Sergio Berensztein for Poder & Dinero and FinGurú
“Bolivia is becoming the new Afghanistan: a sanctuary for drug trafficking penetrated by global organized crime networks, including Islamic terrorism.” The expert on regional security issues does not hold back adjectives to describe the severity of the current crisis, which could lead to an economic and political collapse with multiple risks for neighboring countries, Argentina among them. Although it may seem exaggerated, the combination of a failed state, a paralyzed economy with hyperinflationary dynamics, a shortage of dollars and basic necessities, increasing social tensions, and a power vacuum fueled by electoral uncertainty (presidential elections are scheduled for August 17, and if a runoff is necessary, for October 19), creates an ideal environment to harbor "sleeper" cells from the Lebanese terrorist group Hezbollah and Iran's Revolutionary Guard, a country with which Bolivia has long established a strategic agreement thanks to the identification of Evo Morales (and many other Chavista leaders in the region) with the Islamic fundamentalist regime.
In the context of the debate that has arisen in our country regarding the roles and priorities of intelligence services and the deployment of the Armed Forces in the north (first the Güemes Plan on the border with Bolivia, recently the Guazurari Plan on the border with Brazil), this threat raises questions about our capacity to prevent and react to the potential humanitarian disaster that would accompany the eventual massive flows of immigrants who would leave their country voluntarily or not if this scenario deepens.
Bolivia experienced a period of relative prosperity in the first decade of the century, especially in Morales' early years, with Luis Arce as the architect of economic policy, buoyed by high commodity prices. Today, that memory is a distant one. Natural gas and oil production, one of its main sources of income, fell by 13% between 2014 and 2023, and the contribution of the energy sector to GDP has decreased by 40% in recent years. The fiscal deficit is alarming: it is projected at nearly 11% of GDP in 2025 and over 13% in 2026. Without external credit (debt hovers around 98% of GDP), it is resorting to issuing currency and has consequently entered a dramatic inflationary spiral while its domestic currency continuously devalues. With a Central Bank lacking reserves, the scarcity of basic supplies deepens, leading to long lines to obtain fuel, while in the informal market, price arbitrage is ruthless. Daily life has turned into an odyssey of uncertainty and perplexity. If we Argentines know what it's about.
On the political front, the implosion of MAS (Movement for Socialism) due to the fierce internal conflict between Morales and Arce (both of whom are out of the presidential race) increases uncertainty regarding the electoral process. The former president, with a standing arrest warrant for human trafficking, which originated during Jeanine Áñez's administration but was revived by this very government, decided to take refuge in the coca-growing area of Chapare to maintain his freedom, where he is "guarded" by his staunch supporters while moving in armored vehicles belonging to Petróleos de Venezuela (whose intelligence services, like the Cubans, have a strong presence in the country). Radicalized, he labeled his former vice president Álvaro García Linera as an "enemy," who had proposed unifying forces behind a common candidate: the Senate president, Andrónico Rodríguez. Arce, for his part, managed to keep the party seal of MAS. However, he has suffered extraordinary wear and tear: his administration has only 10% approval according to a recent Ipsos poll. In this context, Arce would aspire to a seat as senator while his faction supported Eduardo del Castillo, the current Minister of the Interior, as the presidential candidate. That decision infuriated Evo's loyal faction, which now promotes Rodríguez's candidacy, who, in turn, faced difficulties registering formally: his improvised party alliance would not meet the necessary requirements. There are suspicions that the Judiciary, highly influenced by the current government, is putting obstacles due to Arce's administration's pressure. According to Latinobarómetro, confidence in the economy (2%), the Armed Forces (23%), and the police (16%) is at historic lows and very far from regional averages. The disconnection between the citizenry and the state apparatus is total. Electoral polls suggest a highly fragmented, unpredictable, and volatile scenario. Moderate and center-right forces currently lack appealing figures.
