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Bolivian fiscal disputes and state company restructuring

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2026-09-27 05:22 UTC → 2026-09-30 21:15 UTC · added ~~removed~~

The Bolivian government has moved forward with a fiscal adjustment plan through Supreme Decree 5727, which prioritizes the reorganization, dissolution, or liquidation of 67 central state-owned and mixed companies. This initiative follows a technical evaluation by the Office for the Strengthening of Public Enterprise (OFEP) that identified at least 20 entities in critical financial condition. The group of 67 includes 42 fully state-owned and 25 mixed companies, such as Entel and various electricity and petroleum firms. Under the new decree, the Strategic Superior Council of Public Enterprise (COSEEP) must approve decisions based on individual technical diagnoses. To protect state interests during this review, affected companies are prohibited from taking on new debt, selling assets, hiring permanent staff, or approving salary increases. Once a reorganization or liquidation is recommended, relevant ministries have 15 business days to implement the necessary regulatory instruments. President Rodrigo Paz has expanded on the administration’s objectives, noting that approximately $7 billion was previously allocated to projects that failed to achieve import substitution goals. OFEP reports that among the 67 companies under evaluation, only three—Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), the Corporación Minera de Bolivia (COMIBOL), and the Empresa Nacional de Electricidad (ENDE)—are currently profitable. To prevent the closure of certain deficit-running entities, the government is considering public-private partnerships to incorporate private capital and expertise. President Paz has criticized previous administrations, alleging state enterprises were used for political purposes. This restructuring occurs amid intensifying friction between the central government and regional authorities. Eight governors have declared a state of alert, demanding a ‘50/50’ tax redistribution model to ensure a 15% share of tax co-participation for departmental governments by 2027. They have also set an October 31 deadline for the government to address the rising costs of diesel, which has strained departmental budgets. model. In response to the potential privatization of strategic assets, the Federation of Bolivian Mine Workers (FSTMB) has declared a national state of emergency.

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