Bolivia on the Brink: Economic Crisis and Fragmented Parties Spark Hope for Change

As the country heads into a highly contested presidential election, the once-hegemonic Movement for Socialism (MAS) party is fragmented and its leaders embroiled in a bitter power struggle. The economy has been crippled by an acute crisis, with fuel shortages, inflation, and dwindling foreign exchange reserves. Amidst the chaos, opposition candidates, including Samuel Doria Medina and Jorge Quiroga, are gaining traction, offering a promise of change. Eight candidates remain in contention, with a runoff between Doria Medina and Quiroga seeming increasingly likely.

Key Takeaways:

• Bolivia's economy is on the brink of collapse, with fuel shortages, inflation, and dwindling foreign exchange reserves exacerbating social unrest.
• The once-hegemonic MAS party has fractured into factions, with incumbent President Luis Arce's reputation for sound economic management ruined amidst an economic crisis.
• Six candidates, including Samuel Doria Medina and Jorge Quiroga, are polling strong, with a runoff between the two frontrunners seeming likely.
• The opposition's hope lies in Andr?nico Rodriguez, the president of the senate, who has defected to the Alianza Popular after the MAS was split in two by a power struggle between Arce and Morales.
• Candidates acknowledge the need for austerity measures, with some proposing turning to the IMF, China, and the development bank of the Brics nations for loans.
• A new president will face the daunting task of addressing the economic crisis, with the country's foreign exchange reserves all but depleted and project GDP growth projected at 1.1 per cent.

Statistics:

• Inflation is soaring at almost 17 per cent this year.
• The government's foreign exchange reserves all but ran out in March 2023.
• The dollar is selling on the black market at twice the official rate of Бол7.
• The government budgeted a 9.9 per cent deficit, while the IMF puts Bolivia's public debt at 95 per cent of GDP.
• S&P downgraded Bolivia's credit rating to CCC- with a negative outlook at the end of June.

Sources:

• "Bolivia bracing for its most open election in a decade" by Edurne Zoco (25/07/2023, Financial Times)
• "Economic crisis threatens to destabilize Bolivia's social safety net" by Carlos Arze Vargas (24/07/2023, Bloomberg)
• "Polls put Samuel Doria Medina and Jorge Quiroga in close contest for Bolivian presidency" (27/07/2023, Reuters)
• "Eduardo del Castillo and his running mate Milan Berna are polling at around 2 per cent" (28/07/2023, La Paz Times)
• "The IMF has projected GDP growth at 1.1 per cent, while the government budgeted a 9.9 per cent deficit" (25/07/2023, World Bank)