Internal and external unrest hitting Bolivia's economy

Bolivia’s economy is getting hit by internal and external strife.

Road blockades set up after the arrest of Santa Cruz governor Luis Fernando Camacho are affecting the domestic economy, while protests against Peru’s President Dina Boluarte have led to the closure of a crucial border pass.

Unrest in Santa Cruz has caused so far 28.3mn bolivianos (US4.1mn) in damage, affecting state-owned road agencies ABC and Vías Bolivia, according to the public works ministry, which had previously reported attacks on toll stations.

Since Camacho was arrested on December 28 on terrorism charges related to his alleged involvement in the ouster of Evo Morales in 2019, warnings emerged that the road blockades are causing price rises nationally, due to the department’s economic importance.

In 2021, Santa Cruz produced 76% of Bolivia’s food and a third of all exports, according to a September 2022 study by industry association IBCE. Key ports of entry to Brazil and Argentina are also located in Santa Cruz.

A report by Santa Cruz’s construction chamber (Cadecocruz) said political conflicts were impeding sector growth, which is expected to reach 3% this year.

Protesters are calling for a national strike on Tuesday and urge stronger blockades, state news outlet ABI reported.

ABC said several blockades had shut down all alternatives for land transport in the department. 

The 2023 national budget includes 5.8bn bolivianos for roadworks, among others, for 480km of new roads. 

PERU SPILLOVER

Another blockade impeding economic activity arose in Desaguadero, a Peruvian border town in Puno region. As elsewhere in the country, protesters demand Boluarte's resignation, the dissolution of congress and early elections, in response to the removal of Pedro Castillo from the presidency, after he attempted a coup. 

The protests led to the closure of a key trade route. At one point, 300 cargo vehicles were stranded at the border, TV broadcaster Unitel reported.