with schisms in the coalition, he replaced civilians with
members of the armed forces and suspended political activities. The economy grew
impressively during Banzer's presidency, but demands for greater political
freedom undercut his support. His call for elections in 1978 plunged Bolivia
into turmoil once again. Elections in 1978, 1979, and 1980 were inconclusive and marked by fraud.
There were coups, counter-coups, and caretaker governments. In 1980, Gen. Luis
Garcia Meza carried out a ruthless and violent coup. His government was
notorious for human rights abuses, narcotics trafficking, and economic
mismanagement. Later convicted in absentia for crimes, including murder, Garcia
Meza was extradited from Brazil and began serving a 30-year sentence in 1995. After a military rebellion forced out Garcia Meza in 1981, three other
military governments in 14 months struggled with Bolivia's growing problems.
Unrest forced the military to convoke the Congress elected in 1980 and allow it
to choose a new chief executive. In October 1982--22 years after the end of his
first term of office (1956-60)--Hernan Siles Zuazo again became President.
Severe social tension, exacerbated by economic mismanagement and weak
leadership, forced him to call early elections and relinquish power a year
before the end of his constitutional term. In the 1985 elections, the Nationalist Democratic Action Party (ADN) of Gen.
Banzer won a plurality of the popular vote, followed by former President Paz
Estenssoro's MNR and former Vice President Jaime Paz Zamora's Movement of the
Revolutionary Left (MIR). But in the congressional run-off, the MIR sided with
MNR, and Paz Estenssoro was chosen for a fourth term as President. When he took
office in 1985, he faced a staggering economic crisis. Economic output and
exports had been declining for several years. Hyperinflation had reached an annual rate of 24,000%. Social unrest, chronic
strikes, and unchecked drug trafficking were widespread. In 4 years, Paz
Estenssoro's administration achieved economic and social stability. The military
stayed out of politics, and all major political parties publicly and
institutionally committed themselves to democracy. Human rights violations,
which badly tainted some governments earlier in the decade, were not a problem.
However, his remarkable accomplishments were not won without sacrifice. The
collapse of tin prices in October 1985, coming just as the government was moving
to reassert its control of the mismanaged state mining enterprise, forced the
government to lay off over 20,000 miners. The highly successful shock treatment
that restored Bolivia's financial system also led to some unrest and temporary
social dislocation. Although the MNR list headed by Gonzalo Sanchez de Lozada finished first in
the 1989 elections, no candidate received a majority of popular votes and so in
accordance with the constitution, a congressional vote determined who would be
president. The Patriotic Accord (AP) coalition between Gen. Banzer's ADN and
Jaime Paz Zamora's MIR, the second- and third-place finishers, respectively, won
out. Paz Zamora assumed the presidency, and the MIR took half the ministries.
