Is Bolivia facing a phase of political instability?

The country has the largest lithium reserves in the world. However, Western companies have not yet been able to get their hands on them. Companies from China and Russia are further ahead. Now Bolivia could become part of the BRICS.

by Alexander Busch, Latin America correspondent for Handelsblatt and Neue Zürcher Zeitung

 

Bolivia was long regarded as a country of chronic military coups. Since 1950, the military has been involved in 23 coups. However, for almost twenty years, the armed forces of the Andean country had largely withdrawn from politics. With the alleged coup attempt last week, they have re-emerged as a political player.

The reason for this is the political vacuum that has prevailed in Bolivia for around two years. President Luis Arce and multiple former President Evo Morales are engaged in a bitter power struggle. Both are long-time companions: Arce was Minister of Economy and Finance under President Morales from 2006 to 2019.

Now both want to run for president again in the elections next August. For Morales, it would be the third time that the constitution prohibits him from doing so. As president, he had already had the legal restrictions on re-election changed in his favor several times, allowing him to rule for 13 years.

But in 2019, Morales failed in his attempt to be re-elected. The elections were said to have been rigged. The population protested. Violent clashes broke out. The military called on Morales to leave the country. Morales fled into exile. Morales and his Movimento al Socialismo (MAS) party regard the removal from office at the time as a coup.

However, after the election of his successor Arce, Morales returned to Bolivia and announced that he would run again in 2025. President Acre, in turn, argues that only he can run as a legitimate candidate.

Since then, the dispute between the former companions has increasingly damaged Bolivia – both politically and economically.

Morales succeeds in blocking the government in Congress with his strong base in the MAS. As a result, President Arce cannot sign any loan agreements with development banks and have them ratified by Congress. The country is running out of dollars. Once important sources of foreign currency and taxes such as the natural gas industry are producing less and less. For years, less and less has been invested in production.

Russia and China want to profit from the unstable situation. Companies from both countries signed concession agreements with the state-owned Bolivian lithium company last year. The companies want to invest around 1.5 billion dollars in Bolivia.

The investment is strategically important for Russia: it would be Moscow’s only potential source of lithium worldwide. China, on the other hand, has already invested in numerous South American deposits and lithium production in Argentina, Chile and Brazil.

China and Russia now also want to strengthen Bolivia’s political ties: Both states will work to ensure that Bolivia becomes a new member of the BRICS in South America, i.e. the China-dominated association of states in the “Global South”, it was reported. Bolivia is already part of the Chinese Belt and Road Initiative.

Argentina under President Milei has rejected the offer of BRICS membership. Bolivia would be the replacement candidate. It is becoming apparent that China and Russia will use the political crisis in Bolivia to expand their presence there.

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© Pixabay/Xavier Turpain

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