Bolivia on the Brink: Economic Crisis and Geopolitical Shifts Ahead of 2024 Elections

Strategic Insights -

As the country struggles with its worst economic crisis in decades, Bolivians are eagerly awaiting the October 2024 elections, which could bring significant changes to the government and the economy. The ruling Movimiento al Socialismo (MAS) party, once a bastion of power, has fractured into factions, giving the opposition its best chance of victory in 20 years.

The MAS party's infighting, combined with an economic crisis caused by an empty foreign exchange account and fuel shortages, has led to widespread discontent among the population. Even in the traditionally MAS-supporting city of El Alto, residents are desperate for change, with many expressing frustration with the government's handling of the economy.

The potential election outcome could trigger a major economic and geopolitical realignment, with a bigger role for domestic and foreign private companies in the economy and a shift away from powers such as China and Russia, and towards the US. However, whoever wins will face the need for painful belt-tightening and the prospect of social unrest.

Eight candidates remain in contention, including Samuel Doria Medina, a multimillionaire businessman, and Jorge Quiroga, a former vicepresident who briefly held the presidency in 2001. Recent polls suggest Doria Medina and Quiroga are the frontrunners, each with 20-25 per cent of voting intention.

Key Takeaways:

  • Bolivia's economic crisis has led to widespread discontent among the population, with many residents expressing frustration with the government's handling of the economy.
  • The Movimiento al Socialismo (MAS) party, once a bastion of power, has fractured into factions, giving the opposition its best chance of victory in 20 years.
  • The potential election outcome could trigger a major economic and geopolitical realignment, with a bigger role for domestic and foreign private companies in the economy and a shift away from powers such as China and Russia, and towards the US.
  • Eight candidates remain in contention, including Samuel Doria Medina and Jorge Quiroga, who are the frontrunners with 20-25 per cent of voting intention each.
  • The next president will face the need for painful belt-tightening and the prospect of social unrest.
  • The government's foreign exchange reserves all but ran out in March 2023, leading to fuel shortages and periodic economic disruptions.
  • Projected GDP growth is 1.1 per cent according to the IMF, despite a 9.9 per cent deficit in the government budget.
  • The IMF puts Bolivia's public debt at 95 per cent of GDP, with most of it being internal debt.

Statistics:

  • Foreign exchange reserves all but ran out in March 2023.
  • Fuel shortages have periodically brought Bolivia to a halt.
  • Inflation is already at almost 17 per cent this year.
  • Projected GDP growth is 1.1 per cent according to the IMF.
  • The IMF puts Bolivia's public debt at 95 per cent of GDP.
  • The government says external debt amounts to $13.8bn, or 25 per cent of GDP.
  • S&P downgraded Bolivia's credit rating to CCC- with a negative outlook at the end of June.

Sources:

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  • Reuters:
  • La Paz:
  • The IMF:
  • S&P: