Friday, May 1, 2026.
Bolivia
As we turn our focus this week to Bolivia, we begin with an observation that captures the broader challenge facing the country today, one that was shared with us by Joseph Weiman, a trusted colleague whose perspective we rely on when assessing Bolivia’s evolving risk landscape.
Joseph noted that the Paz administration faces a significant task in rebuilding institutional credibility after years under MAS governance, particularly in the context of attracting Western investment. At the center of this effort is not just policy reform, but people, bringing in capable leaders who are both willing and able to navigate entrenched structural challenges, even when progress is slow and resistance is inevitable.
This point resonates strongly with the realities we continue to observe on the ground. Investor confidence is not built through messaging alone; it is built through execution, consistency, and the demonstrated ability to overcome institutional friction. The selection of leadership, especially in key sectors, will serve as one of the clearest indicators of whether Bolivia is prepared to move in that direction.
We’re grateful to Joseph for framing this so succinctly. His insight reflects exactly the kind of grounded, experience-based perspective we value as we assess risk across the region, and it sets the stage for a deeper look at Bolivia in this week’s report.
Brett Mikkelson
Founder, B.M. Investigations, Inc. – Private Investigations in Panama
TOP NEWS and TIDBITS:
After 20 Years, Oil Nationalization in Bolivia Leaves Less Gas and Greater Dependence
State revenues during the governments of Evo Morales and Luis Arce (2020–2025) totaled approximately $60 billion, according to Bolivia’s president, Rodrigo Paz, who alleged mismanagement and corruption involving part of those resources, claiming they were not used to strengthen the state oil company.
The nationalization of hydrocarbons—symbol of the political cycle initiated by former president Evo Morales in 2006—reaches its twentieth anniversary amid growing criticism in Bolivia due to the decline in gas reserves, investment, and revenues, as well as the limitations of the state-owned YPFB in sector exploration, which has increased dependence on fuel imports.
On May 1, 2006, Morales (2006–2019) surprised oil companies by announcing from the San Alberto gas field in southern Bolivia the nationalization through a decree establishing “absolute control” over the sector. The decree forced companies—including Repsol, Petrobras, and TotalEnergies—to hand over production to the State and renegotiate contracts within 180 days or leave the country.
The decree included the military occupation of oil fields and plants, as well as the acquisition of majority stakes in strategic companies, increasing the State’s share of gas revenues.
Morales presented the measure as the third and final nationalization, following those carried out in 1937 against Standard Oil and in 1969 against Gulf Oil, both American firms.
“It was a kind of shock for the sector, the way they came in with a military takeover. It was highly symbolic,” recalled Carlos Delius, former president of the Bolivian Hydrocarbons Chamber, who was a director at the time and later led the institution between 2010 and 2014.
“Then came the ‘Héroes del Chaco’ decree, and together with Law 3058 (Hydrocarbons Law, in force since 2005), it sealed the fate of the sector—shifting from a system with modern contracts to one that changed everything and became excessively state-controlled,” he added.
The nationalization aimed to increase State revenues, which experienced a boom period, with annual peaks exceeding $5 billion in 2013 and 2014, before the decline began.
According to Delius, the measure slowed new investments, as companies chose to remain due to already committed capital in wells and plants. However, faced with reduced revenues, they focused on recovering investments rather than taking risks, losing interest in exploration.
“The success of nationalization—capturing revenue—ultimately became its own poison. It was unable to replenish gas reserves,” he noted.
Some figures
State revenues during the governments of Evo Morales and Luis Arce (2020–2025) totaled around $60 billion, according to Rodrigo Paz, who alleged mismanagement and corruption involving part of those funds, which were not directed toward strengthening the state oil company.
For hydrocarbons analyst Fernando Rodríguez, the balance after two decades is critical.
Current gas reserves are estimated at around 3.7 trillion cubic feet (TCF), compared to 10.7 TCF in 2017.
Additionally, gas production declined from 60 million cubic meters in 2014 to 27 million in 2025, lower than the 35 million recorded in 2006, according to the Fundación Jubileo.
