Bolivia's Gas Boom Crashes as Reserves Run Dry — SkimNews
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- Bolivia's economy boomed from 2006–2014 on fossil gas exports under Evo Morales, who commissioned a presidential skyscraper and the world's longest urban cable car network in La Paz before the 2014 commodity crash.
- Successive governments funneled gas profits into heavy state spending, costly fuel subsidies, and a fixed dollar peg (ended earlier this year) rather than investing in steel, aluminum, agriculture, education, or healthcare — trapping Bolivia in a classic rentier-state model.
- Bolivian elites hold an estimated $10bn offshore — roughly an eighth of GDP — while informal labor reached 84% in 2024, the highest rate in Latin America, according to Cedla analyst Carlos Arze.
- A $1.9bn IMF loan approved in July will mostly service debt or add reserves rather than fund economic diversification, former Central Bank of Ecuador COO Andrés Arauz noted, while dollar shortages continue to deter foreign investors.
- Bolivia is projected to become a net fossil gas importer by about 2030, prompting the government under President Rodrigo Paz to cut fuel subsidies in December and refocus the state hydrocarbons firm on exploration, extraction, and refining.
- Indigenous and peasant communities in Bolivia's Amazonian lowlands exported £145m of Brazil nuts in 2024 — double the value of its timber sector — through sustainable bioeconomies, but biologist Vincent Vos says mining and agroindustrial lobbies hold increasing power over a government that has sidelined environmental policy.
Why it matters: The cost of Bolivia's failed diversification falls on ordinary people: vendor Felipa Huanca at La Paz's Rodríguez market reports imported staples have doubled in price while wages stagnate. Arauz contrasts Bolivia's trajectory with Norway and Qatar, where state hydrocarbon revenues were paired with private-sector development — a parallel investment Bolivia never made, leaving it dependent on the next commodity cycle.
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