Three months before presidential elections, Bolivia gripped by economic crisis

Cesar Uco

Sign at La Paz protest supporting return to office by Bolivia's former President Evo Morales [Photo by @EVOespueblo577 vía Youtube, Radio Kausachun Coca (Bolivia) / CC BY 3.0]

With less than three months until the presidential elections, Bolivia is gripped by an unprecedented political and economic crisis. The government has requested that the International Monetary Fund (IMF) delay the release of a document on Bolivia’s financial situation, but its contents have been leaked on social media.

The report highlights high inflation, a shortage of US dollars that disrupts trade, and fuel shortages leading to long lines for truckers at gas stations.

The political landscape is highly fragmented, with the ruling Movement for Socialism (MAS,) divided into factions supporting former President Evo Morales, current President Luis Arce, and Andrónico Rodríguez, who broke away from the Morales faction to run for president with a new party, Alianza Popular. 

Right-wing parties failed to unite behind a single candidate, and the upcoming election will feature nine candidates spanning the political spectrum.

Morales is seeking support for his presidential candidacy, despite the Constitution barring him from running after completing two terms in office. Supporters among coca growers have marched demanding his eligibility, leading to clashes with police, who used tear gas after protesters threw stones. In a troubling incident, protesters also attacked the press, including a reporter from China.

Evo Morales began his political career in the late 1990s as a leader of coca growers, opposing US efforts to eradicate coca crops. In 1997, he founded the Movement for Socialism (MAS), which garnered support from major peasant and worker organizations, ultimately becoming the dominant political force in Bolivia. As recently as 2020, the MAS presidential candidate, Luis Arce, won with 55 percent of the votes.

During the early years of Evo Morales’s presidency (2006–2019), Bolivia benefited from the commodities boom that lasted from 2002 to 2014. Critical of US imperialist domination, Morales and Hugo Chávez from Venezuela promoted “21st Century Socialism” and a nationalist agenda that included the promotion of political participation by indigenous peoples. The 2009 Constitution declared Bolivia a Plurinational State.

In 2005, Morales nationalized Bolivia’s oil fields, defying the IMF and World Bank agenda for Latin America. This move enabled him to implement subsidies for basic goods that significantly contributed to reducing poverty.

However, during his second term, lower commodity prices and reduced foreign investment led to an economic slowdown; such that, between 2014 and 2024 Bolivia’s oil revenues decreased from $5.491 billion to $1.635 billion, and gas production was halved, from approximately 60 million cubic meters per day to 29.55 million. 

The IMF report demands urgent fiscal adjustments, including an initial devaluation of the exchange rate to restore stability. It deems as unsustainable price controls, fuel subsidies, and export restrictions, effectively mandating an end to MAS’ plurinational populist economic model, even as poverty increases in Bolivia.

The IMF, as reported by Infobae:

...presents a concerning outlook for Bolivia. The organization projects that inflation will reach 15.8 percent by 2025, more than double the government’s forecast of 7.5 percent. Additionally, economic growth is expected to be limited, with a predicted GDP growth of only 1.1 percent.

Based on the IMF report, Infobae reports that “In the first three months of the year, accumulated inflation hit 5 percent, … and household prices have risen significantly over the past two years.”

Recent statistics indicate troubling trends in Bolivia. Once known for a stable consumer price index (CPI), the CPI rose by 1.71 percent in March, leading to an annual rate of 22.6 percent. With inflation largely due to increasing household goods prices, the most affected are working class and peasant families.

Food price hikes are having a severe impact on the Bolivian population, with chicken up 9.45 percent, beef 4.45 percent, tomatoes 25.58 percent and onions 22.83 percent. 

The IMF points to the country’s inability to meet its financial commitments to foreign capital, Infobae reports:

The fiscal situation is particularly critical. The deficit is increasingly financed through loans from the Central Bank, which has depleted international reserves—expected to be nearly exhausted by the end of 2023—and raised public debt to 84 percent of GDP.

Additionally, lower gas exports and high fuel imports have resulted in a current account deficit of 5 percent of GDP.