“They have dismantled YPFB, production has fallen, there are no reserves, and fundamentally we have destroyed the golden goose, which is YPFB—a company that will celebrate its 90th anniversary this year,” he said.
According to Rodríguez, private investments were around $1.2 billion annually, but after being “driven away,” YPFB took over operations and failed in 15 projects in which it invested $1.5 billion, “not only due to inefficiency, corruption, and lack of technical capacity, but also because of geological reality.”
“There is no sea of gas, and if we are lucky, we will find one or two megafields,” he stated.
These difficulties have led to increased dependence on imports. Currently, Bolivia imports 90% of the diesel and 50% of the gasoline it consumes, and according to official projections, by 2029 the country will become a net importer of natural gas.
New President of Bolivia’s YPFB Warns the Country Is “On the Brink of an Energy Crisis”
The interim president of the state-owned company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Sebastián Daroca, warned that Bolivia is “on the brink of an energy crisis” and that, if current trends are not reversed, the country may need to import natural gas within four to five years. If that occurs, Bolivia would shift from being one of the region’s largest natural gas exporters to an importer in less than two decades.
“The lack of investment in recent years has caused our reserves to decline systematically, our gas and liquids production to fall, and this is a trend we must reverse as a national priority,” Daroca explained in an interview on the Unitel channel. He added that previous administrations have left the country in an “energy risk situation—we are on the verge of a much larger energy crisis.”
The head of the state oil company, who prior to his appointment served as Operations Manager, stated that if concrete actions are not taken to increase production, within a “four- to five-year timeframe” the country could “even need to import natural gas.”
Gas production in Bolivia has experienced a significant decline over the past decade, dropping by nearly half from its peak in 2014—when it reached approximately 60 million cubic meters per day—to the levels recorded in 2024. This decline is attributed to the natural depletion of fields, lack of investment in exploration, and inefficient sector management.
Daroca’s statement comes amid an institutional restructuring process in the hydrocarbons sector—following the resignation of the previous president of YPFB and the replacement of the Minister of Hydrocarbons, the two main executives in the sector—and in the midst of a fuel crisis that has remained unresolved for more than two months.
The recent issue of poor-quality gasoline, described by the government as “destabilized,” emerged in mid-January, just weeks after the administration of Rodrigo Paz eliminated fuel subsidies and adjusted prices that had remained fixed in the market for twenty years.
In February, the government admitted it had distributed low-quality fuel but did not take responsibility for its origin. Since then, it has provided varying explanations: initially attributing it to rubber and manganese residues in storage tanks “inherited” from previous administrations, and later denouncing internal sabotage plans and the existence of international criminal networks allegedly replacing part of the gasoline with water and oil.
As protests and complaints increased, the state oil company created a compensation system for users who can certify vehicle damage attributed to the gasoline. According to YPFB data, by the first week of April, 9.7 million bolivianos—equivalent to over $1 million—had been allocated to compensate more than 8,000 drivers.
In recent weeks, and amid institutional adjustments, diesel shortages have also been reported. The government attributed this to increased demand from agricultural activities during the season. In his initial statements, Daroca said dispatches had been increased and that supply would be normalized this week.
Several analysts warn that the issues of supply, quality, and production reflect a sustained deterioration of the national energy system. In this context, transport leaders in La Paz have announced protests starting this Monday to demand definitive solutions to a problem that, beyond political decisions, will also require time to resolve.
ECEBOL Uncovers Irregular Purchases of Up to 50 Trucks per Person
The management of the Empresa Pública de Cementos de Bolivia (ECEBOL) reported irregularities in cement sales by its production plant during a press conference. It revealed serious irregularities inherited from previous administrations, linked to questionable commercial operations and pending delivery commitments that are now being addressed by the current management.
According to the report, 49 clients with outstanding orders since November 2025 were identified, with an accumulated backlog equivalent to nearly 900 truckloads of cement. However, within just a few months, the current administration has already delivered 205 truckloads to 37 clients.
“The country must know the truth. We are not talking about small consumers, but wholesale operators who made completely disproportionate purchases under modalities that ECEBOL does not recognize. Our obligation is to ensure transparency and correct these issues,” the company’s management stated.
