Bolivia: MAS Split, Dollar Shortage, Lithium Deals — 2026-10-25
Former President Evo Morales issued a stark warning on October 24 that armed struggle could return to Bolivia, intensifying tensions with the Paz administration amidst a deepening economic crisis. As the country faces a severe fuel shortage and a parallel dollar rate nearing Bs12, the government struggles to manage inflation and political fragmentation within the MAS party. Meanwhile, critical lithium contracts with Russian and Chinese firms remain stalled in the legislature, delaying billions in potential investment.
Top developments
Evo Morales Warns of Return to Armed Conflict
On Saturday, October 24, 2026, former President Evo Morales publicly warned that armed struggle could return to Bolivia, although he stated he personally opposes such a path. This statement comes as Morales remains a wanted figure facing arrest warrants, further polarizing the political landscape and raising fears of renewed violence amidst ongoing protests.
Economic Growth Forecasts Slashed Amid Crisis
On October 22, the Economic Commission for Latin America and the Caribbean (ECLAC) cut Bolivia’s 2026 growth forecast to a mere 0.2%, while the International Monetary Fund (IMF) projects a severe 3.0% contraction. This 3.2-point gap between regional and global forecasts highlights the uncertainty surrounding the Paz government’s austerity measures and the impact of the fuel subsidy cuts.
Dollar Shortage and Parallel Exchange Rate Volatility
Bolivia continues to grapple with a critical shortage of US dollars, with the parallel exchange rate fluctuating significantly in late October. Reports from October 23 and 24 indicate that the parallel dollar has been trading at differentiated rates for buying and selling, diverging sharply from the official rate reported by the Central Bank. This instability has driven some of the population to seek financial refuge in cryptocurrencies like Tether (USDT).
Lithium Contracts Remain in Legislative Limbo
Despite Bolivia holding one of the world's largest lithium resources, key contracts with Russian and Chinese firms remain paralyzed in the Plurinational Legislative Assembly. The state-owned Yacimientos de Litio Bolivianos (YLB) has stated that contracts for battery-grade lithium carbonate production are awaiting approval, with the Constitutional Tribunal also reviewing related legal challenges. This delay prevents the commencement of industrial plants that were expected to generate significant employment and revenue in Uyuni.
Local view
Local media and stakeholders are increasingly focused on the humanitarian impact of the fuel crisis. Red Uno de Bolivia has provided daily updates on the parallel dollar, reflecting the public's urgent need for accurate exchange rate information amidst hyperinflationary pressures. La Razón reported on October 25 that the scarcity of traditional fuels has led to a surge in electric vehicle adoption, with 8,059 light electric vehicles now circulating in the country.
Infobae highlighted comments from former minister Carlos Sánchez Berzaín on October 24, who argued that national unity is essential to defeat "narco-state" elements, suggesting that President Paz has "taken part of the Government but has not taken power". This reflects a growing narrative in some political circles that the current administration lacks full control over state institutions.
Context & numbers
- Growth Forecasts: ECLAC projects 0.2% growth for 2026, while the IMF forecasts a -3.0% contraction.
- Electric Vehicles: 8,059 light electric vehicles are currently in circulation in Bolivia, driven by fuel scarcity.
- Parallel Dollar: The parallel exchange rate has shown significant volatility in the last week, with distinct buy and sell prices reported on October 23 and 24.
- Lithium Investment: The stalled contracts with Uranium One and a major Chinese firm were projected to bring $2 billion in investment to Uyuni.
On the radar
- Potential Protests: Following Evo Morales' warning on October 24, there is heightened concern about the potential for renewed roadblocks and street protests, particularly in the Altiplano regions.
- Lithium Legislation: Watch for any movement in the Plurinational Legislative Assembly regarding the stalled lithium contracts, which remain a key economic lever for the Paz government.
- Central Bank Interventions: The Central Bank's ability to manage the parallel dollar rate without depleting remaining gold reserves will be critical in the coming weeks.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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