What is happening in Bolivia?

On 26 June, a group of military personnel, led by former-Commander of the Armed Forces Juan José Zuñiga, led an apparent coup attempt in Bolivia. The coup was directed towards President Luis Arce, who assumed office in 2020, and is a member of the leftist Movement for Socialism (MAS), a political party. In recent years, President Luis Arce has faced significant opposition from former president Evo Morales, despite both belonging to the same political party, MAS. Evo Morales was president between 2006 and 2019.

Zúñiga had been dismissed from his position a day earlier due to comments against Morales' potential re-election in 2025.. On 26 June, President Arce, with the support of protestors outside the presidential palace, managed to make the soldiers leave, arresting Zuñiga. Zuñiga had previously been involved in controversies regarding the embezzlement of public funds, and had been accused of leading a group within the army that monitors coca production and political opponents. In 2022, Morales accused Zuñiga of having a plan to eliminate him.

Evo Morales was disallowed from taking office in 2019, as Bolivia’s Constitution limits the president’s mandate to a maximum of two terms, and in 2023 his bid for the 2025 elections was blocked by the Constitutional Court. Popular upheaval forced Morales to step down in 2019, making Jeanine Anez the natural successor due to her being the highest-ranking opposition figure. Her presidency was short lived, as elections in 2020 led to Arce’s presidency, and in 2022 Jeanine Anez was convicted to 10 years in prison, in a move characterised as political persecution by the UN and foreign bodies from the US and UK. Despite it being unconstitutional and blocked, Morales has continued campaigning.

During the 26 June coup attempt, a face-to-face discussion between coup leader Zuñiga and President Arce was televised, with Arce declaring “I am your captain, and I order you to withdraw your soldiers, I will not allow this insubordination”. Zuñiga had survived an army personnel reshuffling this past January, and was suspected of earning his high ranking not entirely for merit but loyalty to President Arce. His close relation with the President and the unexpected and strange nature of the coup attempt have raised questions over the possibility of it being staged by current president Arce to increase his popularity. Zuñiga declared this as he was being arrested on national television, with Morales calling for an independent investigation into the military action.

Bolivia has experienced a negative economic outlook for the past four years, with the opposition from Morales within the MAS party exacerbating the economic woes brought by Covid. The internal rift between Arce and Morales has made Arce’s policies ineffective, but Morales has indicated that if his campaign were to be stopped, he would “unleash unrest”. Bolivia faces severe economic challenges, including a dollar shortage, a growing fiscal deficit, and depleted reserves.

What is in it for you?

For our readers in Latin America, Bolivia’s coup attempt, staged or not, is an important reminder of the unforeseeable possibility of military uprisings, especially in the light of fierce oppositions and economic woes. Leaders from Brazil, Mexico, Ecuador, Colombia and Venezuela, amongst others, condemned the attempt, and called for the preservation of democracy. Latin America’s most recent coup attempt outside Zuñiga’s was Peru’s then-president Pedro Castillo’s failed self-coup attempt amidst calls for his removal. 

The region is currently marked by the rise of populist leaders, especially from the hard right, such as Milei, Bolsonaro and Bukele. Bukele’s recent re-election was facilitated by a reinterpretation of the constitution which has allowed him to bypass the presidential term limit. While Bolivia’s main political figures in Morales and Arce come from the same left-wing party, the potential of Zuñiga’s military action being a staged coup attempt to rally support for Arce should be enough to warn readers over similar prospects elsewhere. 

The rise of disinformation and misinformation seem to be at the core of modern-day politics, and while most of it seems to be focused on attempts to discredit politicians or campaigns, attempts such as Zuñiga’s are clear reminders of the evermore important need to constantly question our political news. Here at Polis Analysis, we have been campaigning to build awareness of the threat of fake news, misinformation and disinformation to democracy, with our very own Fake News Observatory. 

While Zuñiga’s attempt remains questioned, Bolivia’s image has been negatively affected by it. Bolivia’s economy, like many in Latin America, is deeply dependent on the dollar, and a lack of cash has made the unofficial exchange rate much higher than market rates. While the official exchange rate is at around 6.90 Bolivian Bolivianos per USD, the black-market rate was over 8 Bolivianos per USD. Additionally, the country is facing depleted reserves, going from $15 billion USD a decade ago to just $2 billion USD now, mainly due to a decline in the country’s gas production and exports. Bolivia’s credit ratings were downgraded in April by Moody’s, in February by Fitch and in November of the past year by S&P, meaning it is getting increasingly expensive for Bolivia to find lenders.

What happens next?

After being arrested, Zuñiga was placed on a six-month preventive detention for his role in the coup, with a potential final sentence of over 20 years. Despite the claims by Zuñiga, Morales and other mandatories including President Milei of Argentina, an investigation is yet to be opened regarding the coup’s entire motivations and potential staging by President Arce to boost his popularity.

Economically, the country is not expected to bounce back immediately, with long-term credit outlooks being mostly negative. Nonetheless, Bolivia hosts the world’s largest lithium reserves, with the world’s single-biggest deposit in the Salar de Uyuni salt flat, which are almost entirely undeveloped. The economic potential of developing this industry has rocketed in recent years, as electrical vehicles and energy battery storage have greatly increased its demand. If positively managed, lithium may bring Bolivia’s economic growth back to its 2000s-2010s levels. 

So far only Evo Morales has presented his candidacy for the 2025 general elections, despite being banned by the country’s Constitutional Court. Morales enjoyed an almost larger-than-life acclaim while being president, as he greatly reduced the poverty rate and enjoyed high GDP growth rates. The 2025 presidential elections will more likely than not become an in-party battle between Arce and Morales, and this coup d'état will certainly be a focal point for both sides, interpreted as either a demonstration of leadership or a calculated political manoeuvre.

The Polis Team in Madrid