Banzer's center-right ADN took control of the National Political Council (CONAP)
and the other ministries. Paz Zamora was a moderate, center-left President whose political pragmatism
in office outweighed his Marxist origins. Having seen the destructive
hyperinflation of the Siles Zuazo administration, he continued the neoliberal
economic reforms begun by Paz Estenssoro, codifying some of them. Paz Zamora
took a fairly hard line against domestic terrorism, personally ordering the
December 1990 attack on terrorists of the Nestor Paz Zamora Committee
(CNPZ--named after his brother who died in the 1970 Teoponte insurgency) and
authorizing the early 1992 crackdown against the Tupac Katari Guerrilla Army
(EGTK). Paz Zamora's regime was less decisive against narcotics trafficking. The
government broke up a number of trafficking networks but issued a 1991 surrender
decree giving lenient sentences to the biggest narcotics kingpins. Also, his
administration was extremely reluctant to pursue net eradication of illegal
coca. It did not agree to an updated extradition treaty with the U.S., although
two traffickers have been extradited to the U.S. since 1992. Beginning in early
1994, the Bolivian Congress investigated Paz Zamora's personal ties to accused
major trafficker Isaac Chavarria, who subsequently died in prison while awaiting
trial. MIR deputy chief Oscar Eidwas was jailed in connection with similar ties
in 1994; he was found guilty and sentenced to 4 years in prison in November
1996. Technically still under investigation, Paz Zamora became an active
presidential candidate in 1996. The 1993 elections continued the tradition of open, honest elections and
peaceful democratic transitions of power. The MNR defeated the ADN/MIR coalition
by a 34% to 20% margin, and the MNR's Gonzalo "Goni" Sanchez de Lozada
was selected as president by an MNR/MBL/UCS coalition in the Congress. Sanchez de Lozada pursued an aggressive economic and social reform agenda. He
relied heavily on successful entrepreneurs-turned-politicians like himself and
on fellow veterans of the Paz Estenssoro administration (during which Sanchez de
Lozada was planning minister). The most dramatic change undertaken by the
Sanchez de Lozada government was the capitalization program, under which
investors acquired 50% ownership and management control of public enterprises,
such as the state oil corporation, telecommunications system, electric
utilities, and others. The reforms and economic restructuring were strongly
opposed by certain segments of society, which instigated frequent social
disturbances, particularly in La Paz and the Chapare coca-growing region, from
1994 through 1996. In the 1997 elections, Gen. Hugo Banzer, leader of the ADN, won 22% of the
vote, while the MNR candidate won 18%. Gen. Banzer formed a coalition of the
ADN, MIR, UCS, and CONDEPA parties which hold a majority of seats in the
Bolivian Congress. The Congress elected him as president and he was inaugurated
on August 6, 1997. GOVERNMENT AND POLITICAL CONDITIONS The 1967 constitution, revised in 1994, provides for balanced executive,
legislative, and judicial powers. The traditionally strong executive, however,
tends to overshadow the Congress, whose role is generally limited to debating
and approving legislation initiated by the executive. The judiciary, consisting
of the Supreme Court and departmental and lower courts, has long been riddled
with corruption and inefficiency. Through revisions to the constitution in 1994,
and subsequent laws, the government has initiated potentially far-reaching
reforms in the judicial system and processes. Bolivia's nine departments received greater autonomy under the Administrative
Decentralization law of 1995, although principal departmental officials are
still appointed by the central government. Bolivian cities and towns are
governed by elected mayors and councils. The most recent municipal elections
took place in December 1999. The Popular Participation Law of April 1994, which
distributes a significant portion of national revenues to municipalities for
discretionary use, has enabled previously neglected communities to make striking
improvements in their facilities and services. Principal Government Officials Bolivia maintains an embassy in the U.S. at 3014 Massachusetts Ave., NW,
Washington, DC 20008 (tel. 202-483-4410); consulates in Los Angeles, San
Francisco, Miami, New Orleans, and New York; and honorary consulates in Atlanta,
Chicago, Cincinnati, Houston, Mobile, Seattle, St. Louis, and San Juan. ECONOMY The most important recent structural changes in the Bolivian economy have
involved the capitalization of numerous public sector enterprises.
