Bolivias Struggle with Boom, Bust, and Politics

Bolivias Struggle with Boom, Bust, and Politics

I first encountered Bolivia in my Modern Latin America class after researching and delivering a speech on Simón Bolívar. Against the Spanish crown that had plundered Latin America’s natural riches and brutalized its peoples, Bolívar, alongside Antonio José de Sucre, marched through the Andes with an army of patriots and liberated five nations: Venezuela, Ecuador, Colombia, Peru, and Bolivia. 2025 marks two centuries of independence for each. However, while four of those nations have, in broad strokes, stabilized and grown, one stands out for its severe economic instability: Bolivia. According to the World Bank, Bolivia’s extreme poverty rate stands at 11.1 percent—meaning that out of a population of roughly 12 million, more than 1.3 million people live on less than $2.15 a day. Thus I wondered: how could a country with such a triumphant birth spiral into such hardship? What economic forces have caused Bolivia’s severe poverty, and how have its people responded politically?

The answer to the question of Bolivia’s perpetual economic crisis may be found even before its independence and when it was still a Spanish colony. During the 17th century, Bolivia’s vast wealth from minerals was so great that Cervantes, in Don Quijote, coined the idiom “valer un Potosí”—“to be worth a Potosí,” referring to the immense amount Gold and Silver in the mountains of southern Bolivia. However, this wealth was not reaped by its native peoples but, instead, entirely by the Spaniards. As per a 2016 Guardian article, under the mita system, a colonial law that required indigenous communities to provide workers, the Spaniards forced millions of Quechuas and Aymaras to labor in the Bolivian mines so that by 1650, some 45,000 tons of silver and gold had flowed into Spain. Yet as extravagant as this output was, the economic crash that followed proved just as dramatic. After just 70 years, all that the Bolivian mountains and peoples had to provide was squeezed out. As one resident of a mining town put it, “Everything is finished…all is affliction and anguish, weeping and sighing.” To say that everything is finished is to declare that an era has ended, that nothing remains but a gaping hole in Bolivia’s economy where its richest resource once stood. The anguish and the weeping reflect the sacrifice of 8 million indigenous lives, consumed in the mines only to be left with nothing. The sighing captures the hopelessness—the acceptance that one’s patria, one’s home, has been plundered for the benefit of another society.

Sadly, this is just the first case of Bolivia overlying on natural resources. After gold and silver, and following the revolution of 1825—specifically, in the middle of the 19th century—came the promise of tin. This shift coincided with the growing use of cans in European countries such as Britain and Germany. According to a University of London research paper, Bolivia’s economy became addicted to tin: “exports increased more than tenfold between 1850–54…and the export of tin mineral ores rose by a factor of thirty-six.” The boom did not stop there. Tin production continued well into the 20th century until, as an Office of the Historian report notes, tin supplied about 70 % of Bolivia’s foreign exchange and 90 % of government revenues. The consequence? Overmining led to declining output. Overreliance meant economic vulnerability. In 1985, when Bolivia’s tin supplies faced competition from Southeast Asia, the country’s competitiveness in the global tin market collapsed. Thus, the price of Bolivian tin dropped by 70 %, and 23,000 miners—nearly three-quarters of the state mining workforce—lost their jobs.

