UPDATE: Bolivia’s Political & Economic Situation POLITICAL Light at the end of the tunnel
On October 19, 2020, Bolivia held a general President Arce was sworn-in on November 8, election in which the Movement Towards 2020 and promptly filled all key positions within Socialism (MAS) won a landslide victory against his administration. opponents, with presidential candidate Luis Arce clasping victory in the first round. Arce’s administration has since implemented policies criticized by the opposition, including a The 2020 elections were held following former directive which orders 6-month deferment loan president Evo Morales’ ousting in November payments to local financial institutions, thus 2019 after declaring victory in a general election affecting the banking sector, and supported the held in October 2019. Morales’ declaration enactment of a law which taxes large fortunes. sparked mass demonstrations throughout Bolivia claiming that the elections had been fraudulent, a On March 7, 2020, the country will hold claim that was later confirmed by all international subnational elections, in which the population will organizations involved in overseeing the 2019 elect 9 governors and 337 mayors. elections, including the European Union and the Organization of American States. It is expected that this election will provide much needed clarity to understand the country’s future As Economy and Finance Minister under Morales for political landscape. over ten years, President Arce oversaw a massive reduction in poverty and economic growth at record levels. For this reason, he ran under the premise that his policies provided tangible improvements to Bolivia’s socio-economic situation.
2 UPDATE: Bolivia’s Political & Economic Situation Luis Arce, President of Bolivia, was the Economy and Finance Minister under Morales for over ten years. He oversaw a massive reduction in poverty and economic growth at record levels. For this reason, he ran under the premise that his policies provided tangible improvements to Bolivia’s socio-economic situation.
UPDATE: Bolivia’s Political & Economic Situation 3 ECONOMY Recovery after a shocking blow
For the past decade, Bolivia’s economy grew at record levels primarily due to commodity exports, including natural gas, silver, zinc, and soy. However, like most countries in the region, Bolivia was hit hard by the Covid-19 pandemic and the related crisis. Lockdowns and restrictive measures prompted an economic contraction during the second quarter of 2020; nevertheless, the economy slowly started to recover in third quarter, thanks to government support and the easing of the restrictive measures. After growing by +2.2% in 2019, the country’s GDP sharply decreased by 7.3% in 2020.
The Economic Commission for Latin America and the Caribbean (ECLAC) predicts that Bolivia will
4 UPDATE: Bolivia’s Political & Economic Situation For the past decade, Bolivia’s economy grew at record levels mostly due to exports of commodities including natural gas, silver, zinc, and soy. However, like most countries of the region, Bolivia was hard hit hard by the Covid-19 pandemic and the related crisis.
register an economic growth of 5.1% in 2021, $3 billion worth of sovereign bonds in the the second highest in South America. international market in 2021.
The Arce administration has set out an With respect to proposal (3), in an effort to economic recovery agenda focused on (1) improve the investment climate, the Arce furthering social policies (health, education, administration intends to promote the 2015 and reduction of poverty); (2) undertaking Investment Law, provide additional incentives large scale infrastructure projects which were to companies interested in investing in put on hold after the 2019 election (highways, strategic sectors, and has vowed not to pursue airports and hospitals); and (3) incentivising nationalizations. With the latter approach in foreign investment in strategic sectors such mind, the Minister of Mining has declared the as energy, gas, and mining. country’s openness to foreign investment, and has received diplomatic delegations from To tackle proposals (1) and (2) of the agenda, China, Japan and the United Kingdom. the Arce administration is looking to issue
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