Latin America in turmoil: Bolivia's slide to instability

An analysis of the regional impact

Bolivia's president Luis Arce | Reuters Bolivia's president Luis Arce | Reuters

Night cloaked La Paz's gritty suburb of El Alto as Carmen Gonzales Teran finally drifted off, weary from another fruitless day coaxing sustenance for her family. Water had barely dribbled from the taps lately—half an hour other mornings, nothing tonight. The duct-taped plastic buckets sat empty as always in her crumbling adobe hutment clinging to a modern high-rise building/home next door. Like thousands in the arid outskirts, Carmen faced the drought and dust daily, troubling signs of the growing crisis gripping the struggling nation.

Resource-rich but impoverished, landlocked Bolivia has seen its fortunes decline sharply of late. Bedeviled by a dollar crisis, economic turmoil, corruption, and environmental woes, the political project of Evo Morales once hailed as Latin America's showcase socialist experiment now seems derailed by his ego.

Morales and his successor Luis Arce are locked in a bitter power struggle tearing their Movement to Socialism (MAS) party apart. This confrontation coincides dangerously with criminal networks and agribusiness elites jousting for economic control of a deeply polarized country.

As these malignant forces overwhelm feeble institutions, the casualties are Bolivia's long-suffering citizens. Carmen's prospects dim each day as water trickles away—both literally and metaphorically. For a nation seated at the crossroads of South America, such gathering storms now risk spilling far across its borders.

Washington has traditionally paid little heed to instability in Bolivia. Yet, new strategic rivals like China, Russia and Iran embedded there require US attention lest crisis should open backdoors further against its interests.

Redrawing battle lines

To grasp how Bolivia arrived at its current precipice under a feud consuming the all-powerful MAS requires understanding its core cleavages and shifting internal dynamics after 14 years of Morales rule until his overthrow and exile in 2019. That year's disputed election triggered spasms of inter-ethnic bloodletting, recalling federalist civil war battles of the past. Yet a fragile peace held after Morales's technocratic former economy minister, Luis Arce narrowly reclaimed power in 2020, chosen as the party’s candidate by Morales himself.

In their mythic narrative, the MAS and Morales —an Aymara Indian and coca growers' union leader— overcame racist elites to uplift the nation's marginalized indigenous majority through a left-indigenist communitarian ideology called "Vivir Bien", To Live Well.

In redistributing national resource wealth, Morales earned support across ethnic groups over three terms for lifting economic fortunes. At the time he was regarded by many as one of Bolivia’s best presidents, creeping corruption and authoritarianism gradually alienated many loyalists who once eagerly lined up behind their first indigenous president.

"Evo lost his way...he got drunk on power," say people who now oppose his political return.

Morales ultimately undid himself by blatantly rigging a fourth re-election in October 2019 despite 51 per cent opposing his continuance in a 2016 referendum he called after winning the election by a landslide.

Evo Morales Former president Evo Morales | Reuters

When the military withdrew backing after three weeks of bloody protests, Morales knew his game was up, the scenario has played out many times in the country’s many revolutions. The Evo who had symbolized Bolivia around the globe for over a decade exited under a political asylum deal that did not last long. His successor Jeanine Anez's interim regime moved immediately to the right, opened several probes of the MAS party's misrule spanning human rights violations to money laundering, and threatened prosecutions to put Evo in prison.

Anez, who was the second vice-president of the senate and the third in line for the presidency after the vice president, assumed office after Evo and his vice president resigned and left the country, as did the others in line. The current government now says her claim to the presidency was a usurpation of power. She ran a government mired in corruption, mismanagement of the COVID crisis, and growing authoritarianism. After toying with a candidacy to the presidency, she dropped out of the race and left office in November after one year as president.

