Bolivia pushes industry reforms after 53 days of protests

As Bolivians try to resume a sense of normalcy after 53 days of blockades that roiled the economy, President Rodrigo Paz is right back where he was just two months ago: attempting to reform the nationalistic laws that dictate the country’s key industries.

His government was able to end the protests that called for his resignation after enacting a 90-day state of emergency that would allow for military intervention and the suspension of some individual rights. And for Paz and heads of industry, now is the time to attract more foreign investment into mining, hydrocarbons, lithium and energy. On Friday, Bolivia’s Finance Ministry announced the country would move to a flexible exchange-rate system to strengthen macroeconomic stability.

“During these 90 days, what the government urgently needs to do is present, approve and implement the laws necessary for the country’s economy recovery,” said Bolivian Exporters Chamber chief Oswaldo Barriga.

It will take months for a full recovery of foreign trade, and the government should help businesses by guaranteeing fuel supplies and assistance to avoid fines from shipping companies and contract losses, he said.

There were about $3 billion in total economic losses, or 6% of Bolivia’s gross domestic product, during the nearly two months of blockades organized by the national labor union, the La Paz farmers federation and followers of former President Evo Morales. The resulting shortages of food, medicine and fuel left residents of La Paz and El Alto in despair — along with those stuck along the routes into those cities.

As lawmakers get back to the negotiating table, buses have started running again, businesses reopened and some groceries began to reappear on supermarket shelves.

Still, much of the country remains in distress. Freight agencies are in chaos, with depots full of packages and endless lines of customers who couldn’t send goods for almost two months. Stressed traffic officers argue with irritated drivers in the recently reopened La Paz bus terminal, while truckers who spent more than 50 days stranded on the roads are now queuing at a nearby gas stations for diesel.

Tomás Flores, a 53-year-old truck driver, was one of thousands stranded in the roads. He spent 51 days and nights inside the cabin of his truck, enduring the freezing temperatures of the Bolivian highlands in the border town of Desaguadero. By Wednesday, the day after all blockades were lifted, he remained in his cabin, this time waiting in a kilometer-long line in El Alto to refuel with diesel.

“Thank God we were in a privileged location,” Flores said, because he and his colleagues got provisions and medical care from neighboring Peru. Others, however, were stranded in remote areas, digging wells in search of fresh water or even dying from health complications, according to local media reports.

Hydrocarbons Minister Marcelo Blanco told local radio Fides that the government was working to guarantee the quality of fuel — after thousands of vehicles were damaged from poor-quality gasoline at the beginning of the year, sparking protests that later escalated into the blockades. He denied any financial difficulties in importing fuels. However, he said Bolivia owes commodity traders Vitol SA and Trafigura Group Pte more than $500 million for fuel purchased on credit.

Foreign cash reserves at Bolivia’s central bank stood at $712 million as of June 19.

“A blockade of this length is not a local inconvenience that clears when the tires come off the road,” said Jonathan Fortun, senior economist at the Institute of International Finance.

He added that the real problem in Bolivia’s situation “is timing,” as the government must move ahead with an ambitious agenda to stabilize the economy, which includes a program with the International Monetary Fund and local currency devaluation while inflation and exhaustion have hit Bolivians’ pockets.

“The country walks into the next phase with less output, more inflation, more fatigue and less room than it had before the conflict,” Fortun said.

A blockade resumed on Thursday in Chapare, not far from the town of Lauca Ñ, where the followers of Morales have built a fortress around a local radio station from which he frequently broadcasts his messages. The government has not publicly discussed plans to execute an arrest warrant against the former president for alleged statutory rape.

Many Bolivians, meanwhile, are far from getting back to their everyday routines.

After weeks trapped by road blockades between La Paz and Oruro, 44-year-old driver Wálter Argollo was still sleeping in his truck cabin while waiting outside the gas station on Wednesday.

He and other drivers tried to stage a protest by blocking the avenue where they were lined up, but a group of police officers warned them that, under the state of emergency, they would be arrested. They had to abandon the demonstration they hoped would bring public attention to their situation and speed up fuel delivery to the station.

“Maybe we’ll have to set up blockades ourselves,” he said. “If blood has to be shed, then so be it, because we can’t live like this.”

(By Sergio Mendoza)