President-elect Rodrigo Paz will take office on Saturday, stepping into leadership as Bolivia grapples with its worst economic downturn in decades and prepares for politically sensitive reforms aimed at restoring fiscal stability.
Paz, a centrist former senator from the Christian Democratic Party, won the October 19 runoff election, ending nearly 20 years of leftist rule by the Movement to Socialism (MAS). His victory marks a major political shift for the Andean nation, which has struggled with high inflation, dwindling reserves, and declining energy exports. “When Paz steps in, he won’t have any liquid reserves in the central bank to import fuel,” said Juan Sola, an economist at BancTrust & Co. “But multilateral lenders are keen to support Bolivia in this new process.”
Although Paz’s party will hold the largest bloc in the new Legislative Assembly, it lacks a majority in both chambers. He will therefore need to forge alliances to advance his reform agenda.
The incoming legislature, which will sit until 2030, is dominated by pro-business and right-leaning parties, potentially giving Paz more room to implement market-friendly policies, analysts said.
Leaders from across Latin America, including Argentina’s President Javier Milei, a libertarian, and Chile’s leftist President Gabriel Boric, are expected to attend the November 8 inauguration in La Paz, underscoring the regional importance of Bolivia’s political transition.
Bolivia’s economy, once buoyed by state-controlled gas revenues, is now mired in fuel shortages, a shortage of U.S. dollars, and inflation topping 20%.
Years of nationalization and heavy subsidies have drained public coffers and discouraged foreign investment. The country’s foreign currency reserves have fallen to record lows, limiting its ability to pay for essential imports such as fuel. “In medical terms, the economy is on the verge of death,” said Gabriel Espinoza, an economic adviser to the incoming government.
Paz has pledged to cut diesel subsidies for agricultural and industrial sectors while phasing out gasoline subsidies more slowly to minimize the burden on commuters and small businesses.
Last month, Paz met with officials from the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) in Washington to discuss emergency financial assistance. Both institutions have signaled their readiness to back Bolivia’s stabilization plan, though any new loans will require legislative approval.
Economists say international cooperation will be critical to rebuilding confidence in Bolivia’s economy and replenishing reserves. “Paz will have to balance austerity with protection for vulnerable sectors, a politically risky path,” said Sola.
Africa Digital News, New York
