VP Alvaro Garcia and President Morales have been in power since 2006
By James Painter
BBC Latin America analyst
President Evo Morales seems set to push ahead with the implementation of a new constitution to place indigenous peoples at the heart of Bolivia's government and society after his victory in Sunday's presidential election.
A poor result for the opposition suggests an easier passage for social reforms and a lessening of demands for secession by departments traditionally opposed to Mr Morales, according to analysts.
Preliminary results say that Mr Morales, an Aymara Indian and Bolivia's first indigenous president, won at least 61% of the vote, easily defeating his conservative opponents.
That is a higher percentage than he won in 2005 when he was elected for his first mandate.
If his victory is confirmed, it would also be the first time in Bolivia since 1964 that an incumbent president has won a second term - an unusual event in a country often synonymous with military coups and political instability.
The key electoral battleground was for seats in the new Plurinational Legislative Assembly. In the previous Senate, the opposition had a small majority which allowed them to block new legislation.
Under the new constitution which was ratified in a referendum last year, the method of electing senators has changed.
Exit polls suggest that Mr Morales's party, the Movement to Socialism (MAS), has won at least 24 seats in the new 36-seat senate, which would give him a two-thirds majority.
However, it is unclear if the MAS has won enough seats in the new Chamber of Deputies to win a similar majority and ensure an easy passage for the 100-plus laws necessary to fully implement a new constitution.
Final official results will be known later this week.
The preliminary results suggest that the MAS has increased its vote in the wealthier eastern departments, where the opposition to President Morales has traditionally been based.
Morales made gains even in the opposition bastion of Santa Cruz state
In the Santa Cruz department for example, exit polls suggest that Mr Morales' party increased its vote to 40% from 33% in 2005.
In Tarija, Beni and Pando, MAS also improved its vote significantly.
According to Oxford Analytica, a research organisation, the degree of support in these areas "means that the prospect of secession is ever more remote".
In 2007 and 2008 there was considerable speculation that Santa Cruz and other departments might break away from the highland, more indigenous, departments where support for Mr Morales is overwhelming.
John Crabtree of Oxford University says the improved performance of the MAS was due in part to the priority the party gave to Santa Cruz in its campaigning.
"Another element was the lessening of the climate of fear amongst the migrant population there," Mr Crabtree says. "It also helped MAS that the opposition was divided and had lacklustre candidates."
President Morales is expected to make the implementation of the new constitution his main legislative priority at the start of his second term.
Amongst the most important changes envisaged are:
- More indigenous rights and more indigenous participation in politics
- A reworking of the judiciary, whereby indigenous systems of justice will enjoy the same status as the official existing system; judges will be elected, and no longer appointed by congress
- Power decentralised into four levels of autonomy - departmental, regional, municipal and indigenous
The key to Mr Morales' success has been his appeal to the 65% of the population who define themselves as indigenous and who see him as "one of theirs".
They have also been the recipients of increased social spending boosted by high international prices for hydrocarbons, and more taxes on foreign oil and gas companies.
Cash payments have been made to poor families to encourage school attendance.
Extra pension payments have been to the elderly, and pre-natal and post-natal care bas been extended to mothers without health protection.
Morales has vowed to deepen reforms focused on Indian power
Some estimates suggest that the payments reached a quarter of Bolivia's 10 million people this year.
According to recent analysis by the Washington-based Center for Economic and Policy Research (CEPR), government revenue has increased by almost 20% of GDP since 2004.
The Morales government has spent massively in recent months to counteract the effect of the global recession.
CEPR says that from a fiscal surplus of 5% of GDP in early 2008 (worth several billion dollars), recent government spending meant this became a fiscal deficit in 2009.
The Bolivian economy is set to grow this year by between 2.5% and 3.5%, one of the highest anywhere in the Americas.
The IMF's director of Western hemisphere countries, Nicolas Eyzaguirre, has praised the Morales government for what he called its "very responsible" macroeconomic policies.
More state intervention?
Morales supporters say that the greater state control of the oil and gas sectors helped to boost government income.
His critics say that state intervention may work well for redistributing income, but not for encouraging investment, technical and managerial expertise and the eradication of corruption.
Government ministers say they want to attract foreign investment into new areas like the development of Bolivia's large deposits of lithium and iron ore.
"We want partners, not patrons" is the oft-repeated slogan.
"One priority for the coming years is industrialisation," says Mr Crabtree, "by which the government means adding value to raw materials by processing them."
Analysts say one key test will be whether the queue of foreign companies interested in developing Bolivia's huge reserves of lithium will turn into a concrete deal between a private company and the state.
Lithium is seen as critical for developing a new generation of battery-driven cars.