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Last Updated: Friday, 10 June, 2005, 12:02 GMT 13:02 UK
Q&A: Bolivia in crisis
Students demonstrate in La Paz
The protests are thought to have cost the country millions of dollars
Bolivia is in the midst of a political crisis, with parts of the country paralysed by protests.

Demonstrators want the country's rich gas and oil reserves nationalised, and changes to the constitution.

President Carlos Mesa has stepped down, and the head of the Supreme Court, Eduardo Rodriguez, has been sworn in as interim leader.

Q: How has the crisis unfolded?

The protests were triggered on 16 May, when congress approved an increase in taxes on foreign gas companies.

The demonstrators, drawn mainly from Bolivia's indigenous majority and from left-wing groups, say the rises do not go far enough to stop oil and gas wealth flowing out of the country.

They are demanding the nationalisation of the country's considerable energy reserves, one of the few sources of wealth in a desperately poor nation.

They are also calling for the constitution to be rewritten to give more power to the impoverished indigenous people.

On 2 June, Mr Mesa, whose term was to have continued until 2007, made a concession by promising elections in October for an assembly to rewrite the constitution. Opposition leader Evo Morales rejected the plan, calling for immediate changes.

On 9 June, the dispute's first fatality was reported, when a miner protesting in Sucre was shot dead by the army.

The protests have brought the main city, La Paz, to a virtual standstill. Weeks of road blockades mean fuel supplies are almost exhausted and prices are rising. Some international flights have had to be cancelled.

After Mr Mesa's resignation , Mr Rodriguez was sworn in as interim leader, promising to call a presidential election soon.

Q: What is the background to the protests?

The country is in the throes of a fundamental and enduring clash over its political identity and direction.

Similar protests led to the popular overthrow of President Gonzalo Sanchez de Lozada in October 2003.

Since then, a kaleidoscope of different social groups has sprung up, with growing influence. These groups - representing indigenous people, farmers, left-wingers, miners, students, and poor Bolivians, among others - have many different preoccupations, some conflicting.

The mines at Potosi - whose silver for three centuries funded the Spanish

But there is general consensus that the political model in Bolivia has failed.

Analysts say that although Mr Mesa had good personal approval ratings, there are high levels of distrust of government.

Two decades of economic hardship and market-led reforms have enriched a small elite, but failed to deliver promised benefits to Bolivia's poor. Bolivia is South America's poorest country, with 30% of the population living on less than $1 a day.

The country's rich energy reserves have become a symbolic battleground in the struggle over Bolivia's future.

Many Bolivians feel that they are being denied the benefits of the country's natural resources, in a repeat of the "ransacking" of the country's resources after the Spanish conquest in the 16th century, typified by the story of the mines of Potosi.

Grassroots social movements have added to the debate, demanding the rewriting the constitution to increase indigenous rights and ensure more equitable distribution of wealth.

Q: Are there any signs of the crisis easing?

Now that the president has been temporarily replaced, elections must be called within six months.

Mr Rodriguez, a 49-year-old Harvard-educated lawyer, is seen as being independent of any of Bolivia's main political parties, which may give him a short breathing space as interim leader.

However, the president was never the main focus of the protesters' anger, and there is no sign of them backing down on their key demands for nationalisation and constitutional change.

Meanwhile, a powerful business elite - mostly of European descent - in the south-eastern city of Santa Cruz has been pushing for far greater regional autonomy and a bigger share of the region's gas and oil wealth.

Leaders there, where most of the country's gas is located, have pledged to hold a referendum on increased autonomy on 12 August - with or without the approval of central government, setting the stage for further conflicts in future.

Q: Is the nationalisation demand likely to be met?

There is strong support on the streets for nationalisation, but little backing in the current parliament.

Even the strongest left-wing party in parliament - the Movement Towards Socialism (MAS) - has stopped short of demanding nationalisation.

The new tariffs introduced by Mr Mesa - a 32% tax on oil and gas production on top of an existing 18% royalty - have the gas companies are up in arms.

Spain's Repsol has vowed to take legal action, which some commentators warn could cost the impoverished nation billions, though protesters have dismissed the threats as "intimidation".

There is concern that nationalisation could halt the flow of foreign investment and skills that are needed to further develop Bolivia's gas reserves, says the BBC's Mark Gregory.

And the IMF says nationalisation would actually be counter-productive, resulting in less investment, less revenue and thus greater poverty for most Bolivians.


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