Austerity and unrest in Bolivia
The self-sacrificing butcher 🔪 acrylic on paper © Sheep María.
Opinion • Stasiek Czaplicki Cabezas • February 20, 2026 • Leer en castellano
One in three of the first 100 days of the new Bolivian government, headed up by Rodrigo Paz and his vice president, Edmand Lara, has passed in a climate of open conflict.
Blockades escalated to the point of paralyzing the country, with mass demonstrations, primarily by mining unions and public school teachers, converging on La Paz, the seat of the executive branch and the center of political power. The tried and true tactic of passing unpopular measures near the end-of-year holidays failed to avert civil unrest and ended in the government partially walking back Supreme Decree 5503.
Blockades were activated for a variety of reasons, including the scandal of poor-quality fuel imports, which damaged thousands of vehicles and sparked off a new round of social unrest.
Beyond the electoral collapse of the Movement Toward Socialism (MAS) party, one thing that remained following last year's elections was a political conflict between the state and the agribusiness sectors of eastern Bolivia.
Since Paz’s inauguration on 8 November, business sectors that didn’t include him in their forums now hold strategic cabinet positions such as the Ministry of Environment and Planning and the Ministry of Rural Development, Plural Economy and Water.
Paz’s cabinet reshuffle was not just cosmetic. It came with a new style of governance: executive decrees, ministry regulations, and proclamations presented as though they had already been discussed, including the repeal of taxes on large fortunes. One good turn deserves another.
Resistance to ‘capitalism for all’ shuts down the country
December 2025’s Supreme Decree 5503 marked a milestone in Bolivia. The legislative package was hammered out behind closed doors, the annexes were off-limits to the public, and the enactments were fast-tracked before the end-of-year recess.
Behind the most obvious measures—key among which is the end of fuel subsidies—lies a broader agenda: export liberalization, secretive contracts with foreign companies, and the dismantling of labor protections.
These measures violate collective norms and rights, but it was presented as inevitable. Opposing the decree was presented as akin to pushing the country into bankruptcy. The government initially called on key social organizations to join a round of “dialogue,” making clear that only adjustments to form, not substance, were on the table. The official narrative was categorical: those who did not participate were unpatriotic.
The Bolivian Workers' Union took the lead, first rejecting and then negotiating Decree 5503. Blockades and demonstrations began before Christmas and, after a well-deserved break, intensified to the point of paralyzing the country between January 4 and 12.
The executive branch sought to minimize the impact of the protests and stigmatize opponents of the decree. But between trying to mask the social turmoil during the visit of the president of the Inter-American Development Bank and the threat by teachers to delay the start of the school year with protests, the Paz government was left with little wiggle room.
It was in this context that the government agreed to negotiate. The result was a partial rollback of the decree, but the measures to alleviate the widespread price hikes brought on by austerity were insufficient.
The already announced rise in fuel prices was barely cushioned by a limited monthly bonus equivalent to just over $15. On top of that, a 20 percent increase in the minimum wage was introduced. The rise was in line with the official inflation rate, and does not reflect the increase in the cost of living.
The government's official response came with another legislative offensive: three “anti-blockade” bills aimed at criminalizing one of the most historic and effective forms of protest in Bolivia. Not even military governments had moved so enthusiastically in this direction.
Paz’s main course: neoliberalism
Over the first 100 days of the Paz government, the demagogic rhetoric of social inclusion has been taken off the menu. The universal salary for women has been shelved without warning. The increase in bonuses has been put on pause. The promise to maintain the subsidy for fuel destined for use in public transportation has vanished.
That's all been left behind, like the props of a candidate who, during the campaign, toyed, at least a little, with the idea of a welfare state.
Instead, Paz repeats a simple but handy refrain: “ideology doesn't put food on the table.” It’s a phrase that says little but that means a lot. It allows the dismantling of social programs, is used to justify cuts, and to present austerity measures as if they were not a political decision but simple economic realism. It makes it seem as if the president’s decisions did not express a specific ideology but rather a supposed technical rationality that’s neutral and based on “common sense.”
