Bolivia’s government considers irrigated agriculture as a major contributor to "better quality of life, rural and national development." After a period of social unrest caused by the privatization of water supply in Cochabamba and La Paz, the government of Evo Morales is undertaking a major institutional reform in the water resources management and particularly in the irrigation sector, aimed at: (i) including indigenous and rural communities in decision making, (ii) integrating technical and traditional knowledge on water resources management and irrigation, (iii) granting and registering water rights, (iv) increasing efficiency of irrigation infrastructure, (v) enhancing water quality, and (v) promoting necessary investment and financial sustainability in the sector. Bolivia is the first country in Latin America with a ministry dedicated exclusively to integrated water resources management: the Water Ministry. Impacts of irrigated agriculture on rural development Bolivia is one of the poorest countries in Latin America. In 2006 the annual income per capita reached to 1,153 dollars and almost 40% of the population lived in extreme poverty. In addition, Bolivia is one of the most unequal countries in the continent with a Gini coefficient of about 0.6 and 10% of the population obtaining over 40% of the total income and indigenous and rural populations in particular suffering the effects of social and economic marginalization. Real per capita income has barely changed over the past fifty years, while increasing in 350% in Brazil, 200% in Chile and 75% in Argentina. Poverty in rural areas stands at 83 percent, compared to 54 percent urban areas, and there is an even greater gap in terms of unsatisfied basic needs (91 percent versus 39 percent). Despite recent improvements in living conditions nationwide, benefits have continued to accrue disproportionately to urban areas. During the 2000-2004 period agriculture contributed an average of 14% to GDP and employed 40% of the population. However, in the rural area agriculture employs up to 80% of the population. In 2001, the agricultural sector generated US$432 million and 30% of national exports. According to the Irrigation Vice-Ministry, the agricultural sector in the eastern part of Bolivia generated US$2,160 million exporting soya, sunflower and sugarcane products. The agricultural sector of the western part of Bolivia is mostly focused on subsistence agriculture and local markets. In addition, frequent government changes over the last five years and social tensions have undermined progress in poverty reduction. The Government of President Morales—Bolivia’s first indigenous President—who came