President-elect Rodrigo Paz inherits empty reserves, 20% inflation, and a divided legislature as he takes office in Bolivia amid economic turmoil.
LA PAZ: Bolivia’s President-elect Rodrigo Paz will be sworn in on Saturday amid severe economic turmoil and a fractured legislature.
Paz, a centrist former senator from the Christian Democratic Party, won the October 19 runoff election ending nearly two decades of leftist rule.
His party is the largest in the Legislative Assembly but lacks a majority in either house requiring alliance-building for reforms.
The legislature is dominated by pro-business and right-leaning parties potentially easing market-friendly policy implementation.
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Argentina’s libertarian President Javier Milei and Chile’s leftist President Gabriel Boric will attend the November 8 inauguration.
Paz’s immediate challenges include securing external financing and implementing potentially unpopular economic measures.
Economist Juan Sola at BancTrust & Co said “When Paz steps in, he won’t have any liquid reserves in the central bank to import fuel.”
Bolivia is enduring its worst economic crisis in decades with annual inflation surging above 20%.
Dwindling foreign currency reserves have triggered acute shortages of fuel and US dollars.
Economic adviser Gabriel Espinoza stated “In medical terms, the economy is on the verge of death.”
Paz has prioritized reducing diesel subsidies for agriculture and business sectors while gradually phasing out gasoline subsidies.
The International Monetary Fund and Inter-American Development Bank have expressed readiness to support the new administration.
Paz initially resisted seeking IMF support but his economic team has presented its program to the Fund.
Sola emphasized that securing public support for measures will be key to political stability.
Paz has strengthened his position by bringing in figures from the pro-business Unity Alliance.
Jointly they now command a working majority in both houses of the legislature.
Unity Alliance spokesperson Marco Fuentes said the bloc would support “any initiative that benefits the country.”
Conservative senator Elena Pachacute noted Paz had embraced an economic rescue plan similar to her coalition’s.
Questions remain over lawmakers with past ties to former President Evo Morales’s Movement to Socialism.
Sola observed “Paz has links with MAS. We don’t know if they will end up supporting him.” – Reuters
