A soldier gestures for journalists to leave Plaza Murillo as soldiers gather outside the presidential palace in Plaza Murillo in La Paz, Bolivia, on Wednesday. Bolivian President Luis Arce warned that there was an “irregular” deployment of troops in the capital, raising concerns that a possible coup was underway.
Juan Karita/AP
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Juan Karita/AP
LA PAZ, Bolivia — Signs reading “I buy dollars” line the doors of Víctor Vargas’ shoe store in the heart of Bolivia’s largest city, a desperate attempt to keep his family business alive.
Just a few years ago, Vargas, 45, opened the doors at 8 a.m. to a crowd of customers already waiting to buy tennis shoes imported from China. Now his store is hopelessly empty.
“Right now we are in a terrible crisis,” he said. “Nobody is buying anything anymore. … We don't know what's going to happen.”
Bolivians like Vargas have been hit hard by the economic turmoil in the small South American country, fueled by a long-standing hyper-reliance on, and now a shortage of, US dollars.
The economic downturn has been exacerbated by an ongoing feud between President Luis Arce and his ally-turned-rival, former President Evo Morales, ahead of next year’s presidential election. Many Bolivians affected by the crisis have lost faith in Arce, who denies the country is even in an economic crisis.
“Bolivia has an economy that is growing. An economy in crisis does not grow,” Arce told The Associated Press in an interview, a claim that was disputed by economists and dozens of Bolivians.
A 'failed coup' or a staged 'self-coup'?
That deep distrust reached a fever pitch on Wednesday after a spectacle the government called a “failed coup” and opponents including Morales called a staged “self-coup” aimed at gaining political points for the unpopular leader before elections.
Whether the attempted coup was real or not, most Bolivians who spoke to the AP said they no longer believe what their leader says, saying Arce would be better served by tackling Bolivia's faltering economy and less spend time performing political stunts.
“He should think about the economy of Bolivia, make a plan to move forward, find a way to get dollars and work to move Bolivia forward,” Vargas said. “No more of those childish 'self-coups.'”
That simmering anger has paved the way for even more unrest in a country experiencing political unrest.
Bolivia's economic crisis is the result of a complex combination of dependence on the dollar, depletion of international reserves, increasing debt and the inability to produce products such as gas, once the economic driving force of the Andean country.
This has led to Bolivia becoming largely an import economy that is “completely dependent on dollars,” said Gonzalo Chávez, an economist at Bolivia's Catholic University. That once worked to Bolivia's advantage and led to the country's “economic miracle” as it became one of the region's fastest-growing economies.
A sign shows the exchange rates in La Paz on Friday, June 28, 2024.
Carlos Sánchez/AP
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Carlos Sánchez/AP
No dollars, no business
The Vargas family started the shoe business almost 30 years ago, because they saw it as a sure way to guarantee stability for future generations. The family imports shoes from China, which they pay for in dollars and sell in Bolivian currency, bolivianos. Without dollars, they have no business.
The dollar shortage has created a black market, with many sellers importing dollars from neighboring Peru and Chile and selling them at exorbitant prices.
Pascuala Quispe, 46, spent her Saturday walking around downtown La Paz, going to several exchange offices and desperately looking for dollars to buy car parts. Although the official exchange rate is 6.97 boliviano to the dollar, she was told the real price was 9.30 boliviano, far too high for her. So she walked on, hoping to find happiness elsewhere.
The sharp prices have trickled down to everything. People have stopped buying shoes, meat and clothes, and that has pushed the working class deeper into poverty. Bolivians joke about having “mattress banks,” storing cash at home because they don’t trust the banks.
“There are no jobs. … and the money we make is not enough for anything,” Quispe said. “Everyone is suffering.”
Some vendors, like Vargas, post signs on the doors of their businesses, hoping sellers will trade dollars at a more reasonable price.
Few short-term solutions
It is a complicated economic problem for which there are few short-term solutions, economist Chávez said.
But Arce insists Bolivia's economy is “one of the most stable” and says he is taking action to address Bolivians' problems, including shortages of dollars and gasoline. He said the government is also industrializing and investing in new economies such as tourism and lithium.
Although Bolivia has the world’s largest reserves of lithium, a high-value metal that is key to the transition to a green economy, investments are only viable in the long term, largely because of government failure, Chávez said. Meanwhile, inflation has outpaced economic growth, and most Bolivians face unstable working conditions and minuscule wages.
That’s only been exacerbated by ongoing fighting between Arce and Morales, who returned from exile after stepping down during unrest in 2019 in what Morales said was a coup against him. Now the former allies have traded insults and fought over who will represent their Movement for Socialism party, known by its Spanish acronym MAS, in the run-up to the 2025 elections.
“Arce and Evo Morales are fighting over who has the most power,” Vargas said. “But neither of them governs for Bolivia. … There is a lot of uncertainty.”
Discontent fuels protests and strikes
The widespread discontent has fueled waves of protests and strikes in recent months. Protests and roadblocks have dealt Vargas, the shoe seller, another economic blow, as customers from across the country no longer travel to buy products amid the chaos of pervasive protests.
Morales, who still holds significant power in Bolivia, prevented Arce's government from passing measures in Congress to ease the economic turmoil, which Arce told the AP was a “political attack.”
Morales has fueled speculation that last week's military attack on the government palace, reportedly led by former military commander José Zúñiga, was a political stunt orchestrated by Arce to gain sympathy from Bolivians. The claim was first filed by Zúñiga himself after his arrest.
“He has deceived and lied not only to the Bolivian people, but to the entire world,” Morales said on a radio program on Sunday.
The political wrangling has left many, like 35-year-old Edwin Cruz, a truck driver, shaking their heads as they wait for hours, sometimes days, in long lines for diesel and gasoline due to periodic shortages caused by a lack of foreign currency.
“Diesel is like gold now,” he said. “People are not idiots. And this whole 'self-coup' thing has to be stopped by this government.”
Cruz is among those who will not vote for Morales or Arce. While Bolivians have few other options, Chávez said discontent opened a “small window” for an outsider to gain support, just as it has for some Latin American outsiders in recent years.
Recently, self-described 'anarcho-capitalist' Javier Milei took over the helm of neighboring Argentina with promises to pull the country out of its economic spiral, which has some similarities with Bolivia's.
Meanwhile, Vargas doesn't know what to do with his family's shoe store. Once a point of pride, the store has turned into a financial pit. He was going to pass it on to one of his four children, but they all want to leave Bolivia. One of his children has already migrated to China.
“They don't want to live here anymore,” Vargas said from his empty store. “There is no future here in Bolivia.”
