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Bolivia-POLITICAL INSTABILITY AND ECONOMIC DECLINE, 1839-79

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Bolivia Index

Aymara Indians playing wind instruments in Achispaya, Larecaja Province, La Paz Department

A Tinku ritual fight in Macha, Chayanta Province, Potosí Department
Courtesy Inter-American Foundation (Kevin Healy)

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 (see fig. 3).

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.

Data as of December 1989

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 countercoups. Democratic civilian rule was established in 1982, but leaders have faced difficult problems of deep-seated poverty, social unrest, and illegal drug production. In December 2005, Bolivians elected Movement Toward Socialism leader Evo MORALES president - by the widest margin of any leader since the restoration of civilian rule in 1982 - after he ran on a promise to change the country's traditional political class and empower the nation's poor, indigenous majority. However, since taking office, his controversial strategies have exacerbated racial and economic tensions between the Amerindian populations of the Andean west and the non-indigenous communities of the eastern lowlands. In December 2009, President MORALES easily won reelection, and his party took control of the legislative branch of the government, which will allow him to continue his process of change.
Location		Central South America, southwest of Brazil
Area(sq km)		total: 1,098,581 sq km land: 1,083,301 sq km water: 15,280 sq km
Geographic coordinates		17 00 S, 65 00 W
Land boundaries(km)		total: 6,940 km border countries: Argentina 832 km, Brazil 3,423 km, Chile 860 km, Paraguay 750 km, Peru 1,075 km
Coastline(km)		0 km (landlocked)
Climate		varies with altitude; humid and tropical to cold and semiarid
Elevation extremes(m)		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: 2.78% permanent crops: 0.19% other: 97.03% (2005)
Irrigated land(sq km)		1,320 sq km (2003)
Total renewable water resources(cu km)		622.5 cu km (2000)
Freshwater withdrawal (domestic/industrial/agricultural)		total: 1.44 cu km/yr (13%/7%/81%) per capita: 157 cu m/yr (2000)
Natural hazards		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, Marine Dumping, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands signed, but not ratified: Environmental Modification, Marine Life Conservation
Geography - note		landlocked; shares control of Lago Titicaca, world's highest navigable lake (elevation 3,805 m), with Peru
Population		9,775,246 (July 2009 est.)
Age structure(%)		0-14 years: 35.5% (male 1,767,310/female 1,701,744) 15-64 years: 60% (male 2,877,605/female 2,992,043) 65 years and over: 4.5% (male 193,196/female 243,348) (2009 est.)
Median age(years)		total: 21.9 years male: 21.3 years female: 22.6 years (2009 est.)
Population growth rate(%)		1.772% (2009 est.)
Birth rate(births/1,000 population)		25.82 births/1,000 population (2009 est.)
Death rate(deaths/1,000 population)		7.05 deaths/1,000 population (July 2009 est.)
Net migration rate(migrant(s)/1,000 population)		-1.05 migrant(s)/1,000 population (2009 est.)
Urbanization(%)		urban population: 66% of total population (2008) rate of urbanization: 2.5% annual rate of change (2005-10 est.)
Sex ratio(male(s)/female)		at birth: 1.05 male(s)/female under 15 years: 1.04 male(s)/female 15-64 years: 0.96 male(s)/female 65 years and over: 0.79 male(s)/female total population: 0.98 male(s)/female (2009 est.)
Infant mortality rate(deaths/1,000 live births)		total: 44.66 deaths/1,000 live births male: 48.56 deaths/1,000 live births female: 40.57 deaths/1,000 live births (2009 est.)
Life expectancy at birth(years)		total population: 66.89 years male: 64.2 years female: 69.72 years (2009 est.)
Total fertility rate(children born/woman)		3.17 children born/woman (2009 est.)
Nationality		noun: Bolivian(s) adjective: Bolivian
Ethnic groups(%)		Quechua 30%, mestizo (mixed white and Amerindian ancestry) 30%, Aymara 25%, white 15%
Religions(%)		Roman Catholic 95%, Protestant (Evangelical Methodist) 5%
Languages(%)		Spanish 60.7% (official), Quechua 21.2% (official), Aymara 14.6% (official), foreign languages 2.4%, other 1.2% (2001 census)
