In the early hours of this Thursday, the soldiers who lined up in the central square of La Paz, capital of Bolivia, left almost as suddenly as they arrived. Their place was taken by crowds of citizens demonstrating in favor of democracy. President Arce came out onto the balcony of the presidential palace and assured: “No one can take away the democracy that we achieved at the polls and with the blood of the Bolivian people.”
The apparent coup attempt failed. And this is actually good news for a region that has been repeatedly tested by coups d’état. However, the fact that there was this threat to the political system and democratic institutions by the army is a symptom of the acute political and economic crisis that the country is going through.
The political crisis has a lot to do with the breakdown of the relationship between current president Luis Arce and former president Evo Morales. General Zuniga (the leader of the would-be coup plotters) may have been fired because of the unfavorable comments he made about Morales in public, the latter may have been quick to condemn the coup attempt and support the president, but that does not mean that everything is fine in relations between the current and former socialist president. Tensions between the two, who previously worked together, have sometimes led to paralysis in government work.
The Morales-Arse conflict that paralyzes government work
The political crisis in Bolivia actually began in 2019, when Morales ran for a third consecutive term – something prohibited by the Constitution. He won, but after accusations of fraud and mass protests that left 36 people dead, the military asked him to resign. He did so and left the country.
In 2020, Bolivia elected Arce, who had served as economy minister in the Morales government, as president, but when the pandemic hit the country, the economy collapsed. Morales is back and has announced that he will run against Arce in 2025, which the president considers unconstitutional (the constitutional court agrees).
However, Morales’ allies in Congress have made it nearly impossible for Arce to govern, blocking efforts to secure loans and blocking plans to attract foreign investors to tap abundant lithium reserves. The president has repeatedly complained about an “economic boycott” by his opponent’s allies.
![Bolivia: The double crisis behind the coup attempt and the role of Morales 1 arce](https://thegurumedia.com/wp-content/uploads/2024/06/arce.jpg)
The most acute economic problems
In the midst of this dispute, Bolivia faces a desperate shortage of dollars to produce fuel, which is largely imported. The official exchange rate between the national currency, the Bolivian, and the dollar has collapsed. On the black market, the US dollar is worth around 50% above the official rate.
The government spends around $2 billion a year on importing subsidized fuel, which, according to The Economist, has brought it to the brink of bankruptcy.
The country’s reserves of natural gas, once a source of energy, are rapidly dwindling, in part due to a lack of investment by the state-controlled hydrocarbon industry. All of this contributes to an explosive scenario that leads to warnings and downgrades from rating agencies, further increasing the country’s financing costs in the markets.
Zuniga peaks and fear of political chaos
The coup attempt seemed to momentarily unite the two rivals. Morales quickly denounced the coup attempt and called for mass mobilization to protect democracy. As the Economist notes, the fear that the right is politically favored may have helped this process.
However, with the soldiers back in their barracks, the prospects of a normalization of Morales-Arse relations do not seem likely. Indeed, if General Zuniga’s claims at the time of his arrest that it was Arce himself who asked him to organize a rebellion “to increase (the president’s) popularity” are at all true, the political crisis will worsen. Before the general could say anything more, he left. But that may not be enough to avert political chaos.