Bolivia's president promises public votes on fuel subsidies and constitutionality of reelection

LA PAZ, Bolivia — Bolivia's socialist President Luis Arce said Tuesday national referenda would be held soon on the removal of politically combustible fuel subsidies and on the constitutionality of presidential reelections, offering for the first time a concrete path out of the country's economic morass and political limbo.

Arce did not give a date for the votes in his speech from Sucre, the southern historical capital, as Bolivia marked the 199th anniversary of its independence. He defended the referenda proposal as a way to dispel some of the uncertainty Bolivians have endured for months, promising that the populist gesture wasn't about “electoral calculations or personal ambitions.”

“It's time for the people, together with their government, to choose the path we wish to follow in view of the bicentennial,” Arce said.

A plan to vote on the elimination of fuel subsidies comes as incensed truckers and other protesters have blockaded roads leading to Bolivian cities in recent weeks over the scarcity of diesel, which is more than 80% imported. Fuel shipments from Bolivia's key ally Russia were stranded by a rainstorm last week at a Chilean port, adding to pressures on Arce's administration.

The government has nearly gone bankrupt importing and heavily subsidizing fuel. Bolivia would need $10 million a day to keep importing gasoline at international prices, selling it at half the price and remaining solvent, energy analyst Raul Velasquez said.

Without exporting natural gas anymore — once the mainstay of its booming economy — Bolivia is burning through its foreign currency reserves.

But curtailing the long-established subsidies risks triggering catastrophic price shocks — and further inflaming outrage among Bolivians already beset with economic woes.

The official exchange rate between the boliviano and the U.S. dollar has effectively collapsed. The black market rate has surged 50% above the official one. In his speech, Arce also said he would convene business leaders for discussions on whether to devalue the local currency.

Arce also announced a referendum on whether and how former presidents may seek reelection, an apparent attempt to resolve a dispute with powerful former President Evo Morales.

Arce's erstwhile mentor and ally, Morales has declared his intent to run against Arce in 2025 presidential elections — which Arce insists is unconstitutional.

Standing for more than two consecutive terms is prohibited under Bolivian law. But Morales managed to serve three terms as president, from 2006-2019, because of a legal loophole.

Morales' bid for a fourth term — which the constitutional court actually allowed at the time even though he lost a referendum on extending term limits — prompted allegations of fraud and unleashed mass unrest that compelled the leftist leader to resign and flee the country in 2019.

Morales' power struggle with Arce since returning home to Bolivia and launching a comeback has created a rolling political crisis that has paralyzed the country’s Congress, sunk plans to lure foreign investors to tap Bolivia’s vast lithium reserves and blocked the government from taking on foreign debt that would alleviate the cash crunch.

“To ensure that political actors do not once again affect the stability and economy of Bolivian families, it's important to clarify the nature of reelection," Arce said, without giving further details about the public vote. It wasn't clear whether the referendum would involve changing the constitution ahead of next year's elections.

Although Independence Day speeches may typically offer leaders a chance to reflect on the year's political accomplishments, President Arce took the occasion to detail his many woes: Bolivia's fall in natural gas production, legislative gridlock, foreign currency shortage — even, he said, “the climate crisis."

His critics showed little pity.

“The president again blames Congress for the country’s crisis and avoids assuming responsibilities,” opposition lawmaker Jairo Quinteros said.

Bolivia's anniversary comes just over 40 days after an alleged botched military coup brought the country to a standstill.

It remains unclear what exactly transpired on June 26 when General Juan José Zúñiga stormed the government headquarters surrounded by military vehicles and briefly faced down Arce before being dismissed and arrested, his alleged overthrow plot vanquished.

Arce — who has denied an eruption of allegations that he masterminded the coup to boost his own political fortunes — shed no more light on the matter Tuesday.

What has become clearer, analysts say, is that Bolivia's economic and political crisis has only worsened.

The sight of tanks ramming into the presidential palace last month didn't quite help restore investor confidence. And amid the Independence Day festivities, trucks and buses idled for hours outside gas stations as the much-anticipated Russian fuel delivered last week failed to relieve the dire shortages.

Few expect the promise of a referendum to solve the country's problems.

“Arce has opted to get rid of his problems, to pass the hot potato onto others by asking the people to find the solution,” prominent Bolivian political analyst José Luis Bedregal said. “A new scenario has opened that will further complicate the political debate.”