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Bolivia
OVERVIEW

Foreign powers have long been interested in Bolivia because of its enormous wealth of natural resources. Over several hundred years, while the participants have changed, certain patterns of engagement have persisted. Most outsiders have hoped to reap as much benefit as possible, employing strategies that create and/or reward a small group at the top of Bolivia's pyramid society. Sustained contact has resulted in the perpetuation of this skewed internal structure. Outsiders have imposed their culture and values. The unintended consequence of an unchallenged elite has been the persistence of a distinct indigenous people that comprise close to 60% of the population. For most of Bolivia's history, control of the purse has led to control of the government, and often interest in the country extends only as far as it aids the economic ambitions of others.

INCAS

The Incas spread south and inland from Peru (Figure 15) and (Figure 24) in the fifteenth century. They encountered distinct tribal groups that had lived in the area for centuries. Archaeological remains provide evidence of settled villages in modern day Bolivia as far back as 1000 BCE. A society with religion, government and cities existed at that time. Copper remnants date back a thousand years earlier. Successive cultures began to extend influence over wider areas. The Chavin civilization began around 800 BCE. It used textiles and gold, displayed advanced pottery techniques, and had major religious centers. No evidence of this culture exists after 100 BCE when tribes from the area of Lake Titicaca (Figure 15) began to dominate the region. The Tiahuanaco domination of the area began in 600 CE and lasted for 600 years. By 1200 CE, regional states and empires, including the Aymara and Quecha tribes, controlled various portions of the area. Speakers of both languages comprise the dominant indigenous groups in Bolivia today.

The Incas benefited from indigenous tribal practices of collective farming, Ayllu, and an integrated economic society based on extreme geographic differences. These two factors facilitated their administration of the area, to which they added a forced labor system, Mita, where all able bodied citizens had to contribute a certain number of days of work each year.

The Incas efficiently administered an area that stretched 2500 miles along the western coast of South America (Figure 24). They had an elaborate system of governance with an efficient central bureaucracy. They employed the Ayllu system throughout their empire, and a chain of command that allowed for local autonomy as long as tribute was paid and labor was provided. The empire was connected via 14,000 miles of road. They established a command economy where central authority determined production amounts and distribution. Two thirds of the agricultural yield was turned over to the empire yet those under Incan rule could expect the state to provide for them. Incan engineers created a water management system that provided sufficient resources for the dry season. Religion was central and integral to maintaining the power of the state, and wisely did not contradict the tenets of local practices. Although the Incas used force when necessary, the years of their control also saw a flowering in the arts.

EUROPEANS

The primary interest of the Europeans in Bolivia was its ample supply of precious metals. The Spanish, who arrived in the 1520s and ruled for the next 300 years, were not interested in settling the area and only a total of 250,000 Spaniards arrived during their first hundred years of rule. As part of Spain's mercantile economy (Figure 7) and (Figure 8), Bolivia existed only to provide these raw materials. The goal was to gain as much as possible while doing only what was necessary to reap the desired benefits. While this was the Crown's intention, other factors did shape the experience. The arrival of the Catholic Church had a large impact on the development of life in the Western Hemisphere.

Culture did not flow in one direction only and the Spanish gained many things from the experience that they had not intended, including farming techniques and crops. These new lands presented an opportunity for many ambitious young Spaniards to make a fortune. The largely male emigration from Europe resulted in racial mixing. The Spanish also needed the indigenous population to work in the mines. Throughout North and South America, the Europeans hoped that the native born population would provide sufficient labor to meet their needs, but eventually they instituted a transatlantic slave trade in order to develop and sustain their work force (Figure 10).

Spanish success in Bolivia and the rest of South America brought more than material wealth. For two centuries, Spain dominated international trade and helped solidify the centrality of Europe in world affairs. As time passed, the Spanish method of mercantilism grew weak in contrast to the strong market economies developed by England and France. As Spain's power waned throughout the eighteenth century, British influence increased in Bolivia. Although the English would not directly control the area, they benefited enormously from gaining access to these now unprotected markets.

UNITED STATES

Formal Spanish involvement ended in the beginning of the nineteenth century. The growing power of the United States increasingly influenced Latin America. (Figure 6). The motivations of this northern neighbor were complex, a combination of economics, altruism, and global strategy. At first, the United States supported the Latin American countries in their movements for independence, proud to have served as a model of freedom from an oppressive monarchy. President Monroe issued his famous doctrine in 1823, asserting that the Western Hemisphere should be free from colonial power. Powerful support for this sentiment came from the British who welcomed the opportunity to now trade in the markets opened by the end of Spanish rule.

