Bolivia is sinking into what is called its worst economic crisis in 40 years. At the center is a dollar shortage. International reserves have fallen from $15.1 billion in 2014 to around $3.1 billion. Natural-gas exports, long the country's mainstay, have dwindled; foreign currency has dried up; prices are rising. A dollar shortage running since early 2023 has spawned parallel exchange rates and fuel-distribution bottlenecks.
The fuel crisis and "junk gasoline"
Amid budget strain, the government ended fuel subsidies, and the burden fell on working people. Imported low-quality gasoline that damaged vehicles set off protests among transport workers. The "junk gasoline" scandal widened into a wave of strikes and demonstrations. La Paz and El Alto have seen food shortages, school suspensions and transport disruptions.
Protests shaking the government
Since May 2026, protests demanding the resignation of President Rodrigo Paz have intensified, and in early June the defense and education ministers resigned. Business groups say road blockades drain more than $50 million a day from the economy and have stranded some 5,000 vehicles on highways. The Paz government's 2026 budget aims to cut the deficit from 15% to 9% of GDP, but the distribution of pain is fueling anger.
How resource dependence unravels
Bolivia's crisis is a textbook case of how a resource-dependent economy breaks. While gas sold, foreign currency and subsidies flowed. As it thinned, subsidy cuts, currency instability and inflation arrived at once — and the pain is heaviest for those who spend most of their income on fuel and food. There is hope in lithium, the next resource, but it will take time to reach daily life. When a resource state loses its support before growing its next pillar, the first thing cut is the footing of the most vulnerable.
A life propped up by resources, when the resources thin, gives way first at its weakest point.
References
- Euronews, "Bolivian ministers resign as protests rock government" (2026-06-03) — euronews.com
- Al Jazeera, "Bolivia in crisis: social unrest, demands for president to resign" (2026-05-22) — aljazeera.com
- NPR, "Bolivia's capital under siege as protests deepen crisis" (2026-05-20) — npr.org
- Rio Times, "Bolivia Budget 2026: Paz Cuts Deficit From 15% to 9%" — riotimesonline.com
※ This article is the author’s commentary based on public information. Please confirm the latest figures, dates and procedures with governments and primary sources. Quotations are kept minimal and sources are cited.