A soldier motioned for reporters to leave Plaza Murillo as soldiers gathered outside the presidential palace in La Paz, Bolivia, on Wednesday. Bolivian President Luis Arce has warned of an “irregular” troop deployment in the capital, raising fears of a possible coup.
Juan Carrita/AP
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Juan Carrita/AP
LA PAZ, Bolivia — A sign reading “I want dollars” hangs outside Víctor Vargas’s shoe store in the center of Bolivia’s largest city, a desperate attempt to keep the family business afloat. .
Just a few years ago, Vargas, 45, would open the door at 8 a.m. to throngs of customers waiting to buy tennis shoes imported from China. Now, his store is empty.
“Right now, we are in a terrible crisis,” he said. “No one is buying anything anymore… We don’t know what’s going to happen.”
Bolivians like Vargas have been hit hard by economic turmoil in the South American country caused by a long-standing overreliance on the U.S. dollar and now a shortage of U.S. dollars.
The recession is exacerbated by an ongoing feud between President Luis Arce and his ally-turned-rival former President Evo Morales ahead of next year’s presidential election. Many Bolivians affected by the crisis have lost trust in Arce, who has even denied that the country is in an economic crisis.
“Bolivia’s economy is growing. An economy in crisis will not grow,” Arce told The Associated Press, a claim that was disputed by economists and dozens of Bolivians.
“Failed coup” or a “self-coup”?
That deep distrust came to a head on Wednesday, with what the government called a “failed coup” and opponents including Morales said it was an orchestrated “self-coup” aimed at running up the election. Earn political points for the unpopular leader.
Regardless of whether the coup attempt is real, most Bolivians interviewed by The Associated Press said they no longer trust what their leaders say and said Arce should do a better job of addressing Bolivia’s economic woes and engage in less political stunts. time.
“He should think about Bolivia’s economy, develop a plan to move forward, find a way to get dollars and try to move Bolivia forward,” Vargas said. “No more of these childish ‘self-coups.'”
In a country no stranger to political unrest, this simmering anger paves the way for more conflict.
Bolivia’s economic crisis is rooted in a complex combination of factors including reliance on the U.S. dollar, depleting international reserves, rising debt and a failure to produce products such as natural gas, which was once the mainstay of the Andean nation’s economy.
Gonzalo Chávez, an economist at the Catholic University of Bolivia, said this means Bolivia has become to a large extent an import economy “completely dependent on the U.S. dollar.” This once worked in Bolivia’s favor, propelling the country to create an “economic miracle” and become one of the fastest-growing economies in the region.
A sign shows currency exchange rates in La Paz on Friday, June 28, 2024.
Carlos Sanchez/AP
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Carlos Sanchez/AP
No dollars, no business
Vargas’ family started the shoemaking business nearly 30 years ago because they believed it was the only way to ensure stability for future generations. The family imported the shoes from China, paid in U.S. dollars, and sold them in Bolivianos, the Bolivian currency. Without dollars, they have no business.
A shortage of dollars has led to the emergence of a black market, with many sellers importing dollars from neighboring Peru and Chile and selling them at high prices.
Pascuala Quispe, 46, walked through downtown La Paz on Saturday, going to different currency exchange shops in a desperate search for dollars to buy car parts. Although the official exchange rate was 6.97 bolivianos to the dollar, she was told the actual price was 9.30 bolivianos, which was too high for her. So she moved on, hoping to find good luck elsewhere.
Price gouging has penetrated into all areas. People stopped buying shoes, meat, and clothes, which pushed the working class deeper into poverty. Bolivians joke about having “mattress banks” because they don’t trust banks and keep their cash at home.
“There are no jobs…we don’t make enough money to do anything,” Quispe said. “Everyone suffers.”
Some vendors like Vargas put signs on their doors in the hope that sellers will trade dollars for more reasonable prices.
Few short-term solutions
Economist Chavez said this is a complex economic dilemma with few short-term solutions.
But Arce insisted Bolivia’s economy was “one of the most stable” and said he was taking action to address problems facing the Bolivian people, including dollar and gasoline shortages. The government is also industrializing, investing in tourism and new economies such as lithium, he said.
Chavez said that while Bolivia has the world’s largest reserves of lithium, a high-value metal key to the transition to a green economy, investment is only viable in the long term, largely due to government failures. Meanwhile, inflation has outpaced economic growth and most Bolivians face precarious working conditions and meager wages.
The situation has only been exacerbated by the ongoing feud between Arce and Morales, who returned from exile after resigning during unrest in 2019 in what Morales insists was a coup against him. Now, ahead of the 2025 elections, the two former allies trade insults and argue over who will represent their Movement for Socialism party, known by its Spanish acronym MAS.
“Arce and Evo Morales, they fight over who is stronger,” Vargas said. “But neither can govern Bolivia… There is a lot of uncertainty.”
Discontent fuels protests and strikes
Widespread discontent has triggered waves of protests and strikes in recent months. The protests and roadblocks dealt shoemaker Vargas another financial blow, as customers from across the country stopped traveling to buy products because of the chaos caused by ubiquitous protests.
Morales, who still wields a lot of power in Bolivia, has blocked Arce’s government from passing measures in Congress to ease the economic turmoil, which Arce told The Associated Press was a “political attack.”
Morales has fueled speculation that last week’s military attack on a government palace, allegedly led by former military commander José Zuniga, was a political stunt by Arce’s group to gain sympathy from Bolivians. This claim was first made by Zuniga himself after his arrest.
“He not only deceived the Bolivian people, he deceived the whole world,” Morales said on Sunday’s radio show.
The political spat has left many, like 35-year-old truck driver Edwin Cruz, shaking their heads as they wait in long lines for hours or even days amid intermittent shortages of diesel and gasoline due to a lack of foreign currency. .
“Diesel is like gold now,” he said. “People are not idiots. With the whole ‘self-coup’ thing, this government has to go.”
Cruz is among those who don’t want to vote for Morales or Arce. Chavez said that while Bolivians have few alternatives, the discontent opens a “small window” for outsiders to gain traction, as some Latin American outsiders have done in recent years.
Recently, self-proclaimed “anarcho-capitalist” Javier Millay took over the reins of neighboring Argentina, promising to break the country out of an economic spiral that bears many similarities to Bolivia.
Vargas, meanwhile, doesn’t know what he’s going to do with his family’s shoe store. The store, once a place of pride, was now a financial struggle. He would pass it on to one of his four children, but they all want to leave Bolivia. One of his children has immigrated to China.
“They don’t want to live here anymore,” Vargas said in his empty store. “There is no future in Bolivia.”
