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There are a number of factors that have contributed to Bolivia being the poorest of all South
American countries. Most of these problems can be traced back to the early 1980's during a time of
government mismanagement, high inflation rates, record unemployment, and severe drought.
Although this economic crisis hurt Bolivia's industrial and agricultural sectors pretty badly, one
industry flourished during this time - the coca trade.
Coca was the only profitable small farmer crop. A high demand for the drug in the U.S. and
Europe coupled with a disorganized political state allowed for the "coca boom"of the mid 1980's.
Between 1980 and 1986, the production of coca grew by about 35% annually. That is, until the U.S.
sponsored the eradication of this illegal narcotic which was used in 80% of the worlds' cocaine
production at its peak. This was a huge blow to the Bolivian economy, especially the peasant classes
(Wikipedia).
A second major blow to the Bolivian......

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