The data presented shows that 23 individuals had transactions exceeding 10 truckloads per client, while five buyers each accumulated more than 50 truckloads, totaling 394 trucks among them. It was also reported that some cases show preliminary indications of purchases made under different billing names, a situation that will be reviewed in accordance with regulations.
The company clarified that ECEBOL does not sell cement under a pre-sale model; therefore, all flagged transactions will undergo documentary, technical, and legal verification to determine responsibilities, both administrative and commercial.
Despite the inherited situation, ECEBOL emphasized that it currently maintains 65 active clients, with an average dispatch of 40 truckloads per day, equivalent to 21,600 bags daily or approximately 1,080 tons of cement per day.
Additionally, the company stressed that it continues operating and supplying the national market. “We did not come to cover up problems—we came to solve them. ECEBOL will not be privatized, liquidated, or shut down. It will be restored, strengthened, and will remain a strategic public company for Bolivia,” management emphasized.
The current administration reiterated that it will continue the process of regularizing pending deliveries, strengthening plant operations, and protecting state assets, prioritizing transparency, production, and institutional responsibility.
Chief of the United States Southern Command Carries Out Official Program in Bolivia
Ryan arrived this week in the political capital of the Andean-Amazon country to hold meetings with authorities from the Ministry of Defense, marking the first visit by a high-ranking U.S. military official since 2006. This reflects both countries’ intention to strengthen bilateral ties.
According to Washington’s diplomatic mission in La Paz, in addition to his meetings with Bolivian counterparts, the head of the United States Southern Command will visit the U.S. Embassy and meet with cadets from the Army Military College.
“It is an honor to be here and to bring with me the respect and commitment of the United States Southern Command. Our Armed Forces are united by a shared commitment to serve our peoples, defend our nations, and act with professionalism and integrity (…)”, the visitor stated, as quoted in an official note from the diplomatic mission.
Ryan’s visit to Bolivia takes place in a context where forces under his command have reportedly caused at least 185 deaths in attacks on vessels in the Pacific Ocean and the Caribbean Sea, which Washington accuses—without presenting evidence—of being involved in “drug trafficking.”
On the Bolivian side, the commander of the Air Force (FAB), General Sergio Lora, confirmed this Wednesday the loss of four pairs of wings from military aircraft and the intervention of the “Diablos Rojos” hangar to conduct a full audit and inventory of its assets.
According to the source, Colonel Guido Alberto C. G. and Major Teddy Y. V. were identified as responsible for the loss of these parts, and an internal investigation determined that both officers bear responsibility.
“That investigation has established that those two individuals, Colonel C. and Major V., be brought before the Personnel Tribunal. We have already referred the case to that body; this is proof that we are taking action,” Lora stated in remarks to the private channel DTV.
He reiterated that the decision to intervene in the “Diablos Rojos” unit is a key part of internal investigations into the loss of aviation equipment.
“We have sent our Chief of Planning and Logistics to intervene in that unit in order to obtain full control of inventories and determine what actually happened with these four pairs of wings,” the military chief explained.
The internal investigations have been expanded due to suspicions that more individuals may be involved in the incident.
Another scandal involving the theft of weapons and combat ammunition occurred the previous week at a unit of the Bolivian Navy.
Conflict Escalates in Bolivia: Tensions Rise in La Paz over Two Marches and a Rally by the Central Obrera Boliviana
The accumulation of social conflicts is increasing tensions in Bolivia. This Friday, as International Workers’ Day is commemorated, a workers’ assembly is scheduled to take place in El Alto, along with the arrival of two marches in La Paz.
At a labor union meeting held on May 28, the Central Obrera Boliviana (COB) decided to reject the government’s invitation to dialogue and called on social organizations and affiliated sectors to participate in a national assembly.
The resolution from the meeting outlines several points on a range of issues, including opposition to the privatization of public companies—something the government has repeatedly denied—declaring the Minister of Economy, José Gabriel Espinoza, persona non grata for implementing what they consider “neoliberal policies,” and demanding the resignation of the Minister of Labor, among other points.
