Bolivia’s ‘capitalism for all’ project sparks backlash for selling-out on natural resources

Bolivia’s political landscape has changed dramatically since August 2025, when a general election ended the Movement for Socialism (Mas) party’s rule after nearly two decades. Its presence in Congress has all but vanished, with rightwing parties now commanding an overwhelming majority.

The new president, Rodrigo Paz Pereira, campaigned with the rightwing populist slogan: fé, familia y patria (faith, family and homeland). He swept to victory in large part due to the widespread popularity of his running mate and now vice-president, Edmand Lara.

As the son of former Bolivian president Jaime Paz Zamora, who led Bolivia from 1989 to 1993, Paz Pereira represents a new generation of the country’s traditional political elite. But Lara, a former police captain who has become prominent on social media since 2023, comes from the popular classes.

The unlikely pair benefited from a strong desire among the Bolivian people for change amid a severe economic crisis marked by a shortage of US dollars and annual inflation of nearly 20%. They also took advantage of widespread distrust of reticence towards politicians from previous governments.

In his November inaugural address, Paz Pereira denounced that Mas had left what he called an estado tranca (obstructing state). He pledged to replace it with a smaller, technocratic state capable of attracting foreign investment. This model of state reform is part of his broader neoliberal project of “capitalism for all”, an ill-defined entrepreneurial vision that celebrates informality.

Paz Pereira’s government soon revealed the contours of its economic and political agenda in Decree 5503. The decree included over 100 articles covering numerous issues such as fuel subsidies, taxes, emergency powers, resource governance and fiscal and monetary policy.

The government presented the decree almost exclusively as a measure to end longstanding fossil fuel subsidies. These subsidies, which were introduced in 1997, had become largely unsustainable with the decline of Bolivia’s gas exports since 2017. The decree ended the subsidies, replacing them with modest increments to the minimum salary and state pensions.

Other, more problematic elements of the decree that overlooked established procedures and the stipulations of Bolivia’s constitution were soon exposed. These included measures to grant the government emergency powers without the required justification, as well as major changes to the nationwide tax regime without legislative approval.

The decree also introduced extraordinary powers for the central bank to acquire limitless external debt without mechanisms of democratic control. And it established a “fast track” mechanism for the approval of contracts for the extraction of strategic natural resources. Contracts would be awarded without legislative oversight or the required processes of environmental impact assessment and informed consent of Indigenous people.

Such a “fast track” mechanism openly revived what was known as the entreguista character of the Bolivian state, which had historically been prevalent under elite rule. This is a term used throughout Latin America to criticise governments or policies perceived as giving away a country’s national interests by, for example, surrendering control of natural resources.

Bolivia is home to the world’s largest known lithium deposit in the department of Potosí, estimated at 23 million tonnes. Lithium is a critical component in the batteries that power electric vehicles and smartphones, as well as in high-tech weapons systems. Bolivia is also well-endowed with other critical minerals such as tin, silver and antimony.

Nationalist movements have fiercely opposed entreguista policies in Bolivia before. These movements have inspired major political events, including a revolution in 1952 that overthrew the ruling oligarchy.

They also led to the so-called water and gas wars in 2000 and 2003. These were periods of social unrest arising over government plans to privatise the water supply in the central city of Cochabamba and export natural gas through Chile, respectively.

As noted in 2006 by Tom Perreault, a researcher at Syracuse University in New York, Bolivian people see tin or gas “not only as natural resources, but as national resources as well, that is, resources that properly belong to the nation and its people”.

This sentiment was captured recently by Bolivian researcher Gustavo Calle. In an article published on January 13, he said that by suggesting strategic resources will be exploited by foreign companies without meaningful control, Decree 5503 touched “the most sensitive vein of the popular nationalism”.

Repealing the decree

Two days after the government published the decree on December 17, Bolivia’s main workers’ organisation, the Bolivian Workers’ Centre, declared a general strike. It asked its members to mobilise, demanding the abrogation of the decree.

Then, on January 5, the largest Indigenous organisations joined the protests. They paralysed the country with more than 50 road blockades. And a march named “Bolivia is not for sale” later entered the capital city of La Paz, bringing together numerous sectors of society.

Paz Pereira portrayed the leaders of the mobilisation as reckless individuals defending their own privileges. He also pledged not to back down against “criminals”. But after nearly 28 days of protests, the government finally conceded and abrogated the decree on January 11.

The government’s image has taken a hit. However, unlike the government during the gas war, its legitimacy has not been challenged. That period of unrest ultimately resulted in the resignation of President Gonzalo Sánchez de Lozada.

Paz Pereira’s defeat is also only partial. The elimination of the fossil fuel subsidies has now been consolidated. And the government is currently preparing a new authoritarian law to sanction road blockages as criminal offences.

In a recent interview with the Financial Times, Paz Pereira also sought to portray the popular opposition to his entreguista policies as being carried out by a mere minority of former Mas leader Evo Morales’ followers.

In the absence of an alternative political project, the new government appears to be in a strong position to impose its agenda. Yet the strength and explosive potential of resource nationalist sentiments in the country should not be discounted.

Enrique Castañón Ballivián does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.