Javier Milei and Rodrigo Paz
A set of reforms proposed by new president Rodrigo Paz Pereira, including giving more powers to the Government and a “fast track” for the approval of mineral exploration contracts, is sparking popular outcry.
Bolivia’s political landscape has changed drastically since August 2025, when a general election put an end to the Movement for Socialism government (BUT) after almost two decades. Their presence in Congress has practically disappeared, with right-wing parties now holding an overwhelming majority.
The new president, Rodrigo Paz Pereiracampaigned with the right-wing populist slogan: faith, family and homeland. He won a significant victory largely due to the widespread popularity of his running mate and current vice-president, Edmand Lara.
As the son of former Bolivian president Jaime Paz Zamora, who governed Bolivia from 1989 to 1993, Paz Pereira represents a new generation of political elite traditional of the country. But Lara, a former police captain who has gained prominence on social media since 2023, comes from the popular classes.
The unlikely duo benefited from a strong desire for change among the Bolivian people in the midst of a serious economic crisis marked by a shortage of US dollars and annual inflation of almost 20%. They also took advantage of the widespread distrust and reticence towards politicians from previous governments.
In his inauguration speech in November, Paz Pereira denounced that the MAS had left what he called a locked state. He promised to replace it with a Smallest and most technocratic statecapable of attracting foreign investment. This model of State reform is part of its broader neoliberal project of “capitalism for all”, an ill-defined business vision that celebrates informality.
Paz Pereira’s government soon revealed the contours of its economic and political agenda in Decree 5503. The decree included more than 100 articles covering numerous issues, such as fuel subsidies, taxes, emergency powers, natural resource governance, and fiscal and monetary policy.
The government presented the decree almost exclusively as a measure to end long-standing fossil fuel subsidies. These subsidies, introduced in 1997, have become largely unsustainable with the decline of Bolivia’s gas exports since 2017. The decree ended the subsidies, replacing them with modest minimum wage increases and state pensions.
Other more problematic elements of the decree, which disregarded established procedures and stipulations of the Bolivian Constitution, soon became public. Among them, measures to grant emergency powers to the government without due justification, as well as major changes to the tax regime national without legislative approval.
The decree also introduced extraordinary powers for the Central Bank, allowing the acquisition of unlimited external debt without democratic control mechanisms. Furthermore, it established a mechanism for “fast track” for contract approval strategies for extracting natural resources. Contracts would be awarded without legislative oversight or mandatory environmental impact assessment processes and consultation with indigenous peoples.
This “fast track” mechanism openly revived what was known as the surrendering character of the Bolivian State, historically prevalent under the elite regime. This is a term used throughout Latin America to criticize governments or policies perceived as neglect of national interests of a country, for example, by handing over control of natural resources.
Bolivia is home to the largest known lithium reserve in the worldin the department of Potosí, estimated at 23 million tons. Lithium is an essential component in the batteries that power electric vehicles and smartphones, as well as in high-tech weapons systems. Bolivia is also rich in other critical minerals such as tin, silver and antimony.
Nationalist movements have already vehemently opposed surrenderist policies in Bolivia. These movements inspired important political events, including the revolution of 1952which overthrew the ruling oligarchy.
They also led to calls water and gas warsin 2000 and 2003. These were periods of social unrest arising from the government’s plans to privatize the water supply in the city of Cochabamba, in the central region of the country, and to export natural gas through Chile, respectively.
As Tom Perreault, a researcher at Syracuse University in New York, noted in 2006, the Bolivian people view tin and gas “not just as natural resources, but also as national resourcesthat is, resources that actually belong to the nation and its people”.
This feeling was recently captured by Bolivian researcher Gustavo Calle. In an article published on January 13, he stated that, by suggesting that strategic resources will be exploited by foreign companies without significant control, Decree 5503 touched “in the most sensitive vein of popular nationalism”.
Revocation of the decree
Two days after the government published the decree, on December 17, Bolivia’s main workers’ organization, the Centro Operário Boliviano (COB), declared a general strike. It called on its members to mobilize, demanding the repeal of the decree.
Then, on January 5, the largest indigenous organizations joined the protests. They paralyzed the country with more than 50 roadblocks. A march titled “Bolivia is not for sale” arrived in the capital, La Paz, bringing together various sectors of society.
Paz Pereira described the mobilization leaders as reckless individuals who defended their own privileges. He also promised Do not back down from “criminals”. But, after almost 28 days of protests, the government finally gave in and revoked the decree on January 11th.
The government’s image was damaged. However, unlike the government during the gas war, its legitimacy was not questioned. This period of unrest culminated in the resignation of President Gonzalo Sánchez de Lozada.
Paz Pereira’s defeat is also only partial. The elimination of fossil fuel subsidies has already been consolidated. And the government is preparing a new authoritarian law to criminalize roadblocks.
In a recent interview with the Financial Times, Paz Pereira also attempted to portray popular opposition to his surrenderist policies as being led by a mere minority of followers of the former MAS leader, Evo Morales.
In the absence of an alternative political project, the new government appears to be in a strong position to impose its agenda. However, the strength and explosive potential of nationalist feelings towards natural resources in the country should not be underestimated.
