Though rich in mineral and energy resources, Bolivia is one of South America's poorest countries. Wealthy urban elites, who are mostly of Spanish ancestry, have traditionally dominated political and economic life, whereas most Bolivians are low-income subsistence farmers, miners, small traders or artisans.
The country has the second-largest reserves of natural gas in South America, but there have been long-running tensions over the exploitation and export of the resource. Indigenous groups say the country should not relinquish control of the reserves, which they see as Bolivia's sole remaining natural resource.
AT A GLANCE
Politics: Differences over the exploitation of energy resources underlie recurring political crises; Evo Morales is the first indigenous president
Economy: Poverty is rife and there are regional disparities in wealth distribution; Mr Morales opposes free-trade policies and has tightened state control over the economy, nationalising the energy sector and key utilities
International: Mr Morales is a strong critic of the US, which in turn is concerned about Bolivian coca cultivation; Bolivia has close ties with communist Cuba and Venezuela's Hugo Chavez
Before President Evo Morales came to power the political fallout from the issue had helped to topple two presidents and had led to calls for regional autonomy, including in prosperous, oil-producing Santa Cruz.
In May 2006 President Morales delighted his supporters but sent shockwaves through the energy world when he put the energy industry under state control.
Bolivia underwent further radical change in January 2009, when voters backed President Morales' project for a new constitution that aimed to give greater rights to the indigenous majority population.
In the 1980s Bolivia experienced a deep economic recession. The tin market collapsed, with the loss of about 21,000 jobs, inflation was rampant and the national currency was in severe crisis.
While strict austerity measures, the introduction of a new currency and tax reform succeeded in curbing inflation and restoring foreign confidence, these policies also widened the already huge wealth gap and generated great social unrest.
Bolivia is one of the world's largest producers of coca, the raw material for cocaine. A crop-eradication programme, though easing the flow of conditional US aid, has incensed many of Bolivia's poorest farmers for whom coca is often the only source of income.
Socialist leader Evo Morales, a figurehead for Bolivia's coca farmers, was elected in 2005, in a major historical shift for his country. Describing himself as the candidate "of the most disdained and discriminated against", he was the first member of the indigenous majority to be elected president of Bolivia.
President Morales pledged to redistribute wealth to the poor
He was re-elected with a convincing majority over his conservative opponents in December 2009; his party also gained two-thirds majorities in both houses of parliament.
Mr Morales made poverty reduction, the redistribution of wealth, land reform favouring poorer peasants and public control over Bolivia's oil and gas resources his main priorities. He has nationalised much of the energy sector.
The president draws his support mainly from the poor indigenous majority, concentrated in the western highlands. Middle class voters and the eastern provinces, where most of the resource wealth lies, worry that his policies are too radical.
In 2009, voters overwhelmingly approved a new constitution drafted largely by Mr Morales' supporters, despite strong - and at times violent - opposition, mainly from in the eastern provinces.
The new basic law accords more rights to the indigenous majority, gives greater autonomy to the states and enshrines government control over key resources. It also allowed the president stand for a second five-year term in a row.
However, in 2011 Mr Morales' popularity plummeted after he scrapped fuel subsidies only to perform a U-turn in response to protests, pushed ahead with a controversial Amazon road project and was then accused of excessive force against indigenous demonstrators protesting against the plan - a charge he denies.
Voters punished Mr Morales in elections to choose Bolivia's top judges in October, with about 60% spoiling their ballots.
Himself a former coca farmer, Mr Morales defends the traditional uses of coca leaf among the indigenous population, as distinct from its use as the raw material for cocaine.
His promise to relax restrictions on growing coca irritated the US, which has bankrolled the fight against drugs in the country. In 2008, he ordered US drug enformcement officials to leave Bolivia.
He has also alarmed the US by forging strong links with Venezuela's left-wing firebrand president, Hugo Chavez.
Born in 1959, Evo Morales is an Aymara Indian from an impoverished family. In his youth he was a llama herder and a trumpet player. The former coca grower lost the 2002 presidential election to the conservative, Gonzalo Sanchez de Lozada.
He succeeded caretaker leader Eduardo Rodriguez, who took office in June 2005 when President Carlos Mesa resigned amid mass protests demanding the nationalisation of the energy sector.
Private newspapers and broadcasters dominate Bolivia's media landscape; their ownership is highly concentrated.
However, there has been a recent, rapid growth of state-owned media, including a network of community radios, says US-based Freedom House.
The organisation noted in 2011 that journalists are "caught up in a polarised political environment". It cited threats and attacks against news media.
Defamation remains a criminal offence. Concerns were raised over a 2010 anti-discrimination law. Its "far-reaching and vague" language would be used to curb and punish legitimate journalism, warned the Committee to Protect Journalists.
Newspaper readership is limited by low literacy. With hundreds of stations, radio is important, especially in rural areas.
Nearly two million Bolivians were using the internet by December 2011 (Internetworldstats.com). The platform has not faced official curbs.
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