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Luis Arce: Bolivia’s new president credited for its socialist growth ‘miracle’

Arce crafted the economic plan for Morales' successful 2005 presidential run, which launched a near 14-year administration that sputtered towards the end as growth slowed and opposition grew to Morales seeking an unprecedented fourth term.

By: Reuters | Updated: October 22, 2020 1:24:47 pm
Luis Arce, center, and his supporters celebrate during a news conference at the party's headquarters in La Paz, on Oct. 18.

Luis Arce, the quiet economist who will take over as Bolivia’s president next month after a landslide election win, knew where he stood in the political spectrum as a young teenager in La Paz, when he picked up the writings of German philosopher Karl Marx.

Arce steered the Andean country’s economy for over a decade under former leader Evo Morales, an ebullient leftist who resigned last year after an election dogged by disputed claims of fraud sparked widespread protests. Arce was often seen as a moderating influence to more radical elements in Morales’ Movement towards Socialism (MAS) party.

At 57, Arce will now have the top job, expected to be fully confirmed on Thursday by Bolivia’s electoral authorities. After an interim conservative government over the last year, the socialists are back in charge.

“I have had my ideas since I was 14 years old and I started reading Karl Marx. Since then I have not stopped having the same ideological position and I am not going to change for anything,” Arce told Reuters in an interview on Tuesday.

Arce is credited by supporters as the architect of Bolivia’s growth “miracle” in the 2000s that lifted many out of poverty in one of South America’s most impoverished nations.

As economy minister, he pushed for the nationalization of many sectors, stoking ire among investors, but – helped in part by the commodities boom – steered Bolivia to an average annual growth rate of 4.6%, one of the best in Latin America.

Arce crafted the economic plan for Morales’ successful 2005 presidential run, which launched a near 14-year administration that sputtered towards the end as growth slowed and opposition grew to Morales seeking an unprecedented fourth term.

Unlike Morales, an indigenous Aymara with a background as a union head for coca farmers who became an almost cult figure, Arce grew up in a middle-class La Paz household and is known for being softly spoken and keeping a low personal profile.

He studied economics at Bolivia’s prestigious Universidad Mayor de San Andrés, and then at the University of Warwick in England.

“He is not really a ‘strong man’ sort of character,” said Franklin Pareja, a Bolivian political analyst in La Paz. “He is a person who comes from the academy, from the middle class, he’s a technocrat and not a social warrior or a union leader.”

That could help Arce heal angry divisions in the country. Many criticize Morales for trying to hold onto power and running in defiance of term limits, though he also retains a strong core of support.

Arce has taken steps to distance himself from Morales, telling Reuters the former president, currently in exile in Argentina, would have “no role” in his administration beyond his influence as leader of the party. At the party headquarters there was little reference to Morales in pamphlets and posters on the walls when Reuters visited.

The country Arce inherits is markedly different from the boom years, with the coronavirus pandemic set to result in a 6% economic contraction this year, World Bank forecasts show. Even under Morales, gas exports and foreign reserves had started to dwindle.

Arce has promised not to cut public spending, though he also acknowledges that some austerity measures will be needed.

But he remains confident that the Bolivian miracle is not over.

“I think our model has shown the world that there is a different way to do things, and do them successfully,” he said.

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