“Capitalism for all” pledges Bolivia’s first non-leftist head of state in two decades

By Jack Kolesar

In an October 19 runoff election across Bolivia, Rodrigo Paz Pereira was declared the next president of the South American nation. Paz, from the Christian Democratic Party, secured 54.6% of the vote over his opponent Jorge Quiroga.This victory signals a significant shift in the politics of Bolivia. Paz, a right-leaning centrist, will end the two decade long dominance of Bolivia’s left-wing party, the Movement for Socialism. Bolivia’s new outlook is likely a product of economic issues like inflation and high fuel prices, along with persistent issues such as crime and corruption. 

As the president-elect, Paz holds experience in roles such as a city councillor, mayor, and senator from the south-eastern department of Tarija. Additionally, as a student of economics abroad, he has presented himself as a pragmatic candidate seeking to revive the Bolivian economy, promising “capitalism for all.” Paz has pledged to use his power to initiate market-oriented policies such as cutting taxes, lowering tariffs, and decentralizing the fiscal power of the central government. The latter aim, decentralization of budget control, is an important one for Paz. His administration will aim to reduce the share of the national budget controlled by the La Paz and Sucre-based central government from 80%  to closer to 50%. As a result, regional and municipal governments across Bolivia will have increased autonomy. Moreover, Paz has also pledged various reforms to the Bolivian state such as battling its robust corruption, restructuring state companies, and reorganizing the judicial system. 

This centrist victory is a seismic shift in Bolivia, a state controlled by leftists since the presidency of Evo Morales began in January 2006. In its two decades of leftist governance, Bolivia nationalized its resources, centralized state control, and created many social programs. Now, with Paz in power, the Bolivian state will shift right. The economy will be more open, with fewer subsidies, along with the state’s power being more decentralized. Despite these massive changes, Paz plans to reform the state gradually, noting that sudden alternations, especially those regarding social programs, could reignite social unrest. These changes seek to replenish Bolivia’s foreign currency reserves, boost its global standing, and improve economic efficiency in both the public and private sector. Importantly, however, critics of Paz note that in reducing the government spending of his leftist predecessors, the erosion of social safety nets and poverty alleviation measures could spell disaster for impoverished Bolivia. It is evident that Paz will have to work hard to gain the support of the low-income communities that supported these leftist policies in order to avoid mass unrest and political instability, persistent issues that are coupled with economic woes in Bolivia. 

Beyond Bolivia, the election of Paz has implications as well. The Tarijeño former senator brings Bolivia into the regional shift rightward. In recent years, governance in South America has often followed this trend of leftist-governed states becoming more centrist or right-wing. Nearby examples include Daniel Noboa’s presidency in Ecuador, or within Bolivia’s neighbor Argentina and its right-wing leader Javier Milei. This shift away from left-wing politics that may be spreading across the region could change how its states trade, govern, and interact. Moreover, extending beyond regional political ideology, the election of Paz will reshape Bolivian foreign policy. Paz has expressed a desire to reconnect with Washington and move away from Beijing. This means a shift away from a current partner in China for Paz’s Bolivia, instead aligning itself more with the United States despite a poor relationship between the two under its 21st century left-wing governments. Overall, this makes Paz’s election not only a national and regional event, but one of great international importance. Bolivia possesses vast natural resources, particularly lithium, so a commitment to capitalism and a willingness to reconnect with Washington and turn away from Beijing will have implications on the global geopolitical stage, with Paz being a new actor of relevance.