Following success of August referendum, President Carlos Mesa sent congress 14-part hydrocarbon bill including proposals to force renegotiation of existing privately held oil leases, increase royalties, create new oil regulator; to be debated 5 October.

Protests by landless farmers and transport workers against government energy and land distribution policies continued, despite 18 July referendum results in favour of President Mesa’s policies. Bolivia and Peru signed agreement on energy integration 4 August, allowing Bolivia access through Peruvian port of Ilo for gas exports.

In boost for government, Bolivians unequivocally backed President Mesa’s 18 July referendum proposals to increase state control over Bolivia’s gas reserves and allow exports. Voters ignored calls to burn ballots from radical indigenous leaders who wanted total nationalisation of reserves. Results showed average 58% support rate for Mesa’s proposals.

Continuing protests against government plans to export natural gas and cut spending. Two died in 1 June clashes between protesters and security forces. Vice minister of education Celestino Choque abducted for 6 hours in La Paz by striking teachers. Ayo Ayo town mayor, accused of corruption, kidnapped, tortured and killed by residents 15 June. Movement of the Landless and inhabitants of Ayo Ayo set up road blocks and announced establishment of “independent government of the new historic state”. Government commission sent to region unable to regain control.

Future of President Mesa remains inextricably linked to controversial plans to export Bolivian gas: referendum on issue set for 18 July. Situation in capital La Paz extremely volatile with almost daily marches, demonstrations.

Government plans to export natural gas causing significant unrest. President Carlos Mesa reshuffled cabinet 13 April to strengthen support base. Some 20,000 protesters demanded his resignation in demonstrations in capital La Paz 22 April, just 6 months after last president toppled. Trade unions threatened continued protests. Referendum to be held in May on direct election of currently appointed governors in effort to respond to demands for greater decentralisation, and 18 July on plans to export gas.

President Carlos Mesa announced series of public rallies at home and abroad calling for Chile to grant landlocked Bolivia corridor to sea. Parliamentarian and coca farmers’ leader Evo Morales withdrew support from Mesa and called for demonstrations against government. Leading trade union called for national elections within 6 months. Miner blew himself up at National Congress building 30 March in protest over pension; 2 security guards also killed.

Alleged coup plot to take over legislative assembly broken up by authorities late January, made public early February. Government’s U.S. backed campaign to eradicate coca leaf continues to cause unrest among growers. Car bomb killed government prosecutor with reputation for fighting drug operations 27 February.

President of landlocked Bolivia called on Chile to hand over strip of coastline seized in 1879-83 war – President of Chile had previously offered economic corridor but refused to discuss land transfer. U.S. increasingly concerned about stability of Bolivia, called for more aid from international community to support economic reform.

Country stable after October riots and resignation of President Sanchez de Lozada. UN Secretary General Kofi Annan pledged greater UN attention to region, following visit to Bolivia. Latin American neighbours also pledged assistance.