Boundary Disputes By treaties made in 1866 and 1874 regarding the disputed Atacama Desert, famed for its rich nitrate fields, the 24th parallel of south latitude was adopted as the Chile-Bolivia boundary line in that region. In addition, various customs and mining concessions in Bolivian Atacama were granted to Chile. Disputes arose between the two countries over the latter provisions, and in 1879 Chile seized the Bolivian port of Antofagasta. In the resulting struggle, called the War of the Pacific, Bolivia and its ally Peru were defeated by Chile. Bolivia was stripped of its one seacoast possession, becoming a landlocked country. A treaty ratified in December 1904 recognized the perpetual dominion of Chile over the disputed territory but granted Bolivia free access to the sea. A dispute with Brazil concerning the possession of the Acre region was settled in 1903, by the cession of about 180,000 sq km (about 70,000 sq mi) to Brazil in return for a money indemnity and small territorial compensations elsewhere. The Bolivian government subsequently became involved in boundary disputes with Argentina, Peru, and Paraguay. A peaceful solution of the dispute with Argentina was reached in 1925. Peru and Bolivia settled disputes over the peninsula of Copacabana by appointing, in the 1930s, a joint commission to decide the border. The Paraguay-Bolivia boundary dispute arose over the Chaco Boreal, a low region lying north of the Pilcomayo River and west of the Paraguay River and extending to the undisputed boundary of Bolivia. Both Bolivia and Paraguay claimed the entire territory. In July 1932 an undeclared war broke out (see Chaco War). A peace treaty was signed in July 1938. In 1945 Bolivia became a founding member of the United Nations. Three years later it joined with other nations of the Americas in founding the Organization of American States. Bolivia has requested that both organizations consider its petition to regain a seaport on the Pacific Coast. Chile, opposing Bolivia's ambitions, declared Arica a free port in 1953 and granted Bolivia special customs and warehousing facilities.

Political Instability The period after 1930 was marked by further internal strife. In that year, President Hernando Siles, who had governed for two years without convening the national legislature, was overthrown in a revolution. Daniel Salamanca, elected president in 1931, was overthrown in 1934 by a clique under Vice President Tejada Sorzano, who in turn was ousted by a military junta led by Colonel David Toro. Toro was largely successful in his attempts to extricate the country from the desperate conditions resulting from the world depression and the Chaco conflict with Paraguay. He made enemies, however, in influential quarters, and in 1937 he was ousted by a group led by Lieutenant Colonel Germán Busch, chief of the general staff. In 1938, during Busch's second term as president, a new constitution was adopted. Busch abolished the new constitution in April 1939, however, and set up a totalitarian state. Four months later he was found dead of a bullet wound, an alleged suicide. General Carlos Quintanilla, who then assumed the presidency, restored the 1938 constitution and stated that the army would exercise control until new elections could be held. In 1940 General Enrique Peñaranda was elected president, and on April 7, 1943, during World War II, he declared war against the Axis powers. In December 1943, Peñaranda was ousted in a coup staged by the National Revolutionary Movement (Movimiento Nacionalista Revolucionario, or MNR), a reformist party that included pro-Axis sympathizers. The new government, headed by Lieutenant Colonel Gualberto Villarroel, was compelled by economic pressures to maintain good relations with the Allied powers. Villarroel headed a totalitarian regime until he was overthrown and killed in July 1946. The government continually faced opposition from both left and right, and after the discovery of a Communist plot early in 1950, the Communist Party was outlawed.

