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Bolivia’s economic turmoil fuels distrust of government and its ‘failed coup’ claims: NPR

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Bolivia’s economic turmoil fuels distrust of government and its ‘failed coup’ claims: NPR

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Soldiers gather outside the presidential palace at Plaza Murillo in La Paz, Bolivia, Wednesday, June 26, 2024. A soldier motions to reporters to leave Plaza Murillo.

Soldiers gathered outside the presidential palace in Plaza Murillo in La Paz, Bolivia, on Wednesday, and a soldier motioned for reporters to leave the Plaza Murillo. Bolivian President Luis Arce warned that an “abnormal” deployment of troops was taking place in the capital, raising concerns about a possible coup.

Juan Carita/AP


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Juan Carita/AP

LA PAZ, Bolivia — Signs reading “I want to buy dollars” adorn the front of Víctor Vargas’ shoe store in the heart of Bolivia’s largest city, a desperate effort to keep his family’s business afloat.

Just a few years ago, Vargas, 45, would open his store at 8 a.m. to a long line of customers waiting to buy tennis shoes imported from China. Now, his store is empty.

“Right now, we’re in the middle of a terrible crisis,” he said. “Nobody’s buying anything anymore. … We don’t know what’s going to happen.”

Bolivians like Vargas have been hit hard by the small South American country’s economic turmoil, which stems from its long-standing over-reliance on the U.S. dollar and now a shortage of it.

The economic downturn has been exacerbated by an ongoing feud between President Luis Arce and former President Evo Morales, his current ally, ahead of next year’s presidential election. Many crisis-hit Bolivians have lost trust in Arce, who has even denied that the country is in an economic crisis.

“Bolivia’s economy is growing. An economy in crisis does not grow,” Arce told The Associated Press in an interview, a comment disputed by economists and dozens of Bolivians.

A “failed coup” or a premeditated “self-coup”?

The deep distrust was evident on Wednesday in what the government called aFailed coupOpponents, including Morales, called it a premeditated “self-coup” aimed at allowing the unpopular leader to score political points ahead of elections.

Whether the coup attempt was real or not, most Bolivians interviewed by The Associated Press said they no longer believed what their leaders said and said Arce would be better off focusing on fixing Bolivia’s troubled economy instead of spending time on political stunts.

“He should think about Bolivia’s economy, develop a plan to move forward, find ways to get dollars, and try to move Bolivia forward,” Vargas said. “No more of this childish ‘self-coup.’ ”

This simmering anger paves the way for further conflict in a country that is no stranger to political turmoil.

Bolivia’s economic crisis is rooted in Dependence on the US dollardepleted international reserves, piled up debt and was unable to produce products such as natural gas that were once the backbone of the Andean nation’s economy.

Gonzalo Chavez, an economist at the Catholic University of Bolivia, said this meant that Bolivia had essentially become an importing economy “completely dependent on the dollar.” This had worked in Bolivia’s favor, fueling the country’s “economic miracle” and making it one of the fastest-growing economies in the region.

A sign displays currency exchange rates in La Paz, Bolivia, Friday, June 28, 2024.

A sign displays currency exchange rates in La Paz, Friday, June 28, 2024.

Carlos Sanchez/AP


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Carlos Sanchez/AP

No dollars, no business

The Vargas family started a shoe business nearly 30 years ago because they saw it as a surefire way to ensure a stable life for future generations. They import shoes from China, pay for them in dollars, and sell them for Bolivian bolivianos. Without dollars, they have no business.

The dollar shortage has led to the emergence of a black market, with many sellers bringing dollars from neighboring Peru and Chile and then selling them at inflated prices.

Pascula Quispe, 46, wandered around downtown La Paz on Saturday, visiting different currency exchange shops, desperately searching for dollars to buy car parts. Although the official exchange rate was 6.97 bolivianos to the dollar, she was told the actual price was 9.30 bolivianos, too expensive for her. So she kept walking, hoping to try her luck elsewhere.

Soaring prices have affected everything. People are not buying shoes, meat and clothes, pushing the working class deeper into poverty. Bolivians joke that they have “mattress banks” because they don’t trust banks and keep their cash at home.

“Without work … we simply don’t make enough money,” Kispe said. “Everyone suffers.”

Some vendors like Vargas put signs on their store doors, hoping sellers will negotiate more reasonable prices.

Some short-term solutions

Economist Chavez said it is a complex economic dilemma with few short-term solutions.

But Arce insisted Bolivia’s economy was “one of the most stable” and said he was taking action to address problems plaguing Bolivians, including dollar and gasoline shortages. He said the government was also industrializing and investing in tourism and new economies such as lithium.

Chavez said that although Bolivia has the world’s largest reserves of lithium, a high-value metal that is key to the transition to a green economy, investment can only be realized in the long term, largely due to government failures. Meanwhile, inflation has outstripped economic growth and most Bolivians face precarious working conditions and meager wages.

The ongoing feud between Arce and Morales has only exacerbated the situation. Return from Exile Morales resigned during the 2019 unrest, which he insisted was a coup against him. Now the two former allies are trading insults and vying over who will represent their Movement for Socialism party, known by its Spanish acronym MAS, ahead of 2025 elections.

“Arcé and Evo Morales are fighting over who is more powerful,” Vargas said. “But neither of them can rule Bolivia … There is a lot of uncertainty.”

Discontent leads to protests and strikes

The protests and roadblocks, which have fueled waves of protests and strikes in recent months amid widespread public discontent, have dealt Vargas, a shoe seller, another financial blow as the ubiquitous protests have kept customers away from his merchandise across the country.

Morales, who still holds great power in Bolivia, has blocked Arce’s government from passing measures in Congress to ease economic turmoil, which Arce told The Associated Press was a “political attack.”

Morales has fueled speculation that last week’s military attack on government buildings led by former military commander José Zúñiga was a political stunt by the Arce group to win sympathy from Bolivians – an allegation Zúñiga himself first made when he was arrested.

“He deceived, lied not only to the Bolivian people, but to the whole world,” Morales said in a radio program on Sunday.

The political bickering has left many people like 35-year-old truck driver Edwin Cruz shaking their heads as they wait in long lines for hours or even days for diesel and gasoline because of intermittent shortages caused by a lack of foreign exchange.

“Diesel is as valuable as gold right now,” he said. “People are not stupid. And with the ‘self-coup’ that has taken place, this government must go.”

Cruz is among those who do not want to vote for either Morales or Arce. While Bolivians have little choice, Chavez said discontent has opened a “small window” for outsiders to gain support, as many Latin American outsiders have in recent years.

Recently, Javier Millais, a self-proclaimed “anarcho-capitalist,” took over neighboring Argentina, promising to lead the country out of its economic woes, which have many similarities to Bolivia’s situation.

Meanwhile, Vargas doesn’t know what to do with his family’s shoe store, which was once his pride but is now a financial burden. He wanted to pass it on to one of his four children, but they all want to leave Bolivia. One of his children has already immigrated to China.

“They don’t want to live here anymore,” Vargas said in his empty shop. “There is no future here in Bolivia.”

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