Broadway Intelligence Ltd – Global Investigations & Risk Analysis » The Political and Economic Significance of Paz Pereira’s Election in Bolivia

On 19 October 2025, Bolivians voted in their country's first ever presidential runoff and chose Rodrigo Paz Pereira as the next head of state. The centre‑right senator secured about 54.6 % of the vote against former conservative president Jorge "Tuto" Quiroga. Significantly, for the first time in 20 years, there was no candidate on the ballot from the leftist Movimiento al Socialismo [MAS]. In his victory speech, Paz declared that Bolivia would "keep building a future" after two decades under MAS and argued that Bolivia's two decades long experience of socialist government had failed to "put food on the table, provide the right to work, create strong institutions, guarantee legal security, and respect for private property".

The end of the MAS era and the rise of a centrist alternative

Prior to this election, Bolivia had a 20 year period under MAS government, first under Evo Morales [2006-2019] and then Luis Arce. MAS' Unity Pact, forged in 2005, united powerful indigenous social movements and allowed the MAS to enact social policies that lifted many out of poverty. It institutionalised indigenous inclusion through the 2009 constitution, trained a generation of indigenous bureaucrats and fostered an indigenous business class. Yet by 2025 the party was internally divided and discredited. Morales and Arce were embroiled in a bitter feud, and the official MAS candidate won barely 3 % of the vote in the first round. Voters attributed the country's worst economic downturn in decades, most significantly the decline in gas revenues, to MAS' economic mismanagement. This combination of infighting and failed economic policies opened the door for Paz, who finished first in the 17 August first round with 32%.

Paz represents a generational shift in Bolivia's political establishment. The 58‑year‑old son of former president Jaime Paz Zamora was born in exile in Spain, studied in Washington, served as mayor of Tarija and later as a senator. He ran under the revived Christian Democratic Party [PDC] label, presenting himself as a moderate reformer and outsider despite his long résumé. His running mate, former police captain Edman Lara, became a TikTok sensation after exposing corruption within the police force, and his anti‑corruption rhetoric attracted disillusioned voters.

In a country where roughly 80 % of workers are self‑employed or informal, this "Paz–Lara" ticket promised "capitalism for everyone", low‑interest loans for small entrepreneurs, and the cancellation of citizens' debts to the state. Analysts note that Paz's platform appealed to the emerging Aymara bourgeoisie - indigenous business owners and traders who felt unrepresented by the MAS but were wary of a traditional right‑wing project.

The significance of Paz's election is therefore both political and symbolic. It demonstrates that Bolivian voters can reject a dominant party without embracing an extreme alternative. Unlike the radical right‑wing turn seen in other Latin American countries, Paz's centrist platform aims to maintain some social programs while promoting market. By electing a candidate who invokes "God, family and country" and emphasises work and legal security over ideology, Bolivians signalled a desire for stability, moderate change and an end to the politicisation of state institutions. His victory also showcases the decline of personality‑driven politics. Many voters were more enthusiastic about Lara's anti‑corruption crusade than Paz himself, illustrating that social media influence and grassroots campaigning challenge entrenched political machines.

Economic stakes: crisis, "capitalism for everyone" and structural constraints

Beyond its political symbolism, the election has huge economic stakes. Bolivia is experiencing its worst economic crisis in four decades. Annual inflation reached around 23–24 % by mid‑2025, foreign currency reserves plunged from USD15bn in 2014 to under USD2bn by 2024, and chronic fuel shortages left lorry drivers waiting more than 24 hours for petrol. Natural‑gas revenues have fallen because of weak exploration and declining output, yet successive MAS governments continued to subsidise fuel and maintain the boliviano’s dollar peg. Attempts to cut these subsidies triggered protests in the past. In this context, Paz's promise of "capitalism for everyone" resonates but also faces structural constraints.

Paz has vowed to open markets while preserving welfare programmes. He plans to secure fuel supplies from the United States and appoint a special envoy to strengthen US–Bolivia. He has expressed a willingness to review opaque lithium‑mining contracts signed by the Arce administration with Chinese and Russian firms, and to enact a law that improves environmental oversight and benefits local. Bolivia holds an estimated 21 million metric tons of lithium, making it a critical player in the global clean‑energy. Reforming the state‑run extractive model could attract Western investment and diversify the economy. Moreover, Paz has indicated he will lower import tariffs, legalise informal trade and provide low‑interest loans to small, measures aimed at integrating the country's vast informal sector. These proposals echo a broader shift towards "popular capitalism" described by his supporters as liberalising the economy for the poor rather than the rich.

