Bolivia's failed economic model: from regional energy heart to blackout risk

Bolivia appears to be reaching the end of the model that for decades underpinned its budget revenues with natural gas shipments to its neighbours. According to El País's analysis, output is falling at fields that have not received fresh exploration capital, and actual production has consistently come in below official figures, jeopardising the renewal of export contracts. Protests lasting several days in La Paz and other major cities are pointing at fuel shortages and the lack of dollars.

Finance ministry data show the budget deficit reached 11% of GDP in 2025, while foreign reserves have shrunk by about 60% over two years. The central bank is allocating dollars through quotas to bridge the gap between its fixed peg and the parallel market rate. State energy company YPFB has confirmed that its northern export pipeline is running half-empty on forward schedules.

An IMF mission is expected in La Paz over the coming weeks. The Bolivian Confederation of Industry says producer prices have doubled because of the dollar shortage, while the opposition is calling on the government to release transparent production figures. The administration says it is drafting a new hydrocarbons law that would open production fields to foreign operators.