In the early 2000s there were high levels of political instability across the country, including five Presidents in four years. Much of the instability dates back to the economic reforms otherwise known as "shock therapy" implemented by President Gonzalo Sánchez de Lozada whereby many formerly public utilities were privatized. These reforms ultimately lead to the First Bolivian Gas War in October 2003 where protesters, many of them of indigenous descent, essentially forced the resignation of Sánchez de Lozada. Carlos Mesa temporarily served as interim President. In his year in office, Mesa held a national referendum on the prospect of the nationalization of the hydrocarbons industry which he claimed to have won. Critics however said that the questions were vague and ambiguous with regard to outright nationalization of the hydrocarbons industry. In May 2005 the Second Bolivian Gas War began after Congress agreed to raise taxes on foreign companies from 18% to 32%. The unions, led by Evo Morales, felt the law did not go far enough and effectively shut down the country, blockading major roads and cutting off the food supplies of several large cities. In June 2005 the protests ultimately led to Mesa's resignation. Supreme Court Chief JusticeEduardo Rodríguez assumed the position of President of the Republic after the presidents of both the Senate and Chamber of Deputies declined the position and Rodríguez was fourth in line of succession. Viewed as an apolitical figure, Rodríguez was welcomed by protesters and called for the presidential elections slated to take place in 2007 to be brought forward to December 2005.
Electoral system
Voters had two ballots; a national-level ballot to elect the President and the nationally-elected members of Congress, and one for members of Congress elected in single-member constituencies in the Chamber of Deputies. Senators and Deputies were returned on a departmental basis; Senators were elected on a majoritarian basis, with the first-place party receiving two and the second-place party one, while deputies were elected on a mixed-member basis, with district deputies joining list deputies awarded by compensatory proportional representation. However, there was no national distribution of seats. Voting was compulsory for all Bolivians over the age of 18, but Bolivians living abroad were not able to take part.
Results
Aftermath
Morales claimed his victory marked Bolivia's first election of an indigenous head of state, but this claim generated controversy, due to the number of mestizo presidents who came before him, and was challenged publicly by such figures as Mario Vargas Llosa, who accused Morales of fomenting racial divisions in an increasingly mestizo Latin America.