What ensued through Arce's landslide win in the re-run election a year later was more than a mere restabilizing transition, suggests Dr Bernardo Aguilar, a La Paz political sociologist. By forcibly passing the baton to former minister Arce, MAS in effect attempted reinventing itself from its crisis of legitimacy while the conservative east regrouped. The party publicly welcomed probe cooperation while blaming excesses only on Morales. In this "MAS 2.0 reset", Arce's scholarly profile offered a reformist contrast to Morales's firebrand indigenous nationalism tainted by corruption, notes Aguilar.

Police crackdowns on opposition media and prosecution of centrist ex-president Anez exposed such rebranding as superficial, however. Arce essentially secured MAS continuity along with renewed leverage for Evo's rehabilitation into Bolivian politics after a year in Argentine exile.

"But we all knew it was a sleeping volcano with Evo outside," Aguilar remarks. "With his networks and ambitions, conflict over the party was always inevitable."

That tussle erupted in 2022 as Arce faltered politically amid deepening economic strife and Morales pulled levers to reclaim his power base. Their showdown now threatens the constitutional order again. Regional tensions magnify risks as strongmen in resource-rich lowland departments resent the Andean MAS exploiting their harvests and gas reserves for patronage. Meanwhile, well-armed coca farmers fear both camps may curb their profitable narcotics livelihoods. Such multi-dimensional strains risk fracturing Bolivia's leadership and state further.

Fueling zero-sum politics is a struggle to monopolize spoils from the vast grey economy of mining, logging and coca-cocaine spanning Bolivia's porous frontiers.

Transnational organized networks like Brazil's PCC cartel and Andean cocaine clans exert rising influence as they transit drug shipments to Atlantic ports.

Meanwhile, the eastern Santa Cruz department centered on agribusiness becomes an ever more powerful magnet for global commodities firms from China and Russia.

Capturing such riches offers whichever MAS faction prevails the budget resources they desperately need to retain power. But perceived tilt by Arce or Morales towards any constituency risks angering the rest and unleashing turmoil.

“Bolivia's quadruple crisis of economic tailspin, worldwide supply chain breakdowns, climate shocks and health impacts make this political moment quite precarious,” warns La Paz political thinker Carla Blanco.

“Unfortunately we see no signs of compromise from any major actor.”

Jockeying amid clenched fists and dynamite

Evo Morales dramatically broke months of tension with the Arce government in September with his announcement of seeking an unprecedented fourth presidential bid in 2025. The gambit was vintage Evo— audacious in open defiance of both Bolivia's constitutional two-term limit he himself instituted and of Arce's reelection plans. It showed the ex-coca grower's famed maneuvering skills remained sharp. At the same time, the assertive comeback made it clear that there would be no willingness to compromise on power-sharing with the person who would follow him.

“We underestimated Evo's lingering clout after three years out of office,” a senior minister in Arce’s cabinet conceded, requesting anonymity to discuss internal party matters. “But his ambition outweighs his wisdom at this point.”

Evo retains immense influence as the MAS's talismanic founder and builder of its national political machinery over decades. His control springs from myriad sources—leaders of legislature blocs beholden to him, ties with the critical coca farmers' trade unions, links to allied grassroots and civic groups across Bolivia’s nine departments, and even influence within the military via nationalist middle ranks. Such networks allowed Evo to pull off mass mobilizations against Arce within weeks.

Cochabamba Social Researcher Dr Arminda Hoffman believes Evo also draws covert backing from prominent figures involved with organized crime and illegal mining given mutual interests and reported past government payoffs permitting unchecked expansion. Powerful regional civic committees with shadowy ties now rally behind the former president while vilifying Arce as a traitor beholden to Washington, media reports suggested.

“Evo's conglomerate of loyalists cuts across both legitimate and shadier economic worlds, so he retains heavy grassroots capability and funding sources,” explains Hoffman. “That makes rivals hesitate in provoking him too openly.”

