Voters end two decades of socialist rule in Bolivia

Voters sent two pro-business candidates to Bolivia’s presidential election run-off, ending two decades of almost-uninterrupted socialist rule and likely transforming both the nation’s economic model and its relations with Washington.

With 95 percent of ballots tallied, opposition senator Rodrigo Paz led with 32 percent, compared to 27 percent for Jorge 'Tuto' Quiroga, who served as president from 2001 to 2002. 

The country’s sovereign bonds jumped to a two-year high Monday morning, with notes due in 2028 and 2030 rising 1.7 cents and 2.4 cents on the dollar, according to indicative pricing data compiled by Bloomberg.

Both candidates have called for austerity and renegotiation of the nation’s foreign debt.

Paz, 57, who outperformed polls that showed him coming third, fourth or fifth, says he wants a more inclusive form of capitalism. He says he’ll “unify” the official exchange rate with the black market rate, according to the manifesto of his Christian Democrat party.   

Quiroga, 65, says he would seek foreign investment in oil and gas exploration and in lithium production. Bolivia is home to the world’s largest deposits of the metal.

The election took place against the backdrop of fuel and food shortages and the steepest inflation in more than three decades, which caused months of unrest and the collapse of support for the ruling socialist movement MAS. Bolivia’s dollar bonds have soared this year on investor optimism that a new government will implement economic reforms.

Entrepreneur Samuel Doria Medina, who had led in polls and been backed by billionaire Marcelo Claure, was unexpectedly pushed into third place. He conceded and said he’ll support Paz in the run-off. 

Socialist senator Andrónico Rodríguez, the most prominent leftist candidate, came in fourth place with 8.2 percent. The ruling party’s candidate was in sixth place with 3.1 percent. The run-off is scheduled to be held on on October 19 and the new president is set to be sworn in on November 8. 

Opposition parties also dominated the elections for the lower house and the senate. With 96 percent of ballots tallied, Paz’s Christian Democrats were on track to be the largest party in both houses, followed by Quiroga’s Libre party. The MAS, which currently has a majority, was on track to lose all, or nearly all of its seats. 

President Luis Arce opted not to run for a second term. The election is the first since 2005 when neither Evo Morales nor a hand-picked successor were on the ballot. Morales, who was barred from running, called on supporters to spoil their votes.  

Morales became Bolivia’s first indigenous president in 2006. At first, a natural gas boom allowed him to preside over strong economic growth and plunging poverty, that turned him into an icon for socialist movements across the world. 

But the shine started to come off that story after 2015, when prices plummeted for Bolivia’s natural gas exports, putting the economy on track for the crisis that is overwhelming it today.

Under Morales and then Arce, Bolivia had close links with Venezuela, Nicaragua, Russia and China, but relations with Washington often soured.