Coin Press - Bolivia at breaking point

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Bolivia at breaking point

In recent months, Bolivia has lurched from crisis to crisis. Long queues at gas stations, sporadic road blockades, and clashes between rival political camps have fed fears of a broader internal conflict. A year after a failed military putsch shook La Paz, the country now faces a decisive political transition against the backdrop of a rapidly deteriorating economy. As of August 18, 2025, preliminary results point to an October 19 runoff that ends two decades of dominance by the ruling movement—an inflection point that could steer the country toward stabilization or push it closer to a dangerous spiral.

A political rupture with violent undertones
Bolivia’s governing bloc fractured into warring factions after the split between President Luis Arce and his onetime mentor, former president Evo Morales. That rift spilled into the streets this year: blockades, counter-mobilizations, and deadly confrontations were recorded in mining towns and highland corridors, with church leaders warning of a “spiral of violence.” Those tensions sit atop the still-raw memory of June 26, 2024, when armored vehicles briefly surrounded the presidential palace before the putsch collapsed and commanders were arrested.

The economic picture is grim. In January, a major rating agency cut Bolivia to CCC-, citing vanishing foreign-exchange buffers and looming external payments; by its estimate, the country faced around $110 million in Eurobond coupons this year with only about $47 million in liquid reserves at one point. Fuel imports—long subsidized—have repeatedly faltered, triggering national transport strikes, border disruptions, and days-long lines for gasoline and diesel. Inflation, once among South America’s lowest, surged to multi-decade highs through mid-2025.

A chronic dollar shortage has fractured the currency regime: while the official rate stayed near 6.96 bolivianos per dollar, a thriving parallel market developed. By late July the street rate hovered around 14 BOB per USD—stronger than its worst levels earlier in the year, but still far from the peg—underscoring lost confidence. As households and small firms struggled to access currency, some turned to crypto and informal finance as workarounds.

Gold and gas: lifelines with limits
To scrape together hard currency, authorities leaned on the country’s booming (and often opaque) gold trade, monetizing bullion to raise billions in fresh dollars—an emergency bridge, not a structural fix. Meanwhile, the gas engine that powered Bolivia for two decades has sputtered. Exports to Argentina ended in 2024 as output slumped, and in a symbolic reversal this year, Argentina began shipping Vaca Muerta gas through Bolivia toward Brazil using Bolivian pipelines—signaling how far the regional energy balance has shifted.

Why fears of wider conflict are not far-fetched
No single spark guarantees a slide into civil war, but several risk factors now overlap: factionalized parties with loyal street bases, pockets of armed actors and hardliners, a legitimacy fight around barred candidacies and court rulings, and an economy that can no longer cushion shocks with cheap fuel or a steady dollar supply. Independent monitors have recorded lethal violence tied to the intra-left feud, while civic leaders in blockaded towns report confrontations between residents, protesters, and security forces. Each new blockade erodes livelihoods, deepens scarcity, and shortens tempers—a classic recipe for escalation.

The runway to October—and what comes after
The first-round result has upended Bolivia’s political map: two opposition figures advanced and the ruling movement’s candidate finished far behind, all amid the worst macro stress in a generation. Whoever wins in October will inherit unpopular choices: rationalizing fuel subsidies, rebuilding reserves, restoring a functional FX market, and reviving the gas sector while speeding up transparent lithium and gold governance. Failure risks further shortages, more street battles over scarcity, and a dangerous normalization of political violence. Success demands a credible stabilization plan, broad buy-in from unions and regional elites, and early signals—like targeted cash transfers and a clear, time-bound subsidy path—to keep social peace while reforms bite.

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Stargate project, Trump and the AI war...

In a dramatic return to the global political stage, former President Donald J. Trump, as the current 47th President of the United States of America, has unveiled his latest initiative, the so-called ‘Stargate Project,’ in a bid to cement the United States’ dominance in artificial intelligence and outpace China’s meteoric rise in the field. The newly announced programme, cloaked in patriotic rhetoric and ambitious targets, is already stirring intense debate over the future of technological competition between the world’s two largest economies.According to preliminary statements from Trump’s team, the Stargate Project will consolidate the efforts of leading American tech conglomerates, defence contractors, and research universities under a centralised framework. The former president, who has long championed American exceptionalism, claims this approach will provide the United States with a decisive advantage, enabling rapid breakthroughs in cutting-edge AI applications ranging from military strategy to commercial innovation.“America must remain the global leader in technology—no ifs, no buts,” Trump declared at a recent press conference. “China has been trying to surpass us in AI, but with this new project, we will make sure the future remains ours.”Details regarding funding and governance remain scarce, but early indications suggest the initiative will rely heavily on public-private partnerships, tax incentives for research and development, and collaboration with high-profile venture capital firms. Skeptics, however, warn that the endeavour could fan the flames of an increasingly militarised AI race, raising ethical concerns about surveillance, automation of warfare, and data privacy. Critics also question whether the initiative can deliver on its lofty promises, especially in the face of existing economic and geopolitical pressures.Yet for its supporters, the Stargate Project serves as a rallying cry for renewed American leadership and an antidote to worries over China’s technological ascendancy. Proponents argue that accelerating AI research is paramount if the United States wishes to preserve not just military supremacy, but also the economic and cultural influence that has typified its global role for decades.Whether this bold project will succeed—or if it will devolve into a symbolic gesture—remains to be seen. What is certain, however, is that the Stargate Project has already reignited debate about how best to safeguard America’s strategic future and maintain the balance of power in the fast-evolving arena of artificial intelligence.