Yet the ex-president also has liabilities. Fair or not, his divisive legacy as an authoritarian populist tainted by corruption scandals makes Evo far from electable nationally again, polls indicate. Younger indigenous voters especially show little warmth for his anachronistic rhetoric. He also burned support within the MAS through the blatant manipulation in 2019 that triggered traumatic street violence and deaths his allies and supporters still resent. Further, his chief base—coca growers in Chapare and Yungas regions—offers diminishing political returns as the anti-narcotic lobby calls tighter restrictions on expanding cocaine production.

Such realities appear to have Arce's decision to directly stand up to Evo in October. Risking an open rupture with powerful constituencies, the president moved to consolidate his position. Cronies on the MAS executive committee that nominally govern the organization were installed while expelling key political threats.

Potential challengers for 2025 like Santa Cruz Governor Luis Camacho found themselves swiftly accused on dubious sedition charges.

Far from replacing Arce, Evo earned public condemnation for illegally claiming MAS ownership and destabilizing the nation. Yet he swiftly rallied support to dispute his blackballing.

Staunch loyalists in half the departments converged on Cochabamba in a forceful show of strength, shutting down the airport and roads for days.

Alleging Arce no longer represented the party's grassroots, Evo unilaterally anointed himself the maximum leader. The move amounted to open revolt even as most legislators continued backing the elected president. Arce in turn rejected the Cochabamba gathering as fraudulent while clinging to just enough party apparatus support to avoid being totally isolated, even as Evo’s coalition placed growing public pressure to bend.

By November’s end, Bolivia drifted towards institutional paralysis and a governance void as two competing MAS factions wrestled for supremacy without an umbrella organization to broker peace. Already futile attempts at reconciliation talks collapsed. Some dissenting lawmakers discussed trying to even support renewed opposition impeachment motions against Arce for 'betraying' core support bases.

For the majority of citizens focused on economic survival like Carmen’s family, however, the widening political chasm piles more uncertainty on top of their daily grind.

Drivers of desperation

While Bolivia's harsh geography has always imposed hardship, the accelerating woes Enrique and his neighbors now face signal an alarming erosion of the state. Three reinforcing dimensions of distress explain growing national anxiety.

The first and most profound shock remains the economic implosion threatening recent developmental gains since Evo took reins in 2006.

Thanks to prudent management and high commodities prices, Bolivia achieved Latin America’s highest growth rates for years, averaging near 5 per cent annually into 2014 led by natural gas exports.

However, this golden decade of growth was revealed as an illusion. It was propped up by over-exploiting rents from export of raw materials like gas and minerals in a way that was ultimately unsustainable. Both progress and stability required permanently high fuel and mineral income to support Evo’s vast social programs.

Activists protest in defense of Mother Earth and against forest fires and gold mining in protected lands, in La Paz | AP Activists protest in defence of 'Mother Earth' and against forest fires and gold mining in protected lands, in La Paz | AP

The house of cards crumbled after 2014 as gas fields depleted amid falling global prices, causing income and exports to fall by half. Government desperation to extract resources also spawned lithium and gold mining booms rife with graft and toxic spills while research points to cocaine trafficking rivaling coffee output.

Despite ecological warnings, rampant slash-and-burn for pasture lands and logging proceeded, shrinking forests 60 per cent in a decade. Such actions temporarily plugged fiscal gaps but stripped Bolivia of future assets.

Statistics illustrate the post-bonanza bust cycle trapping Bolivia in underdevelopment again. Growth slowed to an average of 3 per cent by 2019 when Evo left, half the regional pace. Export values keep declining yearly. Overseas currency reserves ran out in 2022 despite controversial sales of the nation’s last gold holdings, forcing deferred payments to overseas creditors.

Over this simmering economic stew, nature’s growing fury heaps more misery as the country is wracked by climate change impacts. Freak droughts and floods affect farm output and city electricity. Millions live vulnerable to disaster from the surrounding Andes glaciers melting as agricultural heartlands dry.