Bloomberg Online has reported a negative outlook on Bolivia among global investors, stating: 

Price increases in the country continue to escalate, with March inflation reaching over 14.6 percent year-on-year, according to the National Institute of Statistics (INE). This positions Bolivia as the fourth most inflationary country in Latin America, following Argentina, Venezuela, and Cuba, despite having one of the lowest inflation rates globally during the pandemic.

As economic reserves dwindled and public finances deteriorated, the government could no longer sustain its subsidies. It faced declining popularity, and internal conflicts leading to rivalry between Arce and Evo Morales for control of the party.

The Bolivian economy faced a setback with the cancellation of contracts between Yacimientos de Litio Bolivianos (YLB) and the Chinese company CBC, as well as the Russian Uranium One Group. Bolivia has the world’s largest lithium reserves, essential for electric vehicles and high-tech products.

Ahead of the elections, MAS has splintered into three tendencies, including Morales:

• Eduardo del Castillo, a former Minister of Government endorsed by President Luis Arce, represents the consolidation of “arcism” within the MAS. 
• Andrónico Rodríguez, President of the Bolivian Senate, has distanced himself from Morales by running for president with the Alianza Popular party.
• Evo Morales was disqualified from the election for not registering his new party, Evo Pueblo. He later attempted to register with the Bolivian National Action Party (PAN-BOL), but that party was also not authorized.

The other leading presidential candidates share far-right views. They include:

• Samuel Doria Medina, a businessman and politician leading the National Unity (UN) coalition. This includes right-wing figures like Luis Fernando Camacho, who during the 2019 coup, famously entered the Government Palace with a Bible, symbolizing his rejection of what he considered an “atheist and communist” regime.

• Manfred Reyes Villa, the mayor of Cochabamba since 2021 and a member of the Autonomía Para Bolivia-Súmate (APB Súmate) party. His father, Armando Reyes Villa, served as defense minister under dictator Luis García Meza. Manfred Reyes Villa is a former military officer and businessman who studied at the Pentagon’s School of the Americas. This institution was known for teaching counterinsurgency strategies and promoting anti-communist ideology, with many alumni involved in human rights violations and coups.

• Chi Hyun Chung, an ultraconservative evangelical pastor and doctor born in South Korea. Leading the Movimiento Nacionalista Revolucionario, he is a supporter of Trump and has been dubbed “the Bolivian Bolsonaro” for his fierce anti-communism and opposition to LGBTQ rights. He advocates pro-life policies and a militarized Bolivia, while criticizing the Movement Toward Socialism (MAS) and Evo Morales for promoting a “communist” model.

Morales’ “21st Century Socialism” has failed, contributing to an economic crisis and the threatened return to power of the far right.

After being excluded from the presidential race, Morales mobilized his supporters in a march on La Paz, leading to confrontations with police following President Arce’s orders to stop them.

Far-right opposition candidate wins presidential election in Poland

Martin Nowak

Karol Nawrocki [AP Photo/Czarek Sokolowski]

According to the results of Poland’s national election commission, Karol Nawrocki won the run-off election for president on Sunday with 50.89 percent of the vote. His opponent Rafał Trzaskowski received 49.11 percent. Nawrocki, who was supported by the extreme right-wing opposition PiS (Law and Justice) party, received 10,606,628 votes, while the candidate of the ruling PO (Civic Platform) party received 10,237,177 votes.

As in the first round, voter turnout reached another record high of 71.63 percent. The enormous politicisation reflected in this makes defeat for the government of Prime Minister Donald Tusk all the more difficult.

It is absolutely clear that the vote in favour of Nawrocki is first and foremost a vote against the Tusk government, which was able to form a coalition government after the 2023 parliamentary elections as the Civic Coalition. This is confirmed not only by the figures, but also by media commentators and members of the governing coalition themselves.

Trzaskowski has been a close political ally of the current head of government since at least 2013, when he was appointed by Tusk to his first government. He has been mayor of Warsaw since 2018 and was narrowly defeated by the then incumbent Andrzej Duda in the 2020 election. Trzaskowski, the man from the capital, exemplifies the political divisions in the country: While the government and PO are strong in the west and in the cities, the PiS dominates in the countryside and in the east.

Social differences are also reflected in voting behaviour: while the majority of better-off employees and managers voted for Trzaskowski, Nawrocki was particularly popular with farmers and the poorer working class voters.

