Bolivia and the United States: A Relationship in Transition?

This past November Bolivia and the United States brought to an end a three-year dispute set in motion when President Evo Morales expelled the U.S. ambassador on charges of conspiracy against his government.





   US Embassy in La Paz, Bolivia. Photo by Evan AbramsonThis past November Bolivia and the United States brought to an end a three-year dispute set in motion when President Evo Morales expelled the U.S. ambassador on charges of conspiracy against his government. With the MAS (Movimiento al Socialismo) administration now ostensibly welcoming the U.S. back, the question for many is what will be the nature of this renewed relationship. To begin to answer this question, it is important to first understand the roots of the diplomatic breakdown.


The 2008 dispute, which also included the expulsion of the U.S. Drug Enforcement Agency (DEA) and the suspension of various USAID (Agency for International Development) programs, has been commonly described as part of an escalating conflict with a secessionist movement that by all appearances was receiving support from the U.S. Embassy in La Paz. While this is correct in a narrow sense, more broadly the expulsion of the United States from Bolivia had to do with the events of 100 years as much as it had to do with one. For most of the last century, U.S. intervention in Bolivia has been detrimental to the country’s national autonomy and economic security.



It began with natural resources: the discovery of massive tin deposits in Bolivia just before 1900. For the first time the U.S. took a sustained interest in the country, with several banks lending to government and private interests to develop the infrastructure necessary to export the increasingly coveted tin. When expansion slowed and loan repayments fell behind, these same banks gave more loans (on more onerous terms) for the government to repay the interest owed. This same pattern of spiraling debt to U.S. creditors would become all too common over the next century. Meanwhile, Simón Patiño, a member of Bolivia’s famed rosca (a group of mining oligarchs who dominated the national economy for decades), moved most of his assets to the U.S. state of Delaware[1] to avoid paying taxes.


Soon after, oil was discovered and John D. Rockefeller’s Standard Oil Company started purchasing assets and politicians, making enemies and eventually playing a role in the lead-up to Bolivia’s devastating 1932 war against neighbor Paraguay. After Bolivia’s defeat, a nationalist government expropriated Standard and the two countries became enemies until just before World War II, when the U.S. realized it was going to need a lot more tin to fight the Nazis.



After the war the U.S. disavowed a number of promises made to Bolivia and the countries became enemies again until several years after the Bolivian National Revolution of 1952. With the Andean country confronting a severe economic crisis[2] with widespread food shortages, the U.S. reappeared to offer assistance in exchange for greater control over economic policy. 12 years later Bolivia had the highest per capita dependence on U.S. assistance of any country in the world, and its revolutionary government was gone, replaced by a military dictator educated in and receiving open support from, you guessed it, the United States.


U.S. assistance did not, however, bring prosperity, and in what Bolivian historian Sergio Almaraz Paz referred to as a complex game of alternating capitulation and defense, the country gradually ceded more and more control over policy to U.S. military and IMF technocrats. What followed was a period of stagnant economic growth with alternating military dictatorships and weak democratic governments, punctuated by regular coups and economic crises of increasing severity. By 1985 Bolivia was ravaged by political instability, suffering one of the highest inflation rates in world history, and increasingly named as an example of a failed state by politicians and pundits alike. The United States again returned with an offer of assistance, this time in exchange for the reformulation of its economy and still-nascent democracy along neoliberal lines.



In the following years, Bolivia’s mining proletariat – vanguard of the 1952 revolution – was dismantled, the country’s state apparatus was greatly reduced, and large segments of national industry were privatized. The short-term inflationary crisis subsided, but macroeconomic growth quickly waned and wealth concentration accelerated while the majority of the country’s population languished. Displaced workers and hungry families gravitated toward the country’s fastest growing industry: the cultivation of the coca plant for export to Colombia to produce cocaine for eventual consumption in the United States and Europe. In response, the U.S. further developed its already close ties with the Bolivian military to include the violent militarization of anti-coca efforts.


Evo Morales and the MAS party emerged from this context. Morales himself was a coca union leader whose life had been threatened by U.S.-led anti-coca task forces. The federation of unions that he came to lead was one of a number of groups that emerged in the 1990s to lead social movements in protest against U.S.-style neoliberalism. MAS’s eventual consolidation as an opposition political party included rhetoric that effectively linked the United States and the national elite together as a common enemy to the interests of most Bolivians. In the weeks before the 2002 presidential election, U.S. Ambassador Rocha publicly threatened that a Morales victory would lead to withdrawal of U.S. aid. In a public repudiation of this brazenly open attempt to buy the national election, the Morales vote, expected to be around 5% only weeks before the election, jumped to nearly 21%. This late surge brought him within 2 percentage points of the eventual winner and prompted Morales’ well-known tongue-in-cheek remark that Rocha had acted as his campaign manager and that he would have compensated him for his services if he had any money.