The third malignant force is organized crime and trafficking overwhelming the state. As economic options constrict, shadow trades with higher returns thrive on corruption and sieve-like frontiers favorable for moving contraband. Experts believe barely 10 per cent of narcotics and contraband gold transiting Bolivia is intercepted while chicken and fuel smuggling evade millions in customs duties.

Such high-reward rackets lure in growing numbers including youth and security officials. Narco clans now recruit children trafficked into forced labor and sexual exploitation. Ruthless Brazilian mobsters like the PCC colonize remote outposts to dominate overseas cocaine supply chains.

Bolivia's wild east falls to outlaw rule

In the eastern regions of Beni and Santa Cruz departments, landowners bankroll militia to illegally expand soy plantations and encroach on parks, supplanting coca bushes poisoning waters downstream. Violence inevitably explodes over the spoils as mafia wars spill blood from Chapare to Cochabamba.

Warlord feudalism is what fills vacuums when economic incentives fail and institutions erode,” notes a retired Bolivian general. “Our nation falls prey slowly into a criminal state.”

"We found criminal presence in 70 per cent of Amazonian municipalities," concluded Bram Ebus, Pulitzer fellow and coordinator of transnational probe "Amazon Underworld". His team's year-long data project exposes malign networks thriving in gaps between states across neglected jungle borderlands.

Nowhere looms this disorder more starkly than Bolivia, Amazonia's heart. "Economically weakened and politically paralyzed, it is falling prey to mafia power," warns indigenous leader Marcial Fabricano in an interview with the Santa Cruz daily El Deber. In the remote eastern half of the nation, outlaw fiefdoms leverage cocaine profits and illegal gold to buy impunity. Their spreading grip over land, economy and marginalized forest tribes alarms neighbors like Brazil battling its own narco onslaught.

In these lawless areas surrounding the world’s second largest wetlands, narco clans process cocaine destined overseas through Paraguay and corrupt security forces. Ruthless Brazilian syndicates have colonized transit routes while backing local allies to ensure smooth supply.

"Officials at all levels are on mafia payrolls," according to Bolivian counter-narcotic agents. Cutthroat capitalists bankroll hired guns to encroach on protected parks, leaving scorched earth and social ruins. Profits permeate into agriculture, logging and land speculation, embedding organized crime influence through legitimate facades regionwide.

Bought authorities turn blind eyes, enabling proliferation. But inevitably, blood spills as mobsters feud over spoils and officials face hitmen.

With climate change ravaging farms and cities alongside political turmoil, into this disorder strides the law of the jungle, and of the gun.

"The government no longer rules here," indigenous leader Rolando Salvatierra told El Deber. "Real power lies with shadow forces dividing our home amongst themselves. It falls on us alone to take it back."

The perilous outlook means rural and marginal Bolivians today live besieged by want on more fronts daily.

Even close to the capital, families like Carmen's hunker in uncertainty over dangers ranging from food price gouging to mob hits to viral outbreaks that overwhelm skeletal healthcare. The country’s SUS (Sistema Unico de Salud), labeled as free healthcare for all, is mere window dressing, poorly covering even the most basic health issues, it is is underfunded, overburdened and failing to meet the needs of its people.

Each new pressure fans public outrage towards whoever holds power in La Paz, explains sociologist Bernardo Aguilar.

“Common people barely care whether Arce or Evo rules...they just know politicians fail them while their lives crumble,” said Aguilar. “This rage gets channeled by opportunists towards scapegoats, weakening society further till violence looks justified.”

For neighbors like Brazil and Peru on the frontlines of spillover impacts, the stakes of averting state failure loom ominous. Distant great powers too like China and Russia face containment hazards as their local clients and partners sink into disorder. The hourglass runs low for Bolivia to pull back from implosion unless compromise and reform take hold. But hope remains sparse on the horizon.

Overarching crisis in perspective

The broader picture framing the turmoil embroiling Bolivia helps contextualize internal pressures straining society's faultlines. Four dimensions of its systemic plight bear weighing for any roadmap to recovery.

