Both presidential candidates who advanced to the runoff promise to undo two decades of leftism.
S ince 2006, Bolivia has been governed by the Movement for Socialism party. Former President Evo Morales, in office until 2019, became a darling of the international left, moving the Bolivian economy to greater state control and moving its foreign policy against the U.S. and toward Venezuela, Russia, and China. “Capitalism is the worst enemy of humanity,” Morales has said.
After seeing capitalism’s alternative firsthand for two decades, the Bolivian people seem to have decided capitalism isn’t the absolute worst.
A few years of relative success on economic measures seemed to vindicate Morales, but things have been going downhill for many years. Politically, the socialist movement has fractured, with Morales leaving his old party and encouraging his supporters not to vote for it. In the first round of this year’s presidential election, which concluded on Sunday, the Movement for Socialism candidate received just 3 percent of the vote. The party could potentially lose all of its seats in the Bolivian legislature.
On a per capita basis, Bolivia is the poorest country in South America besides Venezuela. Bolivia’s 1990 GDP per capita of $5,124 was about $1,000 behind neighboring Peru’s. Today, Peru is more than $5,000 ahead, and Peru’s growth hasn’t been exactly stellar either. Inflation is about 25 percent.
In recent times, Bolivians have been dealing with persistent fuel shortages. Fuel is price-controlled, of course, which has caused a steep decline in production and exploration in what was once South America’s natural-gas powerhouse. When the ruling-party candidate went to cast his ballot on Sunday, other voters shouted that he should wait in line to vote like they have to wait in line for fuel.
The two candidates who advanced to the runoff, scheduled for October 19, both want to undo socialism. The first-place finisher, Christian Democratic Party candidate Rodrigo Paz Pereira, said he wants “capitalism for all, not just a few.” The second-place finisher, Jorge Quiroga of the Libre party, was already president from 2001 to 2002, before the socialists took power.
The result might remind you of Javier Milei’s victory in Argentina to undo decades of socialism there. But the most Milei-aligned candidate was Samuel Doria Medina, a businessman with a more radical austerity agenda, and he finished third. He endorsed Paz after conceding.
Paz comes from a family of Bolivian politicians, and his father was president from 1989 to 1993. He did not run as a “brash populist,” but rather as the candidate of “renewal,” according to Latin America watcher Kevin Ivers on his Substack newsletter. “Campaigning more on vibes than bold policy, Paz gathered the confidence of voters hungry for change but not yet ready to go too abruptly to the right,” Ivers wrote. A Quiroga victory would be a more straightforward return to the pre-socialist era, restoring the right-wing former president to office.
Either way, Bolivians will be getting a step toward freer markets and away from government control. Paz wants to decentralize government power by sending half of all public funds to regional governments. He also wants to shut down failing state-owned enterprises, stabilize the currency, and remove import barriers. Quiroga has been promising to do Milei-lite, with public spending cuts and government reforms to root out the socialists in power.
One key difference is that Paz opposes help from the International Monetary Fund, while Quiroga is open to it. Milei has had a positive relationship with the IMF while pursuing his free-market reforms in Argentina.
Choosing between which variety of pro-market candidate is a great place for Bolivia to be. Bolivian bond prices have been rising this year as investors anticipate the end of two decades of socialism. More important, though, the Bolivian people can finally expect some relief from shortages and stagnation.
Government controls on the price of bread haven’t changed in 17 years, but the size of the loaf has been cut roughly in half. In an Associated Press story this month, 60-year-old bread seller Raquel de Quino said, “Let’s pray to God that under the next government, there will bread for our children.” The enemy of humanity is the economic system that makes poor women say that sentence.