‘You can’t just bet everything on exports’: as its gas runs out, is Bolivia doomed to repeat history?
A fossil gas boom that lifted millions out of poverty has collapsed and inflation is rising – but not everyone believes selling gold and soya is the answer
TL;DR
- Bolivia experienced an economic boom from 2006-2014 driven by fossil gas, which expanded social programs and reduced poverty.
- A decline in commodity prices and depletion of gas reserves led to economic collapse, soaring inflation, and increased poverty.
- The crisis is attributed to decades of reliance on gas, a failure to discover new fields, costly subsidies, and capital flight.
- Successive governments prioritized state spending and fuel subsidies over industrialization and value-added exports.
- Bolivia adopted a rentier state model, depending on raw natural resource exports rather than building domestic industries.
- Experts criticize the failure to invest in core economic pillars, diversify revenue, and regulate offshore capital.
- Sustained prosperity would have required investment in sectors like steel, aluminum, agriculture, education, and healthcare.
- The country faces challenges from dollar shortages, an informal labor sector, and wary foreign investors.
- Despite calls for diversification, powerful mining and agroindustrial lobbies continue to influence government policy.
- Alternative economic models, such as sustainable harvesting of non-timber forest products, offer potential but face political barriers.
- There is concern that Bolivia may repeat its history of natural resource dependence with new sectors like gold and agroindustry.