Signs reading “I’m buying dollars” line the doors of Víctor Vargas’s shoe shop in the heart of Bolivia’s biggest city, a desperate attempt to keep his family business alive.
Just a few years ago, Mr. Vargas, 45, would unlock the doors at 8 a.m. to a crush of customers already waiting to buy tennis shoes imported from China. Now, his shop sits hopelessly empty.
“Right now, we are in a dreadful crisis,” he said. “No one buys anything anymore. … We don’t know what’s going to happen.”
Bolivians like Mr. Vargas have been hit hard by economic turmoil in the small South American nation — fueled by a longtime hyper-dependence on, and now shortage of, U.S. dollars.
The economic downturn has been exacerbated by an ongoing feud between President Luis Arce and his ally-turned-rival former President Evo Morales in the lead-up to next year’s presidential election. Many Bolivians impacted by the crisis have lost trust in Mr. Arce, who even denies the crisis.
“Bolivia has an economy that’s growing. An economy in crisis doesn’t grow,” Mr. Arce said. That was contradicted by both economists and dozens of Bolivians.
That deep distrust came to a head on Wednesday following a spectacle which the government called a “failed coup d’etat” and opponents including Mr. Morales called a staged “self-coup” meant to earn the unpopular leader political points before elections.
‘Political stunts’
Whether the coup attempt was real or not, most Bolivians said they no longer believe what their leader says, and that Mr. Arce would be better served addressing Bolivia’s gasping economy and less time carrying out political stunts.
“He should think about Bolivia’s economy, find a way to get dollars and work to move Bolivia forward,” Mr. Vargas said. “No more of these childish ‘self-coups.’”
That simmering anger has paved the way for even more strife in a country that is no stranger to political unrest.
Bolivia’s economic crisis is rooted in a complex combination of dependence on the U.S. dollar, draining international reserves, mounting debt and failures to produce products like gas, which was once the Andean nation’s economic boon.
This has meant that Bolivia has largely become an import economy “totally dependent on dollars,” said Gonzalo Chávez, an economist with Bolivia’s Catholic University. That once worked in Bolivia’s favour, driving the country’s “economic miracle” as it became one of the region’s fastest growing economies.
Mr. Vargas’s family opened the shoe business nearly 30 years ago because they saw it as a surefire way to ensure stability for coming generations. The family imports shoes from China, which they pay for in U.S. dollars and sell them in Bolivia’s currency, bolivianos.
The shortage of U.S. dollars has led to the emergence of a black market, with many sellers bringing in greenbacks from neighbouring Peru and Chile and selling them at a gouged price.
Pascuala Quispe, 46, spent her Saturday walking around La Paz’s downtown going to different currency exchange shops, desperately searching for U.S. dollars to buy car parts. While the official exchange rate is 6.97 bolivianos to the U.S. dollar, she was told the real price was 9.30 bolivianos, far too high a price for her.
Trickling down
Gouged prices have trickled down to everything. People have stopped buying shoes, meat and clothing, and that has pushed working class people deeper into poverty. Bolivians make jokes about having “mattress banks,” storing cash at home because they don’t trust banks.
“There are no jobs. … and the money we earn isn’t enough for anything,” Ms. Quispe said. “Everyone suffers.”
It’s a complicated economic bind that has few short-term solutions, said Mr. Chávez.
But Mr. Arce insists that Bolivia’s economy is “one of the most stable” and said he was taking action to address problems ailing Bolivians, including shortages of U.S. dollars and gasoline.
He said the government was also industrialising, investing in new economies like tourism and lithium.
While Bolivia sits on the world’s biggest stores of lithium, a high-value metal key to transitioning to a green economy, investment is only viable in the long term, largely due to government failures, said Mr. Chávez.
Meanwhile, inflation has outpaced economic growth, and most Bolivians face unstable work conditions with minuscule pay.
That is only compounded by ongoing fights between Mr. Arce and Mr. Morales, who returned from exile after resigning during unrest in 2019, which Mr. Morales maintains was a coup against him. Now the former allies have slung insults and fought over who will represent their Movement for Socialism party (MAS), ahead of 2025 elections.
“Arce and Evo Morales, they fight over who is more powerful,” Mr. Vargas said. “But neither govern for Bolivia. … There’s a lot of uncertainty.”
Mr. Morales, who still wields a great deal of power in Bolivia, blocked Mr. Arce’s government from passing measures in Congress to ease the economic turmoil, which Mr. Arce said was a “political attack.”
While Bolivians have few other options, Mr. Chávez said discontent opened a “small window” for an outsider to gain traction, just as it has with a number of Latin American outsiders in recent years.
Most recently, self-described “anarcho-capitalist” Javier Milei has taken the helm of neighbouring Argentina with promises to lift the country out of its economic spiral, which shares a number of similarities with Bolivia’s.