However, the new administration will confront daunting challenges. Bolivia's public finances are severely strained and any attempt to stabilise prices and build reserves will likely require reducing subsidies, devaluing the currency or cutting public spending, measures that could provoke social unrest. Campaign promises notwithstanding, unpopular austerity measures are probably inevitable and will disproportionately affect Indigenous communities that benefited from MAS. The country's new plural and fragmented Congress lacks a solid majority for any party, meaning that Paz will need to build coalitions to pass reforms. Meanwhile, former MAS leaders still control influential social movements and can mobilise protests. The incoming government must therefore balance fiscal discipline with social stability while navigating a hostile political landscape.

Paz's rejection of loans from the International Monetary Fund [IMF] appeals to nationalist sentiments and reflects Bolivia’s bitter history with multilateral austerity programmes. During the campaign he insisted that budget adjustments and anti‑corruption efforts would finance his reformsenglish.elpais.com. Yet experts note that international credit markets may be unavoidable given the magnitude of Bolivia’s deficits and impending debt. A restructuring of public debt looms large, and the government will need to negotiate with creditors while maintaining social spending. The pledge to cancel citizens' debts to the state may increase pressure on fiscal accounts, and there is scepticism about whether tariff reductions and small‑business loans can generate enough growth to offset lost revenue. In short, while Paz's economic programme signals a decisive break with MAS policies, it remains ill‑defined and fraught with risks.

Foreign policy and regional implications

Paz's election also has foreign‑policy implications. The United States and eight other countries quickly issued a joint statement congratulating him and pledging to work with Bolivia to stabilise its economy, boost trade and strengthen democratic institutions. This reflects Washington's interest in pulling La Paz back from alliances with authoritarian regimes. Under MAS, Bolivia aligned with Venezuela's Maduro government and cultivated close ties with China and Russia. Paz has said he will suspend [but not sever] relations with Caracas and review foreign agreements. He intends to rebuild counternarcotics cooperation with the United States and to modernise the justice system. These shifts could reposition Bolivia as a centrist partner in regional security and the energy transition.

Nevertheless, prudence is warranted. Bolivia's lithium reserves have attracted attention from multiple powers, and renegotiating contracts could spark diplomatic tensions or investor lawsuits. While closer ties with the United States may unlock fuel supplies and investment, they could also anger left‑wing allies and provoke domestic backlash from nationalists who distrust Washington. Moreover, a complete embrace of market reforms could open the door to foreign extractive industries without ensuring benefits for local communities. Balancing sovereignty, environmental protection and the need for capital will test Paz’s diplomatic skills.

The election's broader regional significance lies in its demonstration that voters can reject entrenched leftist parties without turning to far‑right populism. Bolivia joins a cohort of Latin American countries—including Uruguay, Ecuador and Paraguay—where centrist or centre‑right governments have been elected to restore macroeconomic stability. However, Bolivia's experience is unique because of its large Indigenous population and the MAS' role in empowering indigenous actors. The new administration must therefore respect and engage these constituencies to avoid re‑polarising politics. As scholars note, indigenous movements have become autonomous and will not easily be co‑opted. Building a post‑MAS coalition requires dialogue with regional leaders like Eva Copa and Andronico Rodriguez, who left the MAS but still command significant.

Cautious optimism with a long road ahead

Paz Pereira's election is a watershed moment that closes the MAS era and opens a new political chapter for Bolivia. It reflects voters' yearning for pragmatic solutions to economic hardship and fatigue with ideological polarisation. His emphasis on legal security, property rights and entrepreneurship resonates with an emerging indigenous middle class and could unlock innovation and investment. The promise to review lithium contracts and seek fuel supplies abroad indicates strategic awareness of Bolivia’s resource endowment and global energy transitions. A moderate rapprochement with the United States might also reduce tensions and attract capital.

Yet optimism must be tempered by realism. The economic crisis is deep, and the measures required to resolve it will be painful. Paz has offered broad slogans but few specifics, and his commitment to avoid IMF loans could limit policy options. Without a legislative majority, he may struggle to pass reforms, and the charismatic vice‑president‑elect could become a rival if promises are broken. The indigenous organisations that empowered the MAS remain powerful and may resist austerity. Social unrest could return if subsidies are cut or prices rise. Additionally, focusing too heavily on foreign investors risks repeating past mistakes of resource extraction without local development.

For these reasons, the political and economic significance of Paz’s victory will be determined not by the symbolism of ending MAS dominance but by his ability to deliver tangible improvements. If he can stabilise inflation, restore fuel supplies, and begin diversifying the economy while maintaining social protections and respecting Indigenous autonomy, he may transform Bolivia into a model of centrist resilience in a volatile region.

If not, his administration could become another cautionary tale of unmet expectations and renewed populist backlash. Either way, the election underscores that Bolivians desire change that combines market pragmatism with social inclusion, a delicate balance that will test the skill and vision of their new president.

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The Political and Economic Significance of Paz Pereira’s Election in Bolivia