As the nineteenth century wore on, the United States continued its watchful concern. South America proved to be a good place to invest American capital and sell American products. Industrialization brought a demand for raw materials such as tin and petroleum that are plentiful in Bolivia. American foreign policy couched these economic interests in lofty sentiments of uplift and opportunity, rhetoric that persists today.

In the twentieth century, the US became involved in South America in more direct ways. The countries of Latin America were weak militarily and diplomatically, and their northern neighbor increasingly exercised its control. At the beginning of the century, the United States claimed that these areas were part of its Sphere of Influence. In the 1930s, President Franklin Roosevelt promised a Good Neighbor Policy and in the 1960s, President John Kennedy stressed an Alliance for Progress. US actions and attitudes combined virtue and self-interest towards its southern neighbors. There was no competition for influence in the area until after World War Two. American companies had invested a great deal in Latin America and the US government protected those interests.

The United States had strong economic ties with Bolivia. Americans consumed its raw materials and sold manufactured goods in its domestic markets. American companies invested directly in the Bolivian economy. Standard Oil was integral in developing the oil industry there (Figure 21a). The United States also provided direct economic aid. As Bolivia suffered during much of the last 50 years, the United States stepped in to help, whether it was providing direct aid or loan supports. Successive American leaders turned a blind eye to Bolivia's government. As long as they did not disturb US economic interests, President Eisenhower accepted claims that the populist governments in the 1950s were not pro-communist despite strong socialist policies. Likewise, the United States supported military rulers who ignored human rights in the 1960s and 1970 until inflation and debt crippled the economy in the 1980s. At that point, the United States insisted on a return to a democratic government and a market economy before it would endorse loans from the World Bank and the International Money Fund.

Although Bolivia complied with these mandates, its economy was not fully self-supporting and in recent years has been subjected to mass protests by those who reject both US policies and assistance. The US continues to provide $100 million annually to Bolivia to pay for everything from infrastructure development to social services, yet symbolically America is considered the enemy. Regional allies, such as Venezuela, are preferred as its assistance is not tainted with markers of cultural imperialism (Figure 26).

OIL AND GAS

Bolivia is no longer in the era of the Incas or the Conquistadors or even the mining barons. Its people will not accept another round of exporting raw material that benefits the elite only. At the same time, Bolivia's newly elected government appreciates that foreign investment and expertise are important contributions to the development of the recent discoveries of natural gas in Bolivia. In the 1990s, Brazilian companies took a leading role in developing this industry in Bolivia.

Most of the natural gas is located in the eastern portion of country (Figure 24) whose residents are increasingly agitating for more autonomy from the central government. Many in western Bolivia note the irony that these same individuals were not calling for separation when the nation's wealth came from tin mines in the west. Newly elected President Morales has taken strong steps to guarantee that all Bolivians gain wealth from the natural gas resource. About six months into his administration, in May 2006, he took steps to nationalize the natural gas industry. These actions did not include whole scale confiscation. In the 1950s, when the Bolivian government assumed complete control over the tin and petroleum industries, these actions did not reduce poverty for the majority of Bolivians. Nor did the government know how to run these industries. Morales hoped to gain control of the natural gas industry without losing the expertise of the foreign companies. He gave these companies 180 days to propose revenue sharing plans that would allow them and their experts to stay. The current arrangement is that 50-80% of the profits would be given to Bolivia's state owned energy company.

This move reflects far more than just economic gain. It speaks to a new and much more comprehensive concept of Bolivian nationalism. While calls for national unity have been invoked in the past, they have been abandoned quickly once mass support was no longer necessary. As the country's first indigenous president, Morales hopes actions such as profit-sharing with foreign companies will promote pride as well as riches to benefit the poor of his country. One component of this new nationalism is a lessening of dependence on former allies, particularly the United States. In general, the US has seen its influence in Latin America wane, in part because of its own policies and in part because of the rise of Hugo Chavez in Venezuela who promotes an aggressive anti-American stance (Figure 26). Chavez provides Bolivia with much more than rhetoric. He uses his country's vast oil wealth to support his allies.

