Following last year's election of socialist Evo Morales as the first President from the indigenous Amerindian community, Bolivia is in the midst of what could be a radical process of transformation. What is at stake is no less than the refounding of this country. The accumulation of grievances against the Bolivian state from indigenous communities, disadvantaged social groups and victims of the inherent corruption of the political and legal systems has led to a consensus that the state needs to start again from scratch - hence the election of a 255-member Constituency Assembly to write a new constitution for a new Bolivia. 
This has given rise to enormous expectations. The whole country is in effervescence. Political slogans are painted on almost every available bit of wall, often praising "Evo" whom, like Fidel Castro, everyone refers to by his first name. But it is also the last throw of the dice because if it fails it will signal a decline into chaos.
Bolivia is sometimes called the Tibet of South America with the bulk of its population living on the Altiplano at some 4000 metres (13,000 feet) above sea level. Yet much of the country is lowland on the edge of the Amazon basin. Bolivia is as big as France and Spain together, but with a population less than that of Belgium. It used to be bigger: in successive wars in the 19th century it lost territory to Brazil, Paraguay and above all, its coastline to Chile. The latter is, even now, a sore point. Bolivia still has no diplomatic relations with Chile and, absurdly, maintains a Ministry for the Navy, complete with Admirals, Captains and so on. It has a national Day of the Sea, when the "navy" parades and they mourn the loss of over 130 years ago!
That is not the only Gilbert & Sullivan aspect of the country. Indeed, if it only produced bananas, it would be the classical case of a banana republic. In the first 161 years of its independence up to 1985, there no fewer than 190 coups d'etat! Since then, it has democracy but not stability: there have been six presidents since the beginning of 2000 and there are a number of major internal conflicts all coming to a head: social tension between the impoverished working classes and a prosperous but small elite; tension between rural and urban areas; conflicts within the working class (not least between miners from state owned mines and those in mining co-operatives); a stand-off between the state and large petrochemical companies; and tensions between large-scale landowners and impoverished peasants; and powerful movements for autonomy to regions and to indigenous communities.
The first major action of the Morales government, which gained worldwide headlines, was on 1 May 2006, when he announced the re-nationalization of Bolivian hydrocarbon assets and sent troops to occupy fifty-six gas and oil refineries. A deadline of 180 days was announced, by which all foreign energy firms were required to sign new contracts giving Bolivia majority ownership and as much as 82% of revenues. By the deadline, all such firms signed new contracts. They were, however, a compromise in so far as it is the oil and gas which is nationalised, but the extraction equipment remains the property of the companies. They will therefore continue to exploit Bolivian oil and gas, but the take for the Bolivian state has increased immensely. This is quite a triumph for Morales, though there are many who warn that the whole episode will frighten off foreign investment.
But the main social tensions in recent months have been in the mines. The fabulously wealthy mine owners (Patino, etc) are now history, with most mines now either nationalised or run by workers co-operatives. However, the co-operative mines are those which the nationalised company no longer thought viable and there are also allegations that their leaders line their own pockets. Morales has proposed to nationalise all mines, but this has met with resistance from the co-operatives, or at least their leaders, with violent clashes.
Violence occurs regularly in many contexts. The massive working class suburb of El Alto, above La Paz, regularly erupts and blockades the rest of the town. Indeed, the blockading of roads is a traditional method of protest, from the working class suburbs of La Paz to remote villages which simply block the nearest main road if, they have a grievance.
Another economic, but also cultural, conflict is the issue of coca. Chewing coca leaves or drinking coca tea is legal here and in Peru, although banned throughout the rest of the world. In fact, a cup of coca tea is hardly more a drug than coffee, and is routinely offered, even in ministries. The problem is that it is also the raw material for producing cocaine. The previous President lost much support when, at the instigation of the USA, he tried to eradicate the growing of coca. Morales saw no reason why Bolivia should uproot its coca plants just because some westerners had begun to make cocaine from the leaves: cocaine, he argued, was totally alien to Bolivia's tradition. He argues that coca should be legalised throughout the world for tea, and then farmers would have an outlet for their product and not be tempted to sell to drug barons. In Morales' office there is a mosaic portrait of Che Guvara made entirely from coca leaves. Apparently, when the American Ambassador paid his first courtesy call on the President, Morales ensured this served as a doubly embarrassing backdrop for the official photograph!
The Morales government is indeed sometimes characterised as being ultra-left. Another description might be ultra-green. Part of the philosophy underpinning the assumption of power by the indigenous communities is a strong "return to nature " philosophy. At best this leads to strong Bolivian support for environmental measures such as rainforest protection and measures to combat climate change. Indeed, they will be one of the first victims of climate change as the Andean ice cap, which provides a steady flow of water throughout the summer, will have melted within the next 20 to 30 years.
But it can also be a somewhat mystical and quasi-religious approach that emerges. The Foreign Minister told me how his primary objective was to teach the rest of the world the concept of Pachamama- the earth goddess. He explained that socialism meant spiritual well-being for man and animal alike and that in their tradition even stones are considered to be living and even have gender (the interpreter said "sex" instead of "gender", which raised a few eyebrows as we puzzled through the concept of stones having sex!). Rather than studying Marx, Gramsci and Mao, they were re-discovering their "better" ancestral codes. Achieving a deeper understanding of the cosmos was also a priority. Harmony with nature also required all men to be married by the age of 25.
