Gene Kuleta, Editor, Latin America Advisor publications

Senator Rodrigo Paz won Bolivia’s presidential runoff election on Oct. 19, defeating former President Jorge “Tuto” Quiroga by a margin of 55 percent to 45 percent with approximately 98 percent of votes counted, according to preliminary data from Bolivia’s electoral authority. “Bolivia is gradually regaining its international presence,” Paz said at a rally in La Paz on election night, adding that the administration of U.S. President Donald Trump has already offered its support to his incoming government. What ultimately decided the race for Paz? What policies will Paz prioritize after assuming office on Nov. 8? What will Paz’s presidency mean for the future of Bolivia’s political institutions, economic development and foreign relations?

Steven E. Hendrix, managing director of Hendrix LLC and former coordinator for foreign assistance of the U.S. Agency for International Development: “Rodrigo Paz’s near-landslide victory marks a decisive break from the populist cycle that has defined Bolivia for two decades. Voters chose stability and competence over ideology. Paz’s disciplined, technocratic message—’capitalism for all’—resonated with a weary electorate facing high inflation, an 8 percent fiscal deficit and a chronic shortage of dollars. His promise of gradual reform, transparency and inclusive growth was more credible than Jorge Quiroga’s call for rapid liberalization. Paz’s priorities will be restoring macroeconomic stability, rebuilding public confidence in institutions and re-establishing Bolivia’s credibility with investors and lenders. Expect early moves to rationalize subsidies, strengthen fiscal discipline and modernize management of gas and lithium. He is also likely to pursue a cautious opening toward new trade and energy partnerships while maintaining social protections that remain broadly popular. Institutionally, Paz faces a divided legislature and fragile bureaucracy. His success will depend on forming a coalition capable of governing by consensus. Having worked within Bolivia’s public sector, I’ve seen how fragile that balance can be—progress will hinge on professionalism and rule-based administration. In foreign policy, Paz offers Washington a pragmatic partner but not a proxy. U.S. engagement should focus on investment, technical cooperation and clean-energy collaboration, not political signaling. If both sides proceed pragmatically, Bolivia can rejoin the global economy on its own terms—showing that moderation still wins in Latin America.”

Michael Shifter, former president of the Inter-American Dialogue: “Against the backdrop of a profound economic crisis, Bolivians clearly voted for change—but change that is measured and gradual, as proposed by President-elect Rodrigo Paz, in contrast to the radical shock therapy advanced by Jorge ‘Tuto’ Quiroga. It appears that key to Paz’s success was his ability to win over disaffected MAS voters who are desperate for improvements in their economic conditions but wary about draconian prescriptions that risk undermining social programs for the Indigenous population and plunging the country into a recession. The Paz administration will confront an array of formidable challenges. The most urgent will be fixing Bolivia’s economic mess, getting access to dollars to finance imports and reducing high inflation and the massive fiscal deficit. He will also have to fashion a more diversified economic strategy for the longer term. To pursue his agenda, Paz will need to make alliances in the Legislative Assembly and seek to forge a consensus behind a sensible economic program and other critical institutional reforms, including of the judiciary. After two decades of leftist rule, he will be able to count on considerable goodwill of foreign investors and the international community, including the U.S. government. His task, however, will not be easy. If he moves too slowly or his policies get bogged down and fail to get Bolivia out of its economic hole, Paz risks losing political capital. Bolivia’s new moment will test both the political skills of its new president—particularly his ability to manage expectations—and the patience of its people.”

