The Republic of Bolivia is a landlocked republic in the Andes, whose recent war against Paraguay cost much of the budget for the next decade. Faith in the republic is at an all-time low as the mineral export-based economy struggles to recover. It borders Brazil to the Northeast, Paraguay to the Southeast, Argentina to the south, Chile to the Southwest and Peru to the Northwest
Since her formation, Bolivia has not fared well in terms of her foreign policy, suffering many painful losses. A border conflict with Chile led to the ‘Saltpetre War’ (1879 – 1883), where Bolivia lost despite an alliance with Peru and ended with the nation being forced to cede the coastal province of Antofagasta, losing its access to the sea. In 1903 Brazil and Bolivia signed the Treaty of Petróplis, ceding the important rubber producing province Acre to Brazil.
While Bolivia's mining wealth increased, so did the influence of mining companies in the government, and their capacity to influence policy. Most of the population now believes that the Chaco War was the doing of said corporate meddling in public affairs. The apocalyptic defeat at the hands of Paraguay was a crushing blow; despite fleeting glory in a few victories that prolonged the war, Bolivia was defeated thoroughly, and Paraguay only sued for peace at Brazil's and Peru's request, both fearing a full collapse of the Bolivian state.
Considering Bolivia's status as the instigator of the war in the disputed territory, the punishment was severe: the Chaco to the east of the Parapeti river, north of the Pilcomayo and east of the Andes was to be ceded to Paraguay in its entirety and in perpetuity; its oil wealth forever in foreign hands. In addition, war reparations were imposed by Paraguay in the treaty negotiations, and as such Bolivia's government put itself in a deeply chaotic situation, of which it cannot easily detach itself from.
The corrupt civilian government was quickly blamed for the humiliation, as many generals and officers publicly decrying interference from the president Daniel Salamanca and his liberal allies. Germáb Busch and David Toro, two decorated war heroes, couped the government in early 1934 and established a ''Government of National Salvation'' with a broad base of support, but no defined ideology other than seeing the needs of the army met, adjusting the fiscal mess left by the war and attempting to improve the situation of the poor in the cities. The entrenched elites of Bolivia plan from next move, and the popularity of the Junta already wanes as 1936 arrives and little has changed despite its extensive constitutional prerogatives.
As a military junta, the state of politics is in flux, as the Busch Regime lacks any ideological background rather than 'Saving Bolivia from Thieves', Its populist rhetoric was immenely popular during the first two years of this Junta, but as time passes, staunch opposition from both worker groups and mining oligarchs see that Busch's efforts are mostly in vain in the domestic front. This situation would rapidly escalate out of control in the case of a serious economic shock
While foreign aid was requested in the post Weltkrieg period, few if any foreign officers bothered with the offers of the Bolivian state. Despite having possession of planes and even a few tanks, the Bolivian officers were unused to these tools and could not use them in the adverse Chaco terrain.
Since it never really admitted the loss of its coastline in the Saltpetre War, Bolivia still has a navy, with a hierarchy and admiralty. Bolivia's navy consists of Patrol Boats that roam Lake Titicaca.
The Bolivian Airforce was completely destroyed in the desperate defence of the Parapeti line in the Chaco War, and Bolivia's skies are currently undefended.
- Abysmal relations with Chile and Paraguay
- Cordial relations with Argentin and Brazil
- Good relations with Uruguay and Peru
Bolivia's foreign policy has been one of the hard choices since its crushing defeat in the Chaco War. Fearing both Paraguay and the resurgent Syndicalist Chilean threat, Peru and Bolivia have intensified their ties, and have signed a mutual aid treaty in the case of a defensive war against Chilean aggression.
Manuel Carlés and the LPA Regime in Argentina have yet to pronounce themselves on Bolivia, but worried politicians believe that its a matter of time before they bring war back to South America. When that happens, many fear Bolivia may not be ready
Bolivia's economy is one based on mining since the time of the Spaniards. The Cerro Rico de Potosí may not have silver anymore, but the immense wealth by the Tin mines, and those of other minerals have led to the rise of powerful mining moguls, such as the Tin King Simon Patiño, whose company is based in Delaware, United States to avoid paying taxes. His aggressive policy of buying foreign mining companies, even German ones, makes him one of the wealthiest men alive.
Such immense wealth is contrasted to the great poverty of the native population of Bolivia, and tensions grew immensely all the way to the 1933 coup. However, the economy has not recovered as predicted with the new regime in place.
While great figures such as Alcides Arguedas, Franz Tamayo and Miguel de Unamuno have led a new era in Bolivian Literature, the widespread illiteracy and poverty of the country ensures that few know these names. A central point in the culture of Bolivia is the steep divide between Whites and Natives, and how, despite the centuries past since, it still resembles the Age of Colonial rule. After the crushing blow of the Chaco War, national morale both among élites and the common folk has plummeted, and fostering nationalism in this situation may prove impossible.