OVERVIEW

Though rich in mineral and energy resources, Bolivia is one of South America's poorest countries. Wealthy urban elites, who are mostly of Spanish ancestry, have traditionally dominated political and economic life, whereas most Bolivians are low-income subsistence farmers, miners, small traders or artisans.

AT-A-GLANCE

Politics: Differences over the exploitation of energy resources underlie recurring political crises; Evo Morales is the first indigenous president Economy: Poverty is rife and there are regional disparities in wealth distribution; Mr Morales opposes free-trade policies and has nationalised the energy sector International: Mr Morales is a strong critic of the US, which in turn is concerned about Bolivian coca cultivation; Bolivia has close ties with communist Cuba and Venezuela's Hugo Chavez

The country has the second-largest reserves of natural gas in South America, but there have been long-running tensions over the exploitation and export of the resource. Indigenous groups say the country should not relinquish control of the reserves, which they see as Bolivia's sole remaining natural resource.

Before President Evo Morales came to power the political fallout from the issue had helped to topple two presidents and had led to calls for regional autonomy, including in prosperous, oil-producing Santa Cruz.

In May 2006 President Morales delighted his supporters but sent shockwaves through the energy world when he put the energy industry under state control. Foreign energy firms were given six months to sell at least 51% of their holding to the state and negotiate new contracts or leave the country.

In the 1980s Bolivia went into a deep economic recession. The tin market collapsed, with the loss of about 21,000 jobs, inflation was rampant and the national currency was in severe crisis.

While strict austerity measures, the introduction of a new currency and tax reform succeeded in curbing inflation and restoring foreign confidence, these policies also widened the already huge wealth gap and generated great social unrest.

Bolivia is one of the world's largest producers of coca, the raw material for cocaine. A crop-eradication programme, though easing the flow of conditional US aid, has incensed many of Bolivia's poorest farmers for whom coca is often the only source of income.

FACTS

Full name: Republic of Bolivia Population: 9.1 million (UN, 2005) Capital: Sucre (official), La Paz (administrative) Largest city: Santa Cruz Area: 1.1 million sq km (424,164 sq miles) Major languages: Spanish, Quechua, Aymara, Guarani Major religion: Christianity Life expectancy: 62 years (men), 66 years (women) (UN) Monetary unit: 1 boliviano = 100 centavos Main exports: Soyabeans, natural gas, zinc, gold, silver, lead, tin, antimony, wood, sugar GNI per capita: US$1,010 (World Bank, 2006) Internet domain: .bo International dialling code: +591

LEADERS

President: Evo Morales

Socialist leader Evo Morales, a figurehead for Bolivia's coca farmers, won presidential elections in December 2005, the first indigenous Bolivian to do so. He described himself as the candidate "of the most disdained and discriminated against".

Indigenous leader Evo Morales defends traditional uses of coca leaf

His victory was decisive; he surpassed the figure needed to take office without the need for a vote in Congress. Much of his support came from Bolivia's indigenous majority.

A few months later, in June 2006, he claimed victory in elections for a new assembly which will rewrite the constitution. He has campaigned for a new constitution to enshrine the party's nationalisation and land redistribution programme.

The president inherited a political tinderbox; street protests over the control of energy reserves had unseated two of his predecessors since 2003. He said he wanted to bring the benefits of the nation's resources to the people.

Mr Morales has already nationalised much of the energy sector. In January 2007 he marked his first year in office with a speech promising further radical measures to help redistribute wealth.

He pledged to raise taxes on foreign mining firms and re-distribute one-fifth of Bolivia's land to peasant farmers. Observers say his government faces growing opposition in the gas and oil producing regions in the east, where many worry that the changes will frighten away foreign investors. But some protesters in the south-east say nationalisation has not gone far enough.

Political soul mates: Morales and Venezuela's Hugo Chavez (left)

His policies in other areas too look set to inflame opinion. In particular, a promise to relax restrictions on growing coca, the raw material for cocaine, could make him a thorn in the side of the US, which has bankrolled the fight against drugs in the country.

Mr Morales defends the traditional uses of the coca leaf among the indigenous population. His government wants to exploit commercial and medicinal uses for the leaves.

Born in 1959, Evo Morales is an Aymara Indian from an impoverished family. In his youth he was a llama herder and a trumpet player. The former coca grower lost the 2002 presidential election to the conservative, Gonzalo Sanchez de Lozada.

He is an admirer of two Latin American populist firebrands - Cuba's Fidel Castro and Venezuela's Hugo Chavez.

He succeeded caretaker leader Eduardo Rodriguez, who took office in June 2005 when President Carlos Mesa resigned amid mass protests demanding the nationalisation of the energy sector.

Foreign minister: David Choquehuanca Interior minister: Alfredo Rada Finance minister: Luis Alberto Arce Hydrocarbons minister: Andres Soliz Rada

Source: BBC news http://news.bbc.co.uk/2/hi/americas/country_profiles/1210487.stm