Wayzata World Factbook 1994/World Factbook - 1994 Edition - Wayzata Technology (1994).iso/pc/text/txtfiles/bolivia.bkg

Text File | 1994-04-07 | 24.9 KB | 435 lines

#CARD:Bolivia:Background Notes
US DEPARTMENT OF STATE BACKGROUND NOTES:  BOLIVIA

September 1991
Official Name:  Republic of Bolivia

PROFILE
Geography
Area: 1.1 million sq. km. (425,000 sq. mi.); about the size of Texas and
California.  Cities: Capital--La Paz (administrative--pop. 976,000);
Sucre (judicial--105,000).  Other cities--Santa Cruz (529,000),
Cochabamba (403,000).  Terrain: Major geographic zones: High plateau
(altiplano), temperate and semitropical valleys, and the tropical
lowlands.  Climate: Varies with altitude--from humid and tropical to
semi-arid and cold.

People
Nationality: Noun and adjective--Bolivian(s).  Population: 7.3 million
(1990 est.).  Annual growth rate: 2.6%.  Ethnic groups: 60% indigenous
(primarily Aymara and Quechua), 20-30% mestizo (mixed European and
Indian ancestry), 5-15% European.  Religions: Predominantly Roman
Catholic; some Protestant.  Languages: Spanish (official); Quechua,
Aymara.  Education: Years compulsory--ages 7-14.  Health: Infant
mortality rate--(1990):  102/1,000.  Work force: 1.8 million.
Agriculture--47%. Industry and commerce--16%.  Services (including
government)--36%.

Government
Type: Republic.  Independence: August 6, 1825. Constitution: 1967.
Branches: Executive--president and cabinet.  Legislative--bicameral
Congress.   Judicial--five levels of jurisdiction, headed by Supreme
Court.
Subdivisions: Nine departments.
Major political parties: Nationalist Revolutionary Movement (MNR),
Nationalist Democratic Action (ADN), Movement of the Revolutionary Left
(MIR), Conscience of the Fatherland (CONDEPA).  Suffrage: Universal
adult.
Central government budget: Receipts--29% of 1989 GDP.
Flag: Red, yellow, and green horizontal bands from top to bottom; coat
of arms is centered on the yellow band.

Economy
GDP (1990): $5.6 billion.  Annual growth rate (1990): 2.6%.  Per capita
income (1989): $760.  Inflation rate (1990): 18%.
Natural resources: Tin, natural gas, petroleum, zinc, tungsten,
antimony, silver, lead, gold, iron, (also lithium, potassium and borax
are not yet exploited).
Agriculture (21% of GDP): Products--potatoes, corn, sugarcane, rice,
wheat, coffee, beef, barley, and quinine. Arable land--27%.
Industry: Types--manufacturing, commerce, extraction of minerals and
hydrocarbons, textiles, food processing, chemicals, plastics, mineral
smelting and petroleum refining.
Trade (1990): Exports--$926 million. Products--natural gas, tin, zinc,
coffee, silver, tungsten.  Major markets--Latin American Integration
Association (ALADI), US, European Community.  Imports--$716 million.
Products--machinery and transportation equipment, consumer products,
construction and mining equipment.  Major suppliers--ALADI, US, Japan,
Brazil.
Official exchange rate (December 1990): 3.37 Bolivianos=US$1.
Fiscal year: Calendar year.
US assistance (FY 1990): $88.1 million (economic), $48.4 million
(military), $15.7 million (law enforcement).

International Affiliations
 UN and some specialized agencies and related programs, Organization of
American States (OAS), Andean Pact, INTELSAT, Non-Aligned Movement,
International Parliamentary Union, Latin American Integration
Association (ALADI), General Agreement on Tariffs and Trade (GATT), Rio
Treaty.

PEOPLE AND CULTURE
 Bolivia's ethnic distribution is estimated to be 60% indigenous Aymara
and Quechua peoples, 25-30% mixed Indian and Spanish (mestizo), and
5-15% European (primarily Spanish).  Among the limited number of foreign
residents are about 700 Japanese and Okinawan families, who emigrated to
Bolivia after World War II and settled in the Santa Cruz area.  A small
Mennonite community resides in the same region.
 Bolivia is the least developed country 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
prevents the annual population growth rate from exceeding 2.8%.
 La Paz is the highest capital city in the world--3,600 meters (11,800
ft.) above sea level.  The fastest growing major city is Santa Cruz, the
commercial and industrial hub of the eastern lowlands.
 Almost 95% of Bolivians are Roman Catholic, although a number of
Protestant denominations are also well represented.  Many Indian
communities interweave pre-Columbian and Christian symbols in their
religious practices.  Approximately half of the people speak Spanish as
their first language.  About 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: the pre-Columbian, the colonial, and the
republican.
 From the pre-Columbian period, there are important archeological ruins,
gold and silver ornaments, and ceramics and weavings of the great Aymara
civilization at Tiahuanacu.  The later Inca conquest of the highlands
left important ruins at Samaipata and Incallajta.  The Quechua (or Inca)
culture originated a beautiful style in ceramics and weavings that has
been preserved.
 The Spanish brought their own tradition of religious art which, in the
hands of local Indian or 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, goldsmiths, and
silversmiths.  In recent years, an important body of baroque music of
the period was discovered.
 Bolivian artists of stature in the 20th century include Guzman de
Rojas, Arturo Borda, and Maria Luisa Pacheco.  Marina Nunez del Prado is
an internationally known sculptor.
 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 less well-known
carnival at Tarabuco.

