President Morales continued nationalisation of energy sector: announced takeover of natural gas sector 1 May, giving foreign-owned companies 6 months to negotiate new contracts or leave; ordered foreign financial firms to cede control over pension fund effectively granting government oversight in 3 large companies. Morales and Venezuelan President Chavez signed 200 far-reaching economic and cultural accords.

Government expelled Brazilian steel company in Puerto Suarez, ending power struggle between Morales administration, which said company had broken foreign ownership rules, and local interests that wanted plant to stay open: locals had kidnapped 3 ministers in protest. String of labour strikes continued, raising fears of deeper social protests. President Morales increased control over energy industry with new regulation granting government power to set prices and export volumes. Morales signed trade pact with Cuba and Venezuela, seen as alternative to trade deals with U.S.

U.S. State Dept. report voiced concern over increased political influence from coca growing organisations. Chile rejected President Morales’ call for OAS session on Bolivia’s right to access sea. Explosions at 2 La Paz hotels killed 2, 21 March; American and Uruguayan arrested in connection but as yet no clear motive.

President Morales threatened protests if congress refused talks on rewriting constitution and continued push towards nationalisation of natural gas industry. Morales controversially re-elected as leader of largest coca farmers union despite indicating would step down from post; later met with U.S. ambassador to discuss drugs issue.

Evo Morales inaugurated as president 22 January after landslide December electoral victory. Morales appointed predominantly indigenous, socialist cabinet; removed 28 generals from security forces. New hydrocarbons minister Andres Soliz Rada signalled tough stance toward multinational energy companies. Morales invited U.S. to build alliance against drug trafficking but repeated defence of coca cultivation.

Evo Morales won historic victory in 18 December presidential election. First round poll, described by observers as “free and fair”, gave Morales over required 50% of vote to become Bolivia’s first indigenous head of state; turnout high. Morales’ party Movement Toward Socialism won 65 of 157 seats in Lower House and Senate; will need to form alliances to pass new legislation.

Interim President Rodriguez settled long-standing dispute over distribution of parliamentary seats by basing rules on latest census; set election for 18 December. Organisation of American States to oversee poll. Energy minister resigned after failing to renegotiate international oil contracts in line with new hydrocarbons law.

Political uncertainty increased after electoral commission suspended December elections amid tensions over redistribution of parliamentary seats. Parliamentary groups and regional leaders met 31 October to try to resolve crisis; Presidential candidate Morales threatened protests if solution not found quickly.

Student and opposition protests continued in build-up to December elections. Controversial court ruling redistributing parliament seats may delay poll and affect presidential favourite Evo Morales’ campaign, who earlier pledged to legalise coca cultivation. Police sent to remove Landless Campesinos Movement in Santa Cruz and Pando.

Finance Minister Luis Carlos Jemio resigned over comments he made in Washington linking top opposition figure Evo Morales to Cuban and Venezuelan leaders. U.S. Sec. Defense Donald Rumsfeld made similar comments, saying Castro and Chavez involved in Bolivia in “unhelpful ways”. Morales candidate in 4 December presidential election and played key role in indigenous protests that led to July resignation of President Carlos Mesa. Yungas coca farmers opposing establishment of police post controlling coca trade announced new round of road blockades.