The line starts forming outside the central bank in downtown La Paz in the dead of the night. Hunkered down under blankets and sipping hot chocolate to fend off the chill at 12,000 feet up in the Andes, they wait for hours and hours for a chance to get their hands on what has perhaps become the hardest thing to find in all of Bolivia: dollars.
There are few, if any, at commercial banks or currency-exchange houses or even in the black market, where traders work from corner kiosks in the shadow of the central bank.
"Imagine the amount of time we're wasting," said Ismael Vargas, "on a transaction that should be simple." Vargas, a lawyer, stood in line for six hours and, in the end, was told to come back in seven weeks to get the $5,000 he wanted.
The crisis here has been long in the making. Years of neglect hollowed out the dominant export industry, natural gas. But the sudden deepening of the financial squeeze also reveals the pain that's rippling across the globe - from the headquarters of Silicon Valley Bank to the finance ministries of troubled developing economies like Turkey and Zambia - as the Federal Reserve extends its all-out push to quell inflation into a second year.
Running low on gas and suddenly unable to borrow from bond markets at the higher rates engineered by the Fed, the socialist government of Luis Arce finds itself desperately short of the money needed to support the local currency. The boliviano has been pegged at a rate close to 7-per-dollar since the commodity boom years of the aughts.
Central bank coffers are so depleted - the latest report put the figure at $372 million, enough to only cover two weeks of imports - that Arce is now pushing lawmakers to overturn a law so that he can sell off some of the country's 43 tons of gold for cash.
One currency dealer explained the growing angst in La Paz this way: He sold dollars till he ran out of them; then people started scooping up the euros he had; when those were gone, they turned to Chilean pesos and Peruvian soles - anything to protect the value of their money if the peg is busted.
Like all others in the trade, the dealer asked not to be identified. The job's become too risky. Thirteen people were arrested on suspicion of black-market trading in one day alone last week, part of the crackdown that has become a hallmark of the Arce government's response to the crisis.
"Essentially, the country has run out of dollars," said Antonio Saraiva, a Bolivian economist who teaches at Mercer University in Atlanta. "When people see other people lining up, and spending the night there to keep their position in the line, everybody is saying this is bad."
Bolivia's current energy crunch can be traced back to 2006, when the leftist leader Evo Morales rose to power. Weeks after his victory, he flew to Caracas, where his mentor and close ally, Hugo Chávez, urged him to follow Venezuela's lead and increase state control of its gas industry. Four months later, it was done. Bolivia nationalized gas fields and refineries run by Repsol, TotalEnergies and Petroleo Brasileiro.
At first, it worked out great. International prices for oil and gas were soaring and Bolivia was raking in cash, which Morales, unlike his counterpart in Caracas, doled out prudently. The economy more than quadrupled in size during his administration, poverty plunged, life expectancy rose and the number of children finishing primary school rose to almost 100%.
But Morales failed to earmark adequate funds to allow the state-run gas giant to invest in exploration. Gas reserves started to dwindle and so too did overseas sales, which at their peak accounted for almost half of all exports at $6 billion. This revenue is down 51% from 2014 and set to completely disappear by 2030, according to Wood Mackenzie, a consultancy.
Last year Bolivia became a net fossil fuel importer for the first time since the 1990s, posting a $1.3 billion deficit.
"It's necessary to invest aggressively in exploration and developing fields," Finance Minister Marcelo Montenegro told reporters last month. "The Bolivian economy is currently paying the price for not having made this aggressive investment."
Arce, who served as finance minister for much of Morales's 14 years in office, is trying to reverse the decline with seven exploration wells planned for this year. His government has taken advantage of tight global gas markets to charge higher prices for its waning exports, and is developing domestic biofuels.
He's also turning to Bolivia's lithium deposits, the largest in the world. In January, Arce signed a $1 billion deal with Chinese battery maker Contemporary Amperex Technology to tap into the reserves in Bolivia's giant salt flats. But Bolivia needs more highways and additional partners to scale up its potential - things that are unlikely to happen anytime soon, analysts say.
Recent government missteps have only further stoked the currency crisis. The central bank stopped reporting the foreign reserves figure in February and the government last month called on people to scale back their purchases of dollars.
Bolivians responded by rushing out to buy more. For some of them, the country's hyperinflationary past is fresh in their minds.
Violeta Lopez remembers watching her parents stuff wads of bolivianos into backpacks to go grocery shopping in the 1980s. "It was an enormous amount of money but it was worth nothing," Lopez, a housewife, said as she waited in line for dollars at the central bank. "That's why we're so alarmed."
Annual inflation peaked at more than 20,000% back then. It's 2.6% today, which makes it one of the lowest rates in the world - less than half that of the U.S., U.K. or Germany. As Lopez sees it, though, a busting of the peg could trigger a sudden spiral in prices. She was looking to buy $30,000.
The central bank has referred to what is happening as a "speculative attack on our economy."
"THERE IS NO shortage of dollars, and all the financial entities are able to change money," screams a post on the central bank's website. "Our economy is strong, solvent and stable."
Last week, the bank began requiring would-be buyers of dollars to make appointments online, to cut the number of people queuing outside its headquarters.
Officials at the central bank, finance ministry and the presidency all declined to comment for this story.
Bolivia's borrowing costs in international markets jumped last year as the Fed and other major central banks started raising interest rates, then rocketed higher in recent weeks as the country's foreign reserves plunged. The government's dollar bonds due in 2028 now yield more than 20%, up from 6.2% at the start of 2022.
"Last year, they couldn't sell" bonds, said Jose Espinoza, a former central bank director during the short-lived administration of Jeanine Anez. "This year, they definitely won't be able to."
Shut out from the bond market, the country only managed to bring in $560 million from all types of foreign financing last year, not even enough to cover the $920 million it had to pay back, according to Espinoza. This upends a model the government had used for years in which it tapped foreign creditors to make up for the shortage of dollars created by slumping gas exports.
"This creates a big hole for them," Espinoza said.
WASHINGTON POST