For the first time in nearly 20 years, Bolivian voters have rejected socialism. The country’s socialist economic “miracle” rested on asset seizures, nationalization of private industries, charity from communist allies, and windfalls from a global commodities boom. But a decade of deepening economic crisis has made voters realize that true prosperity comes from productive investment, not state handouts.
On 17 August, Bolivia held presidential and general elections. Former socialist president Evo Morales, founder of the MAS party, was barred from running. Morales had risen to power during the early 2000s “pink tide” of leftist leaders that swept Latin America, and his party had dominated Bolivian politics since 2006.
This time, however, the Movement Toward Socialism (MAS) suffered a crushing defeat after nearly two decades in power, with its official candidate Eduardo del Castillo finishing sixth, winning only 3.2 percent of the vote. The other leftist candidate, Senate president Andrinico Rodriguez, captured just 8% of the vote
The election results confirmed a dramatic political shift. Centrist candidate Rodrigo Paz led with 32.8 percent of the vote, followed by right-wing former president Jorge “Tuto” Quiroga with 26.4 percent. Since neither candidate reached the required threshold of 50 percent, or 40 percent with a 10-point margin, the two will face each other in a runoff on October 19.
Both candidates mark a decisive break from MAS socialism, each vowing sweeping reforms to dismantle the state-led economic model. No matter who wins in October, the result will mark the definitive end of socialism’s long dominance in Bolivia.
The collapse of support for socialism in Bolivia is rooted in a severe economic crisis marked by soaring inflation, fuel shortages, and widespread mismanagement under the outgoing socialist government. By late 2024, the country was virtually bankrupt, with liquid reserves falling to just $47 million out of $1.98 billion, leaving Bolivia unable to cover balance of payments pressures.
Inflation reached 10 percent at the end of 2024—the highest in more than a decade—and climbed to 14.6 percent by March 2025, placing Bolivia among the most inflationary economies in Latin America after Argentina, Venezuela, and Cuba. At the same time, the fiscal deficit exceeded 10 percent of GDP, public debt climbed to 84 percent of GDP (92 percent dollar-denominated), and the parallel exchange rate devalued by 20–25 percent, exposing extreme currency distress.
The crisis has been devastating for ordinary Bolivians. Food prices have surged, with chicken up 9.45 percent, beef 4.45 percent, tomatoes 25.58 percent, and onions 22.83 percent. Oil and gas revenues, once the backbone of the economy, collapsed from $5.5 billion in 2014 to $1.6 billion in 2024, while gas production was cut in half. Rating agencies repeatedly downgraded Bolivia, with JP Morgan ranking it the second riskiest economy in the region after Venezuela. The IMF projects inflation will reach nearly 16 percent in 2025 with GDP growth of just 1.1 percent. This economic freefall pushed President Arce’s disapproval rating close to 80 percent by early 2025 and ultimately led to the complete electoral collapse of the socialist party.
During the early years of Evo Morales’s socialist rule (2006–2014), Bolivia experienced rapid socioeconomic gains that seemed to validate the government’s model. Gas revenues increased nearly sevenfold, from $731 million to $4.95 billion in just eight years. This windfall allowed social spending on health, education, pensions, and poverty programs to rise by 45 percent in real terms.
Between 2006 and 2019, GDP per capita doubled, average GDP growth reached 4.8 percent annually, one of the fastest rates in South America, and international reserves surged from $1.1 billion in 2000 to $15.3 billion by 2014. Poverty fell by 25 percent, extreme poverty by 43 percent, and inequality declined sharply, with the Gini coefficient dropping from 0.60 to 0.446.
Social indicators also improved: electricity access rose from 68 to 92 percent, illiteracy fell from 13 to 2 percent, and child mortality rates were cut roughly in half. Meanwhile, the real minimum wage rose nearly 88 percent, and unemployment was halved from 7.7 to 4.4 percent by 2008. In 2010, the World Bank upgraded Bolivia from “lower-income” to “lower-middle income,” reflecting these broad gains.
Bolivia’s so-called economic miracle came at the expense of personal freedom, property rights, and heavy dependence on foreign allies. Rather than building sustainable industries, the boom was fueled by asset seizures, external subsidies, and a favorable global commodities cycle.
On May 1, 2006, Morales sent the military to occupy gas fields and forced foreign firms to renegotiate contracts under threat of expulsion. The state’s share of revenue jumped from 50 to 82 percent, not through greater productivity but through coercion. Limited land redistribution followed, with about 50 million acres of government land granted and roughly 100,000 hectares seized from large ranches, relatively small compared to promises of sweeping reform.
Support from communist-aligned nations bolstered the system. Cuba provided $63 million in free medical care and trained over 5,000 Bolivian doctors, while Venezuela extended preferential treatment through its ALBA alliance. China’s role also expanded, with state-linked firms like CAMC winning nearly half a billion dollars in contracts without competitive bidding.
Bolivia also benefited from the global commodities boom between 2002 and 2014, which drove hydrocarbon revenues up nearly sevenfold, from $731 million to $4.95 billion during Morales’s first eight years. Much of the growth attributed to socialism was in fact the product of this external windfall rather than genuine, sustainable development.
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