Workers also expressed in the document their rejection of the government’s response to the list of demands submitted on April 1, in which they requested a 20% salary increase.
The administration of Rodrigo Paz has described this proposal as “unviable” and recalled that in December a similar percentage increase was decreed for the minimum wage when fuel subsidies were lifted. “It is not viable (the increase), and that is absolutely clear,” stated the Minister of Economy, adding that “the vast majority of people are concerned about job stability, so that is what must be protected.”
In this context, the government extended an invitation to union leaders and representatives of private business sectors to discuss the wage increase demand, together with the Ministers of Government, Labor, and Economy.
However, workers declined to participate and announced that attendees at Friday’s assembly would determine the course of the protest. “We have left it in the hands of the people to decide what will happen moving forward,” said Mario Argollo in an interview with the Unitel channel.
Workers also decided to support two additional mobilizations: a teachers’ march and a farmers’ march, which departed days earlier from the departments of Oruro (west) and Pando (north) with their own demands.
According to teachers’ leaders, around 3,000 people are participating in the march that began on Tuesday from the town of Calamarca, 54 kilometers from La Paz, demanding salary increases, job positions, and greater investment in public education. They are expected to participate in the COB assembly in El Alto and then head to downtown La Paz.
Meanwhile, this Friday the farmers’ march from the Amazonian region of Pando—joined progressively by other regions—will arrive in La Paz, protesting Law 1720, which authorizes the voluntary reclassification of land. Under this law, small properties can be registered as medium-sized at the owners’ request, allowing them to be used as collateral for bank loans.
While the government defends the law as promoting individual freedom and agricultural development, critics argue it could lead to land concentration, threaten indigenous collective territories, and put small producers at risk.
In this context, the president stated that he does not fear the increase in social protests. “Bolivia wants change, and I am not afraid of mobilizations; I am a builder of democracy who grew up among marches and historic leadership,” the head of state said Friday after a meeting with newly appointed departmental authorities. “What I fear is not having solutions for the future of our country,” he added.
Bolivia Will Not Adopt Economic Measures That Affect the Most Vulnerable
The Minister of Economy and Public Finance, José Gabriel Espinoza, stated that Bolivia has shown progress in economic matters over a period of 120 days in office. Despite having inherited a country with certain financial problems, the administration—led by right-leaning politician Rodrigo Paz—assures that it will not implement policies that harm the poorest sectors.
During the presentation of an initial assessment after 120 days in office, Espinoza reported improvements in some economic indicators. As an example, he noted that inflation, which exceeded 20% when the administration took office at the end of 2025, has now been reduced to a range of 14–15%. He also highlighted that the exchange rate has moved from 11 bolivianos to approximately 9.6–9.7 bolivianos per U.S. dollar.
At a press conference outlining progress during the first 120 days in charge of the economic portfolio, Espinoza emphasized that adjustment measures have been implemented to address the “dramatic economic situation” inherited from previous governments, but insisted that these measures will not be passed on to the population.
“We have worked under a very simple premise: no one can be left behind. The adjustment cannot fall on the people, and we will not repeat past approaches that punished the most vulnerable,” Espinoza said during his remarks to the media.
Despite the figures presented by the representative of Rodrigo Paz’s cabinet, many in Bolivia do not feel that the measures implemented—or the data presented—are benefiting household finances.
“Despite the numbers showing a reduction in inflation, prices remain high. The shortage of diesel is also having an impact—it is undeniable that this destabilized gasoline is affecting household economies. Beyond the government’s optimism, there are still structural issues that must be resolved, such as the foreign exchange market,” said Luis Fernando Romero, economist and former president of the College of Economists of Tarija, in an interview with France 24.
After more than two decades of the leftist Movimiento al Socialismo (MAS) in power, conservative leader Rodrigo Paz assumed the presidency last November. At that time, he announced a series of measures aimed at pulling the country out of its worst crisis in four decades, characterized by shortages of fuel and foreign currency, as well as one of the highest inflation rates in Latin America.
