LA PAZ, Bolivia (news agencies) — Signs reading “I’m buying dollars” line the doors of Víctor Vargas’ shoe shop in the heart of Bolivia’s biggest city, a desperate attempt to keep his family business alive.
Just a few years ago, the 45-year-old Vargas would unlock the doors at 8 a.m. to a crush of customers already waiting to buy tennis shoes imported from China. Now, his shop sits hopelessly empty.
“Right now, we’re in a dreadful crisis,” he said. “No one buys anything anymore. … We don’t know what’s going to happen.”
Bolivians like Vargas have been hit hard by economic turmoil in the small South American nation fueled by a longtime hyper-dependence on, and now shortage of, U.S. dollars.
The economic downturn has been exacerbated by an ongoing feud between President Luis Arce and his ally-turned-rival former President Evo Morales in the lead-up to next year’s presidential election. Many Bolivians impacted by the crisis have lost trust in Arce, who denies the country is even in an economic crisis.
“Bolivia has an economy that’s growing. An economy in crisis doesn’t grow,” Arce told media in an interview. That was contradicted by both economists and dozens of Bolivians.
That deep distrust came to a head on Wednesday following a spectacle which the government called a “failed coup d’etat” and opponents including Morales called a staged “self-coup” meant to earn the unpopular leader political points before elections.
Whether the coup attempt was real or not, most Bolivians who spoke to the news agencies said they no longer believe what their leader says, and say Arce would be better served addressing Bolivia’s gasping economy and less time carrying out political stunts.
“He should think about Bolivia’s economy, make a plan to move forward, find a way to get dollars and work to move Bolivia forward,” Vargas said. “No more of these childish ‘self-coups.’”
That simmering anger has paved the way for even more strife in a country that is no stranger to political unrest.
Bolivia’s economic crisis is rooted in a complex combination of dependence on the dollar, draining international reserves, mounting debt and failures to produce products like gas, once the Andean nation’s economic boon.
This has meant that Bolivia has largely become an import economy “totally dependent on dollars,” said Gonzalo Chávez, an economist with Bolivia’s Catholic University. That once worked in Bolivia’s favor, driving the country’s “economic miracle” as it became one of the region’s fastest growing economies.
Vargas’ family opened the shoe business nearly 30 years ago because they saw it as a surefire way to ensure stability for coming generations. The family imports shoes from China, which they pay for in dollars and sell them in Bolivia’s currency, bolivianos. Without dollars, they have no business.
The shortage of dollars has led to the emergence of a black market, with many sellers bringing in greenbacks from neighboring Peru and Chile and selling them at a gouged price.
Pascuala Quispe, 46, spent her Saturday walking around La Paz’s downtown going to different currency exchange shops, desperately searching for dollars to buy car parts. While the official exchange rate is 6.97 bolivianos to the dollar, she was told the real price was 9.30 bolivianos, far too high a price for her. So she kept walking, hoping to find luck elsewhere.
Gouged prices have trickled down to everything. People have stopped buying shoes, meat and clothing, and that has pushed working class people deeper into poverty. Bolivians make jokes about having “mattress banks,” storing cash at home because they don’t trust banks.
“There are no jobs. … and the money we earn isn’t enough for anything,” Quispe said. “Everyone suffers.”
Some vendors like Vargas paste signs on their business doors, hopeful sellers will trade dollars at a more reasonable price.
It’s a complicated economic bind that has few short-term solutions, said Chávez, the economist.
But Arce insists that Bolivia’s economy is “one of the most stable” and says he’s taking action to address problems ailing Bolivians, including shortages of dollars and gasoline. He said the government is also industrializing, investing in new economies like tourism and lithium.
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