HISTORY AND POLITICS
 Man probably arrived in the Andean region about 20,000 BC.  Between 100
BC and AD 900, an advanced culture developed at the southern end of Lake
Titicaca.  This culture, centered around Tiahuanacu, developed advanced
agricultural and irrigation techniques.  It spread to surrounding areas
and formed the Aymara empire.  In about 1450, the Quechua-speaking Incas
entered the area of modern highland Bolivia and added it to their
empire.  They controlled the area until the Spanish conquest in 1525.
 During most of the Spanish colonial period, this territory was called
"Upper Peru" or "Charcas" and was governed from Lima.  The principal
cities were Chuquisaca (modern Sucre) and Potosi.  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 (1879-84) 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.  Political parties that reflected the
interests of the mine owners ruled until the 1930s with few outbreaks of
violence.
 The lot of the Indians, 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 Indians.  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 from the ferment
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.
 Twelve years of tumultuous rule left the MNR divided, and in 1964, a
military junta overthrew President Paz at the outset of his third term.
In 1969, the 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.
 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 Victor Paz
Estenssoro's MNR and former Vice President Jaime Paz Zamora's Movement
of the Revolutionary Left (MIR).  However, in the congressional run-off,
the MIR sided with MNR, and Paz Estenssoro was chosen for a fourth term
as president.
 When Paz Estenssoro 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%.  There was
widespread social unrest, chronic strikes, and unfettered operation by
drug dealers.
 In 4 years, his administration achieved an economic and social
stability that remains the envy of Bolivia's neighbors.  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, Paz Estenssoro's remarkable accomplishments were not won
without sacrifice.  The collapse of tin prices in October 1985, coming
just as the government was moving to nationalize its mismanaged mining
company, forced the government to lay off over 20,000 miners.  The
highly successful shock treatment that restored Bolivia's financial
system also led to unrest and temporary social dislocation in some
cases.  His government's achievements remain fragile in the face of
Bolivia's poverty and the country's history of political instability,
but they are no less remarkable for that.
 President Jaime Paz Zamora took office August 6, 1989, following an
electoral contest whose results were only determined early in the
morning of the previous day.  Election results were: MNR 23.1%; ADN
22.7%; MIR 19.6%.  (Paz finished third in the May 7, 1989, elections.)
Bolivia's constitution, however, mandates congressional determination of
the victor in presidential races where no candidate obtains a majority
vote.
 In negotiations preceding congressional voting, Paz hammered out a deal
with the second place finisher, Gen. Hugo Banzer, to share the
leadership.  Paz' center-left MIR assumed the presidency and half the
ministries.  Banzer's center-right ADN gained control of the National
Political Council (CONAP), in addition to its ministries.
 The 1989 elections were the cleanest in recent Bolivian history.
Nonetheless, the MNR asserted that electoral court invalidation of key
voting tables gave the ADN/MIR three of its congressional seats.
 Paz Zamora has been a moderate president who, despite his Marxist
origins and his self-proclaimed "leftist nationalism," has learned from
experience that pragmatic approaches to problems are those most likely
to bring solutions.  Having seen Bolivia experience the hyper-inflation
(24,000%) of the Siles Zuazo administration as vice president, he now
supports orthodox economics.
 Paz has taken a hard line against domestic terrorism, personally
ordering the December 1990 attack on terrorists of the Nestor Paz Zamora
Committee (named after his brother who died in the 1970 Teoponte
insurgency).  The terrorists killed their kidnap victim when surrounded
by the police.  The police then killed three terrorists and arrested
three others.

GOVERNMENT
 The constitution promulgated in February 1967 provides for traditional
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 consists of the Supreme Court and departmental
and lower courts.  Bolivia's nine departments have limited autonomy,
although departmental officials have been appointed by the central
government for many years.
 As a result of the July 14, 1985, elections, Bolivian cities and towns
are now governed by elected majors and councils for the first time since
1951.

