Following a coup attempt by one of its military generals, Bolivia grapples with a sever economic downturn compounded by political unrest.
Market analysts warned that Bolivia’s economic troubles are spilling into the political arena, threatening to drive the country into an even worse situation.
Bolivia’s foreign currency reserves have dwindled to US$1 billion, leading to prices of rice, tomatoes and other essentials to soar. Traders are protesting the scarcity of US dollars, demanding that the government releases more currency to facilitate imports.
In late June, President Luis Arce accused the military of attempting to seize control of the country. He cited an incident involving soldiers and military vehicles taking control of Plaza Murillo, a key government site.
The coup attempt was led by General Juan José Zúñiga, who had recently been dismissed as head of the Army after being openly critical of former President Evo Morales.
Reports of the military coup sent shockwaves through Bolivia’s political circles, given the country’s history of military uprisings over its 200-year history. General Zúñiga claims, however, that there was no such thing as a coup, accusing President Arce of fabricating the allegations to boost his electoral prospects.
Bolivians will cast their votes in August 2025. Much of the current economic distress can be traced back to the policies of former President Evo Morales. While Morales implemented fuel subsidies, he also nationalized natural gas mines.
Natural gas, Bolivia’s primary export commodity, significantly contributes to the country’s foreign currency reserve. Due to nationalization, natural gas exports have declined over the past few years, while the costs of fuel subsidies sharply increased. Bolivia imports more than 60% of its petrol and diesel, adding further pressures to its economy.
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