The government camp has lost support in the urban milieu in particular since its 2023 election victory. If you place the votes of the anti-PiS coalition in the Sejm (parliament) elections two years ago in relation to the current turnout, Trzaskowski should have received over 11 million votes. He had plenty of support: officially, he was backed by all parties in the governing camp, as well as three eliminated candidates from the preliminary round, five former heads of state or government (Wałęsa, Bielecki, Miller, Kwaśniewski, Komorowski) and numerous intellectuals and celebrities.

But nothing has remained of the former spirit of optimism surrounding the collapse of Stalinism. Even if it was always vague and filled with terms such as “democracy” or “rule of law”, many associated it with concrete hopes—for more equal rights, protection for minorities, humane migration policies. Instead, the Tusk government not only continued the PiS policies, but even massively tightened them in some areas, such as limiting migration and asylum.

Trzaskowski’s election campaign also focused on “shedding the ‘left’ label, and many of his statements were more similar to the PiS narrative than that of the Civic Coalition—both in terms of worldview and economic and social issues”, as Mateusz Baczyński commented for the Onet website.

Nawrocki’s far-right agenda hardly came under attack. Instead, the election campaign focused on his past as a boxer and bouncer—which probably made him even more attractive to many as an “underdog” and “anti-establishment figure”.

The rejection of the political establishment is particularly clear among young people. In the first round of voting, the far-right and supposedly “far-left” candidates Menzen and Zandberg together received around 56 percent of the vote in the under-30 age group.

The “Young people, vote!” campaign reviewed the voting behaviour and motives of young people. According to Paweł Mrozek, a member of the initiative, many young people did not vote for Nawrocki out of conviction, but out of rejection of Trzaskowski and the government camp.

The issues that are important to young people—such as education, mental health, housing, work and quality of life—hardly play a role in government initiatives, Mrozek continued.

Criticism is also growing within the governing coalition. Szymon Hołownia from Polska 2050 spoke of the government being given a “yellow, partly red card”. Ahead of the coalition’s emergency meeting, he called for a new coalition agreement in order to “clearly tell the citizens what we intend to do in the next two years”. At the same time, he expressed doubts about Tusk’s plan to call a vote of confidence—a statement that he withdrew after internal criticism, partly because Polska 2050 is likely to be one of the biggest losers in any new elections.

Criticism from the right-wing conservative PSL (Peoples Party), which forms the Trzecia Droga (Third Way) alliance together with Polska 2050, was much harsher. Marek Sawicki, a former minister under Tusk, accused him of “laziness” and “disinterest in government work” and called for a constructive vote of no confidence to reappoint the head of government.

Włodzimierz Czarzasty from the social democratic Nowa Lewica (New Left) party also declared: “I think that we have simply messed up a lot as a government.” He also urged a vote of confidence in order to stabilise the coalition.

The coming weeks will show whether and to what extent the Tusk government faces a crisis as a result of the presidential election. In an eagerly awaited speech on Monday evening, Tusk announced that he would “not let up for a moment” and would call for a vote of confidence—as a signal to the country and abroad. In other words: he wants to stick to his right-wing and militaristic course. His government’s “priorities” included “building a powerful army,” a “strong economy,” the “re-Polandisation of industry” and “fighting crime.”

While Nawrocki’s election victory is undoubtedly also due to the government’s anti-social and disappointing policies, the role of the war in Ukraine should not be underestimated. Poland is the central NATO state on the border with Russia and—with broad support from all parties—has adopted a massive rearmament and militarisation programme. Sawicki’s accusation of “disinterest” on Tusk’s part probably also refers to his foreign policy trips, for example to promote a joint European arms offensive. A few weeks before the election, Tusk signed a friendship agreement with France on security policy cooperation.

However, the opposition is no less bellicose. Back in March 2022, PiS leader Jarosław Kaczyński called for a “NATO peacekeeping mission” for Ukraine. Poland has been a logistical hub for weapons and intelligence support since the start of the war. However, shortly before being voted out of office, the PiS increasingly distanced itself from Ukraine—a reaction to growing tensions within NATO and the EU over the escalation of the war. These differences have intensified dramatically with Trump’s second term in office. It is no coincidence that US Secretary of Homeland Security Kristi Noem openly called for Nawrocki’s election at the far-right CPAC conference in Warsaw. During the election campaign, the latter repeatedly declared his rejection of EU or NATO membership for Ukraine.

