Bolivia’s shrinking gas industry has left the country facing fuel scarcity, dollar shortages and its highest inflation in more than three decades, The Guardian Economics reports. With estimates suggesting Bolivia could become a net gas importer by about 2030, the crisis is intensifying debate over whether expanding other commodity exports can provide a durable recovery.
The gas boom of 2006-14 helped expand the economy and social programmes while poverty rates halved. Evo Morales’s government took control of the hydrocarbons sector in 2006 and renegotiated foreign companies’ contracts, benefiting from strong global fuel prices. But successive administrations directed revenues towards state spending, fuel subsidies and a dollar-linked exchange rate rather than building industrial capacity and higher-value exports, according to the report.
After commodity prices fell in 2014, foreign reserves dwindled as the government maintained subsidies and the currency peg, financing deficits by printing money. The peg ended earlier this year, but dollar shortages and a parallel exchange rate continue to hamper business. Some imported staples in La Paz now cost twice as much, the outlet reports, while traders say customers are buying less and choosing cheaper goods.
Economists interviewed by The Guardian Economics differ over the causes of the downturn. Some blame hydrocarbon nationalisation, while Andrés Arauz, a former senior official at Ecuador’s central bank, points to offshore capital flows and insufficient domestic industrial development. Luis Fernando Romero, a former head of an economists’ association in southern Bolivia, says technological obstacles and dollar shortages deter foreign investors. A $1.9bn IMF loan in July largely went towards debt servicing or reserves rather than diversification, the report says.
Goldmining and agroindustry are gaining importance as gasfields decline, raising concerns about another cycle of dependence on raw-material exports. Forest-based livelihoods offer a different approach: Amazonian communities harvest products including açaí, cacao and Brazil nuts without clearing forests. Bolivia exported £145m of Brazil nuts in 2024, twice the value of timber exports, according to the outlet.
Biologist Vincent Vos argues that forest harvesting could expand alongside tourism and carbon sequestration programmes, although mining and agricultural interests wield greater political influence. Arauz cautions that replacing gas with other unprocessed exports would not itself transform the economy; developing domestic markets and industries remains essential.