Monday, July 15, 2024

LATIN AMERICA | 03-07-2024 10:58

Growing discontent amid dollar, fuel shortages in resource-rich Bolivia

Along with the fuel shortage in Bolivia, which tends to be chronic due to economic problems in imports, there is also a lack of dollars in the country and, consequently, an increase in the exchange rate in the parallel market.

Bolivian long-haul driver Gerardo Salluco prepares to spend his second night in a snaking queue of buses, waiting for fuel at a service station under military guard.

Such lines for diesel and petrol have become a common sight in the country, battling a severe economic crisis and political instability that led to an alleged coup attempt last week.

Bolivia is unable to purchase and import sufficient fuel for its needs due to a shortage of US dollars, in turn caused by a dramatic drop in exports of natural gas – once a mainstay of the economy.

Much of its dwindling foreign reserves are spent on fuel subsidies, which ironically have stoked theft of the ever-scarcer, but cheap, resource for bootleg sale in neighbouring countries.

The cumulative result has been crushing shortages of petrol at home, cost of living increases, growing discontent and mass fuel protests.

Adding to the turmoil, President Luis Arce last week claimed to have put down an attempt to unseat him militarily.

In an unusual twist, coup leader Juan José Zúñiga claimed he was following Arce's orders, and that the president had hoped for the coup to trigger a crackdown that would boost his popularity.

"It seems that they want to distract us," said 49-year-old Salluco, who has been ferrying passengers between Bolivia and Chile for the past 12 years.

"I am not very involved in politics, but we realise it. They want to distract, there are no dollars, there is no diesel."

Amid the political upheaval, however, Salluco is keeping his focus on the petrol station.

"I have to stay vigilant," the driver told AFP as night started to fall, still in line. "They could start selling at any moment."



Bolivia is one of the poorest countries in the region despite sitting on vast mineral resources such as gas and lithium -- a key component of batteries used in electric cars.

The country, home to 12 million people and an Indigenous majority, saw a short-lived "economic miracle" under the 2006-2019 presidency of leftist Evo Morales, with Arce as economy minister.

Morales, Bolivia's first Indigenous president, nationalised hydrocarbons and other resources such as lithium.

The country experienced more than four percent annual growth while poverty rates tumbled from 60 percent to 37 percent, according to official figures.

Critics say Morales' failure to implement structural economic reforms meant the growth was unsustainable.

Last August, the president of state oil company YPFB (Yacimientos Petrolíferos Fiscales Bolivianos), Armin Dorgathen, said Bolivia was running out of natural gas – which it also sold to Argentina and Brazil -- due to a lack of investment in new exploration.

Production had fallen from 59 million cubic metres per day in 2014 to 37 million, he said.

Foreign currency reserves, meanwhile, fell from US$15 billion a decade ago to about US$1.8 billion last month.

There are now restrictions on withdrawals of greenbacks – officially 6.96 Bolivianos to the dollar but traded at rates up to 30 percent higher on the black market.

"Before we did not have a limit for sending (dollars) abroad, nowadays we do... in some banks it is no longer possible," student Minerva Ruelas, 27, told AFP.

As frustration at shortages rises, the YPFB has put part of the blame for the lack of fuel on alarmist social media posts sparking "overdemand."

Last month, Arce's government deployed soldiers to service stations to thwart fuel theft.

For truck driver Claudio Laura Flores, 33, the situation means waiting hours, sometimes days, in long fuel queues "far from your family, cold, hungry."

Fellow long-haul driver Severo Bustencio, 40, said that the fuel shortage "is affecting us a lot because we cannot travel." 

"And if we cannot travel, we do not earn."

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by Juanes Restrepo, AFP


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