Signs reading “I buy dollars” line the doors of Victor Vargas’ shoe store in a popular open-air market in one of Bolivia’s largest cities, a desperate attempt to keep his family business alive.
Just a few years ago, Vargas, 45, would open his doors at 8 a.m. to a crowd of customers already waiting to buy sneakers imported from China. But now his store is largely empty.
“Almost no one buys from us anymore. We are in a crisis,” she lamented.
Vargas is one of many Bolivians who have been affected by the economic turmoil in the small South American nation, with a long-standing hyperdependence on — and now shortage of — dollars.
The current crisis has been exacerbated by a long-running dispute between President Luis Arce and his former ally, former President Evo Morales, over control of the ruling party. ahead of next year’s presidential elections. Many Bolivians have lost confidence in Arce, while the 60-year-old leftist leader continues to deny that the Andean country is going through an economic crisis.
“Bolivia has a growing economy, an economy in crisis does not grow,” Arce said in a recent interview with The Associated Press. What there are are “temporary problems” such as the shortage of dollars and fuel that “we are resolving.”
The deep distrust of the government came to a head on Wednesday after a movement of soldiers with armored vehicles at the government headquarters in La Paz, which the Arce government described as a “failed coup” attempt.
His critics have called it a “self-coup” designed to boost the political image of an unpopular leader ahead of the 2025 elections.
Most Bolivians who spoke with the AP said they no longer believe what Arce says and believe that the president would be better off addressing the problems of the Bolivian economy and spending less time engaging in political maneuvering.
Morales (2006-2019) on Sunday joined those who doubt the official version of Wednesday’s military movement. He accused Arce of deceiving the Bolivian people by orchestrating a “self-coup” in order to score political points among the electorate amid disputes in the ruling Movement towards Socialism (MAS) party.
Rising living costs and a deteriorating economy, coupled with disputes with Morales, have caused Arce to lose strength and credibility, critics say.
“I don’t know where in Bolivia (Arce) lives. “I would invite you to stop by here to stay in this establishment for at least a day,” said Vargas, the shoe merchant in the La Paz market. “Go to the other side of my neighbors the next day to see if there is economy.”
Vargas believes that the economic crisis has been exacerbated by the lack of dollars in recent times. He says that he can pay up to 40% more than the official exchange rate for each dollar, since he needs the greenbacks to buy merchandise due to the shortage in banks and legal stores.
Bolivia’s economic crisis has its roots in a complex combination of hyperdependence on the dollar, depletion of international reserves, growing debt and failures in the production of products such as gas, which was once an engine of prosperity in the country.
This has meant that Bolivia has largely become an importing economy “totally dependent on dollars,” said Gonzalo Chávez, economic analyst and professor at the Catholic University of Bolivia. That once worked in Bolivia’s favor, making it one of the fastest-growing economies in the region.
The Vargas family opened the shoe business almost 30 years ago, seeing it as a way to ensure economic stability for generations to come. They import shoes from China, pay for them in dollars and sell them in the Bolivian currency—bolivianos—. Without dollars, they have no business.
In the midst of the crisis, what has emerged is a black market for dollars in which many sellers bring green dollars from neighboring Peru and Chile and sell them at speculative prices.
Pascuala Quispe, 46, spent Saturday walking through the downtown market in La Paz going to different exchange houses, desperately searching for dollars to buy car parts. While the official exchange rate listed at the exchange houses is 6.97 bolivianos per dollar, she was told the real price was 9.30 bolivianos — too high for the owner of a truck that exports vegetable oil. So she kept walking, hoping to find luck elsewhere.
“As the dollar has risen, car parts and tires are more expensive, there is no longer a dollar and then everything is going up,” said Quispe. “There is no way to live in Bolivia.”
Rising prices are everywhere, causing people to stop buying shoes, meat and clothes, while the poor and working class have plunged into deeper poverty. Bolivians joke about keeping their money in the “colchón bank” because they don’t trust banks.
Other vendors like Vargas post signs on the doors of their businesses in the hope that vendors will exchange dollars at a more reasonable rate.
While Bolivia has the world’s largest reserves of lithium — a high-value metal key to the green transition — investment in that and other sectors is only viable in the long term largely because of government failures, said Chavez, the analyst.
This entire adverse economic outlook is only aggravated by the ongoing fights between Arce and Moraleswho recently returned from exile after resigning during the 2019 riots, which the former coca-growing president maintains was a coup against him.
Meanwhile, greater discontent has fueled waves of protests and strikes in recent months. The protests and road blockades have dealt another economic blow to Vargas, the shoe seller, because customers from across the country are no longer traveling to buy products with the marches underway.
“Arce and Evo Morales fight over who is more powerful,” Vargas said. “But neither of them governs for Bolivia… There is a lot of uncertainty.”
Morales, who still wields great power in Bolivia, has prevented Arce’s government from passing measures in Congress to ease economic turmoil, something Arce told the AP is a “political attack.”
Morales has fueled rumors that a military assault on the government palace, led by former military commander José Zúñiga, was a political stunt organized by Arce to win the sympathy of Bolivians. That rumor was started by Zúñiga himself after he was arrested.
Political disputes are raising concerns for many, like truck driver Edwin Cruz, 35, who has to wait in long lines for hours or even days to buy diesel and gasoline due to intermittent shortages caused by a lack of foreign currency.
Cruz said he has to drive into the city from rural areas outside La Paz to fill his gas tank. He keeps a blanket, a pillow and a small mattress in his truck for the nights he has to wait in lines. Cruz is among those who, with no interest in voting for Arce or Morales, say Bolivia needs an “outsider” to run for president.
“Diesel is worth its weight in gold now,” Cruz said. “People are not idiots. And with all this ‘self-coup’, this government cannot stay.”
Vargas, for his part, doesn’t know what he will do with his family’s shoe store. The store that was a source of pride has become a financial drain. His four children want to leave Bolivia to study or work elsewhere. In fact, one of them has already gone to China to work in that country.
“They don’t want to live here anymore,” Vargas said in his empty shop. “This is how things are in Bolivia, there is no future.”
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