Another statement that appears repeatedly, with slight variations, in Paz's speeches is even more revealing: “Bolivia is capitalist because the people work with capital.” In addition to being incorrect, it contains a dangerous romanticization of informality.
Not all money is capital, nor is self-employment always capitalism. Owning merchandise or tools does not automatically make someone capitalist. Capital, in terms of political economy, is that which allows for reproduction and expansion by appropriating the labor of others or the surplus it generates.
In Bolivia, most people do not control capital in that sense. What they have are minimal subsistence resources which force them to work long hours, rely on fragile incomes, all without any access to social security. Rather than a means of accumulation, these conditions constitute a regime of exploitation.
Referring to precarity as “capitalism” is not a neutral description. Rather, it is an ideological position that transforms structural exclusion into individual responsibility and mass precariousness into “entrepreneurship.”
The other pillar of this ideological turn is symbolic nationalism, a rhetorical device aimed at stirring up the idea of “patriotic sacrifice.”
This is not a form of sovereignty that defends resources or rights, but empty rhetoric that calls on people to endure “for the homeland.” It is a call for resignation, embellished with heroic phrases that are introduced just as austerity measures are implemented.
Dual discourse
There are two more slogans at the heart of the government's public discourse that capture the spirit of the moment and help us understand what lies ahead.
On the one hand, there is “Capitalism for all,” a direct echo of the old liberal doctrine of Peruvian economist Hernando de Soto. Soto was co-architect of Alberto Fujimori’s neoliberal policies in the 1990s, which considers the poor “capitalists without capital.”
On the other hand, we see the classic European fascist slogan “God, Country, and Family” being used, which was openly adopted by Bolivia's military regimes. It presents conservative order, political repression, and Catholic morality as state doctrine.
Today, this dual discourse is being communicated as part of a phase of “regaining stability.” According to the Paz government, the economy is “under control,” and we must now enter a stage of “reactivation.”
The problem is that reality stubbornly refuses to match this narrative. The World Bank acknowledges that the recession is continuing this year and will deepen next year. Inflation continues to accelerate, and neither the second gasoline price hike nor the formal devaluation of the exchange rate, which will lead to further inflation, have been implemented. The worst, it seems, is yet to come.
To top it all off, Paz, who promised financial sovereignty during the campaign, is now negotiating an emergency loan of $3.3 billion with the International Monetary Fund, after having already borrowed $8 billion from the Andean Development Corporation and the IDB. These loans are not a reactivation but an emergency measure for severe structural imbalance in the economy.
The government's narrative is based on a familiar formula: build confidence by hiding key information, even as the evidence contradicts common sense.
One example of this is the recent scandal involving the distribution of low-quality fuel that damaged thousands of vehicles across the country. Initially, the government denied the problem, then downplayed it. Today, the government blames the MAS and claims that the issue was caused by a case of “destabilized gasoline” within the state apparatus.
Meanwhile, soybean exports are being liberalized, and four major bills aiming to “transform the country” are to be announced within the next six months, even though no one knows what they are about yet. In addition, another bill initially promoted by the MAS to allow business access to land under small property ownership is now being revived by agribusiness.
That means that over 10 percent of Bolivia’s agricultural land could end up in the hands of companies or banks, something that’s been unheard of since the 1953 agrarian reform. This would open the door to legalizing the dispossession of small farmers in Bolivia, in a context of severe economic crisis and rapidly deteriorating rural living conditions.
There is no rupture in Bolivia today. There is continuity. A profound continuity with the neoliberal model that the MAS never dismantled, which today finds a more forthright and disciplined version that’s less uncomfortable with its own consequences and with its current program of government austerity.
The question is not where Bolivia is headed. The direction is clear.
The question, instead, is who will pay the price, and how much resistance there will be.