(Capitalization in the Bolivian context is a form of privatization where
investors acquire a 50% stake and management control of public enterprises in
return for a commitment to undertake capital expenditures equivalent to the
enterprise's net worth). Parallel legislative reforms have locked into place
market-oriented policies, especially in the hydrocarbon and mining sectors, that
have encouraged private investment. Foreign investors are accorded national
treatment, and foreign ownership of companies enjoys virtually no restrictions
in Bolivia. As a consequence of these measures, 1996 private investment surged
by 25% to an estimated $225 million, and in 1998 it exceeded $1 billion. The
privatization program has generated commitments of $1.7 billion in foreign
direct investment over the period 1996-2002. In 1996, three units of the Bolivian state oil corporation (YPFB) involved in
hydrocarbon exploration, production, and transportation were capitalized. The
capitalization of YPFB allowed agreement to be reached on the construction of a
gas pipeline to Brazil. A priority in the development strategy for the sector is
the expansion of export markets for natural gas. The Brazil pipeline contract
projects natural gas exports of 9 million metric cubic meters per day (mmcmd) by
the end of 2000, increasing to over 30 mmcmd by 2004. The Bolivian
Government has signed a financing contract for the Bolivian side of the gas
pipeline with Petrobras, and the capitalization of YPFB's transportation company
will facilitate the finance, construction, and operation of the pipeline. The
government plans to position Bolivia as a regional hub for exporting
hydrocarbons. Six smaller public enterprises were sold during 1996, and the Government of
Bolivia has taken steps to improve the efficiency of some public services
through concession contracts with private sector managers. All three major
airports were transferred to private managers in March 1997, and a water supply
company was transferred to a private operator in June 1997. By May 1996, three of the four Bolivian banks that had experienced
difficulties in 1995 were recapitalized and restructured under new ownership
with support from the Bolivian Government's Special Fund for Strengthening the
Financial System (FONDESIF), which helped restore confidence in the banking
system. In November 1996, the Bolivian Congress approved a comprehensive pension
reform that replaces the old pay-as-you-go system by a system of privately
managed, individually funded retirement accounts, and the new system began
operations in May 1997. The reform represents a major step toward lasting fiscal
consolidation in Bolivia. Bolivian exports were $1.1 billion in 1998, from a low
of $652 million in 1991. Imports grew in 1998 to a level of $1.7 billion, with
import growth facilitated by the gradual reduction of Bolivian tariffs to a flat
10% (except for capital equipment, which has a 5% rate). Bolivia's trade deficit
rose from $419 million in 1996 to $620 million in 1997. Bolivia's trade with neighboring countries is growing, in part because of
several regional preferential trade agreements it has negotiated. Bolivia is a
member of the Andean Community and has free trade with other member
countries--Peru, Ecuador, Colombia, and Venezuela. Bolivia began to implement an
association agreement with MERCOSUR (Southern Cone Common Market) in March 1997.
The agreement provides for the gradual creation of a free trade area covering at
least 80% of the trade between the parties over a 10-year period. The U.S.
Andean Trade Preference Act (ATPA) allows numerous Bolivian products to enter
the United States free of duty on a unilateral basis. Tariffs have to be paid on
clothing and leather products only. The U.S. remains Bolivia's largest trading partner. In 1998, the U.S.
exported $626 million of merchandise to Bolivia and imported $149 million,
according to the World Trade Atlas of the Global Trade Information Service.
Bolivia's major exports to the U.S. are tin, gold, jewelry, and wood products.
Its major imports from the United States are computers, vehicles, wheat, and
machinery. A Bilateral Investment Treaty has been signed but has not yet been
ratified by the U.S. Agriculture accounts for roughly 15% of Bolivia's GDP. The amount of land
cultivated by modern farming techniques is increasing rapidly in the Santa Cruz
area, where weather allows for two crops a year and soybeans are the major cash
crop. The extraction of minerals and hydrocarbons accounts for another 10% of
GDP. Bolivia exports natural gas to Brazil. Manufacturing represents less than
17% of GDP. The Government of Bolivia remains heavily dependent on foreign assistance to
finance development projects. At the end of 1998, the government owed $4.3
billion to its foreign creditors, with $1.6 billion of this amount owed to other
governments and most of the balance owed to multilateral development banks. Most
payments to other governments have been rescheduled on several occasions since
1987 through the Paris Club mechanism. External creditors have been willing to
do this because the Bolivian Government has generally achieved the monetary and
fiscal targets set by IMF programs since 1987. Rescheduling agreements granted
by the Paris Club have allowed the individual creditor countries to apply very
soft terms to the rescheduled debt. As a result, some countries have forgiven
substantial amounts of Bolivia's bilateral debt. The U.S. Government reached an
agreement at the Paris Club meeting in December 1995 which reduced by 67%
Bolivia's existing debt stock. The Bolivian Government continues to pay its
debts to the multilateral development banks on time and to receive soft loans.
