Bolivia is entering a new era after two decades of political and economic dominance by the left-wing Movement Toward Socialism (MAS) party. On October 19, 2025, Bolivians elected Rodrigo Paz, a centrist from the Christian Democratic Party, as their new president, marking a dramatic shift in the nation’s political landscape. The inauguration of Paz on November 8 signaled not only the end of the MAS era, led for years by Evo Morales, but also the beginning of a period rife with both hope and daunting challenges, especially on the economic front.
The election outcome reflected widespread frustration among Bolivians, who have endured mounting economic turmoil in recent years. Fuel shortages, soaring inflation, and the depletion of foreign exchange reserves have battered the country. As Callan Hummel, a political science professor at the University of British Columbia, put it during a seminar titled “Bolivia at a Crossroads: Analyzing Election Outcomes,” the vote was less about ideology and more about accountability. “Bolivia is in the midst of a severe economic crisis, which is the largest since the mid-1980s, when there was record hyperinflation, and so Bolivians voted for a government that would get them out of the crisis,” Hummel explained, according to the University of Miami.
The roots of Bolivia’s crisis stretch back to the early days of the MAS administration. When Evo Morales first took office in 2006, his government benefited from booming natural gas exports, which filled state coffers and funded ambitious public services. However, as Eduardo Gamarra, a professor at Florida International University, noted, “The collapse that we see in the last five years is not only because of the mismanagement of the economy, but it occurs because there was no attempt to reproduce the refinery sector, and they did not invest in exploration of natural gas and other hydrocarbons.” Over time, revenues dwindled, debts mounted, and the economic model faltered.
Rodrigo Paz, who hails from a distinguished political family and previously served as senator of Tarija, campaigned on a platform of gradual market reforms paired with continued social protections—a model he calls “capitalism for all.” His message resonated with voters desperate for both stability and a way out of the crisis. But it wasn’t just his policies that won the day. According to Hummel, “There are several reasons for Paz’s success, but one is that he ran with Lara. Lara is a young ex-cop that has a large social media following, and he does a lot of work around corruption and chasing out corruption among the police force.” Edman Lara, Paz’s vice-presidential running mate, is a charismatic former police captain whose anti-corruption crusades and digital savvy made him especially popular among the working class and youth.
Bolivia’s new leadership has wasted no time signaling a change in direction. After his runoff victory, Paz traveled to Washington, D.C., where he met with members of the Inter-American Development Bank and U.S. Secretary of State Marco Rubio. He also has a pending meeting with the International Monetary Fund (IMF). These early moves brought tangible results: Gamarra reported that Paz was able to secure enough promised funds to alleviate the country’s acute fuel crisis. But the honeymoon may be short-lived. “Bolivia will have to borrow from the IMF and accept pretty stringent conditions in order to maintain this honeymoon period,” Gamarra warned.
The economic challenges ahead are stark. Bolivia’s foreign exchange reserves have dwindled to just over $100 million, while nearly $400 million in foreign debt payments loom in March 2026. The government has only a few months to stabilize the economy, negotiate repayment terms, and stave off a painful default. The crisis is especially acute in the civil aviation sector, where the lack of U.S. dollars has made it difficult to import fuel, pay for aircraft leases, and acquire the spare parts needed for maintenance and operations. The state-owned Boliviana de Aviación (BoA) dominates the market, holding 91% of domestic seat capacity and 43.7% of international seat capacity in 2025, according to data from Aviacionline. The outgoing administration even admitted the airline was in “critical moments” and sought to attract foreign operators to inject competition into the near-monopoly.
The new government’s response is a sharp departure from the statist approach of its predecessors. Paz and his coalition have outlined plans to deregulate the aviation market, attract private investment, and implement an open skies policy. The goal is to end Bolivia’s isolation, improve connectivity, and stimulate economic growth by inviting new international airlines and fostering the creation of private domestic operators. The administration has also expressed a desire to normalize relations with the United States, which could pave the way for new bilateral agreements and increased interest from North American companies.
Peter Cerdá, IATA’s Vice President for the Americas, expressed optimism about the new direction. He told Aviacionline, “We look forward to working with the new Bolivian Government under the leadership of President Paz, especially as aviation can positively contribute to the socioeconomic development of the country and its people.” Cerdá acknowledged the severe challenges, especially the currency shortage and declining domestic aviation fuel production, but emphasized, “The critical role of aviation in providing connectivity for trade, tourism, and access to global markets… facilitating the successful growth of the sector will automatically create economic opportunities throughout the value chain.”
Meanwhile, the government inherits a mixed legacy in infrastructure. Just before the transition, Bolivia’s Ministry of Public Works, Services, and Housing detailed ongoing investments in airport expansions and upgrades across the country, including projects in Tarija, Villazón, La Paz/El Alto, Santa Cruz de la Sierra/Viru Viru, and Riberalta. The outgoing administration urged the new leadership to continue these efforts, recognizing their importance for national development and international integration.
Yet, the internal dynamics of the new administration present their own set of hurdles. Vice President Edman Lara, described by Gamarra as “a loose cannon,” has already sought a larger role in government than is customary, insisting on attending all cabinet meetings and traveling to provinces to speak on the government’s behalf. Balancing Lara’s ambitions with effective governance will be another test for Paz as he navigates the treacherous waters of coalition politics and institutional fragility—issues that have long plagued Bolivia and much of Latin America.
With precious little time and even fewer resources, the Paz administration faces a daunting to-do list: stabilize the macroeconomy, resolve the currency crisis, implement structural reforms in aviation and beyond, and build a viable governing coalition in a country where political parties are notoriously weak. All eyes are on Bolivia as it attempts to chart a new course, one that could serve as a model—or a warning—for other nations in the region grappling with similar challenges.
For now, Bolivians are watching and waiting, hoping that the promise of “capitalism for all” and a more open, connected country will deliver the stability and opportunity they so desperately seek.