Country name		conventional long form: Plurinational State of Bolivia conventional short form: Bolivia local long form: Estado Plurinacional de Bolivia local short form: Bolivia
Government type		republic; note - the new constitution defines Bolivia as a "Social Unitarian State"
Capital		name: La Paz (administrative capital) geographic coordinates: 16 30 S, 68 09 W time difference: UTC-4 (1 hour ahead of Washington, DC during Standard Time) note: Sucre (constitutional capital)
Administrative divisions		9 departments (departamentos, singular - departamento); Beni, Chuquisaca, Cochabamba, La Paz, Oruro, Pando, Potosi, Santa Cruz, Tarija
Constitution		7-Feb-09
Legal system		based on Spanish law and Napoleonic Code; has not accepted compulsory ICJ jurisdiction; the 2009 Constitution incorporates indigenous community justice into Bolivia's judicial system
Suffrage		18 years of age, universal and compulsory (married); 21 years of age, universal and compulsory (single)
Executive branch		chief of state: President Juan Evo MORALES Ayma (since 22 January 2006); Vice President Alvaro GARCIA Linera (since 22 January 2006); note - the president is both chief of state and head of government head of government: President Juan Evo MORALES Ayma (since 22 January 2006); Vice President Alvaro GARCIA Linera (since 22 January 2006) cabinet: Cabinet appointed by the president elections: president and vice president elected on the same ticket by popular vote for a single five-year term; election last held 6 December 2009 (next to be held in 2014); note - per the new constitution, presidents can serve for a total of two consecutive terms election results: Juan Evo MORALES Ayma elected president; percent of vote - Juan Evo MORALES Ayma 64%; Manfred REYES VILLA 26%; Samuel DORIA MEDINA Arana 6%; Rene JOAQUINO 2%; other 2%
Legislative branch		bicameral Plurinational Legislative Assembly or Asamblea Legislativa Plurinacional consists of Chamber of Senators or Camara de Senadores (36 seats; members are elected by proportional representation from party lists to serve five-year terms) and Chamber of Deputies or Camara de Diputados (130 seats; 76 members are directly elected from their districts [7 or 8 of these are chosen from indigenous districts] and 54 are elected by proportional representation from party lists to serve five-year terms). elections: Chamber of Senators and Chamber of Deputies - last held 6 December 2009 (next to be held in 2015) election results: Chamber of Senators - percent of vote by party - NA; seats by party - MAS 26, PPB-CN 10; Chamber of Deputies - percent of vote by party - NA; seats by party - MAS 89, PPB-CN 36, UN 3, AS 2
Judicial branch		Supreme Court or Corte Suprema (judges elected by popular vote from list of candidates pre-selected by Assembly for six-year terms); District Courts (one in each department); Plurinational Constitutional Court (five primary or titulares and five alternate or suplente magistrates elected by popular vote from list of candidates pre-selected by Assembly for six-year terms; to rule on constitutional issues); Plurinational Electoral Organ (seven members elected by the Assembly and the president; one member must be of indigenous origin to six-year terms); Agro-Environmental Court (judges elected by popular vote from list of candidates pre-selected by Assembly for six-year terms; to run on agro-environmental issues); provincial and local courts (to try minor cases)
Political pressure groups and leaders		Bolivian Workers Central or COR; Federation of Neighborhood Councils of El Alto or FEJUVE; Landless Movement or MST; National Coordinator for Change or CONALCAM; Sole Confederation of Campesino Workers of Bolivia or CSUTCB other: Cocalero groups; indigenous organizations (including Confederation of Indigenous Peoples of Eastern Bolivia or CIDOB and National Council of Ayullus and Markas of Quollasuyu or CONAMAQ); labor unions (including the Central Bolivian Workers' Union or COB and Cooperative Miners Federation or FENCOMIN)
International organization participation		CAN, FAO, G-77, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO (correspondent), ITSO, ITU, LAES, LAIA, Mercosur (associate), MIGA, MINUSTAH, MONUC, NAM, OAS, OPANAL, OPCW, PCA, RG, UN, UNASUR, UNCTAD, UNESCO, UNFICYP, UNIDO, Union Latina, UNMIL, UNMIS, UNOCI, UNWTO, UPU, WCL, WCO, WFTU, WHO, WIPO, WMO, WTO
