Bolivia: Fuel Subsidy Cuts Spark Protests In Bolivia

Fuel Subsidy Cuts Spark Protests in Bolivia Bolivia Bolivia saw nationwide protests this week as unions launched a general strike against President Rodrigo Paz’s decision to scrap long-standing fuel subsidies, a move the government claims is necessary to stabilize an economy facing severe dollar shortages and its worst crisis in four decades, MercoPress reported Tuesday. On Monday, thousands of miners, coca growers, and labor activists took to the streets on the first day of the strike, with demonstrations and roadblocks disrupting activity in La Paz, El Alto, and other major cities. Police sealed off access to central government buildings in La Paz, while highways were blocked in six of the country’s nine regions, according to Bolivia’s highway administration agency. The protests, called by the Bolivian Workers’ Union (COB), focused on Decree 5503, issued last week by Paz, who took office in November. The decree ended fuel subsidies that had been in place for more than 20 years under previous left-wing governments and had kept gasoline prices at about $0.53 per liter. Under the new rules, prices rose to around $1 per liter. Paz defended his decision, saying Bolivia was spending about $10 million a day “on a subsidy that benefits smugglers,” who have been reselling fuel domestically and abroad. The government has argued that fuel imports – which cost up to $3 billion a year – have drained foreign currency reserves and worsened economic turmoil after the decline of natural gas exports. Officials noted that eliminating the subsidies will ease dollar shortages and help companies import goods and capital. Business groups have backed the measures, while some trade unions have also accepted the changes. Bus drivers stayed away from the strike after the government offered duty-free imports of auto parts, while Paz also mandated a 20 percent increase in the minimum wage, the Associated Press added. Other unions – particularly those aligned with former leftist President Evo Morales – rejected the cuts and leaders accused the government of favoring business interests. Analyst Carlos Cordero told AP that the strike aimed to “show its strength” ahead of next year’s municipal and regional elections. However, he noted that Monday’s turnout was low, suggesting that the union has been weakened and many sectors of the government believe the cuts were “necessary.” Despite limited participation from some unions, COB leaders vowed to remain on the streets until the subsidy cuts are reversed.