Dispatches: Bolivia’s New President
A Fresh Face Who Must Tackle Engrained Challenges Like Building Trust at Home and Abroad
Key Notes
Voters delivered Rodrigo Paz a decisive 54% victory over a neoliberal contender representing the political establishment.
Paz and running mate Lara benefited from a tactful use of social media and promised private sector engagement and protection of minority rights.
Building allies and trust at home and abroad will be challenges for Paz, as he seeks to make rapid economic reforms while encouraging foreign investment.
The Development: Paz Wins Election
Senator Rodrigo Paz won the second round of Bolivia’s presidential elections on October 19, after also winning the first round vote on August 17. Paz, of the Christian Democratic Party (PDC), won close to 55% of the vote, ahead of Jorge “Tuto” Quiroga’s approximate 45% vote share.
Paz’s campaign resonated with voters by combining a pro-economic growth platform with positioning himself closer to the ideological center. His “capitalism for all” message was persuasive considering the country’s shortage of dollars (needed for foreign transactions, including fuel imports) and high inflation (22% in April, 25% in August, annualized), weakening the informal boliviano. Paz and his running mate, Edman Lara, a former police officer turned anti-corruption social media personality, have promised to rid the government of corruption and reform the judiciary. This is an appealing promise, but it is likely catchier than plausible. Finally, Paz has said he will provide more funding to regional governments, boost private sector growth, and remove fuel subsidies to fix Bolivia’s fiscal crisis, but will still provide subsidies and social programs for vulnerable groups. He has also signaled that he supports minority groups’ rights.
The Analysis
While the rejection of MAS is notable and widely covered elsewhere, voters ultimately chose Paz and Lara (over Tuto) because they are the candidates of change, a popular political flavor across the Americas. While Paz has served in the Senate and as a mayor in Tarija, Tuto already ran for president thrice (2025 was his fourth attempt), and briefly served in the role between 2001 and 2002. Tuto’s persistence in running for president worked against him. Also, his connections to former Presidents Jeanine Añez, serving a 10-year sentence for terrorism, and Hugo Banzer, a dictator who then became a democratically elected neoliberal, deterred left-wing voters.
Paz, and especially Lara, were very successful in campaigning on the streets and on social media, an important tool in winning elections in Latin America. Lara served in the national police and, while campaigning, denounced police corruption and graft in government, delivering an appealing message. Paz and Lara will struggle to rid the system of corruption and crime as it is heavily entrenched with both issues.
Many of the former-MAS voters likely backed Paz and Lara. Evo Morales instructed his followers to pick Paz; in the first round, Evo’s proclamation to vote null represented 22% of the votes, indicating his lasting political influence. Paz’s closer-to-the-center stance indicated that he would not be a full swing to the right following years of MAS rule. Tuto’s promises to boost free trade, restore private property rights and staunchly support privatization likely repelled voters who remember the Guerras del Agua and Gas, rejections of Western influence that increased natural resource nationalism.
Of note, Paz undoubtedly benefited from Samuel Doria’s (Unidad party) endorsement, who finished in third in the first round.
The Forecast: Domestic Focus
Paz will take office on November 8 but will struggle to act immediately. Paz’s PDC party won 49 of the 130 seats in the Chamber of Deputies, and 16 of the 36 seats in the Senate. Tuto’s party (Libre) has 43 and 12, and Unidad has 26 and 7, respectively. The three biggest parties in the legislature are all right-leaning, providing some optimism that Paz can enact policy. However, in recent years, the legislature was sluggish in seemingly simple tasks, like receiving grant funding from foreign donors.
Even if Paz can legislate, he will face immense political risks from the protesters and unions, who are incredibly efficient in shutting down key transit routes, bringing the economy to its knees. Paz will find it easier to pass right-leaning reforms, like fiscal consolidation, but selling these ideas to the population will be a great challenge. Already, however, he is showing some promise here. Paz claims he will import fuel on day one using deferred payment plans. Vulnerable groups will still benefit from subsidies, while others will be forced to pay the market rate. This carveout may delay or subdue protesters who are accustomed to fuel subsidies.
The Forecast: International Focus
Paz wants closer relations with Western governments but is not opening the floodgates to foreign investment. President-elect Paz has already stated his opposition to an IMF deal, expressing mistrust in Western institutions that are seen as causing economic hardships in neighboring countries.
In fact, he wants to boost the domestic private sector. However, foreign firms will still play a crucial role. Paz has said he will remove import restrictions for products Bolivia does not produce locally. This is a good start, but greater imports from abroad will be needed. While Bolivia has an impressive entrepreneurial spirit, foreign technology and capital in artificial intelligence, mining, oil and gas and infrastructure will allow domestic firms to increase innovation and productivity in key sectors.
Western investors often think of Bolivia in terms of its lithium, and while its massive reserves are proven, the relationships need to be rekindled. Due to skepticism of Western influence, Paz will have to use political capital to rally the legislature and his base behind sizable investments from US and European players.
Foreign firms should proceed with cautious optimism, ensuring a good impression with the new government. Executives and investors must treat Bolivia as a partner, not as an infinite source of critical minerals. Firms should expect to partner with private or public entities to mine lithium or extract gas. Chile’s state-owned Codelco, for example, partners with Western firms in joint ventures. In Bolivia, profit-sharing agreements must quell fears that the state’s resources are being stolen at an unfair price. In addition, firms will need to demonstrate to politicians and citizens that they can be trusted by respecting the environment and cultural norms. Firms must work toward acquiring a social license. This intangible license is built upon trust and can be easily revoked, but careful negotiations and continuous communication help firms maintain and fortify this license.
Risks
While opportunity exists for Western firms, economic and political risks remain. If Paz is unable to make immediate fiscal adjustments, allowing for international trade, fuel shortages will continue, weighing on his popularity and economic activity. Paz will have to be comfortable making many people uncomfortable through economic reforms.
A principal political risk is relations with the White House. The White House has publicly feuded with left-leaning leaders in Colombia and Brazil, but Paz’s right-leaning stance does not guarantee favorable treatment. Paz and his foreign policy team will have to operate with care, building relationships within Latin America, Europe and North America to avoid any initial diplomatic hiccups that could take time to overcome.