When in 2008 the MAS government came under threat from the same elites it had finally displaced in 2005, it was not a stretch for Morales to believe that the United States was again in the shadows, propping up its preferred political leaders. In this way, the decision to expel the ambassador and other agents of U.S. influence arose not only from the events of the past months or years, but from decades of varied interventions that had intimately shaped the social movements and opposition politics emerging in the first years of the 21st century. For MAS, the expulsion was a very natural extension of the politics that had brought it to power.


Much as this history of U.S. involvement in Bolivia is fundamental in understanding the deterioration of relations in 2008, so too is it important in analyzing the potential significance of the so-called framework agreement (acuerdo marco) that the two countries signed this past November 7th.



The acuerdo marco opens by asserting that it is based on the principle of mutual respect for national sovereignty. Points of the agreement refer to non-intervention in opposing internal affairs, the rights of the states to elect their own political, economic and social systems, respect for human rights, and the peaceful resolution to all disputes. The agreement calls for greater cooperation between the two states, particularly in the areas of development assistance, trade, and counter-narcotics efforts. Furthermore, the agreement creates in principle a joint committee to oversee and approve all further actions involving the two countries, particularly mentioning the allocation of U.S. aid.


Considered in the context of the relationship’s history, the agreement’s largely theoretical language conveys a very concrete message: any further interactions between the two countries will be based on principles of equality, respect, and fair treatment. Afterward, Deputy Foreign Minister of Bolivia Juan Carlos Alurralde rightly pointed out that this is the first bilateral agreement with the U.S. since 1951 to move beyond technical cooperation to include broader issues of political dialogue and shared responsibility. The very ability of Bolivia to establish a framework based on its own view of the relationship’s history – as opposed to the various U.S.-dominated issues of resource extraction, debt repayment, communism or the war on drugs – indicates a first step in reversing a decades-long dynamic of intervention, dependency, and domination.



The countries’ first interactions under this new framework have also given reason for tentative optimism. In late January Bolivia signed an antinarcotics accord jointly with the U.S. and Brazil. Including the fast-emerging South American power in this process was a first and portends well for more explicit attempts to counter the United States’ historic domination of the issue. The agreement itself appears much more aligned with MAS’s favored “social control” approach to anti-coca efforts than it does with past U.S. policies of militarization.


However, there are still reasons to be concerned about the durability of this newfound parity. First, the acuerdo marco stops short of explaining how the joint review committee will be formed or managed, or how the other points of cooperation will be implemented. Considering the many Trojan horses the U.S. has presented Bolivia over the years, it would be wise to pay attention to the details of how these principles are respected over time. United States influence in Bolivia remains strong, particularly within the military and through the unilateral dollar diplomacy practiced by USAID and the legion of NGOs it supports. As they have so many times before, these existing relationships could be used to reactivate the dynamic that defined U.S.-Bolivian relations over much of the past hundred years.



Indeed, one needs only to review the relationship’s long history to recognize the possibility of a backslide in this changing power dynamic. It is not by accident that in several discussions by this author with U.S. Embassy and USAID officials in La Paz, Morales was repeatedly compared with Víctor Paz Estenssoro: hero of the 1952 revolution, president during Bolivia’s most precipitous loss of national autonomy vis-à-vis the United States, and eventual architect of the country’s neoliberal “New Economic Policy” in 1985. The message is that Morales too can be swayed, and with Bolivia still suffering from a number of its historic economic weaknesses[3], it would be foolish to discount the return to a relationship of greater dependency and lesser national autonomy.


As always, the best antidote to this danger is to keep history’s lessons alive in the minds of an engaged citizenry. In Bolivia the social movements that led the country’s recent political shift will be crucial in keeping its government away from that slippery slope of assistance, dependency, and reduced economic security.



Ethan Earle recently completed his Master’s degree at FLACSO-Argentina, writing his thesis on the history of U.S.-Bolivian relations. He is also the U.S. Director of The Working World, an organization that manages a revolving loan fund to support democratic worker cooperatives. He can be reached at



[1] In a pattern that would also be much repeated throughout the 20th century by U.S. corporations, though that’s another story.

[2] This crisis had a number of short- and long-term domestic and international causes, the scope of which is too great for this article. For a detailed analysis, see Almaraz Paz (1969) or Dunkerley (1984), among others.

[3] Including lack of industrialization and related infrastructure, over-dependence on the exportation of raw materials, and a weak position in international finance markets.