If anything was lacking in this explosive mix, it is the penetration of drug trafficking and global organized crime networks. For a long time, Bolivia has been recognized as one of the world's leading producers of coca leaf. Since 2006, the U.S. has classified it as a producer of base paste, with volumes reportedly multiplying exponentially in the last five years. At least five high-ranking Morales officials, including anti-drug directors René Sanabria and Maximiliano Dávila, ended up arrested following DEA investigations. In 2023, the official candidate Del Castillo acknowledged that 27 laboratories and more than 1,800 factories had been destroyed since 2020, most in Chapare, Morales' stronghold. However, this official was allegedly connected with Sebastián Marset, one of the most wanted criminals by the DEA, who fled Bolivia in 2023. The presence of the region's most significant cartels is recognized by leading security specialists and is a common refrain in diplomatic circles. One of the leaders of the PCC (First Commando Capital), Brazil's most important and sophisticated criminal organization, was extradited expeditiously and without due process. Members of the Tren de Aragua use Bolivia as a sanctuary to "cool off" (safeguard) their members.
To make matters worse, relations with Hezbollah have recently tightened (the same is happening in Brazil and Colombia), which plays a vital role in logistics, especially in the transportation of base paste to the waterway, typically carried out with aircraft. Furthermore, the presence of Iran's Revolutionary Guard elite force, Quds, has been detected (according to intelligence sources, between 120 and 150 members of this unit have been identified between Venezuela and Bolivia). The Argentine government, particularly the Ministry of Security, is aware of the situation and has warned Bolivian authorities of the decision to prohibit any incursions into national territory. Both the Foreign Ministry and the Ministry of Defense and intelligence services are monitoring the evolution of the crisis, which could escalate in the coming months.
Bolivia has become a "failed state": loss of the monopoly on violence, institutional collapse, rampant corruption, an ever-dominant informal economy, multiplying unresolved internal conflicts, and the presence of powerful non-state actors, especially groups that are part of global narcoterrorism networks. Argentina must prepare for the worst: if its neighbor collapses, the impact will not stop at its border.
Sergio Berensztein Doctor in Political Science (University of North Carolina, Chapel Hill) and a graduate in History (UBA). He obtained a Research Certificate in Social Sciences at CEDES (Center for State and Society Studies). He is president of Berensztein®, a political and strategic analysis consultancy he founded in 2014, with a regional and comparative perspective based on rigorous and innovative research methods, both traditional (qualitative and quantitative) and big data. He works with some of the leading figures in Argentina and the region, from both the public and private sectors, helping them understand the changing domestic and global environment and make decisions in a context of high uncertainty. He frequently gives conferences and master classes both in and outside Argentina, in both Spanish and English. He also serves as a professor in the Master’s in Business program at UBA’s Faculty of Economic Sciences. Since early 2019, he has been appointed president of IPS (International Pres Service) for Latin America.
He has served as an advisor to major international institutions such as the Andean Development Corporation (CAF), the Inter-American Development Bank (IDB), the International Monetary Fund (IMF), the United Nations Development Program (UNDP), and the World Bank (WB).
He was director of the Master in Public Policies and Professor of various programs at Torcuato Di Tella University (1997-2017), where he was part of the Board of Directors (2012-2014). He was also a visiting professor at foreign academic institutions such as Duke, Georgetown, Stanford, Princeton, New Mexico, FLACSO, CIDE (Mexico), and Salamanca (Spain).
He is the author of the books “The First Fiscal Revolt in History: The 125 and the Conflict with the Agrarian Sector” (co-authored with María Elisa Peirano, Margen Izquierdo, 2020), “Are We All Peronists?” (El Ateneo 2019), “Why Do All Governments Fail?” (co-authored with Marcos Buscaglia, El Ateneo, 2018), “Masters of Success” (with Alberto Schuster, Edicion, 2017), “The Benefits of Freedom” (co-authored with Marcos Buscaglia, El Ateneo, 2016), 125 Years of Banco Nación (Banco Nación, 2016), and “Narco Power” (co-authored with Eugenio Burzaco, Sudamericana, 2014), among others. He has also published more than 30 academic articles in specialized journals and edited volumes.
He is the host of “Power and Money” for Americano Media (Miami). He is also the host of El Tornillo (Canal de la Ciudad) and co-host of Radioinforme 3, on Cadena 3 Rosario. He was co-host of the radio programs “Politically Incorrect” (Radio Rivadavia), “Return Flight” (Milenium), and “Politics and Balls” (Splendid). He was also co-host of “Intellectual Emergency” (América TV), a panelist on «Free-Range Animals» (América TV), and a columnist for A24. He regularly publishes opinion columns in the newspaper La Nación, TN.com.ar and El Cronista Comercial, as well as previously in the newspapers Perfil and La Gaceta, and is regularly consulted by the leading media in the country and abroad.
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