Mareike Winchell, assistant professor in the Department of Anthropology at The London School of Economics and Political Science: “Senator Rodrigo Paz Pereira’s election to the presidency marks a sea change for Bolivian politics. While Paz’s centrist Christian Democratic Party constitutes a less dramatic turn to the right than that of his opponent, former President Jorge ‘Tuto’ Quiroga, it nonetheless brings to a definitive end the socialist platform of the long-ruling Movimiento al Socialismo (MAS) party. Paz promises to clamp down on government corruption and forge a path toward greater economic security at a time marked by devastating inflation and debilitating fuel shortages. Last month, in the rural Santa Cruz region where I was visiting, diesel truck drivers had to wait more than 10 hours for fuel. Inflation has pushed up food prices by around 31 percent, the highest spike in 15 years. Basics like rice, sugar, eggs and oil, too, are scarce and require long waits, if they are available at all. But for many Bolivians, this most recent food and fuel crisis only confirms what they already felt: that the nation needs a change, and that the MAS status quo is no longer feasible. Paz campaigned on the promise of ‘capitalism for all.’ This milder, more centrist call for economic justice is this time paired not to state socialism or neo-extractivism (the funding of social programs via state-controlled resource exports), but internationalism. To many onlookers in Bolivia, Paz marks the end of an era of isolationism and the dawn of a new time defined by necessary reintegration into world politics and global, capitalist markets. To others, his election represents the lesser of two evils in the face of a divided, largely delegitimized MAS that could no longer carry the vote, nor the backing of its erstwhile supporters.”

Nicolás Saldías, senior analyst at the Economist Intelligence Unit: “President-elect Rodrigo Paz’s landslide victory was a result of his more moderate approach to unwinding the economic distortions caused by 20 years of socialist rule under the leftist Movimiento al Socialismo (MAS). His opponent Jorge Quiroga’s promise of front-loaded fiscal austerity turned off voters, especially in the rural areas that are poorer and traditionally vote for the left. Another reason Paz appealed to more voters was that Quiroga was associated with the traditional political establishment, as he was president between 2001 and 2002. As governing looms, Paz’s more piecemeal economic proposals raise questions about whether the adjustments he is proposing will be sufficient to address Bolivia’s severe economic crisis. He has said that he will not go to the IMF to enter into a program, at least not initially, but foreign exchange reserves, excluding gold, were a meager $162 million in September. Moreover, an IMF program would provide his government with the policy credibility that it currently lacks. The market’s reaction to his win was relatively muted, with the informal exchange rate actually weakening immediately after the election result. Country risk premiums also remain higher than their Oct. 17 level. Paz will foster better relations with the United States, which has had extremely poor bilateral relations under MAS. Paz will likely distance Bolivia from close ties with Venezuela, Cuba, Nicaragua, Russia and Iran, but maintain pragmatic ties with China. A challenge for Paz will be how to balance likely U.S. demands for a forceful coca production crackdown with the power of coca producers’ organizations.”

Mauricio Becerra de la Roca Donoso, managing partner at BDA Abogados in Santa Cruz:“Although both candidates that made the second round in this election in Bolivia were from the center-right, Rodrigo Paz’s advantage was in his measured economic proposal: Avoid ‘shock packages’ that hit the most vulnerable sectors. This message allowed him to capture voters from the center and the left, which represented more than 20 percent in the first round, and establish distance from Tuto Quiroga, who, for example, prioritized turning to the IMF to address the crisis. Paz’s proposal, ‘capitalism for all,’ is focused on the private sector in every aspect. It proposes reducing the size of the state (which he calls the ‘blocking state’), decentralizing resources to regional governments, lowering taxes, closing the national customs office, promoting low-interest loans and liberalizing exports. It also includes controversial measures, such as expanding social security bonuses and legalizing undocumented cars. Nevertheless, the new government will have to address two urgent issues in the immediate future: the critical shortages of hydrocarbons and dollars. Administratively, Paz’s victory represents a new opportunity to rebuild the institutional framework by promoting judicial reform that restores the legal security that has been eroded and, thus, restores foreign investment. Practical, not ideological leadership is required in foreign policy to overcome Bolivia’s virtual absence of relations in the past 20 years with the United States or other western powers. This will be a crucial issue in a context where international support will be key to overcoming the crisis and reinvigorating the country’s growth.”

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What Will Rodrigo Paz’s Victory Mean for Bolivia?