Unfortunately, the way Bolivia has politically managed its cycles of boom and bust has been ineffective—and perhaps that is why they keep repeating. One might expect that, after the devastation caused by the exhaustion of gold and silver in the 17th century, the newly independent nation would design a constitution to break from its colonial-style system, where Spaniards and local oligarchs occupied the top of the social and economic pyramid and the indigenous majority languished at the bottom. The opposite occurred. When Simón Bolívar liberated Bolivia, he preserved much of the old order, meaning that power remained firmly in the hands of the criollo elites—descendants of Spaniards born in the Americas—who had long profited from the silver mines and continued to dominate the country’s politics and economy. This failure to dismantle the colonial hierarchy laid the foundation for the disaster of the tin industry, for those in command had learned nothing from the past—for those in command did not suffer. During Bolivia’s tin era, according to a Guardian article on the “tin barons,” the criollo elites controlled 72 % of the nation’s tin exports while paying only 3 % of their profits in taxes. Meanwhile, those who actually worked in the mines, as a World Bank brief put it, endured “deplorable social conditions,” and “received extremely low wages… in relation to prices” of tin. Mining tin is hard work—and that is where the disparity lies. The labor put into mining and by extension, the profit made from it, did not circle back to miners. Instead, it circled back to tin barons who sat in offices and managed trade from above. As history shows, when there is a stark difference between the degree of labor and degree of wage, revolution sparks—whether that be factory strikes during the 19th century in England, the bourgeois uprising against the Tzars in 1907 in Russia, or even peasants decapitating the throne and the absolute monarchy in 1789 in France.

That is precisely what happened in 1952. Under the Movimiento Nacionalista Revolucionario (MNR) party, miners and workers’ militias rose up, seizing weapons, defeating the army in three days of street fighting, and toppling the oligarchic regime; in doing so, they forcibly disempowered the criollo-dominated society and sought to establish a socialist system. An International Workers League article details how the revolution, furthermore, nationalized the tin mines and redistributed land to Indigenous peasants. However, with the rise of the MNR came the rise of its main flaw: the state-run mining sector, COMIBOL, became inefficient. According to a World Bank brief, COMIBOL was overstaffed and plagued by mismanagement. Thus, it makes sense why Bolivia could not keep pace with the global tin industry during the 1980s: the very institution created to manage the mines was incapable of sustaining production.

The most recent crisis facing the Bolivian people is the collapse of its oil and fuel sector. A 2025 Reuters article explains that Bolivia, once a major player in the global fuel market, has seen its reserves dry up—forcing the country to import more than 80% of its fuel, much of it from Russia. The crisis has grown so severe that the Bolivian government has begun imposing restrictions on everyday life. As MercoPress reported, authorities ordered cable car services in La Paz to run only from 5 a.m. to 11 p.m., prioritized fuel distribution for the agricultural sector on a strict schedule, and designated specific service stations exclusively for public transport. These restrictions fall on the most basic necessities. Agriculture, for example, is one of the most critical industries any society needs to remain healthy, for fuel should always be readily available for growing food. Even fuel for the public’s everyday use—for using public infrastructure for getting from place to place or even their own vehicles—is being cut. What this highlights is the severity of the situation: it is stripping Bolivians of their ability to carry out and meet the most fundamental needs and actions of daily life. The response of the Bolivian people? Protests, strikes, and roadblockades. In the city of La Paz, El Alto and Santa Cruz, Bolivians have marched through the streets banging pots to denounce soaring prices and fuel shortages while transport unions have blocked roads and highways to stop traffic and trade.

With elections looming, one thing is clear: Bolivia cannot continue to economically place all its eggs in one basket. History shows that there are two results. The first is that the ruling class dominates and profits while the people of Bolivia are left to suffer. The second is a socialist movement that attempts to distribute resources more equitably, but poor management means that when reserves—whether gold, silver, tin, or oil—run out, the country once again plunges into crisis. Today, Bolivia is repeating this pattern in its attempt to confront the fuel shortage. In 2024, the state oil company YPFB announced the discovery of a hydrocarbon basin in the Mayaya area with an estimated 1.7 trillion cubic feet of natural gas. While this immense find will certainly boost the economy, it too will eventually run out. Thus, Bolivia must invest in a true industry. After all, it is an industrious country, but the product being developed is not man-made—it is natural. The nation must learn to produce, export, and enrich itself—and by extension its people—with goods that can be produced by man. If Bolivia hopes to escape its cycle of booms and busts, it must build a government that strikes a balance between the criollo system and the MNR system—one with competent management and without the vast disparities between elites and workers. To return back to its back to the triumph it once had at its start under Bolivar and Jose de Sucre, Bolivia must escape its curse of overruling on natural resources and politically skewing too far capitalist and socialist in response.

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