SUCRE.– The new government of Bolivia announced this on Wednesday will end fuel subsidieswhose prices remained frozen during the 20 years of left-wing governments that preceded him.
Funding policy depleted the country’s international dollar reserves and triggered the worst economic crisis in four decades.
Bolivia centralizes imports of gasoline and diesel, which it buys at international prices resold at a loss.
According to the center-right government of Rodrigo Paz, who took office on November 8, facilitated corruption and smuggling worth millions of dollars.
Against the background of this diagnosis, the president tried to present the decision as a structural change in economic policy.
“With the publication of this decree, the new Hydrocarbon prices (…). Eliminating poorly designed subsidies of the past does not mean abandonment. It means order, justice, clear redistribution“said President Paz in a televised message, flanked by his ministers.
The President also reported this Diesel is removed from the list Government Controlled Substances, to facilitate imports from the private sector.
“The subsidies that it was used to Hide the looting They will not condemn Bolivia again. The stabilization of prices (…) will enable generation additional tax resources“, he added.
The announcement comes amid growing tensions in the domestic fuel market, which was already showing signs of deterioration.
Since 2023, constant bottlenecks have been observed at gas stations Long lines of vehicles waiting for fuel for hours and sometimes days.
In his first days in government Paz denounced that the left had turned the state into a “sewerage system of extraordinary proportions.” and announced investigations to identify those responsible for alleged corruption crimes.”
This political diagnosis has now been translated into an institutional definition of extreme seriousness.
“We’ll explain economic, financial, energy and social emergency, because Bolivia could not continue to work with the standards of the last 20 years,” said the President this Wednesday.
He also announced the reduction of subsidies other economic measures that’s part of what he called a “historic decision to save the homeland”.
“We will simplify taxes, incentives for purchasing machinery and others. “We will support entrepreneurs and ease the burden on exports,” said.
He indicated that he would exempt from tax the repatriation of capital that was taken out of the country during this time the governments of Evo Morales (2006-2019) and Luis Arce (2020-2025).
According to the government, the large wealth tax introduced in 2020 and recently abolished by Paz led to this the flight of more than $2 billion from the country.
The government assured that the fiscal adjustment would not fall exclusively on the most vulnerable sectors and that there would be compensatory measures.
The minimum wage will rise from $395 to $474 from January 2026. The government has also promised Increasing existing assistance awards for vulnerable population groups.
Interannual inflation in Bolivia reached 20% in November. after reaching a peak of nearly 25% in July this year.
The dollar is still scarce in the highlands and is only available through a black market with prices higher than the official fixed price.
This package of measures complements other measures already promised, such as: “Massive dismantling”of 30% of the budget deficit.
AFP Agency
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