April 25, 2025 – This Impunity Observer investigation examines the root causes of Bolivia’s economic crisis and assesses the government’s efforts to mitigate the foreign-currency shortage. Drawing on insights from experts with the Libera Bolivia think tank, we also explore potential pathways out of the crisis, with a focus on medium- and long-term solutions to stabilize the economy and build resilience for the future.
Key Findings
- Since 2007, Bolivia has relied almost entirely on natural-gas revenues to fund subsidies, social programs, and macroeconomic stability. However, the lack of reinvestment in exploration has led to the collapse of the country’s main source of foreign currency. Meanwhile, neighboring countries have boosted their own gas production.
- Bolivia imports more than 70 percent of domestically consumed fuel: gasoline and diesel. The state sells rationed quantities to citizens at a subsidized price—30 US cents per liter—and has no reserves. Bolivia’s inefficient system has led to fuel shortages and fiscal desperation.
- As of late 2024, Bolivia’s central-bank reserves had fallen below US$2 billion, with 96 percent made up of gold. The government has resorted to selling the metal as a stop-gap measure to generate cash. This strategy is vulnerable to corruption, and it risks depleting one of the country’s last buffers against delinquency. Bolivian President Luis Arce allowed cryptocurrencies in 2024 to attract foreign currency.
- Experts from the Libera Bolivia think tank contend the real solution is “liberalizing fuel imports and removing subsidies, reducing the size of the Bolivian state, and adopting a policy of fiscal surplus.”
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Review the full article here (in English and Spanish).
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