On the economic front, the government implemented a controversial elimination of long-standing fuel subsidies, causing diesel and gasoline prices to surge over 120%, which triggered protests and roadblocks predominantly led by the Central Obrera Boliviana (COB) and mining unions. Despite resistance, Paz branded the subsidy removal a “conquest economic” and a necessary step to stabilize fiscal deficits and preserve foreign reserves depleted by prior subsidy policies and export income declines. The government agreed with unions to repeal the initial decree but confirmed continuation of the subsidy withdrawal alongside social compensation like increased minimum wages and support bonuses targeting vulnerable groups. Daily savings from subsidy elimination amount to $10 million, though roadblocks have cost twice that in lost economic activity.
Political tensions have escalated with Vice President Edmand Lara distancing himself from Paz’s administration, labeling it exclusionary and corrupt, complicating governance ahead of subnational elections where Bolivia faces a fragmented multiparty landscape with over 34,000 candidates registered. In response, Paz is consolidating his own political alliance, “Patria,” aiming to secure territorial influence and support policy continuity amid rising instability. The government also seeks new credit lines from multilateral banks worth $7.6 billion to support economic modernization efforts.
Overall, Bolivia navigates complex reforms to harness its lithium potential while confronting acute fiscal pressures and social unrest, with transparency and stable governance critical to attracting foreign investment in one of the world’s most promising lithium basins.
This article was curated and published as part of our South American energy market coverage.
