Rodrigo Paz’s proposals to govern Bolivia after 20 years of socialism (and how he will fulfill them without foreign currency)

LOOK: “Rodrigo Paz has won because the majority of the population prefers the renewal of political figures in Bolivia”

The government of Luis Arcewho did not run for re-election because he had no chance of winning, depleted dollar reserves to maintain the fuel subsidy policy.

Furthermore, for about two years Bolivia suffers from a shortage of dollars and fuel that has triggered inflation to 23% year-on-year as of September.

The economy of Bolivia registered a contraction of 2.4% in the first half of 2025, according to the National Institute of Statistics (INE).

Precisely, the campaign offers of Peace58, focused on plans to solve the economic crisis.

During the campaign, he spoke of injecting some US$4 billion in the first year of his Government to reactivate the economy, through investments, financing mechanisms and foreign investment.

Another of his promises was not to resort to eternal credit. “Get the house in order without resorting to the International Monetary Fund”said.

And this Monday, in his first press conference as president-elect, he announced that he has maintained contacts with friendly countries such as the United States, Brazil, Argentina, Uruguay and Paraguay to seek their support in solving the crisis of fuels.

But can he keep his promises? The Bolivian journalist and analyst Rafael Archondo he told The Commerce that Paz will take office without a majority in Congress, and will depend on an alliance with Jorge Tuto Quiroga to sustain governability of the country and so that it can fulfill what it offered during the campaign.

If the alliance goes and Peace reaches the two thirds in Congressexplains Archondo, will be able to appoint high authorities, reform structural laws or call referendums.

“Without that pact, your room for maneuver will be very limitedand any attempt at deep reform will be blocked“, Archondo remarked.

Then, Archondo noted, the government’s initial agenda should focus on the coincident points between the Paz and Quiroga programs.

Capitalism for all

What did Rodrigo Paz promise?

One of its key proposals is “capitalism for all”, where it offers a model focused on giving more opportunities to entrepreneurs and commerce, reducing paperwork for businesses and providing access to cheap credit.

It also seeks to provide incentives to those who currently work informally to enter the formal system.

That they pay a single tax below 10% and that tariffs are reduced to a minimum.

Archondo said that “capitalism for all” lacks real economic support so that it is reflected in reality, and that responds more to a electoral narrative than to a structured development plan.

He added that he targets sectors such as smugglers, informal traders, illegal miners and producers linked to gray economieswhich represent a broad social base in the country, but their formalization it is extremely difficult.

He Movement to Socialism (MAS) formally born in 1997 in Boliviapromoted by peasant and coca growing organizations from the highlands and tropics of Cochabamba. Its main founder and historical leader is Evo Morales. The left party He has won four consecutive presidential elections: 2005, 2009, 2014 and 2020.

Budget decentralization

Paz also proposed the decentralization of the national budget. You want this to be distributed 50% to the central government and 50% to subnational governments.

“Today the central State keeps 80% of the resources and sends 20% to more than 339 municipalities, governorates, universities and decentralized entities. It is a misery (…) The federal structure is going to be the solution for the country and within the proposal we propose 50/50, which seeks to decentralize the resources of the State”Paz said after the first round on August 17.

proposed freeze the activities of all public companies that maintain operating deficits.

Fuel subsidies

Peace He said he will keep the fuel subsidy for the “vulnerable sectors” of society.

The shortage of fuel This is due to the lack of foreign currency for imports, in addition to the problem of subsidy. The country does not have dollars because gas exports fell for several years, since no new deposits were discovered.

During the campaign, Quiroga proposed requesting a external credit of US$12 billionpartly from the IMF. Paz opposed this alternative because it would double the external debt. The president-elect prefers to go for internal cuts and tax savings for some US$1.2 billion.

Archondo suggested that both should give in and agree to a middle groundprobably a more moderate loan accompanied by an austerity plan.

But the problem is not going to be solved with the loan that is obtained. You have to go towards the diversification of the economysince we can no longer depend on gas exports.

At this point, the elimination or reduction of hydrocarbon subsidy is inevitable, Archondo stressed, but warned that it is politically explosive, as it could lead to a social outbreak.

“Eliminating the subsidy would generate immediate inflationgeneral rise in prices and a potential social upheavalsimilar to what happens in Ecuador”, Archondo said.

The analyst stated that neither Paz nor Quiroga promised its immediate elimination, so the alternative would be a gradual reduction with temporary compensations to transporters, for example. But he noted that Bolivia has no fiscal margin nor reserves to sustain that plan for long.

The Evo Morales factor

As to Evo Moralesthis is already moving to capitalize on any misstep of the future president. On Monday, he took credit for Paz’s victory by assuring that he won with the “evista vote” and that the vote “was more against Tuto Quiroga.”

Archondo said that, indeed, a fraction of Evo’s vote was decisive to tip the balance in the second round, but he stressed that its real electoral strength has fallen from 60% to 15%. He indicated that another key vote for Paz was that of the businessman Samuel Doria Medinawho came third in the first round.

The analyst maintained that Morales now seeks to position himself as arbiter of social oppositionwaiting for mistakes from the new government.

“I think that The worst news for Evo Morales these days would be that a coalition that is actually anti-Evo is organized, which would be the Paz-Quiroga alliance”he indicated.