A New Era for Bolivia as Opposition Ends 20 Years of Leftist Rule

Bolivia, a South American nation, held national elections for president and congress on August 17. The result was a major shift from Bolivia’s past 20 years, as the ruling left-wing Movement for Socialism (MAS) party suffered a historic defeat, with two opposition candidates advancing to the presidential runoff for October 19. 

The election occurred amidst a major economic crisis—24% inflation, public debt at 95% of GDP, a shortage of US dollars and fuel, and a junk credit rating of CCC- —in Bolivia. Over the past decade, Bolivia benefited from a major commodities boom and revenue from natural gas exports, earning $14 billion in foreign reserves. However, due to a lack of investment in gas production and a decline in gas prices, government gas revenue was only $1.6 billion last year, and total foreign reserves have fallen to $2 billion, with only $50 million in liquid foreign currency. A major cause of the government’s lack of funds is fuel subsidies, which cost approximately $3 billion annually. As a result of the cash crunch, importing sufficient fuel has become unaffordable, leading to major shortages and long lines at gas stations. There is also a shortage of US dollars due to the government's inability to maintain the fixed exchange rate tying the national currency, the boliviano, to the US dollar. To boost the gas sector and increase economic growth in the long-term, the new government will have to cut taxes and regulations on the gas industry, bolster private sector involvement in the economy and assure investors that Bolivia is an attractive place to invest.

As a result of the economic crisis, support for the MAS has fallen, leading incumbent president Luis Arce to choose against a re-election bid and MAS candidate Eduardo del Castillo to earn merely 3.17% of the vote. Instead, a major splinter of MAS was led by Bolivian Senate president Andrónico Rodríguez, who ran in the election as part of the left-wing Popular Alliance. Rodríguez aimed to consolidate support as the standard bearer for the left-wing, but many supporters of former president Evo Morales refused to back him. Ultimately, Rodríguez only earned 8.5% of the vote, failing to make the runoff.

In addition to the MAS’s general unpopularity, Morales—who led MAS before falling out with Arce—played a key role in the left-wing defeat. He was banned from running in the election due to a court ruling that enforces Bolivia's presidential two-term limit. Morales had already exceeded this limit, having served three terms from 2006 to 2019. In protest of this decision, Morales urged his supporters to cast a null vote to protest his exclusion. The final tally revealed that almost 20% of votes cast were null. Morales also refused to endorse Rodríguez, branding him a traitor. 

The two candidates who did advance to the runoff were centrist Senator Rodrigo Paz with 32% and conservative former president Jorge “Tuto” Quiroga with 27% of the vote. Paz unexpectedly led the first round, despite most polls predicting that Samual Doria Medina—a center-right businessman—would advance instead. One key reason for Paz’s victory in the first round was his running mate, former police captain Edman Lara, who has been an outspoken opponent of corruption and led a savvy social media campaign. In addition, Paz has built a broad coalition of support by winning votes from both the anti-MAS opposition and the moderate, disillusioned MAS supporters who are skeptical of more conservative candidates such as Quiroga and Medina. His policy platform reflects not only a market-friendly ideology but also a commitment to protecting social programs, as evidenced by his campaign slogan “capitalism for all, not just a few.” Specifically, Paz has pledged to distribute more funding to local governments instead of the central government, combat corruption, increase access to credit and loans, lower taxes, reduce import tariffs and privatize unprofitable state-run companies. However, unlike Quiroga, Paz has said he would not request a loan from the International Monetary Fund (IMF) to help Bolivia resolve its debts. Medina, who won 20% of the vote, has also endorsed Paz. 

Quiroga, by contrast, is a more traditional right-wing candidate, having run for president many times before. He also served out the remainder of the right-wing President Hugo Bánzer’s term after Bánzer resigned due to poor health. He may be able to win by leveraging anger about the MAS’s economic policies, promising a total reversal of the past 20 years. However, Quiroga’s appeal is limited beyond his conservative base and may struggle to appeal to moderate voters. Quiroga has promised to pursue pro-business policies, economic liberalization, an IMF loan and austerity measures, while also modernizing government services and increasing access to credit.

Most analysts predict that Paz has an advantage in the runoff, but if he wins, he will have to stabilize the economy while building a coalition within a fragmented, albeit conservative-leaning Congress.

Extemp Analysis by: Ty Tan

Question: What does Bolivia’s shift right signal for the rest of Latin America?

AGD: I would do one of two things:

1. A joke about Bolivian politics, as both Arce and especially Evo Morales have infinite joke potential.

2. I would do a heart story about someone suffering in Bolivia—and that a right shift seems hopeful, but worrying

Background: 

This background would be hard to manage, but I would do something like:

1. Basic background of leftist rise / control of LatAm politics

2. Recent shift right due to growing discontent

3. How Bolivia’s election results → signal something larger of a shift / change

Answer: This question is deceptive - in that it represents both a squo change AND an evaluative: my thesis would like be:

Early forecasts of Right-wing Tides (play on Pink Tide of Socialism for thematic appeal)

1. Weakening Leftist Control

2. Political Turmoil

3. Appeal of Right Wing Policies

Analysis + Concluding Thoughts

A hard part of these points is making sure your B always ties into Bolivia’s elections. Its hard to get behind but making sure the B proves solvency via Bolivia’s right leaning shift. I think your points should all be conditions of LatAm politics/society that are affected by Bolivia’s election results. I picked 3 basic ideas, but there are far more creative ones and others that weaken point bleed overall.

Happy Extemping!

Read more here:

• Joshua Klein, Congressional Research Service

• Christopher Sabatini, Chatham House

• Catherine Osborn, Foreign Policy

• Rich Brown, Americas Quarterly