Civilization in the Bolivian Andes is thought to stretch back some 21,000 years. The most influential Pre-Columbian cultures were the Tiahuanaco, who were based around Lake Titicaca and who ruled the region between 600-1200 AD, and the Incas, who headed a vast empire comprising most of Peru, Bolivia, Ecuador and northern Chile.
The Spanish conquest of the country began in 1531 under Francisco Pizarro. The conquistadors made rapid progress, exploiting the trust (and later the disunity) of the Indians to secure the territory that within two years became known as Alto Peru. In 1544, deposits of silver were discovered at Potosí. The wealth generated by this find underwrote the Spanish economy (and the extravagance of its monarchs) for more than two centuries. However, conditions for the mine workers were appalling, with most of the enslaved Indians and Africans dying within a few years.
The process of achieving independence from the profligate Spanish administration finally came in the form of Simón Bolivar's lieutenant Antonio José de Sucre, in the battle of Ayacucho in 1824. Bolivia was formally declared a republic the following year.
Bolivia's territory had always been coveted by its neighbors, encompassing as it did over 2 million square kilometers (780,000 sq mi). Chile's desire for more land first bore fruit in the War of the Pacific, which it fought with Bolivia between 1879 and 1884. Chile triumphed, securing 850km (527mi) of coastline and robbing Bolivia of the port of Antofagasta, leaving the country landlocked. Soon after, Peru, Brazil and Argentina also began hacking away at Bolivia's borders. In 1932, a border dispute with Paraguay in the Chaco region over oil deposits stripped Bolivia of further land. The ensuing Chaco War (1932-35) also served to foment civil unrest within the country, promulgating reformist associations and leading to a series of coups by reform-minded military leaders.
Perhaps the most significant development during this time was the formation of the populist Movimiento Nacionalista Revolucionario (MNR). In 1951, the MNR, under the leadership of Víctor Paz Estenssoro, prevailed in the general elections but was stymied by a last-minute coup. The coup provoked a popular armed revolt which became known as the April Revolution of 1952. The military was subsequently defeated and Paz Estenssoro was brought back.
In 1964, a military junta headed by General René Barrientos overthrew the MNR. Military regimes subsequently came and went with monotonous regularity until the election of the leftist civilian Movimiento de la Izquierda Revolucionaria (MIR) under Dr Hernán Siles Zuazo in 1982. Three years later Zuazo was defeated by Paz Estenssoro, who immediately sought to curb the stratospheric inflation levels (at one point reaching 35,000% annually) and implemented austerity measures. The current president, Jorge Quiroga Ramírez, was promoted from the vice presidency in August 2001 after Hugo Banzer Suarez of the AND resigned.
Bolivia is currently vying to strengthen its regional links and is a supporter of a South American common market. It's reputation as a cocain-producing country in the early 1990s hurt relations with the US, the hemisphere's 800lb gorilla. This strained relationship exacerbated a severe recession that peaked in 1999 with a record 20% unemployment. While inflation has been reduced to around 4% annually, the country's history of economic instability still deters overseas investors. Bolivia's main structural problem is the huge gulf that seperates this divided society, half immersed in the world of 20th-century business and half who remain subsistent peasants.
