Financial turmoil in Bolivia fuels distrust in executive and its declaration of ‘failed coup’: NPR

LA PAZ, Bolivia – There are signs reading “I’m buying dollars” on the door of Victor Vargas’ shoe shop in the middle of Bolivia’s largest city, a determined struggle to keep his community business alive.

Just a few years ago, Vargas, 45, would open the doors at 8 a.m. to a throng of customers already ready to buy tennis shoes imported from China. Now, his shop lies depressingly empty.

“Right now, we are in a terrible crisis,” he said. “Nobody buys anything anymore… We don’t know what’s going to happen.”

Bolivians like Vargas were drained by the economic turmoil within the smaller South American peoples, created by the established over-dependence and now shortage on the US dollar.

The industrial slowdown has been exacerbated by the ongoing feud between President Luis Arce and his ally-turned-rival, former President Evo Morales, in the lead-up to the presidential election. Many Bolivians affected by the emergency have lost confidence in Arce, who denies that the country is even in an economic emergency.

“Bolivia’s economy is growing. A crisis economy does not grow,” Arce told The Related Press in an interview. This was refuted by economists and dozens of Bolivians.

A ‘failed coup’ or a staged ‘self-coup’?

That deep mistrust came to the fore on Wednesday after what the federal government called a “failed coup” and what the warring parties, including Morales, called a staged “self-coup” aimed at earning unpopular political points. Before the elections.

Whether or not the coup was genuine, most Bolivians who spoke to the AP said they do not trust what their leaders say, and say it would be better for Arce to address Bolivia’s gasping economy. It would be better if he does not do political stunts for more weeks. ,

“They should be thinking about Bolivia’s economy, making a plan to move forward, finding a way to get dollars and working to move Bolivia forward,” Vargas said. “There will be no more childish ‘self-coup’.”

That rising tension has paved the way for more conflict in a country that is no stranger to political unrest.

Bolivia’s financial emergency is rooted in money dependence, depletion of global reserves, rising debt and difficulties in producing goods like fuel that were once a financial boon for the Andean people.

The aim, said Gonzalo Chávez, an economist at the Catholic College of Bolivia, is to replace Bolivia’s largely import economic system with one “totally dependent on the dollar”. When Bolivia’s favoritism was implemented, the country’s “economic miracle” led to it becoming one of the country’s fastest growing economies.

A sign presenting foreign currency conversion fees in L.A. Paz on Friday, June 28, 2024.

Carlos Sanchez/AP

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Carlos Sanchez/AP

Negative Greenback, Refuse Trade

Vargas’ network opened up the shoe industry nearly 30 years ago because he saw it as a surefire way to ensure balance for future generations. The community imports shoes from China, for which they pay in greenbacks and sell them in Boliviano, the currency of Bolivia. Without dollars, they are deprived of trade.

The shortage of greenbacks has culminated in the emergence of a sluggish market, with many dealers bringing dollars from neighboring Peru and Chile and selling them at higher prices.

Pascuala Quispe, 46, spent her Saturday at L. Spent strolling around A. The city of Paz is flocking to other foreign currency exchange stores, desperately looking for greenbacks to purchase automotive parts. The actual exchange rate as of date is 6.97 bolivianos per dollar, he was once told that the actual value was 9.30 bolivianos, which to him was a greatly inflated price. So she kept wandering in the hope of finding success in other places.

The whole thing has an indirect cost impact. The population has imposed restrictions on purchasing shoes, meat and clothing, and this has driven the affluent masses into poverty. Bolivians make jokes about having a “mattress bank”, storing money in the house because they do not consider banks.

Quispe said, “There are no jobs… and the money we make is not enough for anything.” “Everyone is suffering.”

Some sellers like Vargas post indicators on their trading doors, hoping traders will trade dollars at a more affordable price.

some momentary answers

“It’s an advanced fiscal package that has some short-term answers,” said Chávez, the economist.

However Arce emphasizes that Bolivia’s economy is “one of the most stable economies” and says he is taking action to deal with Bolivia’s nagging problems, including dollar and gas shortages. He said the federal government is industrializing, investing in new economies like tourism and lithium.

Debt Bolivia sits on the world’s largest reserves of lithium, a high-value metal key to the transition to a green economy, Chávez said, adding that investment is the most viable in the long run, largely due to administrative disasters. . Meanwhile, inflation has outpaced monetary expansion, and most Bolivians face unbalanced working conditions with little pay.

It is only linked to the ongoing battles between Arce and Morales, who returned from exile after resigning in 2019 following unrest, which Morales believes was a coup against him. Now the former allies have traded insults and fought over who will form his Motion for Socialism party, known by its Spanish acronym MAS, ahead of 2025 elections.

“Arce and Evo Morales, they fight over who is more powerful,” Vargas said. “But no one will rule for Bolivia…there is a lot of uncertainty.”

Dissatisfaction fuels protests and movements

Widespread discontent has fueled waves of protests and walkouts in recent months. The protests and road blockades have caused another economic loss to shoe trader Vargas, as consumers across the country have not continued to purchase goods due to the chaos of the widespread protests.

Morales, who still wields power admirably in Bolivia, banned Arce’s government from taking action in Congress to deal with the industrial unrest, which Arce told the AP was a “political attack.” ” Was.

Morales has fueled speculation that the army attack on the executive palace, reportedly led by former army commander José Zuniga, was a political stunt orchestrated by Arce to elicit relief from the Bolivian people. This announcement was first made by Zuniga himself at the time of his arrest.

“He deceived and lied not only to the people of Bolivia, but to the entire world,” Morales said in a Sunday radio program.

The political disputes have left many people, like 35-year-old truck driver Edwin Cruz, shaking their heads as he sometimes waits for hours in long lines for diesel and gas due to intermittent shortages due to shortages. Of foreign currencies.

“Diesel is like gold now,” he said. “People are not stupid. And with this whole ‘self-coup’ this government has to go.”

Cruz is among those who do not need to vote for either Morales or Arce. Bolivians have few alternative options, Chávez said, adding that the discontent has opened a “small window” for an infiltrator to gain traction, as it has recently with so many Latin American outsiders.

Recently, self-described “anarcho-capitalist” Javier Miley has taken the helm of neighboring Argentina, which shares many similarities with Bolivia, with a promise to lead the country out of its economic crisis.

Meanwhile, Vargas doesn’t know what he’ll do with his community’s collection of shoes. Once a somewhat happy state, the store has turned into a financial drain. He will pass it on to one of his four children, although they all want to lose Bolivia. One of his children has already gone to China.

“They don’t want to be here anymore,” Vargas said of his empty collection. “Here in Bolivia, there is no future.”