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Bolivia, named after independence fighter Simon Bolivar, broke away from Spanish rule in 1825; much of its subsequent history has consisted of a series of nearly 200 coups and countercoups. Democratic civilian rule was established in 1982, but leaders have faced difficult problems of deep-seated poverty, social unrest, and illegal drug production.

Bolivia has been economically unstable for many years. In 1982, in an effort to re-gain economic stability, Bolivia attempted to decrease inflation rates by implementing free market and free trade. Bolivia signed a free trade agreement with Mexico, and became a member of Mercosur, a Latin American Trade Organization. They have also privatized state airlines, telephone companies, railroads, electric companies, and oil companies. All these factors helped to expand Bolivia's economy throughout the 1990s. However, political instability and Bolivia's lack of natural resources are still a source of major volatility. Bolivia's extensive unemployment issues result in poor domestic activity and, in turn, cause decreases in gross domestic product rates. Bolivia is one of the poorest and least developed countries in Latin America, and it is often predicted that without foreign aid, Bolivia will unlikely solve its economic problems.

In December 2005, Bolivians elected Movement Toward Socialism leader Evo Morales president - by the widest margin of any leader since the restoration of civilian rule in 1982 - after he ran on a promise to change the country's traditional political class and empower the nation's poor, indigenous majority. However, since taking office, his controversial strategies have exacerbated racial and economic tensions between the Amerindian populations of the Andean west and the non-indigenous communities of the eastern lowlands.

Morales, a left leaning leader has lashed out repeatedly at the Bush Administration and now at Obama too. The US, in response to what it says are weak attempts to control the cocaine trade, has reduced trade agreements which will cost exports in Bolivia and ultimately, jobs.