Bolivia continues to be rocked by corruption and the dollar

When the Bolivian currency went into a de facto devaluation against the dollar, the government of Luis Arce ordered the Central Bank to make $240 million available to private banks to meet growing demand.

The loudest, however, remains the war between Luis Arce and Evo Morales this reveals acts of corruption on both sides, with cross complaints for negotiation in the importation of fuels and the management of lithium exploitation.

The order to the Central Bank probably just stopped or reduced the speed of the dollar race that was going on because the banks didn’t have one, but it leaves the Central with only 132 million in its international reserves, an amount that would barely cover a few days of imports. Over the past year, Bolivia’s imports amounted to $13,049 million, an average of $1,087 million per month.

With these desperate measures, the government is facing the worst economic crisis since Evo Morales came to power in 2006 and has benefited from the fabulous prices of the raw materials that Bolivia was exporting.

Dollars, which have disappeared from banks, so much so that remittances from abroad sent in dollars have been converted into national currency even by money transfer companies, such as Western Union.

Private banks offered the public looking for dollars to deliver sums of up to 5,000, but in 20 notes.

Considering this, a black market where the dollar, which has been trading at 6.96 since 2013, reaches 7.10 and even more in the exchange offices where importers used to go. Rumors came to mention that some sellers offered dollars up to 7.40 bolivianos.

Before ordering the Central Bank to deliver these 240 million dollars, the government had chosen to attribute the strong demand for this currency in the banks to “speculators” who would be identified to be brought to justice.

The truth is that the equilibrium of the fixed exchange rate had been broken and the market was de facto fixing a devaluation of the national currency.

Experts fear that dollars given to banks are not enoughbecause the market has already lost confidence in economic policy and in the fixed exchange rate.

And there are additional complications. Now, gold miners are demanding from the government that the provision by which the Central Bank will buy some of the metal establishes that payments will be made in immediate, in dollars and not through bank documents. The miners say they could use dynamite in their fight to get Parliament to agree to this demand. They want dollars for gold, not the national currency.

President Arce remained silent in the face of this economic nightmareespecially since it is coupled with accusations of corruption emanating from his own party, even from his own political mentor.

Cocalero Morales and former minister Carlos Romero have turned on a fan of denunciations about the corruption that the Arce government has allegedly committed, with hints of negotiations that will continue now, despite the crisis.

Romero said the state oil company, YPFB, imports gasoline and diesel, but a significant percentage of those volumes are re-exported before it even reaches Bolivian territory. The business is “bleeding”, he said.

Morales accuses Arce of ordering the use of money intended for advertising in the “digital warriors” project, which he now calls “digital mercenaries” after journalism recalled that the entire project was born under his administration as president.

And on the Arce side, there are complaints about dark influences and games for assigning lithium mining to Chinese companies.

At the moment, Arce and Morales are facing each other and, despite the economic crisis, they are still thinking about the 2025 elections, in which both aspire to be candidates.

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