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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.”
___
DeBre reported from Buenos Aires, Argentina.
The spotlight next week will shift somewhat to the Federal Reserve’s second-quarter earnings season and monetary policy. Market watchers will be treated to results from several major names, including Dow 30 components Goldman Sachs (GS), UnitedHealth (UNH), Johnson & Johnson (JNJ) and American Express (AXP), along with streaming giant Netflix (NFLX).
The Fed will still attract some attention as investors will be eager to hear from a packed lineup of central bank speakers just before the policy meeting lockout period.
In terms of the economic calendar, after fifteen days of labor market and inflation indicators, activity data will gain momentum in the form of the latest retail sales and industrial production reports.
Earnings Highlight: Monday, July 15 – Goldman Sachs (GS) and BlackRock (Black). See the full earnings calendar.
Earnings Highlight: Tuesday, July 16 – UnitedHealth (UNH), Bank of America (BAC), Progressive (PGR), Morgan Stanley (IN), PNC Financial (PNC) and JB Hunt Transport (JBHT). See the full earnings calendar.
Earnings Highlight: Wednesday, July 17 – Johnson & Johnson (JNJ), US Bancorp (USB), Morgan Children (KMI), United Airlines (UAL) and Ally Financial (ALLY). See the full earnings calendar.
Earnings Highlight: Thursday, July 18 – Netflix (NFLX), Abbott Laboratories (ABT), Black stone (BX), Domino’s pizza (ZDP) and Taiwan Semiconductor Manufacturing (TSM). See the full earnings calendar.
Earnings Highlight: Friday, July 19 – American Express (AXP), Halliburton (THANKS) and Travelers (VRT (return to recoverable value)) See the full earnings calendar.
IPO Observation: Hospital and healthcare clinic operator Ardent Health Partners (TARDT), insurance service provider Twfg (TWFG) and the biotechnology company Lirum Therapeutics (LRTX) are expected to price their IPOs and begin trading next week. The analyst quiet period ends at Rectitude (RECT) to free up analysts to publish ratings.
Police cars outside the residence of Thomas Matthew Crooks, the suspected shooter at a Trump rally on Saturday, investigate the area in Pennsylvania. Following the incident, one rally attendee was killed, two rally attendees are in critical condition and Donald Trump suffered a non-fatal gunshot wound. The shooter is dead after being shot dead by the United States Secret Service. (Photo by Kyle Mazza/Anadolu via Getty Images)
Investors will initially favor traditional safe-haven assets and may lean toward trades more closely tied to former President Donald Trump’s chances of winning the White House after he survived an assassination attempt, according to market watchers.
“There will undoubtedly be some protectionist or safe-haven flows into Asia early this morning,” said Nick Twidale, chief market analyst at ATFX Global Markets. “I suspect gold could test all-time highs, we’ll see the yen being bought and the dollar, and flows into Treasuries as well.”
Early market commentary suggested Trump’s shooting at a rally in Pennsylvania on Saturday could also prompt traders to increase his likelihood of success in the November election. His support for looser fiscal policy and higher tariffs is generally seen as likely to benefit the dollar and weaken Treasuries.
An indicator of market sentiment heading into the weekend: Bitcoin surged above $60,000, likely reflecting Trump’s pro-crypto stance.
Other assets positively linked to the so-called Trump trade include stocks of energy companies, private prisons, credit card companies and health insurers.
Traders will also be closely watching market measures of expected volatility on Monday, such as those in the tariff-sensitive Chinese yuan and Mexican peso, which have begun to price in the U.S. vote.
Trump said he was shot in the right ear after a shooting at his rally. His campaign said in a statement that he was “fine” after the incident, which prompted him to rush off the stage.
“Currencies will be the first major market on Monday in Asia to react to the weekend’s shots. There’s potential for extra volatility, and getting a clear reading could be especially difficult because liquidity will be hurt by Japan’s national holiday,” said Garfield Reynolds, Asia team leader for Bloomberg Markets Live.
Strategists had already expected a volatile run-up to the election, particularly as Democrats are still agonizing over President Joe Biden’s candidacy after his poor performance in last month’s debate raised questions about his age. Investors were also grappling with the possibility that the election could end in a drawn-out dispute or political violence.
But there is little precedent for events like those in Pennsylvania. When President Ronald Reagan was shot four decades ago, the stock market plunged before closing early. The next day, March 31, 1981, the S&P 500 rose more than 1% and benchmark 10-year Treasury yields fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
Bond investors should pay particular attention as the attack is likely to boost Trump’s election chances and ultimately lead to concerns about the fiscal outlook, according to Marko Papic, chief strategist at California-based BCA Research Inc.
“The bond market must at some point become aware of President Trump’s greater chances of winning the White House than any of his rivals,” Papic wrote. “And I continue to believe that as his chances increase, so too must the likelihood of a bond market revolt.”
Kyle Rodda, senior financial markets analyst at Capital.com, said he was seeing client flows into Bitcoin and gold following the shooting.
“This news marks a turning point in American policy norms,” he said. “For markets, it means safe-haven trades, but more tilted toward non-traditional safe-havens.”
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Jio Financial share price: Should you buy this Reliance group stock on Monday ahead of Q1 FY2024 results?
Q1 2024 Results: Jio Financial Share Price will be in focus on Monday as the Reliance Group company has a fixed board meeting on July 15, 2024 to consider and approve the company’s unaudited standalone and consolidated financial results. Trust Group company informed about the Q1 2024 Results date on Wednesday last week via an exchange filing. According to stock market experts, Jio Financial Services Limited is poised to deliver impressive Q1 results for FY25 on solid operating income. They have forecast a healthy QoQ PAT for the company in Q1 FY25.
Jio Financial Services News
Speaking on the Jio Financial Services Q1 2024 results, Manish Chowdhury, Head of Research, StoxBox, said, “We believe Jio Financial Services is poised to deliver impressive results in Q1FY25 aided by its operating income, which is likely to show robust growth driven by strong investment income, which in turn should lead to healthy PAT growth on a sequential basis. Jio Financial Services continues to make strategic moves such as launching digital products and expanding its ecosystem, with a clear focus on future growth. The company has announced plans to introduce products for lending against stocks and mutual funds, leveraging Jio’s large user base, which could be a significant growth driver in the coming quarters.”
“Furthermore, with the NBFC receiving RBI approval to become a primary investment company, Jio Financial Services is well-positioned to unlock value from its investments. Overall, we expect the company to report robust numbers in the upcoming quarter,” the StoxBox expert added.
Jio Financial Stock Target Price
Speaking about the technical outlook of Jio Financial share price, Ganesh Dongre, Senior Manager, Technical Research at Anand Rathi, said, “Jio Financial Services share price is poised to make a fresh high at the ₹260 apiece level. If the stock breaks above this mark, the Reliance Group stock could make a fresh high by touching the ₹290-₹295 zone. Hence, those with Jio Finance stock in their portfolio are advised to stick to the script by keeping a stop loss at ₹205. If the stock breaks above ₹260 decisively, then one can upgrade the stop loss at ₹240 for the near-term target of ₹295.”
On the advice to new buyers regarding Jio Financial stock, Ganesh Dongre said, “New buyers are advised to wait for the breakout. Once the stock breaks above ₹260, one can buy this Reliance Group stock at the short term target of ₹295, keeping a stop loss of ₹240 apiece.”
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. Investors are advised to consult with certified experts before making any investment decisions.
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