Social and political instability, the perpetual scourge of the orange economy in Bolivia | La inestabilidad social y política, el eterno verdugo de la economía naranja en Bolivia

By Gina Baldivieso, EFE, Vision 360:

Tourism and Gastronomy

Among the most affected sectors are tourism and gastronomy, which suffered a severe setback during the post-electoral political and social crisis of 2019 and later due to the restrictions during the COVID-19 pandemic.

Turistas pasean en el sector conocido como el Callejón de las Brujas, en el centro de la ciudad de La Paz (Bolivia). Foto: EFE / Luis Gandarillas

Tourists stroll through the area known as the Witches’ Alley, in the center of La Paz (Bolivia). Photo: EFE / Luis Gandarillas

Social instability, almost a constant in Bolivia, has taken a toll on sectors of the orange economy, such as tourism and gastronomy, which were just beginning to recover after the COVID-19 pandemic and are now once again on the ropes due to the political conflicts registered this year in the South American country.

Aside from economic problems, the main social issue at present stems from the internal struggle within the ruling Movement for Socialism (MAS) between the faction aligned with the country’s president, Luis Arce, and the wing loyal to former president (2006-2019) and party leader Evo Morales over control of the government and the party.

Earlier this year, there was already a blockade by the so-called ‘Evo supporters’ over the judicial elections, as well as against a constitutional ruling that prevents Morales from running again in the 2025 elections.

Now, these groups are blocking roads again in the central part of the country in response to a criminal investigation against the former president in a case of alleged human trafficking and statutory rape, although they also claim to protest the shortage of dollars and fuel and rising food prices, among other issues.

Among the most affected sectors are tourism and gastronomy, which suffered a severe setback during the 2019 post-election political and social crisis and later due to the restrictions during the COVID-19 pandemic.

During the pandemic, restaurant revenue “did not exceed 30%,” yet owners had to continue meeting their responsibilities to employees and banks, Ernesto Olivares, vice president of the Bolivian Chamber of Gastronomic Entrepreneurs (Cadeg), told EFE.

The hotel sector, which had occupancy rates of 60% to 80% before the pandemic, “plummeted” and experienced a “total collapse” due to travel restrictions. It also had to take on debt to continue fulfilling its obligations, explained Luis Ampuero, president of the Bolivian Chamber of Tourism (Cabotur).

After the worst was over, the situation began to improve somewhat for both sectors, but over the past year, problems such as the shortage of dollars and fuel, and rising food prices emerged, exacerbated by road blockades that began on Monday.

Pathological Conflict

Olivares indicated that, at this moment, the blockades “are preventing food like chicken, rice, and sugar,” which are produced on a large scale in Santa Cruz, Bolivia’s economic engine, from reaching other regions. This has resulted in price increases that typically “do not go back down.”

The representative for the gastronomic sector explained that restaurants “maintained their prices as long as they could,” but eventually had to raise them.

“The final consumer starts to feel the pinch when prices increase, begins looking for other options, and therefore, our revenue, which used to be 100%, will drop to 70%,” he warned.

Olivares reminded that the gastronomic sector “is the biggest employer of young people” and that “tightening the noose” only destroys “the poor economy of La Paz” and the national economy.

“Tourism is extremely fragile, volatile. As a tourist, you will never travel to a conflict-ridden place… Reservations simply get canceled,” said Ampuero.

According to Ampuero, while tourism in the rest of South America has recovered, Bolivia has not returned to the levels of 2019, when 1.4 million tourists visited. It is estimated to be 33% below that figure.

“We are increasingly seen as a country in a permanent state of conflict, with destinations where there may be nothing today, but something could happen tomorrow,” he lamented, hindering the sector’s “attempt” to recover.

Nevertheless, Olivares and Ampuero agreed that both sectors have developed “resilience” in a country where social conflict is “almost pathological,” while also urging more decisive action from all levels of government to help boost Bolivia’s orange economy.

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