While its largest city, La Paz, is the highest capital city in the world (11,800 feet above sea level), Bolivia has one of the lowest standards of living in South America. Since winning independence from Spain in 1825, Bolivia has suffered through over 190 failed governments, with the average government lasting less than a year. The unstable political system has not done much to help the people of Bolivia, leaving over 60 percent of the population in poverty. A history of racism has allowed the descendents of former Spanish colonists to become the wealthiest people in Bolivia while leaving many of the indigenous people and mestizos (over 80 percent of the population together) in poverty. This economic inequality has only increased the racial tension between citizens of European decent and indigenous communities.
In 2005, Bolivia elected Evo Morales, the country's first indigenous president, who has promised to bring social justice to Bolivia and end discrimination. Most of the indigenous population lives in rural, isolated areas of the country where they have little access to basic services such as health care or education. In the cities they face racism. The fact that many speak languages other than Spanish makes it difficult to attend school and obtain higher paying skilled jobs. Thus, most indigenous Bolivians continue to work as subsistence farmers, traders, artisans, or miners - all jobs that currently pay very little and offer little opportunity for advancement.
In addition to facing discrimination and lack of economic opportunity, indigenous people in Bolivia have recently found themselves caught in the middle of the war on drugs. Bolivia is the third largest producer of coca in the world (after Colombia and Peru). Although coca can be consumed legally in Bolivia for reasons such as curing headaches, curbing hunger, or for use in religious ceremonies, the plant is also used to make the illegal drug, cocaine. To stop cocaine production and drug trafficking, Bolivia has been pressured by governments from around the world, particularly the US, to destroy its coca farms. Many indigenous groups have refused to stop growing coca because it is part of their heritage and because, in some cases, it is the best way to earn a living. To support indigenous people, President Morales, a former coca union leader, has promised to allow coca growing while standing firm against cocaine production. In some areas of the country, organizations are assisting communities with the transition away from coca production by providing agricultural and work alternatives such as the production of arts and crafts.
For a great overview of the current situation in Bolvia, check out this video interview with the Washington Office on Latin America (WOLA) and the Institute for Policy Studies. Its about an hour long, but is very informative.