Beijing's new Taiwan playbook

Beijing's military machinery and political ambitions have moved it closer to a point where it could attempt to seize Taiwan by force. Decades of double‑digit defence spending have yielded advanced amphibious assault vessels, fleets of hypersonic and ballistic missiles and an air force that can saturate airspace around the island. Naval analysts note that the People’s Liberation Army Navy’s new Type 054B guided‑missile frigates incorporate artificial‑intelligence‑enabled sensors to improve anti‑submarine warfare and fleet air defence and can undertake long‑range escort missions. Dozens of civilian‑flagged research vessels, operating under the cover of scientific exploration, have spent years mapping the seabed across the western Pacific and as far afield as Guam and Hawaii to improve Chinese submarine navigation and to erode the United States’ traditional advantage in undersea warfare. Expanded missile launch infrastructure in Xinjiang, featuring scores of launch pads, is intended to increase the survivability of China’s land‑based nuclear forces.Yet despite these capabilities, Beijing has shown little appetite for a near‑term invasion. A recent threat assessment by the United States’ intelligence community concluded that Chinese leaders do not currently plan to execute an invasion by 2027 and lack a fixed timetable for unification. Taiwan’s defence ministry concurs that China’s build‑up is relentless but emphasises that deterrence, rather than assumptions about invasion windows, will shape Beijing’s calculations. Analysts argue that a war would trigger unprecedented economic costs. Taiwan’s semiconductor industry underpins global technology supply chains and about a fifth of world trade transits the Taiwan Strait. Any conflict that closed this artery would reverberate through financial markets, manufacturing and energy supplies. Even without U.S. intervention, Chinese leadership would risk social stability at home if a miscalculated assault stalled or provoked severe sanctions.Against this backdrop, Beijing has refined what some analysts describe as a grey‑zone strategy — a web of coercive measures designed to wear down Taiwan’s morale and manoeuvre it towards “reunification” without firing a shot. People’s Liberation Army aircraft entered Taiwan’s air defence identification zone more than three hundred times a month after William Lai’s 2024 election, only for the number of incursions to fall sharply in 2026 as planners redistributed sorties to training and maintenance. China’s coast guard now conducts routine multi‑ship patrols in the restricted waters around Kinmen and Pratas, two Taiwanese‑administered archipelagos close to the mainland, to normalise jurisdictional claims and erode Taiwan’s threat awareness. As part of the large‑scale “Strait Thunder 2025A” and “Justice Mission 2025” exercises, the People’s Liberation Army practised cutting power and blockading Taiwan’s liquefied natural gas terminals — a rehearsal for imposing energy strangulation during a future crisis.Energy insecurity is a key prong of Beijing’s hybrid approach. Taiwan imports around 97 percent of its energy, with liquefied natural gas accounting for roughly half of electricity generation. When war in Iran temporarily choked off shipments through the Strait of Hormuz earlier this year, Chinese‑language social media channels flooded TikTok and Xiaohongshu with ominous videos claiming Taiwan’s gas reserves would expire within a fortnight and extolling “peaceful unification” as the only remedy. Officials from the Taiwan Affairs Office even offered to supply electricity and gas from the mainland as soon as Taiwan surrendered its sovereignty. Taiwan’s government countered by publicising the diversification of its imports, increasing strategic reserves and conducting joint navy‑coast‑guard drills to escort fuel tankers through potential blockades. Such moves aim to reassure citizens and blunt the psychological impact of Beijing’s energy narratives.Political infiltration forms another component of the grey‑zone campaign. Beijing has long supported parties in Taiwan that advocate a looser relationship with the mainland, but recent cases show a willingness to back actors whose public stance on unification is ambiguous. Taiwanese courts convicted a former spokesperson for the Taiwan People’s Party (TPP) after she accepted funds from Chinese handlers and provided contact lists of government agencies. Investigators say the case is not isolated: election interference and covert recruitment have targeted both the centrist TPP and elements of the governing Democratic Progressive Party (DPP). 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The DPP has proposed a special budget worth around US$40 billion to procure hundreds of thousands of unmanned systems, develop an integrated air and missile defence network and fund the domestic arms industry. Opposition parties controlling the legislature have delayed the budget, preferring a smaller package focused on conventional platforms such as artillery and anti‑tank missiles. Delays threaten to slow deliveries of High Mobility Artillery Rocket Systems, self‑propelled howitzers and anti‑tank weapons from the United States. At the same time, Taipei is investing in its first domestically built submarine and plans to upgrade two Dutch‑built boats from the 1980s. Such measures are meant to raise the cost of aggression and complicate any blockade.Elsewhere in the region, countries are recalibrating their own strategies in anticipation of cross‑strait tensions. Japan has acquired Tomahawk cruise missiles from the United States and is modifying its destroyers to carry them, signalling a shift towards a counter‑strike doctrine that can threaten missile launch platforms on the Chinese coast. The Philippines and Japan have agreed to step up military intelligence sharing and have begun negotiating a boundary in their overlapping exclusive economic zones east of Taiwan. Manila is seeking Japanese anti‑submarine destroyers and anti‑ship missiles to bolster its navy. Such cooperation, alongside the United States’ continued security commitments under the Taiwan Relations Act, suggests that any attempt by Beijing to seal off the island would face a more coordinated regional response.Seen together, these developments reveal why Beijing may perceive hybrid coercion as “something better” than a risky assault. China’s ability to project force across the Taiwan Strait has improved markedly, but its leaders recognise that a failed invasion would jeopardise economic growth and political legitimacy. By combining military modernisation with psychological operations, energy leverage, political interference and calibrated maritime pressure, Beijing hopes to corrode Taiwan’s will and convince its citizens that unification is inevitable. Whether this strategy succeeds will depend on Taiwan’s resilience, the cohesion of its democratic institutions and the willingness of regional partners to deter aggression. For now, the contest remains a test not of who can fire the first shot, but of whose vision for the island’s future will ultimately prevail.