Bolivia: Political and Economic Developments and Relations with the United States

Publication Date: July 2008

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

Type:

Coverage: Bolivia

Abstract:

In the past few years, Bolivia has experienced extreme political unrest resulting in the country having six presidents since 2001. Evo Morales, an indigenous leader of the leftist Movement Toward Socialism (MAS) party, won a convincing victory in the December 18, 2005, presidential election with 54% of the votes. He was inaugurated to a five-year term on January 22, 2006.

During his first year in office, President Morales moved to fulfill his campaign promises to decriminalize coca cultivation, nationalize the country's natural gas industry, and enact land reform. These policies pleased his supporters within Bolivia, but have complicated Bolivia's relations with some of its neighboring countries, foreign investors, and the United States.

Any progress that President Morales has made on advancing his campaign pledges has been overshadowed by an escalating crisis between the MAS government in La Paz and opposition leaders in the country's wealthy eastern provinces. In August 2006, many Bolivians hoped that the constituent assembly elected in July would be able to carry out constitutional reforms and respond to the eastern province's ongoing demands for regional autonomy. Five months later, the assembly is stalled, the eastern provinces have held large protests against the Morales government, and clashes between MAS supporters and opposition groups have turned violent.

U.S. interest in Bolivia has traditionally centered on its role as a coca producer and its relationship to Colombia and Peru, the two other major coca- and cocaineproducing countries in the Andes. U.S.-Bolivian relations became tense in 2006 in the wake of the Morales government's questionable commitment to combating illegal drugs, increasing ties with Venezuela and Cuba, and the nationalization measure. Some U.S. officials have stated that democracy in Bolivia could be at risk because of measures taken by President Morales to undercut the opposition and eliminate checks on his authority.

In the 109th Congress, the FY2006 Foreign Operations appropriations measure (P.L. 109-102) provided $116.6 million in foreign assistance to Bolivia, including some $79.2 million in counternarcotics funds. For FY2007, the Administration proposed spending $99.8 million on Bolivia, including $66 million in counternarcotics funds. Final action on the FY2007 foreign aid appropriations was not completed by the end of the year, leaving the 110th Congress to complete action in 2007. In December 2006, Congress voted to extend trade preferences for Bolivia, along with Colombia, Ecuador, and Peru, under the Andean Trade Preferences and Drug Eradication Act (ATPDEA) through June 30, 2007. The 110th Congress is likely to monitor the conditions in Bolivia and to conduct oversight on counternarcotics, trade, and human rights issues. This report will be updated as events warrant.