LA PAZ – Bolivia is on the verge of a pivotal decision as voters head to the polls this Sunday for a runoff presidential election. The contest is intensely close, with two conservative, pro-market candidates vying to convince the electorate they can best tackle the country’s pressing economic challenges. This comes after nearly 20 years of leadership by the Movement Toward Socialism (MAS) party.

Since the beginning of 2023, Bolivia has been grappling with a severe shortage of U.S. dollars, leaving many citizens unable to access their own savings and causing significant disruptions in imports. The situation has been exacerbated by the black market, where the boliviano trades at half of its official rate.

Inflation has surged alarmingly, with last month’s year-on-year rate hitting 23%—a peak not seen since 1991. Contributing to the economic turmoil are crippling fuel shortages affecting daily life across the nation.

In the race, former President Jorge “Tuto” Quiroga and centrist Senator Rodrigo Paz present themselves as agents of change. They promise to move Bolivia away from the high-spending populism that characterized the era under MAS, a party established by Evo Morales. Morales, a charismatic leader of the coca growers’ union, made history as Bolivia’s first Indigenous president in 2006.

The MAS party, now fractured by internal disputes and facing public discontent over fuel shortages, suffered a significant setback in the election held on August 17.

Both Quiroga and Paz vow to end Bolivia’s fixed exchange rate, restructure state-owned companies and attract foreign investment. Among the factors that most distinguish them is how far and fast they propose pushing their reforms.

Voting in the runoff is compulsory in the South American nation, and around 7.9 million Bolivians are eligible to vote.

Differing approaches to change

Quiroga wants to get dollars flowing into Bolivia immediately with a big rescue package from the International Monetary Fund and other multilateral lenders.

That would demand savage cuts in state spending, such as slashing fuel subsidies, shrinking the public payroll and cutting the state out of Bolivia’s gas and mining businesses. His supporters say that’s the change their country needs.

“I think Quiroga is better prepared,” said Mirian Chávez, a 24-year-old architecture student. “The crisis needs to be resolved now.”

Paz favors a more cautious approach. He says he’ll phase out fuel subsidies gradually and provide MAS-style social protections like cash handouts to the poor to cushion the blow.

“I don’t want a neoliberal president who imposes shock measures,” said 27-year-old taxi driver Marcelino Choque.

“Lara and Paz promise to continue providing bonuses to people in need,” Choque said, referring to Paz’s running mate, Edman Lara.

Shunning the IMF — an organization viewed with contempt in Bolivia during the nearly two decades of left-wing rule — Paz promises to scrape together dollars by legalizing Bolivia’s black market and fighting corruption.

“One candidate thinks that the first thing to do is to call the IMF, and the other thinks that we first need to review the internal accounts to see how we are misusing the money,” said Veronica Rocha, a Bolivia political analyst.

Battle of optics

Although Paz, the son of former President Jaime Paz Zamora (1989-1993), has spent more than two decades in politics as a lawmaker and mayor, he appeared in this race as a political unknown. The senator rose unexpectedly from the bottom of the polls to a first-place finish in the August vote. He beat Quiroga, but didn’t secure enough votes to avoid a runoff.

His popularity, experts say, was further buoyed by Lara’s outsider status.

“Captain Lara,” as he’s known, was fired from the police in 2023 for denouncing corruption in viral TikTok videos that drew a huge following from the working-class residents of the Bolivian highlands — former MAS supporters who appreciated the party’s egalitarian ethos, but soured on its taxes and regulation.

The pair mounted a fast-paced underdog campaign, crisscrossing cities and rural communities to throw beer-soaked, no-frills events with the message of “ capitalism for all.” They played up their contrast with the wealthy Quiroga and his large campaign war chest.

Quiroga briefly served as president from 2001-2002, after his predecessor Hugo Banzer fell ill and stepped down. He has unsuccessfully run for president three times since.

Vast task ahead

The next president faces a task that’s about as simple as running a marathon in Bolivia’s highlands — altitude: 4,150 meters (13,600 feet).

In the heady early days of Morales’ long tenure (2006-2019), a boom in natural gas exports underwrote the state’s unbridled spending. Now, gas exploration and production has collapsed. But Bolivia continues to splurge to keep fuel practically free, paying $2 billion last year on the subsidies.

The candidates agree that the elimination of fuel subsidies is key to restoring fiscal order.

But previous attempts didn’t go well: Morales’ bid to lift fuel subsidies in 2011 lasted less than a week as mass protests engulfed the country.

Public transportation unions have already threatened to ignite unrest, if fuel subsidies are lifted. Before the second round of the election, Quiroga and Paz have toned down their rhetoric about tough austerity, promising voters that they’ll move at a palatable pace. Some have their doubts.

“We had one type of candidate in the first round, and a different type in the second round,” Rocha said. “They’ve softened up and contradicted themselves so many times.”

Result would be felt across the region

Whoever wins, the end of MAS after around 20 years of hegemony will trigger a major economic and geopolitical realignment that could reverberate across the continent. The candidates say they’ll welcome foreign investment and encourage private enterprise in Bolivia, which has the world’s greatest lithium resources, but has long failed to get production going.

The election also means a shift away from Bolivia’s current allies, China and Russia, and toward the United States, after decades of anti-American hostility.

During frenzied campaigning last month, both Quiroga and Paz flew to Washington to meet with IMF and Trump administration officials.

“Both candidates running in the runoff election want strong and better relations with the United States, so that’s another transformative opportunity,” U.S. Secretary of State Marco Rubio said at a news conference Tuesday as U.S. President Donald Trump welcomed Argentine President Javier Milei, a close ally, to the White House.

“Like Bolivia, there are numerous other countries coming our way,” Trump said.