Bolivia is dealing with a spike in food and fuel prices, which are the source of massive street upheavals throughout the country. Citizens are placing their bets and getting ready to go to the polls. At the same time, the economic landscape presents key challenges that the next administration will need to address. Analysts predict that the new government may struggle to improve the living conditions for many Bolivians amidst rising inflation and dwindling resources.
Bolivia’s annual inflation rate soared to an astronomical 24% in June, making its effects felt on the ground in all aspects of daily life. For Bolivian political scientist and analyst Franklin Pareja, the incoming administration doesn’t have what it takes to generate profound change. He worries they’ll fail to produce meaningful change. He noted, “The population is assigning a change in government almost magical qualities, because they think that with a change of government we’ll return to stability and prosperity.”
The impact of this present economic crisis is particularly acute in cities. El Alto, Bolivia’s second-largest city, home to 1.2 million people at 4,150 meters (13,615 feet), is particularly affected by this reality. Above, residents from across the continent protest against their rising cost of living. Josue Macias, a car mechanic, lamented about the difficulty of affording basic meals, stating, “Prices for everything are going up, but we are still earning the same.” He said that he could afford to pay for an ice cream but not a decent meal.
In conversation with ICC, taxi driver Gonzalo Ris expressed his growing frustration with the chaos and climaxing fuel shortages. It frequently takes him four to six hours waiting at gas stations just to get enough fuel into his vehicle. It’s a situation that hundreds of thousands of drivers across the country can find frustrating. This situation has arisen partially due to Bolivia’s long-term policy of keeping fuel prices artificially low through subsidies for nearly two decades. All told, the Bolivian federal government spent about $2 billion (£1.5 billion) on these energy subsidies last year.
To economist Gary Rodriguez, the bigger problems with Bolivia’s economy were apparent. The country needed structural reforms. He pointed out that a product priced at seven bolivianos domestically could sell for 15 bolivianos abroad, indicating a disparity that necessitates economic reform. “We need to change the model because the current model has too much emphasis on the state,” Rodriguez remarked.
Alessandra Guglielmi, owner of The Clean Spot small food business, echoes these sentiments. Despite her personal financial walls crumbling as she survives the Great Recession, her fortunes change. She criticized the limitations imposed by credit card companies and remarked, “The problem with the credit cards is that all the banks have limits that are ridiculous.” Guglielmi lamented her ability to pay her employees a fair wage when she herself has to charge more for food. “I am worried with food prices going up I can’t afford to pay my staff a decent salary,” she said.
The political climate has changed dramatically as candidates gear up for the 2024 presidential election. Samuel Doria Medina of the National Unity Front is surging in the polls. Jorge Quiroga of Freedom and Democracy isn’t far behind him. As both candidates position themselves to address the nation’s economic troubles, many Bolivians remain skeptical about how effective these political changes will be in alleviating their hardships.
Pareja underscored what a new right-wing government could mean. He implied that Bolivia could only feel the true weight of its economic crisis in the wake of changing leadership. “Bolivia will only feel the hard impact of the economic crisis with a new government because it will make structural economic changes, which will be unpopular,” he stated.
The mounting frustrations among citizens underscore the urgency for effective governance in addressing fundamental economic issues. As the election approaches, citizens are left wondering whether new leadership can break from past policies and deliver long-term solutions.