Principal Government Officials
President--Jaime PAZ Zamora
Vice President--Luis OSSIO Sanjines
Minister of Foreign Affairs--Carlos ITURRALDE
Ambassador to the US--Jorge CRESPO Velasco
Ambassador to the UN--Hugo NAVAJAS Mogro
Ambassador to the OAS--Mario ROLON Anaya
 Bolivia maintains an embassy in the US at 3014 Massachusetts Ave., NW,
Washington, DC 20008 (tel. [phone]), consulates in Los Angeles, San

Francisco, Miami, New Orleans, New York, and honorary consulates in
Atlanta, Chicago, Cincinnati, Houston, Seattle, St. Louis, and San Juan.

ECONOMY
 Real economic growth resumed in 1987 after 5 years of decline.  While
the annual output of goods and services has grown in real terms between
2% and 3% starting in 1987, it has not yet regained the level achieved
in 1981.  GDP is estimated to have grown another 2.6% in 1990, with
inflation increasing  to around 18% for the year.  Economic growth has
been mainly from new investment by the private sector which has
benefited by the elimination of price controls, import permits, and
currency controls.  The Bolivian government successfully completed in
1990 the second year of a 3-year International Monetary Fund (IMF)
"Economic Structural Adjustment Facility Program" and managed to keep
the budget deficit to less than 3.5% of GDP.
 Agriculture still accounts for about 21% of GDP and employs almost half
of the 1.8 million people in the labor force.  Total agricultural
production declined slightly in 1989 and 1990 due to drought, but
cultivation of wheat, barley, cotton, sunflower, and other
non-traditional crops all expanded in the Santa Cruz area.  The
extraction of minerals and hydrocarbons accounts for more than 15% of
GDP, followed by manufacturing and commerce, each with 13%.
 New contracts for oil exploration by several foreign firms should spur
the economy, especially if one of them discovers oil (as opposed to gas)
so that oil exports can be renewed.  Exploitation of Bolivia's large
salt flats of the altiplano should also increase export earnings.

External Financing
 The government of Bolivia remains heavily dependent on foreign
assistance to finance development projects.  As of September 1990, the
government owed over $3.6 billion to its foreign creditors.  However,
most of those loans have very low interest rates with long repayment
schedules.  The government owed more than $1.6 billion to the
multilateral development banks and was servicing those debts on
schedule.  It owed almost $2 billion to other governments, but those
governments agreed, at the March 1990 Paris Club meeting, to reschedule
all of the bilateral debt payments falling due in 1990 and 1991 under
the concessional "Toronto terms."  Most of the payments that should have
been made in 1990 and 1991 instead will be paid in installments between
the years 2005-15.  The USG reduced 80% of Bolivia's bilateral debt on
food assistance loans and all the debt ($341 million owed to the US
Agency for International Development (USAID).  France and the
Netherlands also have canceled one-third of the debt owed by Bolivia.
 The government stopped making payments on its debts to foreign banks in
the early 1980s.  In 1987, those banks agreed to allow the government to
buy back its commercial debt claims at 11 cents on the dollar.  Through
this procedure and the exchange of investment bonds for debt claims, the
Bolivian government was able to reduce its commercial debt from $678
million at the end of 1987 to $209 million by September 1990.
 The government reduced its debt further through a debt swap with
Argentina and by renegotiating its debt with Brazil.  Debt payments are
a burden, but every year since 1985, disbursements of new loans have
exceeded repayments.  In 1989, the government paid $221 million on its
external debts, almost 28% of registered export earnings, but received
$327 million of new loans plus a significant amount of grant assistance.

Foreign Trade
 Registered exports exceeded $1 billion in 1980 and then declined for 7
years in a row reflecting the collapse of the economy and falling
mineral prices.  From a low of $570 million in 1987, exports have grown
steadily and exceeded $900 million in 1990.  Registered imports fell
from over $900 million in 1981 to $490 million in 1984.  Imports have
grown slowly, ($716 million in 1990) leaving Bolivia with a positive
trade balance in 1989 and 1990.
 The IMF estimated that an additional $250 million of goods were
smuggled into Bolivia in 1989.  This was probably offset by smuggled
exports of coca paste, cocaine, and gold.
 Up until the early 1970s, most of Bolivia's trade was with the United
States.  As Bolivia's economy has diversified and opened during the past
two decades, trade with other countries has grown sharply.
 The United States remained Bolivia's major supplier in 1990 providing
$139 million, or 19%, of Bolivia's imports.  The United States was the
second largest market for Bolivia, buying $203 million, or 22%, of
Bolivia's exports.
 Bolivia's major exports to the United States are tin, gold jewelry, and
wood products.  Its major imports from the United States are wheat,
flour, motor vehicles, and all sorts of machinery.

