Bolivia, in an election year
By: Irving Alcaraz - 11/08/2025
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The informal economy in Bolivia reaches 85 percent, the highest in the world according to some sources. This is the foundation that sustains the vast majority of Bolivians, including, most likely, you. Multidimensional poverty (measured not only by income) rises to 61.2 percent. In the cities, the percentages are as follows: Potosí (68 percent), Santa Cruz (66.1 percent), El Alto (65.5 percent), Trinidad (63.9 percent), Oruro (62 percent), Cochabamba (56 percent), La Paz (50.7 percent). (Data from the Center for Labor and Agrarian Development, CEDLA). Cobija is not listed, or we were unable to find it. Note that Santa Cruz and El Alto, the most dynamic cities in the Bolivian economy and those that attract the most internal migration, appear in the top spots only behind Potosí. The Jubilee Foundation, for its part, points out that extreme poverty, nationwide, reaches 17.5 percent. Needless to say, in many cases, this means hunger.
There is no gasoline, no diesel, and no dollars at the official price. LPG threatens to suffer the same fate and, for now, has ceased to be exported to Brazil and Peru. (Álvaro Ríos). Brazil's and Argentina's interest in Bolivian natural gas has evaporated, as have the reserves. The Argentine Ministry of Energy has been offensively clear: "Gas imports from Bolivia will drop to zero starting in October, never to return." Without even taking into account the legal barriers that hinder investment in the sector, including the State's Political Constitution and the Hydrocarbons Law, the current reality of the gas sector is extremely complicated: Fewer markets, less investment. Less investment, less exploration. Less exploration, fewer reserves. Fewer reserves, fewer exports. Fewer exports, fewer dollars. And finally, if anything weren't enough, fewer reserves, less production, which means that storm clouds are also covering the skies above the thermoelectric plants, which run on natural gas. In other words, the electricity supply is also in question. To put it even more pertinently: The energy that drives Bolivia is in question. Most industries, taxis, private transportation, and Bolivian kitchens run on gas. They all opted for this energy source, encouraged by the development and the clean, bright future that seemed to illuminate the sector. But lightning strikes in a clear sky in Bolivia more frequently than one might imagine. Today, the words that resonate in the country are not how to export, but how to import. And with what money. Mining Minister Alejandro Santos, who comes from the mining cooperative sector, referring to the fuel shortage, also a consequence, albeit indirect, of the gas debacle, said with naive sincerity: "We're screwed," adding that the solution to the problem could only come "through God," a fitting epitaph for the goose that lays the golden eggs, which is taking its last breaths on the altar of dreams of grandeur ("we will be Switzerland"), of an anachronistic statist project long since surpassed by history. Look at China. An uncomfortable question arises from all this: To avoid such a catastrophe, wouldn't it have been better to respect Gonzalo Sánchez de Lozada's contracts? And to add insult to injury, wouldn't it have been better for Bolivia to respect the 1874 Boundary Treaty with Chile? In the end, the inviolability of the saltpeter tax would have lasted only 25 years, almost the same time the gas crisis was brewing. Legal security does not only mean honest judges.
The devaluation of the Bolivian peso against the dollar exceeds 100 percent. Inflation has soared (5.21 last June, 15.53 in the first half of 2025, 23.96 percent year-on-year); Bolivians' wages, pensions, and other incomes are being reduced to the same extent. International credit rating agencies have downgraded Bolivia's sovereign bonds to "junk" status and warn of the risk of default. To avoid such opinions, President Arce, true to himself to the end, wants to "regulate" the work of these companies, not take steps to correct the situation. No one knows exactly the size of the country's international reserves, nor how much of the Central Bank's gold remains. Another unknown is the fate of the $25 billion that Bolivians saved in pension funds and that the government of Luis Arce Catacora transferred to a state-owned fund manager. Do they still exist? In a hypothetical revaluation of the Bolivian peso, will this amount to $12 billion? With a few exceptions, virtually all 63 officially registered public companies, true monuments to waste and corruption, are in deficit, among other reasons because they were perhaps never conceived with the primary objective of making money, but rather to convince Bolivians that Bolivia was industrializing—a late legacy of the Raúl Prebisch era—and, in the process, teach private enterprise how things are done.
That's all?
No.
The country's fundamental institutions—the judiciary, the armed forces, and the police—have collapsed under the sinister weight of corruption. Bolivia ranks second to last in the world in criminal justice (World Justice Project) and second in corruption (Transparency International). Everything, everywhere, has a price, naturally outside the law. Drug trafficking is rampant, and international gang leaders and their families, duly protected, rub shoulders with high society in some cities, with the solvency of a fat wallet. Smuggling, of course, is not to be mentioned. Both public and private. Even tankers full of gasoline and diesel enter and leave the country without emptying their tanks, in one of the fastest and most profitable businesses in the world, while Bolivians wait in endless lines that last days, or even weeks, to obtain fuel.
