Mr Morales faces many political challenges

When Bolivia's President Evo Morales addresses a crowd, it is as if he is punching the air with each sentence.

He makes no effort to hide his emotions.

The day we meet, he is pledging half of his monthly salary - $950 - to help Peru's earthquake victims.

Cynics will say this latest action is an attempt to divert attention away from political discord at home.

But Mr Morales, Bolivia's first indigenous president, says he is used to such attacks.

"The way I see it, it's impossible to change things without encountering resistance," he shrugs.

Reclaiming resources

Mr Morales is wearing a black wool jacket with a strip of traditional embroidery.

His thick, shiny fringe slumps over tired eyes.

It's impossible to change things without encountering resistance Evo Morales

We are in a long hall, furnished with gilded mirrors and lavish dressers, in the presidential palace.

Just over 18 months ago, he was on the outside shouting and blocking streets to get heard.

Now, he is hammering away at a controversial programme of social change from the inside.

Within months of his taking up office, he put the energy industry under state control - foreign firms were given six months to sell at least 51% of their holding and negotiate new contracts, or leave.

Nationalisation sent tremors through the energy sector, but Mr Morales insists it is making Bolivia richer.

Many of the president's supporters come from the indigenous poor

"We are starting a process of decolonisation in Bolivia," he says. "All this is bringing about change and we will continue."

But for the country to profit from its rich oil and mineral reserves, it needs to attract foreign investment.

Analysts say poor infrastructure and Mr Morales's radical policies have deterred investors.

Even he admits the first year was disappointing, in terms of securing foreign investment, but he says Bolivia will have attracted more than $4bn of investment by the end of this year.

He is putting pressure on gas companies already operating in Bolivia to bring forward their investment plans.

"I am not saying we will expel a company from the country," he says.

"They may carry on working, but as the owners of the natural resources, we will have to recover what is needed to deliver the investment the company should have delivered."

Tackling drugs

Mr Morales is hardly your average politician, having spent years defending the traditional use of the coca leaf at a grass-roots level.

Opponents back the capital's move to Sucre

These days, he fights for coca on a diplomatic front, pushing for a change in international law so that Bolivia can export traditional coca products.

Mr Morales says Bolivia is eradicating its illegal coca plantations, but that the international community could do more in the fight against drugs.

"If the law is harsh on the coca leaf, why isn't it harsh on consumers of cocaine?" he asks.

"Governments must face up to the problem of secret banking," he says, hands outstretched.

"Secret bank accounts are for laundering dirty money. Heads of state at the UN should put an end them. That would be the best way of tracking down the drugs traffickers."

Regional relationships

When the president talks about Bolivia's relationship with Cuba and Venezuela, his face lights up. These are the friends, helping his country to develop.

When we get it wrong, we get it wrong. Who doesn't get it wrong? Evo Morales

"Cuba has installed 11 optometry centres in Bolivia, they have operated on more than 120,000 patients for free," he says leaning forward.

"What has Cuba asked of us; ownership of a mining centre, or partnership in oil? No, nothing."

When asked if he is his replacing what he calls "North American imperialism" with Venezuelan imperialism, Mr Morales retorts:

"Venezuela helps without imposing conditions. Our relationship is based on mutual respect between governments, countries and communities."

According to Mr Morales, this is what is lacking from the US.

"Right from the start, they said this little Indian is only going to be president for three or four months," he says.

"That day passed and now they say this little Indian is going to be here for a long time, we have to do something about it; and that means encouraging confusion or destabilisation."

'Honesty'

The destabilisation he refers to is a regional campaign to move the executive and legislative branches of power from La Paz to Sucre, making Sucre the sole capital.

The issue has caused gridlock in the assembly set up by Mr Morales to draft a new constitution.

There have been hunger strikes and mass demonstrations, and with eastern and southern regions now supporting the move to Sucre, the country seems more divided than ever.

Is the assembly in jeopardy? "I have a lot of hope for the Constituent Assembly," Mr Morales says.

"If it fails, if it closes, it will be exactly because of the people who do not want the rules changed, who do not want a cultural revolution, or to lose their privileges."

Bolivia's president has been sitting next to me for 45 minutes. Speaking in a soft voice, he has defended his record and criticised his opponents.

"When we get it wrong, we get it wrong. Who doesn't get it wrong?" he says.