Flag description		three equal horizontal bands of red (top), yellow, and green with the coat of arms centered on the yellow band note: similar to the flag of Ghana, which has a large black five-pointed star centered in the yellow band; in 2009, a presidential decree made it mandatory for a so-called wiphala - a square, multi-colored flag representing the country's indigenous peoples - to be used alongside the traditional flag
Economy - overview		Bolivia is one of the poorest and least developed countries in Latin America. Following a disastrous economic crisis during the early 1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large northern hemisphere markets. In 2005, the government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company. In early 2008, higher earnings for mining and hydrocarbons exports pushed the current account surplus to 9.4% of GDP and the government's higher tax take produced a fiscal surplus after years of large deficits. Private investment as a share of GDP, however, remains among the lowest in Latin America, and inflation remained at double-digit levels in 2008. The decline in commodity prices in late 2008, the lack of foreign investment in the mining and hydrocarbon sectors, and the suspension of trade benefits with the United States will pose challenges for the Bolivian economy in 2009.
GDP (purchasing power parity)		$43.38 billion (2008 est.) $40.88 billion (2007 est.) $39.08 billion (2006 est.) note: data are in 2008 US dollars
GDP (official exchange rate)		$16.6 billion (2008 est.)
GDP - real growth rate(%)		6.1% (2008 est.) 4.6% (2007 est.) 4.8% (2006 est.)
GDP - per capita (PPP)		$4,500 (2008 est.) $4,300 (2007 est.) $4,200 (2006 est.) note: data are in 2008 US dollars
GDP - composition by sector(%)		agriculture: 11.3% industry: 36.9% services: 51.8% (2008 est.)
Labor force		4.454 million (2008 est.)
Labor force - by occupation(%)		agriculture: 40% industry: 17% services: 43% (2006 est.)
Unemployment rate(%)		7.5% (2008 est.) 7.5% (2007 est.) note: data are for urban areas; widespread underemployment
Population below poverty line(%)		60% (2006 est.)
Household income or consumption by percentage share(%)		lowest 10%: 0.5% highest 10%: 44.1% (2005)
Distribution of family income - Gini index		59.2 (2006) 44.7 (1999)
Investment (gross fixed)(% of GDP)		18% of GDP (2008 est.)
Budget		revenues: $8.039 billion expenditures: $7.5 billion (2008 est.)
Inflation rate (consumer prices)(%)		14% (2008 est.) 8.7% (2007 est.)
Stock of money		$3.998 billion (31 December 2008) $3.032 billion (31 December 2007)
Stock of quasi money		$6.339 billion (31 December 2008) $4.729 billion (31 December 2007)
Stock of domestic credit		$5.433 billion (31 December 2008) $4.759 billion (31 December 2007)
Market value of publicly traded shares		$NA (31 December 2008) $2.263 billion (31 December 2007) $2.223 billion (31 December 2006)
Economic aid - recipient		$582.9 million (2005 est.)
Public debt(% of GDP)		45.2% of GDP (2008 est.) 46.3% of GDP (2007 est.)
Agriculture - products		soybeans, coffee, coca, cotton, corn, sugarcane, rice, potatoes; timber
Industries		mining, smelting, petroleum, food and beverages, tobacco, handicrafts, clothing
Industrial production growth rate(%)		10.6% (2008 est.)
Current account balance		$2.015 billion (2008 est.) $1.984 billion (2007 est.)
Exports		$6.448 billion (2008 est.) $4.49 billion (2007 est.)
Exports - commodities(%)		natural gas, soybeans and soy products, crude petroleum, zinc ore, tin
Exports - partners(%)		Brazil 60.1%, US 8.3%, Japan 4.1% (2008)
Imports		$4.641 billion (2008 est.) $3.24 billion (2007 est.)
Imports - commodities(%)		petroleum products, plastics, paper, aircraft and aircraft parts, prepared foods, automobiles, insecticides, soybeans
Imports - partners(%)		Brazil 26.7%, Argentina 16.3%, US 10.5%, Chile 9.5%, Peru 7.1%, China 4.8% (2008)
Reserves of foreign exchange and gold		$7.722 billion (31 December 2008 est.) $5.318 billion (31 December 2007 est.)
Debt - external		$5.931 billion (31 December 2008) $5.385 billion (31 December 2007)