Surveys show just how much the PiS is benefiting from growing opposition to the war: approval of arms deliveries to Ukraine has fallen by around 20 percent since the start of the war. At the same time, there has been an increase in agitation against Ukrainian refugees—even though most of them work in Poland and do not receive any state benefits.

The constant anti-Russia threat narrative is also meeting with increasing rejection. Only around a fifth of the population would voluntarily defend the country in the event of war—over a third preferring to flee abroad.

The elections in Poland shed light on the actual situation in a country that is often celebrated by Western economic commentators for its growth rates. However, despite all appearances of modernisation, social inequality has worsened since the restoration of capitalism and is increasingly undermining the foundations of democratic rule.

Poland is among the most unequal in Europe, with the latest data showing that the top 10 percent takes in more than 37 percent of income, while the bottom 50 percent accounts for less than 22 percent.

The high approval ratings for nationalist and in some cases openly fascist forces in particular show how unresolved historical issues weigh heavily on social consciousness.

OECD cuts global growth forecast

Nick Beams

The Organisation for Economic Cooperation and Development, a grouping of 38 economies, has significantly cut its forecast for global growth because of the uncertainty created by the trade and tariff war being waged by US President Trump.

It said the world economy was heading for its weakest period of growth since it was hit by the COVID-19 pandemic in 2020.

OECD cuts global growth forecast in light of tariff threat [Photo by Statista / CC BY-ND 4.0]

Global growth, it forecast, would be just 2.9 percent in 2025 and 2026, compared to growth of 3.3 percent in 2024, after it had exceeded 3 percent in every year since 2020.

Warning of the impact of the Trump tariffs, it said the “significant increase in trade barriers as well as in economic and trade policy uncertainty” had “negatively impacted business and consumer confidence and is set to hold back trade and investment.”

“Weakened economic prospects will be felt around the world, with almost no exception. Lower growth and less trade will hit income and slow job growth,” the editorial introducing the report said.

It said risks had risen “considerably” and could increase even further, and that additional trade barriers might be introduced. According to our simulations, additional tariffs would further reduce global growth prospects and fuel inflation, dampening global growth even more.”

It also warned that rising government debt posed financial risks and that “historically elevated equity valuations also increase the vulnerability to negative shocks in financial markets.”

It said “by far” the most important policy priority was to ease trade tensions and lower tariffs to revive growth and avoid rising prices. But as if to emphasize there is absolutely no chance of this taking place, Trump signed an executive order yesterday, lifting the tariffs on steel and aluminum from 25 percent to 50 percent, to come into effect today.

In what amounted to a desperate and fearful plea for a reversal of the trade war, the OECD’s chief economist Álvaro Pereira said countries need to make deals to lower trade barriers. “Otherwise, the growth impact is going to be quite significant. This has massive repercussions for everyone.”

The report noted that boosting investment was necessary to promote economic revival and that it had been too low since the global financial crisis of 2008. One of the reasons is that financial parasitism and speculation have assumed an ever-increasing role in profit accumulation.

“Despite rising profits, firms have shied away from fixed-capital investment in favor of accumulating financial assets and returning funds to shareholders,” it said.

The report pointed to a significant downturn in US growth. It would fall from 2.8 percent in 2024 to 1.6 percent in 2025 and 1.5 percent in 2026. The OECD had previously forecast US growth for this year at 2.2 percent. At the same time, inflation would increase, preventing the Federal Reserve from cutting interest rates to provide a boost to the economy.

Predictably, the downgrade in US growth prospects brought denunciations from the White House, with Trump’s spokesperson Kush Desai declaring that the OECD “joins a growing list of doomsayers that are untethered to reality.”

But the report is very much in line with other assessments.

The chief international economist for the financial firm ING, James Knightley, said the OECD downgrade “adds more credibility to the private sector view that the US economy will feel a cold wind until we start getting clarity on the trade and tax environment that businesses and households will face.”

