Bolivia: Evo Morales cruises to third consecutive presidential term
In a general election held on 12 October, incumbent President Evo Morales and his leftist ‘movement towards socialism’ (MAS) secured a landslide victory.
The charismatic Bolivian leader, who has been in office since 2006 received the support of 61.4% of the electorate, thus crushing runner-up Samuel Doria Medina of the centre-right ‘national unity front’ (UN), who won 24.2% of the votes. In Congress, the MAS managed to retain its two-third ‘supermajority’.
Key ingredients to the new electoral success include a track record of high economic growth and poverty reduction (GDP growth has averaged 5% since 2006 and this has in turn allowed for a substantial increase in pro-poor public spending), Evo’s personal appeal (his farmer background and indigenous origins are well-perceived in Bolivia, a largely agricultural society with a 55% Amerindian population) and opposition weakness (as evidenced by Evo’s first-ever election win in the department of Santa Cruz, a traditional opposition stronghold).
Impact on country risk
Earlier this year, Credendo Group upgraded its medium-to-long-term political risk classification for Bolivia from category 6 to category 5. This was done to reflect that in recent years, both political stability and macroeconomic fundamentals have greatly improved. Prudent policy-making has crucially contributed to this achievement, and in light of the election outcome, is unlikely to be reversed in the years to come.
Challenges do prevail, however. Primarily, with falling commodity prices, the need to diversify Bolivia’s commodity-dependent economy will become more pressing. To this end, the government has proposed an ambitious industrialisation program.
To attract the necessary foreign investments, it has improved legislation and vowed to refrain from making new expropriations. Yet given past experience as well as pressure groups’ continued advocacy for state interventionism, investor confidence along with capital inflows are expected to remain subdued in the near future.
Country risk analyst, Sebastian Vanderlinden, Credendo Group
Disclaimer: Credendo Group has used its best endeavours to ensure that all the information, data, documentation and other material in this report are accurate and complete. Credendo Group accepts no liability for errors or omissions. The views expressed herein are the author’s personal views and are not intended to reflect the views of Credendo Group. Credendo Group will not be liable for claims or losses of any nature arising directly or indirectly from use of the information, data, documentation or other material from this report. The texts and illustrations can be printed for private use; distribution is permitted only after authorisation by Credendo Group. Quotations are permitted provided that reference is made to the valid source. Reproductions are permitted provided that reference is made to the valid source, unless for commercial aims, in which case reproduction, even with source indication, is not permitted.