Apparently, nothing has been left standing. University education is going through perhaps the worst period in its history, not only because in many cases it subordinates academic training to ideological instruction, but also because teachers have surrendered to the student power endorsed by the ruling party. At the secondary level, the situation is even more grim: A study by the Plurinational Observatory of Educational Quality—no less—concluded that out of every 100 high school graduates, only 3 pass the math and chemistry tests and only 2 pass the physics tests. The study, based on the current curriculum, covered 40,000 students from public and private schools, both in urban and rural areas. Under these conditions, it is understandable why Bolivia does not participate more frequently in international assessments of educational quality, such as the PISA tests. Health, transportation, and the environment are another disaster. The long lines at hospitals and health centers, the lack of medicines, and doctors, nurses, and other staff members working in deplorable conditions attest to this. Something similar can be said of public transportation, which, with exceptions, consists of vehicles in a terrible state, with slick tires and irresponsible, generally underpaid drivers, who also work inhumane hours. These deficiencies result in accidents with terrible fatalities, so common that no one in Bolivia is moved by them anymore. And what can be said about the destruction of the environment? It has reached insane proportions, especially in areas related to land exploitation and mining resources. The devastation of forests in the Amazon region—and not only by fire—covers territories the size of countries. Agricultural and livestock businesses, large, medium, and small, legal and illegal (Friedrich Ebert Foundation, Tierra Foundation), participate in this task year after year, protected by permissive legislation, with no one putting a stop to such nonsense. Mercury and surplus cocaine take care of that work in other regions.
Very few pay taxes, and among those who do, there are those who pay a lot, those who pay a pittance, and those who pay nothing. Think of gold miners, large landowners, or informal millionaires. Looking only at those who pay, Gonzalo Colque of the Tierra Foundation asks: "Why do some companies in the general tax system, for the same sales or income, pay five or ten times more taxes than those in the agro-export sector?" Distortions of this kind, upward or downward, exist throughout the current tax system.
A recent survey indicated that up to two million Bolivians want to leave the country. Most of them are young people. The reason is simple: there are no jobs for them. Several thousand are already choosing to go into exile. Neighboring nations view this phenomenon with suspicion. A Peruvian congresswoman recently proposed reintroducing entry visas for Bolivians, who can currently enter Peru with an identity card under the terms of the Andean Community of Nations. According to this congresswoman, one million Bolivians could enter Peru in the coming months due to the economic crisis. "We don't want other Venezuelans," she said. For the country's president, Dina Boluarte, Bolivia is a failed state. In northern Chile, local authorities dug a ditch to block the entry of Bolivians and migrants from other countries, especially Venezuelans, who use Bolivia as a transit point. For some Chilean politicians, such as former presidential candidate José Antonio Kast, this measure is insufficient. He wants a wall built, Trump-style. Argentina has already installed barbed wire along sections of the border to hinder both the entry of illicit drugs and smuggling in both directions. South American projects linking the two oceans carefully avoid Bolivian territory. This approach incubates a geopolitical risk that should not be underestimated.
That's all?
No.
The institutional devastation also affects politics. We are heading toward a new election without political parties. These were systematically dismantled after the overthrow of Gonzalo Sánchez de Lozada's government in 2003. This was not a fortuitous event; it was a textbook approach typical of authoritarian regimes, whose primary task is to concentrate power, both economically and politically. Marxism and fascism share this vision. Mussolini adopted the slogan "Everything within the State, nothing outside the State, nothing against the State," which actually originated in the socialist groups of Italian Marxism, his origins. This manual was applied in Bolivia with dedication and, it must be said, with success. But when it comes to returning, as is now expected, to a serious democracy, it is clear that political parties are needed. These are not only electoral machines, but also, and above all, schools for training leaders in different areas of state management for when the time comes to exercise power. One of the main differences between the 1985 and 2025 elections, both with the common denominator of a profound economic, political, and social crisis, is that in the former, there were consolidated political parties: the MNR (National Revolutionary Movement), the ADN (National Liberation Front), the MIR (Member of the Revolutionary Armed Forces), and even the Christian Democrats. In the latter, political parties do not exist, or exist so precariously that the acronyms flutter from one side to the other, just like their members. This is not the fault of anyone in particular, but of a system that urgently demands change from the bottom up. To begin with, parties should be institutions, not groups of friends. They should be national, not regional, both in their structure and in their national vision, an essential condition for them to contribute to national unity, already sufficiently damaged, and not to its disintegration. Jeanine Añez paid dearly for the lack of political support of that nature. Those who came to power with her did so with little or no preparation, coupled with a deep-rooted regional animus. The slogan they raised, "It's our turn," in the absence of a transition program sufficiently capable of dealing with a society in crisis, was interpreted by many as a free pass for corruption, which discredited the nascent government and dealt a fatal blow to the epic change that had taken place.
That's all?
No.
The list of problems is longer—the public finance deficit, domestic and foreign debt, capital flight, among others—but, for now, suffice it to say that the government that emerges from the polls soon, whoever it may be, will have to make difficult decisions in a social environment already sufficiently strained by inflation and the lack of dollars and fuel, the most visible faces of the crisis. Consequently, what awaits them is not a shining highway, but a road with multiple obstacles, sharp turns, and cliffs without barriers. Facing this harsh reality will undoubtedly be a great challenge. Former President Víctor Paz Estenssoro, following Machiavelli and Clausewitz, said that, in politics, "one does not do what one wants, but what one can." It's true. But he himself demonstrated that, sometimes, it is possible to bring the two things, the desirable and the possible, almost to the point of blurring them. He did it. And the Bolivian people supported him. Perhaps studying that experience in detail would be useful at this point.
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