DEFENSE
 Bolivia's armed forces have played a major and often controversial role
in the country's history.  Defeated in the 1952 revolution, the army was
at first drastically reduced in size and influence.  Later, however, the
MNR rebuilt the armed forces to counter the power of unruly military
leaders.  The corrupt, albeit short-lived, tenure of Gen. Luis Garcia
Meza from 1980 to 1981 did much to discredit military rule.  The armed
forces adhered strictly to their constitutional role during the term of
elected President Hernan Siles Zuazo (1982-85) and supported fully the
constitutional transition to elected presidents, Dr. Paz Estenssoro
(1985) and Jaime Paz Zamora (1989).  Despite the country's occasionally
uncertain political climate, Bolivia's military in recent years has
contributed responsibly to strengthening the country's still fragile
democrac.
 Estimates of Bolivian armed forces troop strength are 22,000 army,
4,000 air force, and 4,000 navy, which patrols Lake Titicaca (the
world's highest navigable lake) and various rivers.  In addition to its
mission of external defense and internal security, the military
participates in civic action programs and provides transportation
services.  Bolivia is a signatory of the Inter-American Treaty of
Reciprocal Assistance (Rio Treaty), an agreement among the American
states for mutual support against aggression.

FOREIGN RELATIONS
 Bolivia traditionally has maintained normal diplomatic relations with
all hemispheric states except Chile.  Relations with Chile, strained
since Bolivia's defeat in the War of the Pacific (1879-83) and its loss
of the coastal province of Atacama, were severed from 1962 to 1975 in a
dispute over the use of the waters of the Lauca River.  Relations were
resumed in 1975 but broken again in 1978 over the inability of the two
countries to reach an agreement that might have granted Bolivia a
sovereign access to the sea.  In the 1960s, relations with Cuba were
broken following Castro's rise to power but resumed under the Paz
Estenssoro administration in 1985.
 During the Garcia Meza regime, Bolivia's relations with many countries,
including the United States, were strained.  Principal concerns focused
on the narcotics problem, human rights abuses, and interruption of the
democratic process.  The restoration of constitutional democracy in 1982
alleviated some of these concerns and greatly improved Bolivia's
diplomatic standing.
 Since 1970, Bolivia has expanded its links with the Soviet Union,
various East European nations, and the People's Republic of China.
(Note:  Taiwan maintains a trade/commercial office in La Paz.)  These
include diplomatic relations, trade, cultural exchanges, and limited
economic assistance.
 President Paz is an active participant in the formulation and execution
of Bolivia's foreign policy.  He has shown interest in improving
Bolivia's historically poor relationship with Chile.

US-BOLIVIAN RELATIONS
 The normally friendly relations between the United States and Bolivia
were interrupted during the Garcia Meza regime.  Following the unusually
violent and repressive coup of July 17, 1980, the United States withdrew
its ambassador, cut off security assistance and arms sales, and
suspended a substantial portion of economic assistance.
 In November 1981, after Garcia Meza's replacement by a more moderate
military leader, the US ambassador returned to La Paz.  US economic and
security assistance programs resumed after Bolivia's return to
constitutional democracy.  The United States has a longstanding aid
relationship with Bolivia.  Between 1945 and 1990, economic assistance
totaled more than $1.5 billion; grants made up almost half this sum.
 The current major issue in bilateral relations is that Bolivia produces
30-40% of the world's coca and is second only to Colombia in production
of cocaine.  For generations, the traditional practice of chewing coca
leaves served to alleviate the rigors of life on the altiplano, but
during the past decades, an increasing percentage of coca cultivation
has been diverted to the illegal market for the production of cocaine.
The corruption and disregard for law that accompanied the growth of the
illegal trade have made narcotics trafficking not only a major domestic
but an international problem for Bolivia.  President Bush's Andean
strategy, announced in February 1990, has started cooperative programs
in Bolivia and with neighbors Peru and Colombia to help combat the
menace of narcotics production and trafficking.

Principal US Officials
Ambassador--Charles R. Bowers
Deputy Chief of Mission--Marilyn McAfee
Political Counselor--Stephen G. McFarland
Economic Counselor--J. Michael Shelton
Consul General--Kevin Herbert
Director, USAID Mission--Carl Leonard
Public Affairs Officer, USIS--Robert J. Callahan
Defense Attache--Col. David Hunt (USAF)
Commander, US Military Group--Col. James D. Hallums (USA)
 The US embassy is located in the Banco Popular del Peru Building,
corner of Calles Mercado y Colon, La Paz (tel. [phone]).  There are
consular agents in the cities of Santa Cruz (tel. [phone]) and
Cochabamba (tel. [phone]). (###)


#ENDCARD