Bolivia has entered a new era of political and diplomatic transformation, as Rodrigo Paz took the presidential oath on November 8, 2025, inheriting a nation grappling with economic hardship, diplomatic isolation, and the specter of organized crime. The inauguration of Paz, leader of the Christian Democratic Party, marked not only the end of nearly two decades of Movement Towards Socialism (MAS) rule but also a decisive break from the country’s recent past—one characterized by strained international relationships and mounting domestic challenges.
The economic landscape Paz now faces is daunting. For years, Bolivia’s prosperity rested on the back of its abundant natural gas reserves. The sector funded social programs, public works, and a sense of stability that made Bolivia a model for much of South America. But as reported by EFE, the well is running dry: natural gas production has plummeted from 61 million cubic meters per day in 2014 to just 29 million in 2025. Gas exports, which once delivered $6.1 billion in revenue in 2013, have nosedived to a mere $788 million between January and August this year.
This collapse has triggered a domino effect. The country’s foreign currency reserves have evaporated, leading to a nationwide shortage of dollars. Businesses struggle to import goods, gas stations ration diesel, and families endure the highest inflation in two decades—18.3 percent in the first nine months of 2025, more than double the government’s forecast for the entire year. As one La Paz shopkeeper told EFE, “It’s not just an economic problem, it’s psychological. People wake up wondering if they can fill the tank.”
To address this crisis, Paz moved swiftly on the international stage. In the first days of his administration, he traveled to Washington and Bogotá for meetings with the Inter-American Development Bank, the International Monetary Fund, and the Development Bank of Latin America and the Caribbean. These efforts bore fruit: a $3.1 billion financial package was secured, providing a much-needed bridge loan to keep the government afloat while longer-term reforms are put in place. Yet, as Paz himself conceded, this cash injection is only a temporary fix—the deeper challenge is restoring faith in Bolivia’s currency, its energy sector, and the very idea of economic stability.
Diplomatic renewal has become a central pillar of Paz’s presidency. In a sharp departure from his predecessors, Paz promised to “put Bolivia in the world and bring the world to Bolivia.” His first moves were symbolic and substantive: he restored diplomatic ties with both the United States and Israel, ending years of isolation that saw Bolivia align with anti-U.S. regimes and sever longstanding relationships. According to the Israeli government, Foreign Ministry Director General Eden Bar-Tal attended Paz’s inauguration, and both nations agreed to work towards a new era of cooperation. “Israel and Bolivia first established diplomatic relations in 1950. There have been disagreements but our friendship goes back decades,” the Israeli Foreign Ministry said on social media.
Paz’s approach has not been without controversy. He pointedly declined to invite Cuba, Nicaragua, and Venezuela to his inauguration—a move that led to Bolivia’s suspension from the ALBA bloc, but also sent a clear message that his administration would only maintain relations with governments that respect democracy. “We will maintain relations only with governments that respect democracy,” Paz told EFE. The recalibration of foreign policy is risky in a country where suspicion of Washington runs deep, but Paz insists that pragmatic engagement is essential for reopening markets, attracting investment, and diversifying the economy beyond gas and minerals.
At home, Paz faces an equally complex security landscape. The rise of organized crime has become a pressing concern, with Bolivia increasingly serving as a hub for trafficking networks linked to Brazil’s Primeiro Comando da Capital (PCC) and notorious figures like Uruguayan fugitive Sebastián Marset. “Organized crime has taken advantage of our institutional weakness,” Paz acknowledged to EFE. He has pledged to work with “any international partner” willing to help dismantle these networks—a stance that has revived memories of controversial anti-drug collaborations with the United States in the early 2000s, which ended with the expulsion of the U.S. DEA and allegations of overreach.
Analysts cited by EFE argue that Paz must strike a delicate balance between enforcement and reform, strengthening the judiciary and financial-crime units while avoiding the pitfalls of militarization. Success, they note, would not only mean safer streets but also renewed investor confidence and a reduction in the shadow economy that drains public revenue. Failure, on the other hand, could reinforce the perception that the rule of law in Bolivia is negotiable.
Paz’s political situation is no less precarious. His Christian Democratic Party holds the largest bloc in Congress but falls short of an outright majority, necessitating alliances with four smaller parties. The support of businessman Samuel Doria Medina’s Unidad party and former president Jorge “Tuto” Quiroga—who promised “constructive opposition”—has allowed Paz’s allies to chair both chambers of Congress. Still, every major reform, from fuel subsidies to judicial appointments, will require careful negotiation and coalition-building. The MAS, though weakened, retains deep loyalty among rural voters and unions, meaning that a single misstep could result in legislative gridlock.
As Paz himself recognizes, urgency may be his greatest ally. The crises facing Bolivia—fuel shortages, dollar scarcity, soaring prices, and security threats—leave little room for ideological posturing. Early victories, even small ones like shorter fuel lines or a steadier exchange rate, could buy the new president both time and legitimacy. “Confidence multiplies,” a political scientist in La Paz told EFE. “But it disappears faster than fuel.”
Bolivia’s recent diplomatic history underscores the significance of Paz’s early moves. The previous socialist administrations of Evo Morales and Luis Arce had isolated the country, aligning closely with Iran and cutting ties with Israel and the U.S. Jeanine Áñez, who served as interim president after Morales’s resignation in 2019, restored ties with Israel but was later imprisoned on controversial charges—a conviction overturned just last week. Under Arce, Bolivia again severed diplomatic relations with Israel in November 2023, joining other leftist governments in the region in accusing Israel of “genocide” in Gaza, while refusing to condemn Hamas’s October 7 attack.
Paz’s inauguration speech left little doubt about his intentions: “Never again an isolated Bolivia, subject to failed ideologies, much less a Bolivia with its back to the world.” In the first hours of his administration, he met with U.S. Deputy Secretary of State Christopher Landau, who expressed American willingness to cooperate in countering Iran’s influence and rebuilding bilateral ties. The diplomatic thaw is already being hailed as “an exciting new era for Bolivia, for relations between Israel and Bolivia, and for the free world,” as Bar-Tal put it.
As Bolivia stands at this crossroads, the stakes could not be higher. Paz must navigate a minefield of economic, political, and security challenges, all while convincing a wary nation that renewal is possible. With every alliance forged and every dollar secured, the new president is betting that Bolivia can once again find its place in the world—and that trust, once lost, can be rebuilt, one step at a time.