Bolivia has qualified for the Highly Indebted Poor Countries (HIPC) debt relief
program. FOREIGN RELATIONS Bolivia pursues a foreign policy with a heavy economic component. Bolivia has
become more active in the OAS, the Rio Group, and in MERCOSUR, with which it
signed an association agreement in 1996. Bolivia promotes its policies on
sustainable development and the empowerment of indigenous people. Bolivia is a
member of the UN and some of its specialized agencies and related programs;
Organization of American States (OAS); Andean Community; INTELSAT; Non-Aligned
Movement; International Parliamentary Union; Latin American Integration
Association (ALADI); World Trade Organization; Rio Treaty; Rio Group; MERCOSUR;
and Uruguay, Paraguay, Bolivia (URUPABOL, restarted in 1993). As an outgrowth of
the 1994 Summit of the Americas, Bolivia hosted a hemispheric summit conference
on sustainable development in December 1996. A First Ladies' hemispheric summit
was also hosted by Bolivia that same month. U.S.-BOLIVIAN RELATIONS Bolivian President Hugo Banzer has pledged to wipe out illicit coca
production and drug trafficking in Bolivia by the end of his term in 2002. His
administration unveiled its 5-year counternarcotics strategy in December 1997.
The plan calls for significant funding from international donors. Former
President Bill Clinton certified to the Congress in 2000 that Bolivia is
cooperating fully with the U.S. on counternarcotics matters or has taken steps
on its own to achieve full compliance with the 1988 UN Convention Against
Illicit Traffic in Narcotic Drugs and Psychotropic Substances. The U.S.
Government is seeking Bolivia's cooperation in achieving a net reduction in the
amount of coca under cultivation and in enacting legislation to criminalize
money laundering. In 1996, the United States and Bolivia ratified a new
extradition treaty which makes it easier for both nations to more effectively
prosecute drug traffickers and other criminals. It replaces the previous
extradition treaty, which came into force in 1990. The new treaty is significant
because, unlike its predecessor, it requires both countries to extradite their
own nationals for serious criminal offenses. In 1991, the U.S. Government forgave all of the debt owed by Bolivia to the
U.S. Agency for International Development ($341 million) as well as 80% (or $31
million) of the amount owed to the Department of Agriculture for food
assistance. Increased U.S. assistance since the late 1980s has been designed to
reinforce democracy, to ensure sustainable economic development, and to make
Bolivia less dependent on the cocaine industry. U.S. economic and development
assistance totaled $53 million in FY 1999, in addition to military and
counternarcotics assistance. U.S. Embassy Functions The consular section of the embassy provides vital services to the estimated
14,000 American citizens resident in Bolivia. Among other services, the consular
section assists Americans who wish to participate in U.S. elections while abroad
and provides U.S. tax information. Besides the American citizens living in
Bolivia, some 20,000 U.S. citizens visit annually. The consular section offers
passport and emergency services to these tourists as needed during their stay in
Bolivia. Principal U.S. Embassy Officials The U.S. Embassy is located at Avenida Arce #2780, La Paz (tel.591-2-430251).
There are consular agents in the cities of Santa Cruz (tel. 591-3-330725) and
Cochabamba (tel. 591-42-56714). Embassy Home Page: http://www/megalink.com/usemblapaz. Other Contact Information American Chamber of Commerce in Bolivia
TRAVEL AND BUSINESS INFORMATION Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225. For after-hours emergencies, Sundays and holidays, call 202-647-4000. Passport information can be obtained by calling the National Passport Information Center's automated system ($.35 per minute) or live operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648). It also is available on the internet. Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800. Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication). U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register at the U.S. embassy upon arrival in a country (see "Principal U.S. Embassy Officials" listing in this publication). This may help family members contact you in case of an emergency. |
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