Mauricio Ríos indicated that the economic crisis demands dismantling the Plurinational State

The economic crisis affecting Bolivia for more than two years continues to generate uncertainty. Mauricio Ríos, an economic analyst, has pointed out that the country is on the brink of economic collapse due to the lack of dollars. Low liquidity and growing external debt have complicated the situation.

According to Ríos, to overcome this crisis, deep reforms must be implemented. These involve dismantling the current model of the Plurinational State established by MAS. Luis Arce's government has tried to downplay the crisis, but structural problems persist.

The analyst explained that uncontrolled money issuance and high public spending have increased inflation and the fiscal deficit. In the last year, Bolivia has significantly increased its public debt. International reserves have fallen to critical levels.

This has caused key sectors of the economy, such as the importation of products and fuels, to be severely affected. One of the biggest problems, according to economists, is the lack of dollars to meet the needs of the domestic market.

The shortage of this foreign currency has forced MAS to resort to unconventional methods, such as the purchase of dollars and cryptocurrencies by Yacimientos Petrolíferos Fiscales Bolivianos (YPFB). This hasn't been enough to stabilize the fuel supply, generating long lines at service stations and social discontent.

Is the regime trying to hide the disaster?

Despite warnings from experts like Ríos, Arce's government has refused to make substantial fiscal adjustments. MAS insists there is no debt crisis. But the downgrade of the country's risk rating by Fitch Ratings and Standard & Poor's is a clear sign of economic vulnerability.

Ríos argues that the solution lies in liberalizing the economy, reducing public spending, and eliminating hydrocarbon subsidies. In his view, the Plurinational State model has caused excessive bureaucracy that has prevented efficient resource management. This structure has fostered excessive public spending and debt that harms the country in international markets.

The situation has been further complicated by the increase in the fiscal deficit, which has reached 9.1% of the Gross Domestic Product (GDP) in 2024. Economic growth projections have also been reduced, and the country could face stagflation if reforms aren't implemented. The drop in exports, especially gas, has worsened the situation.

The MAS regime still hasn't found an effective way to diversify the economy. Meanwhile, the College of Economists of Santa Cruz has issued a warning about the risk of default given the high vulnerability of the country. In its latest report, it highlighted the urgent need for structural reforms to avoid an even deeper financial crisis.

The lack of liquidity, public debt, and rampant inflation could generate a crisis of historic proportions if immediate action isn't taken. The Government has tried to shift the blame to external factors, such as political opposition in the Legislature, which has refused to approve international loans. However, many analysts agree that the lack of internal action and administrative inefficiency are the main culprits of the crisis.

Does the Plurinational State generate economic losses?

Experts suggest that the solution lies in a combination of fiscal and economic measures, including reducing public spending and eliminating subsidies. Mauricio Ríos isn't the only analyst warning about the severity of the situation. Other economists point out that the Bolivian economy is trapped in a vicious cycle of debt and dependence on natural resources.

The MAS economic model, which was based on state control of key sectors such as mining and hydrocarbons, has proven unsustainable in the long term. The fall in commodity prices and the reduction in gas production are factors that have further aggravated the crisis.

The state decree authorizing YPFB to acquire dollars and virtual assets for fuel importation has been criticized by several sectors. Some see it as an improvised measure that doesn't solve the underlying problem. For experts, the long-term solution is a structural reform that eliminates dependence on the Plurinational State and paves the way for a freer and more competitive economy.

Ríos concluded that the reforms must be deep and comprehensive, from modifying hydrocarbon and mining laws. A legal framework must be created that guarantees legal security and the rule of law. Without significant changes in the structure of the State, the prospects for the country remain bleak.