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The bitter political struggle in Bolivia is paralyzing the government as unrest grows over the economic crisis
LA PAZ, Bolivia (AP) — Protesters stormed Bolivia’s capital, their throats hoarse from singing and their feet blistered from a week of walking along the national highway.
The throngs of street vendors from the South American country’s vast informal workforce ended their nearly 100-kilometer (60-mile) march from Bolivia’s mountainous plains with a call that has sparked years of growing anger over the country’s dangerously depleted foreign exchange reserves: “We want dollars!”
With prices rising, dollars scarce and lines snaking at gas stations without fuel, protests in Bolivia have intensified due to the precipitous decline in the economy of one of the continent’s countries. faster growth two decades ago for one of his hardest hit by the crisis today.
“We can change the country because we are the engine of production,” said Roberto Ríos Ibáñez, secretary general of the Bolivian Confederation of Merchants, as tired protesters stopped for lunch around them in the capital’s congested center. “The government doesn’t listen. That’s why we’re on the streets.”
FILE – Merchants shout slogans during an anti-government march against banks’ lack of U.S. dollars, in La Paz, Bolivia, June 17, 2024. (AP Photo/Juan Karita, File)
Bolivia’s financial quagmire results, at least in part, from an unprecedented split at the highest levels of the ruling party.
President Luís Arce and his former ally, leftist icon and former president Evo Moralesare fighting for the future of Bolivia’s fragmented Movement for Socialism, known by its Spanish acronym MAS, ahead of the 2025 elections.
The political struggle has paralyzed the government’s efforts to deal with growing economic despair and analysts warn that the social unrest could explode in the historically turbulent nation of 12 million people.
Cracks in the governing party opened in 2019when Morales, then Bolivia’s first indigenous president, ran for an unconstitutional third term. He won a contested vote plagued by allegations of fraud, triggering mass protests which caused 36 deaths and led Morales to resign and flee the country.
After one interim government took control in which BUT called a scamMorales’ chosen successor, Arce, won the election in a campaign promise to restore prosperity to Bolivia, once Latin America’s main source of natural gas.
FILE – A stencil graffiti of former president Evo Morales adorns a peeling wall in La Paz, Bolivia, June 14, 2024. (AP Photo/Juan Karita, File)
FILE – Supporters of Bolivian President Luis Arce hold signs that say in Spanish: “Lucho, you are not alone” during a pro-government march, in La Paz, Bolivia, June 17, 2024. (AP Photo/Juan Karita, Archive )
Arce was finance minister under Morales, who oversaw years of strong growth and low inflation, but upon assuming the presidency in 2020, he found a grim economic situation. reckoning with the coronavirus pandemic. The decline in gas production sealed the end of Bolivia’s budget-destroying economic model.
Still very popular among Bolivia’s indigenous communities, coca growers and unionized workers, Morales saw an opportunity. After returning from exilethe charismatic populist last year announced plans to run in the 2025 elections — putting himself on a collision course with Arce, who is expected to seek re-election.
“Bolivia has an indigenous majority and people will instinctively support someone like Morales based on what he represents,” said Diego von Vacano, an expert on Bolivian politics at Texas A&M University and a former informal adviser to Arce. “Now they have the pressure factor, the lack of success of the Arce administration.”
Earlier this month, Morales drew tens of thousands of loyalists to Cochabamba, southeast of La Paz, galvanizing his rural stronghold.
“We are going to win the elections and we are going to save Bolivia,” shouted a triumphant Morales in a stadium full of enthusiastic supporters waving wiphalas, the brightly colored checkerboards to represent the many peoples of Bolivia.
FILE – Supporters of Bolivian President Luis Arce wave Wiphala flags during an event marking the 29th anniversary of the ruling party, Movement to Socialism, MAS, in La Paz, Bolivia, March 28, 2024. (AP Photo/Juan Karita, Archive)
Arce disputes the legitimacy of Morales’ campaign, arguing that a 2023 constitutional court ruling prevents him from running.
Legal experts say it’s not so clear.
“We saw both politicians manipulate the courts to decide political issues that have great influence on the Constitution,” said Eduardo Rodríguez Veltzé, a Bolivian judge who served as president in 2005-2006.
Morales, who proclaimed in his speech that “we follow the rules,” threatened to trigger mass unrest if he is disqualified from running.
However, with the liquidity crisis preventing access to dollars to pay suppliers abroad, Bolivian traders produced extraordinary scenes on the border with Brazil and Peru, clamoring to buy North American currency at inflated prices in neighboring countries.
When to change stores in La Paz dried up last yearBolivians waited in line all night outside the Central Bank to withdraw hard currency.
It’s a stark contrast to Bolivia’s boom at the turn of the 21st century. Driven by a windfall of export earnings, the Morales government pulled the poverty rate down for 15%, it expanded the middle class and built cities and extensive roads.
The problems began in 2014, when raw material prices fell and the government turned to its foreign exchange reserves to support spending. He then resorted to his gold reserves and even sold his dollar bonds locally.
“We ate the savings and now we are scraping the pot,” said Gonzalo Chávez, professor of economics at the Catholic University of Bolivia.
FILE – Pedestrians walk past a currency exchange office in La Paz, Bolivia, June 12, 2024. (AP Photo/Juan Karita, File)
With the government shelling out $2 billion a year to import heavily subsidized gasoline in an effort to quell public discontent, the squeeze has tightened. Ratings agency Fitch in February downgraded Bolivia’s debt further into junk territory, giving it a CCC rating.
And the fight for MAS is getting worse economic problems.
Morales’ allies in Bolivia’s Congress have consistently thwarted Arce’s attempts to take on debt that would ease the pressure. Bolivia is sitting on a treasure trove of lithiumbut lawmakers won’t give Arce approval to allow foreign companies to extract it.
Arce calls the impasse an “economic boycott” aimed at subverting his presidency.
Seeking to assuage investors’ fears, the Minister of Finance, Marcelo Montenegro, denies that there is a crisis. But the long lines of frustrated drivers outside gas stations suggest otherwise. In recent days, angry truck drivers have blocked roads and burned tires.
“Arce has dismantled our social organizations while abandoning management of the economy,” said Jorge Cucho, an indigenous leader and activist. “Prices have increased by 70 percent. Our salaries are no longer enough to go to the market.”
The tensions that plague the MAS offer Bolivia opposition their first real opportunity to come to power since Morales won an unprecedented electoral majority in 2005. Centrist and conservative politicians entered the field. But the opposition is fractured and its legitimacy is at stake, with dozens of its politicians behind bars.
FILE – Senator Simona Quispe, center, of the ruling Movement for Socialism or MAS party, attends a meeting of lawmakers with former President Evo Morales, in La Paz, Bolivia, March 5, 2024. (AP Photo/Juan Karita, File)
“The opposition now has many more opportunities because of the division,” said Fernando Mayorga, a sociologist at the Bolivian public university in Cochabamba. “So far, we have seen no signs that it can act on them.”
Bolivians who are outraged by Morales but disappointed by Arce say the country is at a dangerous crossroads.
“People are sleeping,” said Ibáñez, the union leader. “Soon they will start to get up.”
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DeBre reported from Buenos Aires, Argentina.