Bolivia's Paz faces mounting protests amid economic crisis and political divisions

Rodrigo Paz took office in November 2025 with a straightforward mandate: fix Bolivia's broken economy. After nearly two decades under the leftist Movement Toward Socialism, first under Evo Morales and then Luis Arce, the country was hemorrhaging dollars, running dry on fuel, and watching prices climb. Paz's prescription was blunt. He eliminated fuel subsidies that had been in place for over twenty years, slashed public spending, and began hunting for foreign financing to stabilize the currency and restore liquidity.

Six months in, the cure was proving more divisive than the disease. By mid-May, the country had fractured into competing camps, each furious at Paz for different reasons. The Bolivian Workers' Central, the country's most powerful labor federation, rejected his plan to close money-losing state companies, calling it a disguised privatization scheme. Teachers in Santa Cruz chained themselves to government offices demanding salary increases and a voice in new education policy. Coca growers in Cochabamba, historically aligned with Morales, threatened to join the escalating blockades. Even the business community was bleeding—the National Chamber of Industries calculated that protests and roadblocks were costing the country between fifty and sixty million dollars a day.

At the heart of the crisis lay a demand Paz refused to meet: a twenty percent wage increase across the board. Labor leaders, led by campesino organizer Alejandro Yura, had moved past negotiation. They wanted the president gone. Paz countered that such raises would crater the fiscal budget and accused protest leaders of trying to destabilize his government to reclaim lost political power.

Nothing illustrated the government's vulnerability more starkly than the fuel contamination disaster. In February, Paz's administration distributed gasoline so degraded it destroyed vehicles across the country. Thousands of drivers reported engine failures, corroded fuel injectors, and dead fuel pumps. Transport unions claimed more than ten thousand vehicles were damaged. The hydrocarbon minister, Mauricio Medinaceli, resigned in April. The state oil company, YPFB, descended into internal chaos, with allegations of corruption swirling but no definitive investigation completed or culprits identified. The government blamed contaminated storage tanks inherited from previous administrations, then pivoted to accuse internal saboteurs of deliberately adulterating fuel with water and oil to undermine the new regime. By May, the truth remained murky.

Political analyst Rafael Archondo saw a government trapped in an impossible position. Paz had tried to govern from the center, refusing to build a solid parliamentary majority despite opportunities to form alliances. Instead, he ruled largely by decree, lacking the political muscle to push through real structural change. The fuel crisis exposed this weakness. So did constant turnover in key posts and the glacial pace of actual economic reform—the fuel subsidy cut was essentially the only major move six months in.

Archondo identified the core trap: Paz had managed to anger both ends of the political spectrum simultaneously. Conservatives and right-wing groups thought his reforms were timid, that he had failed to genuinely break with the MAS economic model. Meanwhile, unions and Morales sympathizers rejected austerity and the rising cost of fuel. The country had split into two opposing forces with incompatible demands, and the president stood between them with no clear path forward.

But the picture was more complicated than a simple left-versus-right standoff. Analyst Ricardo Calla Ortega argued that multiple actors were destabilizing Paz, not just Morales loyalists. Morales retained real capacity to mobilize rural unions and coca growers, particularly in Cochabamba, La Paz, and Oruro, where he maintained influence through rural syndical networks. These groups controlled key roadblocks between La Paz, Oruro, and Cochabamba. Yet Calla also noted that Morales himself had lost much of his former electoral and political weight.

Calla went further, suggesting that criminal networks—drug cartels, illegal miners, smugglers—were also fueling the unrest. These groups felt threatened by Paz's crackdown on narcotics trafficking and organized crime, so they financed and reinforced blockades in the Chapare region, northern La Paz, and areas near El Alto. The protests, in this reading, were not a coordinated Morales operation but a collision of competing interests all seeking to destabilize the government for their own reasons. For now, Calla assessed, the conflict remained geographically contained—mainly in the highlands and western regions—and lacked the force to topple Paz outright. But the pressure was building, and the president's next move would determine whether Bolivia found its footing or descended further into chaos.