Goldman Sachs has said it expects US growth of only 1.7 percent this year, and the Fed has downgraded its forecast from 2.1 percent to 1.7 percent.

These forecasts are being backed up by data. The ISM survey of purchasing managers in the manufacturing sector came in at 48.5 for May, below the level of 50 that is the boundary between expansion and contraction.

The result was below expectations, lower than the previous month, and the fourth consecutive monthly fall in the index.

The chief economist at the tax and consulting firm RSM US, Joe Brusuelas, told the Financial Times: “The confusion of trade policies is making it nearly impossible for supply managers to source goods efficiently. This tells me that we may run into bottlenecks in terms of production leading to shortages.”

The downgrade for the US economy was replicated across the board, with the OECD cutting its forecasts for three-quarters of the G20 group of economies from the predictions it made in March.

Chinese growth would slow from 5 percent last year to 4.7 percent in 2025 and 4.3 percent in 2026. The eurozone will grow by only 1 percent this year and 1.2 percent in 2026. Japan will grow by anemic 0.7 percent this year and 0.4 percent in 2026. The figures for the UK are 1.3 percent this year and 1 percent next year.

Global trade is expected to grow at an already historically low level of 2.8 percent this year and then fall further to 2.2 percent in 2026. And given that the Trump tariff hikes have yet to come fully into effect, the fall could be even sharper.

The social implications of the lower growth rate were set out, albeit indirectly, in the warnings over the rising levels of government debt contained in the report.

It said that “restoring fiscal discipline is key for countries to avoid fiscal sustainability problems and build buffers for future shocks” and given the already high debt levels, countries had to ensure that public debt is on a sustainable path with the development of credible plans to show “how countries intend to ease pressures on public finances.”

Translated from the economic jargon in which such reports are written, this means major attacks on social spending, as well as job cuts resulting from lower growth, which will be intensified by the increases in military spending being undertaken by governments around the world.

Democrat Lee Jae-myung wins South Korea’s presidential election

Ben McGrath

South Korean new President Lee Jae-Myung takes an oath during his inauguration ceremony at the National Assembly in Seoul, South Korea Wednesday, June 4, 2025. [AP Photo/Jeon Heon-Kyun]

Lee Jae-myung of the Democratic Party (DP) was elected as president of South Korea on Tuesday, defeating his primary challenger Kim Moon-soo of the People Power Party (PPP). Lee immediately began his five-year term on Wednesday.

Lee defeated Kim by more than 2.8 million votes, taking 49.42 percent of the total to the latter’s 41.15 percent. Lee Jun-seok of the right-wing Reform Party took most of the remainder of the votes with 8.34 percent.

Tuesday’s election was triggered by the removal of former president Yoon Suk-yeol of the PPP in April, following impeachment proceedings over his imposition of martial law in December. Voter turnout reached 79.4 percent, the highest in 28 years, driven by widespread anger towards Yoon and his party.

In his campaign, Lee Jae-myung promised to end the threat of insurrection represented by Yoon and his supporters in the military, as well as improve the economy.

He declared in his inaugural address on Wednesday, “It is time to restore security and peace, which have been reduced to tools of political strife; to rebuild livelihoods and the economy damaged by indifference, incompetence, and irresponsibility; and to revive democracy undermined by armored vehicles and automatic rifles.”

The last remark was in reference to soldiers who stormed the National Assembly in an attempt to arrest lawmakers in December during Yoon’s failed coup attempt.

Lee, however, will impose the demands of the ruling class no less ruthlessly than the PPP. The new president has no progressive solutions to any of the crises that grip South Korea, which include a stagnating economy worsened by Trump’s trade war and Washington’s accelerating militarization of the Indo-Pacific region.

In line with these US war plans aimed at China, Lee takes over South Korea’s military preparations from where Yoon left off. While the PPP openly embraces militarism, the Democrats attempt to posture as opponents of war. This is done along narrow, nationalist lines, focusing on encouraging “dialogue” with North Korea while consciously ignoring Washington’s plans to goad Beijing into a conflict.

As throughout his campaign, Lee made clear to Washington and Tokyo on Wednesday that whatever his rhetoric about dialogue and peace, his administration will continue the trilateral military alliance with the US and Japan. Yoon sealed the agreement in August 2023 with former Japanese leader Fumio Kishida at the behest of US President Joe Biden.

