The political landscape in Bolivia is teetering on the edge as the country grapples with a worsening fuel crisis, a severe dollar shortage, and a government at odds with itself. President Luis Arce has gone on the defensive, assuring Bolivians that the economy is not collapsing, even as gas stations see long lines, businesses struggle to obtain fuel, and the price of the U.S. dollar soars on the black market.
At the heart of the crisis is a simple but devastating issue: Bolivia doesn’t have enough foreign currency reserves to pay for its fuel imports. The government blames the Legislative Assembly for blocking $1.6 billion in international loans that Arce insists would resolve the problem. His critics, including former president Evo Morales and opposition lawmakers, argue that his administration’s economic mismanagement is to blame.
Fuel Crisis and Economic Turmoil
The fuel crisis has become an immediate and visible symptom of Bolivia’s economic troubles. As reported by La Razón, Arce’s government has rolled out ten emergency measures to tackle fuel shortages, including reducing government vehicle usage by 50%, increasing fuel distribution to stations from 50% to 80%, and launching a mobile app to inform citizens where fuel is available. Additionally, public and private sector employees have been put on a continuous work schedule, and schools may shift to virtual classes to reduce commuting.
Meanwhile, the black market for fuel has exploded. According to El Deber, diesel prices on the illicit market have skyrocketed, jumping from 12 bolivianos to as much as 25 per liter in some areas. Farmers and transporters, who depend on diesel for their work, are being hit especially hard, with some fearing the crisis could endanger agricultural production.
One of the most controversial moves by the state-owned oil company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) was its announcement that it may use cryptocurrency, specifically USDT (Tether), to pay for fuel imports. As reported by El Deber, this revelation sent shockwaves through Bolivia’s financial sector, causing the unofficial exchange rate for the dollar to surge to 12 bolivianos. Economists are warning that using cryptocurrency could further destabilize the economy and drive even more speculation.
Fernando Romero, president of the College of Economists in Tarija, called it a “desperate measure” that shows the government has no alternative funding sources. “It’s a bad sign when YPFB admits it lacks dollars and is forced to turn to crypto,” he told El Deber.
Government Gridlock and Internal Power Struggles
The economic crisis is exacerbated by political infighting. The most immediate cause of the cash crunch is the Legislative Assembly’s refusal to approve international loans that Arce says are needed to keep the economy running. His opponents argue that taking on more debt is irresponsible.
Arce’s biggest political adversary is not just the opposition but also his former ally, Evo Morales. The ex-president, who was once Arce’s mentor, has turned into his most vocal critic. Morales has accused the government of failing Bolivia’s economy and has called Arce’s administration a “beggar state” dependent on foreign loans.
In response, Arce has struck back, blaming Morales and his loyalists in the legislature for deliberately obstructing the approval of much-needed loans. “We are not asking for charity,” Arce insisted in a recent speech, as reported by La Razón. “We are asking for the credits that the state can pay.”
The ongoing feud between the two leftist leaders is setting the stage for the next presidential election. Morales, who still commands significant political influence, has been maneuvering to challenge Arce for leadership of the Movement for Socialism (MAS) party. This split within Bolivia’s ruling party has left the country in a state of political paralysis, with neither side willing to back down.
The stakes have become even higher with Morales facing serious legal trouble. As reported by El Deber, the former president is currently evading an arrest warrant on allegations of statutory rape and human trafficking involving a minor. The case has fueled widespread controversy, with the government unable or unwilling to enforce the law in Morales’ stronghold of Chapare. Critics argue that this impunity highlights the dysfunction of Bolivia’s judicial system and the influence Morales still wields.
Morales, in turn, has used the case to rally his supporters, framing it as a politically motivated attack. According to El Deber, he is planning a mass mobilization of over 100,000 people in La Paz to pressure the government into allowing him to run in 2025, despite a constitutional ruling barring his candidacy. This planned demonstration, if it materializes, could further destabilize the country.
Bolivia Loses Its Vote at the United Nations
Further complicating matters, Bolivia recently lost its voting rights at the United Nations due to its failure to pay its membership dues. According to El Deber, Bolivia owes $780,000 in unpaid fees, placing it alongside Venezuela and Afghanistan on the list of nations unable to participate in UN decisions.
Diego Pary, Bolivia’s former representative to the UN, called the situation an embarrassment and criticized Arce’s administration for allowing it to happen. “Not paying our UN dues is a sign of how precarious our foreign policy has become,” Pary said, as reported by El Deber. He also cited growing concerns over political repression in Bolivia, stating that more than 70 indigenous and campesino leaders have been arrested for protesting against the government.
Judicial System on the Brink of Collapse
While the economy and fuel shortages dominate headlines, Bolivia’s judicial system is also in crisis. According to El Deber, the court system has lost over 70% of its staff due to budget cuts. In Santa Cruz, the country’s largest department, the number of workers handling legal cases has been slashed from 80 to just 15—an unmanageable burden for a city of nearly four million people.
Romer Saucedo Gómez, the president of Bolivia’s Supreme Court, warned that the justice system is on the verge of collapse. “Just like we see people standing in long lines for gasoline today, soon we will see them standing in lines at the courthouse, waiting hours for basic legal services,” he told El Deber.
The dysfunction of the judicial system is also evident in the Morales case. Despite an active arrest warrant, law enforcement has not acted against him, reinforcing perceptions that political power determines who faces justice in Bolivia. Meanwhile, ordinary citizens must wait for hours—if not days—to access basic legal services.
The Road Ahead: More Uncertainty
Arce insists that Bolivia’s economy is not in free fall. He points to continued public investment and government spending as proof that the state remains financially solvent. But for the average Bolivian, reality looks very different. Long fuel lines, soaring black-market exchange rates, and rising frustration with the government’s inability to resolve the crisis paint a grim picture.
The president’s fate is now tied to his ability to secure funding—either through legislative approval of loans or through unconventional methods like cryptocurrency transactions. Meanwhile, Morales continues to loom in the background, waiting for his opportunity to regain power.
The coming weeks could be critical. If Morales proceeds with his planned mass protest in La Paz, it could escalate into a full-blown political showdown. The government’s response—or lack thereof—will determine whether Bolivia moves toward resolution or deeper instability.
Bolivia’s future remains uncertain, but one thing is clear: the country is entering one of its most challenging political and economic periods in recent history. Whether the government can weather the storm or whether Bolivia will plunge deeper into crisis remains to be seen.