Stock of direct foreign investment - at home		$5.998 billion (31 December 2008)
Stock of direct foreign investment - abroad		$NA
Exchange rates		bolivianos (BOB) per US dollar - 7.253 (2008 est.), 7.8616 (2007), 8.0159 (2006), 8.0661 (2005), 7.9363 (2004)
Currency (code)		boliviano (BOB)
Telephones - main lines in use		690,000 (2008)
Telephones - mobile cellular		4.83 million (2008)
Telephone system		general assessment: privatization begun in 1995; reliability has steadily improved; new subscribers face bureaucratic difficulties; most telephones are concentrated in La Paz and other cities; mobile-cellular telephone use expanding rapidly; fixed-line teledensity of 7 per 100 persons; mobile-cellular telephone density slighly exceeds 50 per 100 persons domestic: primary trunk system, which is being expanded, employs digital microwave radio relay; some areas are served by fiber-optic cable; mobile cellular systems are being expanded international: country code - 591; satellite earth station - 1 Intelsat (Atlantic Ocean) (2008)
Internet country code		.bo
Internet users		1 million (2008)
Airports		952 (2009)
Pipelines(km)		gas 4,883 km; liquid petroleum gas 47 km; oil 2,475 km; refined products 1,589 km (2008)
Roadways(km)		total: 62,479 km paved: 3,749 km unpaved: 58,730 km (2004)
Ports and terminals		Puerto Aguirre (inland port on the Paraguay/Parana waterway at the Bolivia/Brazil border); Bolivia has free port privileges in maritime ports in Argentina, Brazil, Chile, and Paraguay
Military branches		Bolivian Armed Forces: Bolivian Army (Ejercito Boliviano, EB), Bolivian Navy (Fuerza Naval Boliviana, FNB; includes marines), Bolivian Air Force (Fuerza Aerea Boliviana, FAB) (2009)
Military service age and obligation(years of age)		18-49 years of age for 12-month compulsory military service; when annual number of volunteers falls short of goal, compulsory recruitment is effected, including conscription of boys as young as 14; 15-19 years of age for voluntary premilitary service, provides exemption from further military service (2009)
Manpower available for military service		males age 16-49: 2,295,746 females age 16-49: 2,366,828 (2008 est.)
Manpower fit for military service		males age 16-49: 1,666,697 females age 16-49: 1,906,396 (2009 est.)
Manpower reaching militarily significant age annually		male: 108,304 female: 104,882 (2009 est.)
Military expenditures(% of GDP)		1.9% of GDP (2006)
Disputes - international		Chile and Peru rebuff Bolivia's reactivated claim to restore the Atacama corridor, ceded to Chile in 1884, but Chile offers instead unrestricted but not sovereign maritime access through Chile for Bolivian natural gas and other commodities; an accord placed the long-disputed Isla Suarez/Ilha de Guajara-Mirim, a fluvial island on the Rio Mamore, under Bolivian administration in 1958, but sovereignty remains in dispute
Electricity - production(kWh)		5.495 billion kWh (2007 est.)
Electricity - production by source(%)		fossil fuel: 44.4% hydro: 54% nuclear: 0% other: 1.5% (2001)
Electricity - consumption(kWh)		4.665 billion kWh (2007 est.)
Electricity - exports(kWh)		0 kWh (2008 est.)
Electricity - imports(kWh)		0 kWh (2008 est.)
Oil - production(bbl/day)		51,360 bbl/day (2008 est.)
Oil - consumption(bbl/day)		60,000 bbl/day (2008 est.)
Oil - exports(bbl/day)		10,950 bbl/day (2007 est.)
Oil - imports(bbl/day)		6,172 bbl/day (2007 est.)
Oil - proved reserves(bbl)		465 million bbl (1 January 2009 est.)
Natural gas - production(cu m)		14.2 billion cu m (2008 est.)
Natural gas - consumption(cu m)		2.41 billion cu m (2008 est.)
Natural gas - exports(cu m)		11.79 billion cu m (2008)
Natural gas - proved reserves(cu m)		750.4 billion cu m (1 January 2009 est.)
HIV/AIDS - adult prevalence rate(%)		0.2% (2007 est.)
HIV/AIDS - people living with HIV/AIDS		8,100 (2007 est.)
HIV/AIDS - deaths		fewer than 500 (2007 est.)
Major infectious diseases		degree of risk: high food or waterborne diseases: bacterial diarrhea, hepatitis A, and typhoid fever vectorborne diseases: dengue fever, malaria, and yellow fever water contact disease: leptospirosis (2009)
Literacy(%)		definition: age 15 and over can read and write total population: 86.7% male: 93.1% female: 80.7% (2001 census)
Education expenditures(% of GDP)		6.4% of GDP (2003)