Bolivia is a South American country in a spiralling economic and political crisis as of 2025.
Bolivia's economic model rests on a fixed exchange rate, subsidised energy and food, and hefty public investment, funded by natural-gas exports paid in dollars. The country has been burning through its dollar reserves since 2014, when gas-export revenue collapsed. In early 2023 the central bank all but ran out of dollars; Bolivians can no longer freely access saved American currency. On the black market dollars sell at almost twice the official exchange rate. Fuel shortages have come to paralyse the country. Inflation hit 18% for the year to September 2025. After 11 consecutive years of deficits, public debt amounts to 92% of GDP. The fiscal deficit exceeds 10% of GDP. The fuel subsidy cost $2bn in 2024, or almost 4% of GDP. The price of petrol has been fixed at around $0.50 a litre since 2004 by government subsidy. The government flogs gold to pay for fuel imports, but shortages are still constant.
Bolivia holds the world's largest lithium deposits.
Mennonite colonies are a significant presence in Bolivia, which is the heartland for conservative Mennonites in the Americas. Visitors to colonies describe a pale, blond population travelling into Santa Cruz, Bolivia's largest city, to buy seeds, fertiliser and tractor parts. Transport in the colonies is limited to horse-drawn carts. Technology—including mobile phones—is mostly shunned, and people leave school at 13.
Bolivia's leaders have spurred industrial farming on deforested land for years through loan programmes and tax breaks. In 2019 the government lifted a ban on beef exports and approved legislation encouraging farmers to expand the agricultural frontier with fire. Beef exports and forest destruction surged in tandem. Deforestation has increased more than five-fold since 2019, according to Global Forest Watch. Cattle-ranching was responsible for 57% of all deforestation in the country between 2010 and 2022.
Bolivia lost 14,800 square kilometres of forest in 2024, the second-most of any country (behind Brazil), up 200% from 2023. It lost more than the Democratic Republic of Congo despite having just 40% of its forested area. Fires drove nearly two-thirds of the damage. Punishment for illegal land-clearing is rare: of 136 cases authorities opened in 2024, just six ended in a sentence.
Bolivia is one of very few countries with a legal market for coca leaves, which can be chewed as a mild stimulant but are also processed into cocaine. The law allows 22,000 hectares of coca fields to feed the legal market. The Single Convention on Narcotic Drugs, a United Nations treaty adopted in 1961, lists coca leaf as a "Schedule I" substance, but Bolivia negotiated a partial opt-out from the convention in 2013. In 2025 Bolivia requested a World Health Organisation review of coca's treaty status, which may recommend that coca be bumped down to Schedule II or removed from the schedules altogether. If the WHO recommends a change, the 53-member UN Commission on Narcotic Drugs would vote on the question. Peru opposes de-scheduling.
Bolivians have developed new coca products beyond traditional chewing, including coca tea, flour, sweets and coca machucada (leaves sprinkled with caffeine and flavourings and put under a power hammer). Such products have helped win over new consumers, bringing a rural habit to the urban middle class. If coca were de-scheduled internationally, Bolivia could begin exporting these products, though Bolivian coca growers worry that profits would be gobbled up by international companies.
Some coca base from Bolivia is processed into cocaine in Bolivian laboratories and then sent on to Europe. See cocaine trade.
Bolivia's government supports supposedly non-profit mining co-operatives, which mine most of the country's gold but often dig beyond their concession areas and flout environmental laws. A foreign-exchange crisis has pushed President Arce closer to the co-operatives. In 2024 the central bank bought $1.3bn-worth of gold from Bolivian miners to shore up its reserves. Opposition lawmakers have accused Epcoro, a new state-owned broker, of laundering illegal gold from the Amazon and selling it to the bank, an allegation Epcoro denies.
Bolivia is the only country besides Mexico that elects judges to its higher courts. Supreme Court judges have been elected since 2011. The selection mechanism has been a disaster, with the court's authority undermined by endless political squabbles; two-fifths of voters spoiled their ballots in the most recent judicial election.