REGIONAL ISSUES

Bolivia's relationship with the other nations of Latin America has a long and complex history. Initially, much of South America was under Spanish control (Figure 4). With independence in the early 19th century, came many opportunities for cooperation and conflict for each of these new countries. The first issue that had to be resolved was boundary disputes. Even the creation of Bolivia as a distinct country was subject to debate and there were moments when it looked as if it might be divided among neighboring countries such as Peru, Chile and Brazil (Figure 11). Even with its sovereignty established, disputes over borders persist to this day. Each nation erected protective tariffs, retarding economic development necessary for growth and stability. Likewise, common concerns such as transportation suffered in the wake of national divisions. All of these ongoing issues continue to undermine Bolivia's economic growth and political stability.

At various times, Bolivia's leaders made attempts to combat these problems, but their efforts often complicated the issues. In the 1870s, the government hoped to exact taxes from the many Chileans who lived in Bolivia's coastal region (Figure 14). When these revenues were not forthcoming, Bolivia declared war on Chile. The defeat led to Bolivia's loss of its access to the sea, a severe blow to its ability to conduct international trade (Figure 16). Likewise in the 1930s, a border dispute with Paraguay over the Chaco region (Figure 18) led to full-scale war in which Bolivia lost this oil rich region <(Figure 21a). Current President Morales has garnered much support for his efforts to try to reclaim access to the Pacific.

The nations of South America (Figure 26) currently share economic and diplomatic concerns yet also exist in competition with one another. They do support each other's economies when it is for their own benefit. Brazil has invested heavily in Bolivia's natural gas industry. Efforts to see common interests are evident in organizations such as MERCOSUR, established in 1991 as a South American common market. Recent tensions have developed concerning the future direction of this group. Brazil and Argentina promote economic integration, open markets and free trade. Venezuela, with Bolivia's backing, wants to pursue a more anti-imperialist (read anti-American) and socialist agenda. Likewise, this body has also promoted "Democracy", not allowing full voting membership to nations with military rulers. Venezuela's president, Hugo Chavez, has been given a virtual carte blanche by his government, and does not see internal politics as an obstacle to full participation in the regional body.

Venezuela looms large in Bolivian affairs. Despite all of Chavez's anti-American rhetoric, he still recognizes the importance of the United States to his country's economic success. The U. S. continues to be Venezuela's most important trading partner and largest consumer of its goods. Trade between the two countries has risen 36% in the last year. This reality has not stopped Chavez from very visibly supporting Bolivia in its efforts to minimize the influence the United States. Venezuela supports Bolivia's burgeoning natural gas industry and Chavez has promised to provide direct assistance if Morales' threats to nationalize this industry result in foreign companies leaving Bolivia. He has also supported Bolivia's right to set prices for natural gas. Chavez has sent troops into the western portion of Bolivia to help subdue Bolivians that resent some of Morales' more left wing policies. Venezuela provides only a fraction of Bolivia's foreign aid but receives the public accolade and appreciation denied to the United States who has invested much more in the country.

FURTHER RESEARCH AND DISCUSSION
  1. What has Bolivia gained or lost from its connection to other nations?
  2. How has Bolivia affected these foreign powers as well?
  3. Why is there resentment towards the United States despite the vast amount of financial assistance it has provided?
  4. How have changes within Bolivia in the last decade affected its relationship to other nations?
  5. How did foreign conquest reinforce internal divisions within Bolivia?
  6. How do centuries of foreign exploitation explain the current attitudes among South American countries?
RESOURCES FOR THIS ARTICLE
  • Feroro, Juan. "Leaders Discuss Bolivian Energy Takeover." The New York Times. May 5, 2006.
  • ______. "U.S. Aid Can't Win Bolivia's Love as New Suitors Emerge." The New York Times. May 14, 2006.
  • Klein, Herbert S. A Concise History of Bolivia. Cambridge: Cambridge University Press, 2006.
  • Library of Congress Website: A Country Study: Bolivia http://lcweb2.loc.gov/frd/cs/botoc.html
  • Rohter, Larry. "Venezuela Wants Trade Group to Embrace Anti-Imperialism." The New York Times. January 19, 2007.
  • Surowiecki, James. "Synergy with the Devil." The New Yorker. January 8, 2007.
Norman B. Leventhal Map Center (http://maps.bpl.org)