SummaryThis article reviews the plight of Bolivia, Latin America's poorest country, and a major production center for the coca leaf and cocaine. Amidst Bolivia's worst economic crisis of the century, the illicit cocaine business during the 1980s has generated much needed foreign exchange along with income and employment for tens of thousands of poor farmers and traders. These economic benefits have been accompanied by a long list of social ills ranging from corruption and drug abuse to decreasing food production and superfluous consumption. Solutions to the drug related problems present Bolivia with a difficult dilemma between economic survival and societal well‐being. Moreover, effective opposition to coca leaf eradication programs comes from well organized peasant unions tied closely to the national labor movement. Genuine developmental solutions must provide attractive prices for alternate crops via preferential export markets in the U.S. and Western Europ