The Bolivian economy showed signs of instability in 2022, and Bolivia remains a challenging place to conduct business. The government, controlled by the Movement Towards Socialism party (MAS), continues to advance a state-centered economic policy. In 2009, Bolivians approved a new constitution that gave the state complete management of the country’s natural resources. During his tenure, former President Evo Morales (2006-2019) nationalized companies in the hydrocarbons, telecommunications, electricity, and mining sectors, in addition to a cement plant, an airport management company, and the pension administration system. In October 2020, MAS returned to power with the election of Luis Arce as president. Arce’s administration brought a measure of political stability initially. However, in 2023 the political situation became more uncertain due to increasing internal conflict within the MAS party between President Arce and former President Evo Morales.
Bolivia’s weak judicial security, complicated regulatory systems, cumbersome bureaucratic procedures, and political pressures adversely affect the private sector in Bolivia. Bolivian commercial law does not have any significant technical barriers to trade or tariffs that substantially affect commerce with other countries. The export of certain edible products requires licenses, and in some instances, the government may prohibit exports to prioritize supplying the domestic market.
Additionally, a primary concern in the Bolivian economy is the growing fiscal deficit derived from unsustainable fuel import subsidies, social programs and the trade deficit, which was reflected in the unprecedented fall in international reserves from around $15.5 billion in 2014 to $4 billion in December 2022, according to the Central Bank of Bolivia.