The first surrounds inherent disadvantages of landlocked developing countries relying on neighbors as sole export outlets. Global data shows they suffer up to 50 per cent lower trade, 15 per cent higher transport costs and below-average growth compared to coastal states. For Bolivia, its route to open seas lies overwhelmingly dependent on commerce down the Parana River into the Atlantic and ties with Brazil and Argentina. Overland routes to the port of Arica in Chile are also depending on political ties and international relations. Such geographical constraints limit the economy despite wealth of minerals and farm output.

Add to that the legacy of racism and feudalism entrenched since Spanish conquest 500 years back has calcified inequality and exclusion of the indigenous majority. Despite significant gains during Evo’s government, that power structure has proven tough change through just constitutional reforms in plurinational republics like Bolivia.

Though poverty halved since 2005, class divides persist painfully amid low productivity, failing schools, malnutrition, gender violence and other woes.

The third liability lies in factional politics obsessed with narrow advantage above national purpose. Though operating under electoral rules, ethnocentric party agendas take turns exploiting rather than strengthening institutions. With no forward vision beyond group benefits, state capacity erodes long-term.

An indirect casualty is managing complexity in economic planning needed for progress. Governance requires astute data analysis, transparent regulatory systems and stabilizing policies that accumulate expertise across changes. But erratic Bolivian policymaking disperses knowledge and reorients strategies. That contributes towards misguided decisions like overreliance on gas rents without offsets or allowing illegal mining that wrecks sustainability. Volatile state signals also hamper domestic entrepreneurship and foreign capital inflows, starving job creation. Over decades, the high costs compound grievously.

These constraints underscore that beyond leadership instability, Bolivia suffers handicaps embedded historically. Even well-intentioned, reformist leaders like Arce or more democratically accountable oppositions would face chronic hurdles to delivering prosperity absent liberating structural reforms. Resolving such strategic deadlocks remains Bolivia's foremost developmental challenge.

Regional spillover risks

At stake if Bolivia continues its downward trajectory without course correction are wider hemispheric consequences given strategic geography and ties. Four neighboring countries face direct externalities of concerns to Washington policymakers: Brazil, Peru, Paraguay and Argentina.

The largest immediate fallout beyond domestic humanitarian impacts hits Brazil as human smuggling, drugs and arms trafficking surge across its vast Amazonian frontier with Bolivia.

Gulf cartels like the Familia do Norte and First Capital Command operating from there already dominate supplying Europe's booming cocaine market through Brazilian exit ports like Santos, the city made famous by Pele.

Turmoil in Bolivia now offers Brazil's mobsters new corridors to consolidate control over production zones while recruiting Bolivia's many desperate youth as they control the routes to Europe and compete with Mexican and Colombian cartels operating in the country

Experts estimate the illicit trades netting Brazilian traffickers over USD 25 billion yearly could expand another 20-30 per cent capitalizing on Bolivia's mayhem. That is aside wider money laundering pipelines to wash dirty cash through the regional banking system.

With their advanced weaponry and brutality, Brazil's syndicates are gaining sufficient foothold to capture swaths of Bolivia's police, judiciary and local municipalities to operate freely as it happened in Ecuador.

Such criminal contagion risks bleeding deeper into South America's largest nation, complicating recent efforts to reverse Brazil's emergence as a mafia haven.

As Bolivia spirals into the abyss, the alarm bells ring loud across the Americas. A nation once hailed as a showcase for 21st century socialism lies besieged by narco warlords and corrupt politicos. Its plight heralds dangers closer home as democratic fragility spreads like a virus from the Andes to the Atlantic.

Washington dispensed with Bolivia as a backwater lacking strategic import. But global rivalries turn peripheral states into powder kegs - havens where China, Iran, and Russia implant proxies while crime cartels leverage mayhem. The expanding disorder ought to serve notice that if the heart of South America succumbs, the health of its neighbors could swiftly follow.

Outside La Paz, Carmen Gonzales still waits for water.


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