Luis Arce

Luis Arce (born September 28, 1963, La Paz, Bolivia) is a Bolivian politician, economist, banker, and academic who became president of Bolivia in November 2020, returning the country to socialist rule after an interregnum of acting right-wing government that had resulted from the 2019 presidential election in which the victory of nearly 14-year (2006–19) incumbent Evo Morales was overturned. Arce was the candidate of Movement Toward Socialism (Movimiento al Socialismo; MAS), the leftist party that Morales had helped to found. He had been the architect of the economic transformation during Morales’s presidency, which renationalized Bolivia’s thriving petroleum industry, redistributed agricultural land, increased taxes on the wealthy, and lifted countless members of the country’s indigenous population out of poverty.

Early life and career

Arce grew up in La Paz, where both of his parents were public school teachers. His secondary education came at the Mexico School, in the capital. From there he went on to study accounting at the Institute of Banking Education, from which he graduated in 1984. Arce then matriculated at the Higher University of San Andrés (UMSA), earning a bachelor’s degree in economics. In 1987 he began his long tenure at the Central Bank of Bolivia with a position as a trader and market analyst in the Department of International Investments. Over the next roughly 20 years, Arce advanced through the ranks of the Central Bank, heading up or acting as the deputy manager of various departments. He took a hiatus from the bank in 1996–97 to pursue a master’s degree in economics in the United Kingdom at the University of Warwick, where he wrote a thesis examining currency substitution in Bolivia. Returning to the bank in 1998, he ultimately served from 2004 to 2006 as the deputy manager of reserves, reporting to the International Operations Management. In the meantime, Arce pursued a parallel career as a professor of economics, finance, and banking at various universities, including UMSA, Loyola University, the Bolivian Private University (UPB), and Franz Tamayo University.

Joining the Movement Toward Socialism (MAS), becoming Evo Morales’s right-hand man, and guiding the Bolivian economy

In 1999 Arce became part of a circle of UMSA professors and socialist activists who began meeting to discuss the inequities of the Bolivian economic system. Their goal was “to dismantle the neoliberal model and turn the State into a planner, investor, banker, regulator and producer of development.” In 2005, as Morales prepared to mount his second run for the presidency, he invited a number of leftist academics to join MAS to help formulate the economic component of the party’s platform for the upcoming election. Among those who joined the team were Arce and Carlos Villegas Quiroga. The program they crafted sought to “build a dignified, communal, supportive and productive Bolivia” by nationalizing the oil and gas industry and by enacting land reform that broke up large agricultural estates and distributed the land among peasant farmers.

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When Morales won, he brought Arce, then aged 43, and Quiroga into his “People’s Cabinet” as the minister of finance and minister of planning and the minister of development, respectively. Morales’s socialist government joined the so-called Pink Tide of leftist regimes that came to power in Latin America in the 2000s. In addition to Bolivia, by 2010 Argentina, Brazil, Chile, Ecuador, Honduras, Nicaragua, Paraguay, Uruguay, and Venezuela all were ruled by leftist governments, many of which reshaped their economies, nationalizing key industries, and dramatically increased social spending.

A dedicated “MASista” but also a pragmatist, Arce oversaw the implementation of Morales’s National Development Plan as the principal steward of the Bolivian economy during Morales’s first two terms as president and much of his third. From 2006 to 2011, GDP grew by an average of 4.6 percent per year, peaking at 6.8 percent in 2013. At the same time, unemployment decreased, inflation fell, and poverty was dramatically reduced. However, the downturn in the world oil market that set in by mid-decade slowed the Bolivian economy—which averaged GDP growth of 3.7 percent from 2016 to 2019—and increased criticism that Arce had failed to diversify the economy and attract foreign investment. A diagnosis of kidney cancer forced Arce to resign from the cabinet in June 2017 to pursue treatment in Brazil. After recovering from his illness, he returned to the government as the minister of economy and public finance in January 2019.

The 2019 Bolivian presidential election and temporary exile

In the meantime, judicial rulings had removed term limits for the presidency (in the face of a national referendum in which some 51 percent of those who voted rejected that change to the constitution), and Morales sought reelection in October 2019. After about four-fifths of the ballots had been counted, it appeared as if Morales would fall short of the support needed to preclude a runoff, but a roughly 24-hour delay in tabulating was followed by a dramatic reversal that revealed Morales to be the outright victor, prompting accusations of election fraud that were echoed by the Organization of American States (OAS). In the coming weeks, Morales was forced to step down and flee into exile, ultimately in Argentina, claiming that he had been deposed by a coup, and the election was subsequently invalidated. In early December, Arce followed suit and sought asylum in Mexico.

In 2020, as the caretaker right-wing government promised a prompt new election but postponed it repeatedly in response to the coronavirus pandemic that swept the globe, some international organizations began to question the validity of the OAS’s evaluation of the October 2019 election. From afar Morales began orchestrating a return to power for MAS that began with his selection of Arce as the party’s presidential candidate in the election that was finally set to take place in October 2020. Although he had a reputation as a mild-mannered technocrat, Arce in fact was a passionate socialist with an abiding affinity for legendary revolutionary Che Guevara, as well as for Bolivian socialist martyrs Marcelo Quiroga Santa Cruz and Óscar Únzaga de la Vega.

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Arce’s ascent to the presidency and the June 2024 coup attempt

Arce’s candidacy was met with widespread approval, and opinion polling showed him to be the front-runner in a crowded field in which his major rivals were former president Carlos Mesa Gisbert, Morales’s principal opponent in October 2019; acting president Jeanine Áñez; and Luis Fernando Camacho of the anti-MAS We Believe party. Seeking not to divide the opposition vote, Áñez dropped out, but Arce still swept to a commanding win, capturing more than 55 percent of the final vote, enough to surpass the threshold necessary to preclude a runoff (the next biggest vote getter was Mesa, with about 29 percent). Arce promised that he was his own man, but the possibility of Morales’s return from exile loomed large as Arce prepared to begin his presidency and to confront the coronavirus pandemic that had clobbered Bolivia, leaving it with one of the world’s worst per capita death rates for COVID-19, the disease caused by the virus.

The pandemic also wreaked havoc on Bolivia’s economy, and the export-fueled growth of the Morales years was sharply curtailed. Morales returned from exile in November 2020, and a widening rift between Morales and Arce became apparent as each tried to present himself as the leader of Bolivia’s left. The feud within MAS was the dominant story in Bolivian politics when, on June 26, 2024, Gen. Juan José Zúñiga launched an uprising against Arce’s government. Armored vehicles breached the doors of the government palace in La Paz, and journalists captured a dramatic scene of Arce confronting the coup leaders. The plot had little traction and even Arce’s political rivals were quick to condemn it; Morales rallied to support his former ally, and Áñez rejected Zúñiga’s attempt “to destroy constitutional order.” Within hours, the immediate crisis had passed; the troops were withdrawn and Zúñiga was placed under arrest. Bolivia’s underlying political and economic uncertainty remained, however, and Morales had already declared that he would challenge Arce for the presidency in 2025.