Lee stated, “We will strengthen South Korea-US-Japan cooperation based on a solid South Korea-US alliance and approach relations with neighboring countries from the perspective of practicality and national interest.”

In real terms, the strengthening of these alliances means South Korea’s own rapid military escalation. This could include ramping up defense spending to 5 percent of GDP—a demand US Defense Secretary Pete Hegseth issued during a warmongering speech at the Shangri-La Dialogue in Singapore on May 31. For Seoul, which already spends about 2.8 percent on its armed forces, this would mean nearly doubling its military budget.

The government will extract this money from the working class at a time when the economy is already stagnating and workers face declining real wages and rising costs. The Bank of Korea (BOK) currently predicts the economy will expand by only 0.8 percent this year, in part due to uncertainty and instability produced by US tariffs, which the Trump regime is wielding like a cudgel to impose its demands on allies.

The Organization for Economic Cooperation and Development has noted that the tariff rate on South Korean exports to the US has already risen from 1 percent to 16 percent, even without the 25 percent “reciprocal” tariff that has been temporarily paused.

Lee’s economic agenda includes plans for heavy investment in artificial intelligence (AI), which under capitalism will result in wage cuts and mass layoffs. A joint report published in February by the International Monetary Fund (IMF) and the BOK found that 27 percent of workers in the country were at risk of losing their jobs or having their wages slashed as a result of AI.

In removing Yoon from office rather than backing his coup attempt, the ruling class decided that it was not yet ready to dispense with the trappings of bourgeois democracy, above all out of fear of the mass popular opposition it would spark. At the height of the protests against Yoon in December, two million demonstrators gathered outside parliament to demand his removal from office.

However, the combination of war and austerity will lead to further opposition from the working class. That is why the ruling class has turned to the so-called “liberal” Democrats to impose its agenda, just as it has done in the past. The DP, which postures as a friend of workers, will work hand-in-hand with the trade unions, particularly the so-called “militant” Korean Confederation of Trade Unions (KCTU), to suppress rising working-class resistance.

The KCTU hailed Lee’s election saying, “Now is the time to realize the demands of worker citizens.” It is promoting illusions that Lee will carry out pro-worker reforms, stating that his election was “the result of citizens’ dedication and struggle,” and falsely claiming that Lee’s win was a victory for democracy.

The KCTU consciously ignores the broader international issues, including the danger of a US-led war against China, in order to obfuscate the real cause of the crisis workers face—the capitalist system itself. Workers are led to believe that simply removing Yoon will be enough to improve their conditions.

The unions, as well as social democrats, pseudo-left groups and various Stalinists that masquerade as left-wing, are part of the falsely named “progressive bloc” in South Korean politics. These groups have a long history of backing the Democrats and providing them with a “left” veneer as they attack the working class.

In the 1990s, the Democrats were first elevated to power, after the end of the country’s military dictatorship, to block workers’ demands and impose restructuring to save big business and the massive family-owned chaebol conglomerates that dominate South Korea’s economy to this day. Under Kim Dae-jung and Noh Moo-hyun, the Democrats enforced widespread layoffs and the mass casualization of the workforce, and relied on the KCTU to strangle strikes and protests.

In 2017, the Democrat Moon Jae-in came to power with the backing of the KCTU, which claimed that Moon would carry out genuine democratic reforms and even a “revolution.” The unions and their progressive allies shut down the mass protests against the previous corrupt right-wing presidency of Park Geun-hye, who was also removed in an impeachment trial. Moon then oversaw the growth of inequality and the expansion of military cooperation with the US.

The KCTU played the same role after Yoon’s coup attempt, calling off strikes and protests in December, claiming that the Democrats would defend democracy. In doing so, the DP and the KCTU provided Yoon Suk-yeol and the PPP with breathing room to recover, rally their right-wing supporters and promote the development of fascistic elements in the country.

Having long since been integrated into the political establishment as an ally of the Democrats and enjoying the privileges that come with it, the KCTU is far more terrified of the development of a working-class movement that goes beyond the confines of capitalism and the parliamentary system than of military dictatorship.