For the last 50 years, Bolivia has endured many economic crises, from hyperinflation to a debt crisis to a financial collapse. It could be hard to believe that Bolivia had been the envy of South America throughout the 1960s and early 1970s, experiencing tremendous growth and prosperity. By 1977, massive deficits, state intervention, and national pain became the status quo. Despite promises by each government for fiscal and monetary reform to stabilize the country, Bolivia has fallen to the same political drama that its regional neighbors, like Chile and Peru, have gone through for so many years.
With Bolivia entrenched in a high-stakes presidential election, the population was forced to choose between centralization and blatant socialism. Whichever won, Bolivians would lose.
Bolivia: A 2020 Election Primer
On Oct. 18, Bolivians went to the polls to choose a president, vice president, and 136 members of Congress. The Movement Toward Socialism (Mas) party’s presidential pick, Luis Arce, declared victory soon after the votes were cast. The results of the election officially superseded those of last year’s electoral contest, which was annulled due to an agonizing political crisis.
President Evo Morales, who was exiled last year and claimed he was the victim of a right-wing coup, did not compete in the race. With the Socialists’ victory in this year’s election, does this mean Morales will have a role to play in Bolivian politics? This was always the possibility, even though Arce declined to say if the left-wing leader would be a part of his government. With the substantial defeat of Carlos Mesa, the centrist candidate of the Citizens’ Community alliance, Mas may have the mandate to do whatever it wishes for the next few years. Will Arce mirror Morales and refuse to leave power and embrace the authoritarian impulse among socialists?
That said, this is what Interim President Jeanine Áñez was hoping to prevent when she dropped out of the presidential race. Although she declared her candidacy earlier this year, irking political observers, she ended her campaign a few months later to avoid a “dispersion of the vote” between the candidates fighting against Arce and Mas.
Violence on Voting Day
Were there irregularities at the voting both? The Associated Press reported suggestions of discrepancies with the votes cast. However, intimidation and violence may have been a far bigger problem for the Bolivian election. U.N. electoral observers registered dozens of violent incidents during the campaign and on Election Day. Moreover, the interim government, citing “intelligence information,” claimed that Mas and its allies were planning violent acts should Arce lose the election. Now that Bolivia has made a hard left, Arce’s Mas will no longer need to riot.
Bolivia’s Socialist Problem
When the Movement Toward Socialism held power, many people observed that this was a case study of a successful socialist government as the economy grew and poverty slipped. However, one of the reasons Bolivia was able to afford a lot of its spending was due to higher energy, mineral. and metal prices – much like Venezuela before it destroyed its crude oil sector. With gold, silver, natural gas, and lithium prices forecast to grow, Bolivia could anticipate an influx of revenues. But with 140,000 confirmed COVID-19 cases and a death toll of more than 8,500, it would be hard for the country to initiate an economic expansion. The nation wants to embark upon greater public investment and increase in the size of government. The problem? The economy is projected to contract 8% this year, the government has billions in loans coming due from the Inter-American Development Bank and the World Bank, and it might default on its bonds.
Critics might defend Mas by arguing that Arce and his merry band of big-government acolytes inherited a mess from the previous interim government. The issue is that many of the country’s setbacks were instigated by Morales, and the opposition is far from free-market disciples. Let the excuses begin for Bolivia not being a socialist paradise commence!
Read more from Andrew Moran.
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