Mr Paz's chief rival at the next election will be Gonzalo Sanchez de Lozada, who as president from 1993 to 1997 pushed through liberal reform.

ECONOMIST: Bolivia��s gender-bending politicians

But in the capital La Paz's main square on independence day, bands played the national anthem, veterans marched in their old uniforms and supporters cheered for the president.

NPR: Bolivian Referendum Reveals Sharp Divisions

La Paz's pre-eminent status in Bolivia is increasingly at risk: nowadays, most foreign companies choose to set up in Santa Cruz, a business-friendly city in the eastern lowlands.

ECONOMIST: Bolivia: Local misrule | The