Evo Morales led the Movement to Socialism (MAS) to power in 2006 and governed until 2019. Under his presidency, GDP grew at almost 5% a year and the share of people living in poverty fell from 61% to 37%. He renegotiated contracts with the firms extracting natural gas and kicked out the US Drug Enforcement Administration.
In 2019 Mr Morales ran for an unconstitutional fourth consecutive term. He won, but allegations of fraud sparked protests and the army asked him to resign. He went into exile in Argentina. An interim government took over—a transition the MAS views as a coup—before the party swept back into power in 2020 under Luis Arce, Mr Morales's former finance minister.
The MAS subsequently split bitterly between factions loyal to Mr Morales and those loyal to Mr Arce. Neither man got onto the ballot for the August 17th 2025 election: the economic crisis ruined Mr Arce's chances and he withdrew, while Mr Morales's candidacy was blocked by a court ruling on term limits. In the process the MAS's reputation was wrecked. Mr Morales was forced out of the party; he called on supporters to spoil their ballots to delegitimise the poll.
The front-runners were Samuel Doria Medina, a centrist tycoon, and Jorge Quiroga, a right-wing former president. Pollsters reckoned neither would surpass 25% in a field of eight; a run-off in October was likely. The left's only real hope was Andrónico Rodríguez, 36, the Senate's president, running not for the MAS but for the People's Alliance.
In the first round on August 17th 2025, the results defied expectations. Rodrigo Paz, a centrist senator whom polls had placed at about 10%, won with 32% of votes. Jorge Quiroga, the right-wing former president, came second with his coalition. Spoiled ballots—driven by Mr Morales's call for a "null vote"—came third, ahead of the MAS candidate, Eduardo del Castillo, who managed just 3%, barely enough to maintain the party's legal status.
On October 19th 2025 Mr Paz won the run-off with 55% of the vote, ending nearly 20 years of MAS rule. He had surged from under 10% in polls by crisscrossing the country with his running partner, Edman Lara, a straight-talking outsider who became a popular hero after being fired from the police for denouncing corruption in viral TikTok videos. Together they promised "capitalism for all"—protecting MAS social programmes while liberalising the economy and cracking down on corruption. Their support was strongest in the highlands, where they took almost 50% of the first-round vote. Mr Quiroga, whose support was concentrated in the agri-business hub of Santa Cruz, had described the reign of the MAS as "20 lost years" and promised radical change.
The new government faces an immediate task of sourcing dollars and keeping fuel imports flowing. Mr Quiroga had said he would go straight to the IMF; Mr Paz claimed a loan would not be needed after his government cut corruption and restored confidence. Both made trips to Washington before the run-off. Whoever governs will need to tackle the fuel subsidy, bloated ministries and loss-making state companies, rebuild an independent judicial system after years of abuse by the MAS, and eventually loosen the fixed exchange rate.
The Chapare is Bolivia's coca kingdom, a tropical lowland region of some 260,000 people across five coca-growing municipalities. Many residents are descended from internal migrants escaping drought and poverty on the arid highlands. The coca farmers' union was forged in resistance to forced eradication backed by the United States. Each union member won the right to a coca plot of 1,600 square metres. An overarching body known as the Six Federations, still led by Mr Morales, unites almost 50,000 coca farmers. It controls the coca trade, sets prices, taxes the proceeds, and governs much else in the region, from land tenure to low-level justice. It runs its own media. Under Mr Morales's presidency, the region flourished. Much of its coca feeds the drug trade; many of its hotels and tourist ventures are said to be money-laundries.
Mr Morales has been holed up in the village of Lauca Eñe in the Chapare, where hundreds of supporters with sharp staves have formed a ragtag garrison since police fired on his car in October 2024. Both Doria Medina and Quiroga said Mr Morales would go to prison if either of them were elected. The Six Federations has vowed to resist with guerrilla tactics.
What we need is either less corruption, or more chance to participate in it.