Economic crisis dominates as preparations to go to Bolivia elections

As Bolivians prepare to vote in a general election, the deepest economic crisis of the country is a central issue. Anyone who becomes the next President of the country, faces a very difficult task to try to resolve dirt.

L Al Alto is the second largest city in Bolivia, home to 1.2 million people. And, at an altitude of 4,150 meters (13,615 ft), it is the highest city in the world with a population of over 100,000.

It is filled with narrow roads with vendors, trying to sell you everything from oranges to knock-off designer trainers. Standing on a pavement, the car mechanic Jose Mcias is enjoying an ice cream with his young son.

He explains how Bolivia’s sky-high inflation is affecting him and his family. The annual rate increased by 24% in June.

“Prices are rising for everything, but we are still earning the same,” they say. “We are just about, but it is difficult because food prices are rising all the time, things like meat, oil and eggs. They are double or triple they used to be.

“We have to tighten our belt. We no longer go out to eat at the restaurant. Instead, I am doing ice cream with my son here on the road!”

Bolivia’s inflation is due to a combination of spike factors. The decline in natural gas production and hence the export of this major foreign earner has led to a decline in foreign revenue.

In turn, this means a lack of US dollars, making it difficult and more expensive to import petrol, diesel and food items for the country, leading to lack and price increase. This has staged protests on the road across the country.

At some petrol stations across the country, lorry drivers often have to wait for more than 24 hours to fill.

Taxi driver Gonzalo RIS is disappointed. As we walk on the streets of La Paz’s administrative capital La Paz’s administrative capital, he tells me about his struggles.

“It was easy to fill before petrol. Now I should wait for about four to six hours at the gas pump to get anything, and it is too much. It is so waste of time.

“And prices are very expensive,” he says. “Now the money we earn does not cover our cost. But we cannot pay our rent because if we do, we will not have a customer. It will be very expensive for them.”

For nearly 20 years, the Bolivia government kept the prices of low fuel artificially low through subsidy. It began when the then President Evo Morales nationalized the country’s hydrocarbon region in 2006.

But in 2023, the state energy company YPFB stated that Bolivia was running out of domestic-made natural gas due to lack of investment in new investigation.

Without this gas to export, the Bolivian government is struggling to continue to find money to subsidize petrol and diesel. Last year, such subsidy was spent on such subsidy $ 2BN (£ 1.5bn), according to a statement by a former minister of hydrocarbon and energy recently.

Outgoing Left President Louis Ars, who is not demanding re -election on August 17, convicted Bolivia’s Parliament for a decline in natural gas production, accused MPs of blocking important overseas loans. In return, his opponents convicted him for the economic turmoil.

The official exchange rate of Bolivia’s currency, Bolivianos, is certainly not helping cases. Since 2011, the government has fixed the exchange rate in a US dollar in 6.96 Bolivianos.

But informally you can get 14 to 15 Bolivianos per dollar. It has led a rich black market, especially for exports from where the government misses the tax revenue.

Bolivian Institute of Foreign Trade General Manager Economist Gary Rodriguez states: “In Bolivia, a product costing seven Boliviano here can be sold abroad for 15 Bolivianos abroad,” he says.

“The problem is that business items will like to sell [overseas] In Bolivia, instead of here, the black market which leads to lack of food and fuel. ,

Ban on the use of credit cards is another headache for Bolivia’s business community.

“The problem with credit cards is that all banks have limitations that are ridiculous,” Alesndra Guglielmi says, the owner of a food business called Clean Spot.

“you can [only] Spend about $ 35 per month on the Internet with online purchase. $ 35 is nothing for business. ,

He is worried about his business.

“I am worried about food prices that I cannot pay a decent salary to my employees,” Ms. Guglielie. “I am worried about people that people are not able to buy their products because I should increase prices.

“And I’m worried because my margin has gone down, so it is very difficult for me to have a business.”

Many people in Bolivia are hoping that a new government will be able to start the fate of the country. Two right -wing candidates are currently ahead in elections for the presidential race.

The leading National Integration Front has Samuel Doria Medina. He was earlier the main shareholder of Bolivia’s largest cement manufacturer.

Second place is George Quiroga of freedom and democracy. He has been the first Bolivia President from 2001 to 2002.

If a candidate does not vote for more than half on August 17 – which is not expected to receive anyone – then October 19 will be the second round of voting.

Bolivian political scientist and analyst Franklin Pereja suspect that the next administration will be able to improve the lives of most people.

“Population is almost changing magical qualities in the government, as they think that with a change of government we will return to stability and prosperity,” they say. “And this is not going to happen.

“Bolivia will only feel the difficult effect of economic crisis with a new government, as it will make structural economic changes, which will be unpopular.”

Mr. Rodriguez is adamant that Bolivia’s economy will have to change a lot. “We need to change the model, because the current model, the state has a lot of emphasis,” they say.

“There are two actors, one region and the other private sector. The driver of development should be a citizen, entrepreneur, and for this, the state should do what he has to do. In other words, good laws, good rules, good institutions.”

While elections suggest that Bolivia’s next administration is likely to be right -wing, such radical government and economic changes are not expected to significantly reduce the role of the state.