Bolivia’s economic turmoil fuels distrust in government and its claim of a failed coup

In Bolivia, a severe economic crisis has left many citizens struggling, including shoe shop owner Victor Vargas in La Paz. The crisis is primarily due to a long-standing dependence on the U.S. dollar, a shortage of which has led to a black market and skyrocketing prices. This economic downturn has been further aggravated by political instability, particularly the ongoing feud between President Luis Arce and his former ally, former President Evo Morales, ahead of next year’s presidential election.

President Arce denies that Bolivia is in an economic crisis, claiming that the country’s economy is growing. However, this assertion is contradicted by both economists and numerous Bolivians. The deep distrust in Arce’s leadership has been exacerbated by a recent incident that was labeled a “failed coup d’etat” by the government and a “self-coup” by opponents, including Morales.

The economic crisis in Bolivia is rooted in a complex combination of factors, including dependence on the dollar, draining international reserves, mounting debt, and failures to produce key products like gas, once the Andean nation’s economic boon. This has transformed Bolivia into an import-dependent economy, as described by economist Gonzalo Chávez from Bolivia’s Catholic University.

The shortage of dollars has led to inflated prices for essential goods, pushing working-class people deeper into poverty. People like Pascuala Quispe, a 46-year-old woman searching for dollars to buy car parts, have been affected. Gouged prices have made it difficult for people to afford basic necessities like shoes, meat, and clothing.

President Arce maintains that Bolivia’s economy is one of the most stable and claims to be taking action to address problems such as dollar shortages and gasoline shortages. He also emphasizes the government’s efforts to industrialize and invest in new economies like tourism and lithium, a high-value metal key to transitioning to a green economy. However, these long-term investments may not provide immediate relief for Bolivians struggling with inflation and unstable work conditions.

The political spats between Arce and Morales have fueled waves of protests and strikes, causing further economic hardship for citizens like Vargas, whose business has been affected by the chaos of ubiquitous protests. Morales, who still wields significant power in Bolivia, has blocked Arce’s government from passing measures in Congress to ease the economic turmoil, which Arce describes as a “political attack.”

The political instability and economic crisis have left many Bolivians disillusioned and seeking alternatives. Some, like truck driver Edwin Cruz, are considering voting for outsiders, as seen in neighboring Argentina with the rise of self-described “anarcho-capitalist” Javier Milei.

For Victor Vargas, the future of his family’s shoe store is uncertain. Once a source of pride, the shop has become a financial burden. His children, who want to leave Bolivia, are unlikely to take over the business. “They don’t want to live here anymore,” Vargas laments. “Here in Bolivia, there’s no future.”

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