LA PAZ, Bolivia — Signs reading “We Buy Dollars” line the doors of Victor Vargas’ shoe store in the center of Bolivia’s largest city, a desperate attempt to keep his family business afloat.
Just a few years ago, Vargas, 45, would open his shop at 8 a.m. to find throngs of customers waiting to buy tennis shoes imported from China. But now his store sits desperately empty.
“Right now we’re in a terrible crisis,” he said. “Nobody’s buying anything anymore. … We don’t know what’s going to happen.”
Bolivians like Vargas have been hit hard by economic turmoil in the tiny South American country caused by years of over-reliance on the U.S. dollar and now a shortage of those currencies.
With presidential elections due to take place next year, the feud between President Luis Arce and his ally-turned-rival Evo Morales continues, and an economic downturn is worsening. Many Bolivians affected by the crisis have lost faith in Arce, who denies that the country is even in economic crisis.
“Bolivia’s economy is growing. An economy in crisis doesn’t grow,” Arce told The Associated Press in an interview, a statement disputed by economists and dozens of Bolivians.
That deep-rooted distrust came to a head on Wednesday following what the government called a “failed coup” and what opponents, including Morales, called an orchestrated “self-coup” to allow an unpopular leader to score political points ahead of elections.
Regardless of the authenticity of the coup attempt, most Bolivians who spoke to The Associated Press said they no longer trusted their leader and that President Arce would be better off spending less time on political maneuvering and more time dealing with Bolivia’s stifling economy.
“He should think about Bolivia’s economy, make a plan to move forward, find ways to get dollars and work to move Bolivia forward,” Vargas said. “Let’s stop this childish ‘self-destruction.'”
Simmering resentment paved the way for more conflict in a country accustomed to political unrest.
Bolivia’s economic crisis is rooted in a complex mix of factors: dependence on the dollar, depleting foreign exchange reserves, mounting debt and a failure to produce products such as gas that once provided an economic boon to the Andean country.
This means Bolivia has become primarily an import economy “totally dependent on the dollar,” said Gonzalo Chavez, an economist at Bolivia’s Catholic University. That once worked to Bolivia’s advantage, helping it become one of the fastest-growing economies in the region and driving its “economic miracle.”
The Vargas family started the shoe business about 30 years ago because they saw it as a surefire way to provide stability for future generations: They import shoes from China, pay in dollars and sell them in Bolivian bolivianos, the national currency. Without dollars, the business wouldn’t work.
The shortage has led to a black market, with many sellers bringing dollars from neighboring Peru and Chile and selling them at exorbitant prices.
Pascuala Quispe, 46, was walking around downtown La Paz on Saturday, visiting various currency exchange shops, desperately searching for dollars to buy a car part. The official exchange rate was 6.97 bolivianos to the dollar, but she was told the actual rate was 9.30 bolivianos — too much for her. So she kept walking, hoping to get lucky somewhere.
Unjustly inflated prices are affecting everything. People are stopping buying shoes, meat and clothes, and working-class people are falling deeper into poverty. Bolivians don’t trust banks so much that they joke about having “mattress banks” where they keep their cash at home.
“There are no jobs… and the money we earn is not enough,” Quispe said. “Everyone is suffering.”
Some sellers, like Vargas, have put up signs on their doors in the hopes that sellers will buy and sell dollars at a fairer price.
Chavez, the economist, said it’s a complex economic predicament with few short-term solutions.
But President Arce maintained that Bolivia’s economy was “one of the most stable” and said he was taking steps to address problems facing Bolivians, including dollar and gasoline shortages. He also said the government was industrializing and investing in emerging sectors such as tourism and lithium.
Chavez said Bolivia has the world’s largest reserves of the valuable metal lithium, key to the transition to a green economy, but investment is only viable for the long term, mainly due to government mismanagement. Meanwhile, inflation is outpacing economic growth and most Bolivians face poor working conditions and low wages.
The situation has been exacerbated by ongoing infighting between President Arce, who resigned during the 2019 unrest and returned from exile, and President Morales, who claims the unrest was a coup against him. Now the former allies are trading insults and sparring over who will lead the Movement for Socialism party, known by its Spanish acronym MAS, ahead of 2025 elections.
“Presidents Arce and Evo Morales are fighting over who has more power,” Vargas said, “but neither of them will run Bolivia. There’s a lot of uncertainty.”
Widespread discontent has fueled a wave of protests and strikes in recent months. The protests and road blockades have dealt further economic damage to shoe retailer Vargas, as the chaos of the protests across the country has discouraged customers from coming to buy goods.
President Morales, who still wields great power in Bolivia, has blocked the Arce government from passing legislation in Congress to ease the economic turmoil, in what Arce told The Associated Press was a “political attack.”
Morales said last week’s military attack on the government palace was led by former military commander José Zúñiga, stoking speculation that it was a political ploy engineered by Arce to win sympathy among Bolivians — a claim he first made himself when Zúñiga was arrested.
“He deceived and lied not only to the Bolivian people but to the whole world,” Morales said on a radio show on Sunday.
The political bickering has left many like Edwin Cruz, 35, a truck driver who has been waiting in long lines for hours, sometimes days, to buy diesel and gasoline because of periodic shortages caused by a lack of foreign currency.
“Diesel is like gold now,” he said. “The people are not stupid, and because of this ‘self-coup’ this government must go.”
Cruz doesn’t want to vote for either Morales or Arce. Bolivians have few other options, but Chavez said discontent has opened a “little window” that could allow outsiders to gain momentum, as has been the case for many in Latin America in recent years.
More recently, self-described “anarcho-capitalist” Javier Milley became president of neighboring Argentina, promising to steer the country, which has many similarities to Bolivia, out of economic decline.
Meanwhile, Vargas is undecided about what to do with her family’s shoe store, once a source of pride but now in financial difficulty. She wants one of her four children to take over the business, but all of them want to leave Bolivia; one of them has already emigrated to China.
“They don’t want to live here anymore,” Vargas said in his empty shop. “They have no future here in Bolivia.”
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