Bolivia is currently grappling with a severe economic crisis, marked by a shocking fuel shortage that has left long queues for diesel stretching for kilometers. Drivers like Victor GarcÃa, 66, report waiting for days to fill their tanks, reflecting widespread frustration among the populace [b78c0e4b]. In a significant policy shift, Bolivia has authorized 27 companies to import fuel, effectively ending the state-owned YPFB's monopoly on fuel distribution. This move comes as the country faces escalating fuel shortages and public outcry [856d3f8c].
The nation’s foreign currency reserves are plummeting, leading to a scarcity of U.S. dollars and escalating public anger against President Luis Arce as the nation approaches elections [b78c0e4b]. Protests have erupted across Bolivia, particularly in La Paz, where demonstrators chant, "Everything is expensive!" as they voice their discontent over rising living costs and fuel shortages [b78c0e4b]. Economy Minister Marcelo Montenegro has claimed that diesel sales are returning to normal; however, inflation has surged to nearly 8%, with food prices doubling in markets like those in El Alto [b78c0e4b].
The Boliviano's value has dropped significantly, from 6.0 to 7.4 against the U.S. dollar, with unofficial exchange rates exceeding 11 bolivianos to the dollar, indicating a deepening economic crisis [856d3f8c]. The government spends approximately $56 million weekly on fuel imports, exacerbating the economic strain [b78c0e4b]. Business chambers have expressed concerns that the ruling Movement for Socialism (MAS) party's economic model is exhausted, with fuel subsidies projected to rise from $439 million in 2021 to an expected $2.1 billion in 2025 [856d3f8c].
In addition to the fuel crisis, Bolivia's poultry sector is facing a crisis reminiscent of Sri Lanka's recent challenges, with rising feed and medicine prices leading to malnutrition among chickens. Chicken prices surged to 23-24 Bolivianos per kilo by December 23, 2024, a significant increase from 18 Bolivianos earlier in the month [871a354d]. The Santa Cruz Poultry Farmers Association has warned of further price increases in 2025, as corn prices have risen over 100%, from 60 to 125 Bolivianos per quintal [871a354d].
Breeding stock imports have fallen from 160,000 to 100,000, and farmers are facing severe shortages of fuel and agricultural inputs. Omar Castro, a representative of the poultry sector, has criticized government agricultural policies, drawing parallels to Sri Lanka's poultry crisis, where chicken output fell by 30% and egg production by 40% [871a354d]. As tensions rise, the government has presented a controversial 2025 budget that includes a 12% increase in spending, which has drawn skepticism from the public [b78c0e4b].
Compounding these issues, Bolivia's state-run food trading firm Emapa has failed to control rising rice prices, which have soared to 500 Bolivianos per quintal, far exceeding the expected price of around 300 Bolivianos. Vice Minister Jorge Silva reported that Emapa sold rice at 220 Bolivianos per quintal without profit, highlighting the challenges posed by foreign exchange shortages affecting food imports [88598839]. The IMF has warned about liquidity draining foreign reserves, while Bolivia's central bank has financed state enterprises, leading to excess liquidity [88598839].
Grain production fell in 2024 due to diesel shortages, and authorities have raided rice warehouses for profiteering amid the crisis [88598839]. The combination of economic hardship, political strife, and public discontent creates a precarious situation for Bolivia, with the potential for further unrest as citizens demand accountability and solutions from their leaders [b78c0e4b]. This situation bears striking parallels to Sri Lanka's recent economic challenges, raising concerns about the sustainability of Bolivia's economic policies [871a354d].