Bolivia’s President Rodrigo Paz fires economy minister amid unrest

Bolivia’s political crisis deepened over the weekend as President Rodrigo Paz removed Economy Minister José Gabriel Espinoza from his post, just days after the legislature voted to censure the official over his handling of the country’s troubled economy. The dismissal, announced late Saturday, marks the most significant cabinet shake-up since Paz took office and underscores the mounting pressure on his government to address widespread discontent.

Espinoza, who had served as economy minister for 14 months, was censured by the opposition-controlled Legislative Assembly on Thursday for what lawmakers called “austerity measures that have failed to stabilise prices and have instead deepened poverty.” The non-binding censure motion, though symbolic, reflected deep divisions over the government’s economic policies, which included subsidy cuts and currency devaluation measures intended to curb inflation and address a widening fiscal deficit.

“The minister lost the confidence of Congress and, more importantly, of the Bolivian people. His departure is necessary to move forward,” President Paz said in a brief televised address, adding that a replacement would be named within 48 hours. However, opposition leaders and social movement organisers criticised the timing of the dismissal, arguing that it was a last-ditch effort to quell protests rather than a genuine policy shift.

Since early August, street demonstrations have erupted in La Paz, Cochabamba, and Santa Cruz, led by unions, indigenous groups, and small business owners. The protests have been fuelled by double-digit inflation, fuel shortages, and allegations of corruption in the distribution of state subsidies. Clashes between demonstrators and police have left several injured, and unions are threatening a general strike if the government fails to reverse its austerity course.

Espinoza’s removal temporarily placated some factions, but analysts warn that the underlying tensions remain unresolved. “Firing one minister does not solve the structural problems. The government needs a credible economic plan that balances fiscal discipline with social protection,” said María Quispe, an economist at the Universidad Mayor de San Andrés in La Paz.

The political fallout comes as Bolivia prepares for municipal elections in December, adding an electoral dimension to the unrest. President Paz, a centrist who succeeded former President Luis Arce in 2025, has struggled to maintain the broad coalition that brought him to power, and the economic crisis is testing his leadership ahead of the vote.

Why This Matters

The dismissal of the economy minister signals potential instability in President Paz’s government, which could affect investor confidence and Bolivia’s ability to manage its fiscal challenges.
Ongoing protests threaten to disrupt economic activity and could escalate into a broader political crisis if the government fails to address underlying grievances.
The December municipal elections will be a key test of public sentiment; unrest may influence voter turnout and shift the political landscape.

Background

Bolivia has faced chronic economic difficulties since the end of the commodity boom in the 2010s. Under former President Luis Arce, the government maintained subsidies and price controls, but a growing fiscal deficit and depletion of foreign reserves forced austerity measures after Paz took office in 2025. In July 2026, the government devalued the boliviano by 15% and cut fuel subsidies, sparking immediate protests. Minister Espinoza was the architect of those reforms, which the government argued were necessary to secure an IMF stand-by agreement. The legislative censure on Thursday was the first formal rebuke of a minister since the new constitution was adopted in 2009, highlighting the depth of opposition.

Key Perspectives

Government: President Paz argues that Espinoza’s removal is a necessary step to restore confidence and allow for a revised economic approach that retains fiscal discipline while addressing social concerns. The administration insists that the reforms are unavoidable and that protests are being exploited by opposition parties for political gain.

Opposition and social movements: They view the dismissal as a tactical move that does not change the substance of the government’s unpopular policies. Leaders of the Workers’ Central and indigenous organisations demand a full reversal of the subsidy cuts and currency devaluation, and are calling for a new, more inclusive economic council to draft alternative measures.

Analysts and economists: Independent observers suggest that the government faces a difficult trade-off. Without fiscal adjustments, inflation and debt could spiral; with them, social unrest grows. The key will be whether Paz can craft a compromise that includes targeted support for the poorest, while still maintaining a credible path to fiscal sustainability.

What to Watch

The appointment of the next economy minister: will it be a concession to protesters or a continuation of austerity?
Union response in the coming week: a general strike could paralyse the economy and force Paz to negotiate.
IMF and international creditors: any shift in policy could affect ongoing loan negotiations and Bolivia’s credit rating.

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