Morales himself, whilst charismatic, is more down to earth. He told us of his social motivations for entering politics, that his first Presidential decision was to cut his salary in half (and that of his ministers) and that rooting out corruption was an important part of his platform. He said that social conflict had diminished since he became President (in opposition, he could rally thousands of people to demonstrations - the current opposition could scarcely manage a couple of hundred!). Health care (with the help of Cuban doctors) and education (that very day saw the attainment of the first illiteracy-free village) are major priorities. He pointed out that he was the first President to have actually done his military service (the middle class usually buys its way out of military service), as a simple private, which he claimed gave him some respect from army generals (though he still found it strange to be their Commander in Chief, having not so long ago been a mere private in total awe of generals!) He was determined to press ahead with refounding Bolivia and bringing in reforms and hopes to persuade the opposition to accept the need for reforms in the Constituent Assembly. Indeed, he said there were signs of movement and willingness to compromise among some parts of the opposition. He was appreciative of the role of the European Union and warmly greeted the EU Ambassador who was with us - he was due to play in a charity football match with him the following Saturday!
But what makes the challenge of reforming Bolivia unique is the cultural and territorial conflict that comes on top of the social conflicts. Bolivia is the only South American country to have a majority indigenous (Amerindian) population. Some 30% of the population is Mestizo (mixed European and Amerindian), and around 15% is classified as white. The indigenous communities see the constituent assembly, to quote their own words, as the " re-foundation of Bolivia, building a new country founded on the peoples as collective subjects of a pluri-national state, which will transcend the liberal mono-cultural state founded on individual citizenship " which was " imposed by western culture which has marginalised and debilitated our original cultures and our political and legal systems ". What they are hoping for is a massive devolution of power to the indigenous communities, which would become almost sovereign entities within Bolivia, with autonomous legal systems based on their historic "customs and practice" and without appeal to the normal courts. Furthermore, they would elect their own officials (and judges), not by universal suffrage, but also according to their historic "customs and practice" - a concept that varies from one group to another and seems to be based either on rotation or on a system of elders or on elaborate consensus-forming mechanisms.
This, of course, scares the living daylights out of the urban middle classes and many others, who claim that indigenous justice amounts to no more than a lynch mob, and that autonomy based on indigenous peoples would divide the country along ethnic lines. To this, the indigenous communities reply that they have in practice always continued to apply their own legal systems in their own areas rather than rely on the sometimes distant and frequently corrupt Bolivian court system. Recent reports of people being executed are in fact extra judicial killings, violating their system (as do shootings in the cities). One compromise could be that individuals will have the right to choose whether or not to go through the indigenous justice system and there would be a right of appeal to a special chamber of the Supreme Court, at least on procedural or on human rights grounds.
As regards territory, detailed work has already delimitated the various areas where indigenous groups would take control: 29 such areas have been designated, covering 12 million hectares. Within those areas, land that has already been allocated to other forms of ownership, such as mines, certain farms, urban settlements etc, have been taken out. This leaves a map that look uncannily like the old "Bantustans" of apartheid South Africa. Of course, they are coming at it from a completely different angle, but what remains is in danger of being precisely the bits of land that nobody else has already claimed which would be left for the natives. Paradoxically, just as the indigenous groups have taken control of the Bolivian state, they appear to be using that power to retreat into what could resemble the "Indian reserves" of the USA.
Instead of devolution to indigenous communities, some want instead a territorial devolution to the regions ("Departments" as they are called). In a referendum two years ago, four of the nine Departments voted for devolution - they are the flat, lowland regions of the east where oil and gas is being developed and which see themselves as the economic driving force of Bolivia, held back by the highlands and by the bureaucracy of the central state. They are accused by their opponents of wanting the break-up of the country and independence which they themselves deny.
Santa Cruz leads the way on this. It is indeed a different world from highland Bolivia. The temperatures are tropical, the land is dead flat with cattle ranching and a few trees, lazy rivers make their way to the Amazon, tropical birds sing, and there is plenty of wide open space. Santa Cruz is the boom-town of Bolivia. It used to be a small, "frontier" town, but it now has 1 ½ million people. The growth is fuelled by the oil and gas industries and by the constant arrival of peasants abandoning the highlands to seek their fortune in the vast expanses of lowland east. Unfortunately, their clearances of the rain forest, and dealing with soils and temperatures of which they have no experience, often leads to ecological and economic disaster. They then drift to the city.
A combination of regional devolution and devolution to linguistic/ethnic communities simultaneously is, of course, not unknown (viz Belgium), but is highly complex. Opposing both are those who see the state as "one and indivisible" with equal, individual citizens (as in the French Republican model). All this echoes the debates about citizenship and communitarianism in other parts of the world.
Whether the Constituent Assembly - which is chaired by Sylvia Lacarte, an indigenous woman which is in itself a remarkable in a traditionally macho, white-dominated country - manages to find a compromise remains to be seen. Up until now it has focused mainly on its internal procedures, leaving just four months to draft the constitution before the August deadline laid down by law. The law also provides for a two-thirds majority to agree the constitution, but a row broke out on whether that means that each and every article needs a two-thirds majority while it is being drafted. Evo Morales's MAS has a majority, but not a two-thirds majority, in the Constituent Assembly. They have been pressing for the two-thirds majority to apply only to the final vote. This was resisted by all the opposition parties. In the end, there is a compromise such that any particular item that has an absolute majority but not a two-thirds majority will be put to a referendum. This leaves open the prospect of a referendum with a dozen or more questions. This might seem a nightmare scenario but I have a sneaking feeling that it will help concentrate the minds of both sides to reach compromises, as each side will have a pretty good idea (but no certainty) of who would win a referendum on any given point and they would therefore do better to negotiate a deal rather than lose entirely. It might just work.
An edited version of this article appeared in Tribune magazine on 27 April 2007.