The Regime of Paz Estenssoro In May 1951, the exiled MNR leader Víctor Paz Estenssoro won nearly half the presidential election vote. Because no candidate had a clear majority of the vote, election of a president from among the three leading candidates fell to Congress. In order to prevent the election of Paz, the incumbent president, Harriaque Urriolagoitia, placed the government under the control of a military junta and resigned. General Hugo Ballivián was appointed president, but in April 1952 his government was overthrown by the MNR, and Paz Estenssoro returned from exile to assume the presidency. The Bolivian government embarked on a pro-labor, anti-Communist program, the key features of which were the nationalization of tin mines, the redistribution of land from expropriated estates, and the diversification of the economy. Throughout the 1950s and into the 1960s the Bolivian economy suffered from a steady drop in world tin prices and from inflation. The tin mines proved consistently unprofitable; government efforts to reduce the size of the force employed in the mines and to restrain wage increases met with resistance from the leftist unions. The Bolivian constitution prevented the reelection of Paz Estenssoro in 1956, but Vice President Hernán Siles Zuazo won election as the MNR candidate; the result of this election was a continuity of policy. Paz Estenssoro was reelected in 1960 and in the following year pressed for the adoption of a new constitution that extended the economic authority of the government and permitted the reelection of an incumbent president. Paz Estenssoro was reelected in 1964, but many of his earlier supporters left him, charging that the MNR was less reformist and more oppressive than it purported to be. Also, the government policies proved generally ineffective in meeting the existing economic problems. Paz Estenssoro was overthrown in November in the aftermath of an uprising by miners, and his government was succeeded by a military junta headed by his former vice president, Lieutenant General René Barrientos Ortuño.

Rule by the Army In the ensuing two years, the military government succeeded in instituting reforms in tin mining operations, including reopening the industry to private and foreign investment. Barrientos, who was elected to the presidency as a civilian in July 1966, was forced, however, to depend heavily on armed force to put down Communist-led guerrilla movements concentrated in the mountainous mining regions. The Bolivian army reportedly smashed the rebel forces in October 1967, in a pitched battle near the village of Vallegrande. Che Guevara, aide to Cuban Premier Fidel Castro, was captured in that encounter and executed shortly afterward. Barrientos was killed in the crash of a helicopter in April 1969 and a series of short-lived governments followed, most led by military men. General Juan José Torres Gonzáles was overthrown by Colonel Hugo Banzer Suárez in August 1971. The Banzer regime moved from a relatively moderate position to full military control in 1974. Banzer stepped down in 1978, pending restoration of civilian government, but elections in 1979 and 1980 were each followed by renewed military intervention. By 1982 the country's earnings from tin production had declined, and foreign debt continued to rise. The illegal export of cocaine was thriving, and the U.S. was pressing Bolivia to take decisive steps against the drug traffic. In October 1982 Hernán Siles Zuazo was installed as president; he faced several cabinet crises and was unable to resolve problems brought on by international banks. After an inconclusive popular election, Congress chose Víctor Paz Estenssoro as president in August 1985. His government's attempts to cut down coca production and the sale of cocaine, aided by a contingent of U.S. troops from July to November 1986, were only partially successful and very unpopular. Jaime Paz Zamora, who finished third in the popular election of May 1989, became president of Bolivia in August after winning a congressional runoff. The next presidential elections, held in June 1993, were won by mining entrepreneur Gonzalo Sánchez de Lozada. Sánchez de Lozada's vice president, Víctor Hugo Cárdenas, was the first Native American to hold such a high office in Bolivia. Sánchez de Lozada worked to implement a number of reforms intended to give more economic and political power to Bolivia's Native American majority. He oversaw a redistribution of the federal budget that boosted money for roads, schools, and water projects in largely native rural areas. The government also legalized native organizations and the practice of folk medicine, all of which had previously been outlawed. In addition, the government allowed bilingual education in Spanish and Native American dialects in schools that previously had been prohibited from teaching any language other than Spanish. As the government continued to work to promote a free market in Bolivia, it moved toward privatizing state oil holdings in 1995 and 1996. Bolivian labor activists responded by staging a series of strikes and protests calling for higher wages and the end of plans to privatize the oil industry. More than three weeks of civil disturbances in April 1995 by thousands of union workers and state employees prompted the government to arrest over 300 labor leaders and suspend constitutional rights so that the government could hold people without a trial. When the protest campaign resumed in 1996, the government deployed soldiers and police to protect refineries and pipeline facilities. .