Luis Arce. Asamblea Legislativa Plurinacional / Flickr
Political turmoil could lead to devaluation, default, chaos, and American intervention
This year’s rainy season in Bolivia has claimed 49 lives, left 324,699 families homeless, and completely destroyed 708 houses. Damage has been reported in 3,937 towns and villages. The situation remains critical. The scale of these natural disasters has overwhelmed the government’s ability to respond, resulting in significant economic losses.
If the Bolivian government fails to support its aviation sector, which includes civil and military aviation as well as the national airport network, it risks becoming fully isolated. For a landlocked country with no sea access and dwindling cash reserves, this is an existential threat.
The economy is approaching a point of no return. The Central Bank’s hard currency reserves have been depleted, and overall international reserves have dropped to approximately one-tenth of the $15 billion peak seen in 2014. President Luis Arce’s administration is clinging to every last banknote and ounce of gold. This policy has choked economic activity, triggered fuel shortages, and fueled growing public discontent — all in the name of staying in power.
For nearly two decades, Bolivia has been governed by the left-wing party Movimiento al Socialismo (MAS, or «Movement Toward Socialism»). Throughout this time, Bolivia has been unique in South America in that no centrist or conservative figure — even with U.S. backing — has managed to seriously challenge MAS’s dominance.
But now, the left has turned on itself. Former president Evo Morales (2005–2019), a champion of Bolivia’s indigenous population, and current president Luis Arce, who represents mestizos and «white» Bolivians, are now rivals. Both belong to the left. They have both announced their intention to run in the 2025 presidential election, plunging their shared political base into chaos and division.
Though both men claim the MAS banner, they now lead competing factions: Morales’s «Evistas» and Arce’s «Aristas». Arce succeeded in having Morales expelled from the party and barred from running for president again by the Bolivian Supreme Electoral Tribunal (TSE), which cited the constitutional limit of serving no more than two consecutive or non-consecutive terms.
Despite these constraints and ongoing legal battles, Morales insists that he has the right to run again. He is currently in hiding with supporters in the coca-producing region of Cochabamba, evading arrest on charges including human trafficking, smuggling, and the alleged rape of a minor who reportedly gave birth to his child. Morales denies the allegations and claims that the Arce administration is persecuting him for political reasons. So far, neither side has produced convincing evidence.
In response, Morales hastily formed a new political party, EVO Pueblo, as a vehicle for his comeback bid. However, on May 14, the TSE reaffirmed that anyone who has served more than two presidential terms is constitutionally barred from running again, effectively confirming Morales’s disqualification from a fourth term.
Nevertheless, Morales refuses to accept the ruling. “Only the people can ask me to step down”, he declared, vowing to continue his campaign under the EVO Pueblo banner. «We have no personal ambition. We will obey the people’s mandate to save Bolivia once again». The only catch? His new party hasn’t been legally registered yet.
As a backup plan, Morales nominated a proxy candidate, 37-year-old Senate President Andrónico Rodríguez. Rodríguez hedged his bets by registering as a presidential candidate under a separate banner, the «People’s Alliance».
Last week, President Arce made his own calculated move: he announced that he would not seek a second term, even though the constitution allows it. In a televised address, he said his decision was aimed at preventing the left from fracturing further, which could hand victory to the right. «I don’t want to be the president whose ambition hands the country over to those who’ve already plundered it», he said, though he did not specify if he meant Morales, himself, or the United States.
Arce will instead run as the top Senate candidate from the capital district. He has also nominated his 36-year-old Minister of the Interior, Eduardo del Castillo, as MAS’s official presidential candidate. Across Bolivia’s political spectrum, this was widely viewed as an attempt by Arce to «save face» in anticipation of the inevitable legal consequences of the country’s deteriorating state.
The split within the left has prompted analysts to speculate that Bolivia could shift politically to the right as early as this year. Spain’s EFE news agency called this one of the right’s best opportunities in nearly two decades of MAS dominance. «They attempted to build a broad right-wing coalition», EFE notes, «but as the effort concluded, Bolivia’s conservative bloc once again revealed its deep divisions and chronic dysfunction».
EFE argues that the right continues to rely on old political figures who lack credibility with a disillusioned electorate. They have failed to produce new leaders, cannot reach basic agreements, and have no unifying strategy. This political impotence persists despite Bolivia being home to some of the most vibrant indigenous and peasant movements in the Andean region.
Consequently, U.S.-backed anti-MAS groups still lack a clear leader to seize what may be their first real opportunity in years.
According to the Bolivian news outlet Urgente.bo, Bolivia’s socialist experiment is in jeopardy due to a political fracture combined with worsening economic and social conditions. «Most Bolivians now face the prospect of returning to extreme poverty, and U.S. intervention is not far off», the outlet warns.
Washington has long viewed MAS’s rise to power as part of a broader threat from Cuba, Venezuela, and Nicaragua. Of course, that’s White House nonsense — but nonetheless, the U.S. sees the upcoming elections as a turning point. «In any case», says analyst José Amesti Rivera, «they’ll be ready to ‘help’ manage the situation».
«Major agro-industrial capitalists and other powerful sectors in Bolivia with ties to the U.S. want the country to regain control over its lithium reserves», Rivera explains.
He notes that current contracts guarantee Bolivia 51% of the revenue from lithium exports — a setup that deeply frustrates Washington and U.S. corporations eager to profit from Bolivia’s resources. «Once China and Russia are pushed out», Rivera says, «all of Bolivia’s lithium profits are expected to go to the United States».
The internal rift within MAS is about more than just personal animosity between Morales and Arce. It reflects a broader crisis within the Latin American left, including an inability to govern effectively in the people’s interest, a corrosive culture of corruption, and the United States’ enduring influence.
On May 19, Bolivia’s Supreme Electoral Tribunal closed candidate registration for five parties and five national alliances. Neither Morales nor Arce appears on the list.
With Arce stepping aside and Morales insisting on running despite being barred, Bolivia’s political future remains unclear.
As Bloomberg recently put it, Bolivia’s crisis may end in devaluation, default, and chaos. We might add direct U.S. intervention to that list.