Bolivia's President Paz to Propose Comprehensive State Reform, New Fiscal Pact to Governors

Bolivian President Rodrigo Paz is set to launch a sweeping reform of the state structure, beginning with a formal meeting with the country's nine governors on August 5. The initiative aims to dismantle the nation's centralist framework, proposing a new fiscal pact that includes a revised tax system and a significant redistribution of resources.

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The 50/50 is a deep, fundamental desire for the transformation of this stagnant state.

Paz envisions governors and mayors as crucial partners in this transformation, seeking to build a "transparent and open" process. He stressed that the reform goes beyond simply dividing existing revenues, advocating for a new fiscal agreement that clearly defines competencies, capabilities, and financial responsibilities among the central government, provincial governments, and municipalities. The president highlighted the desire for a "50/50" resource split as a fundamental goal, but cautioned that it must be part of a broader structural change.

While the reform aims to empower regions, Paz warned against a hasty transfer of responsibilities. He expressed concern that an abrupt decentralization could pass on central government inefficiencies, deficits, and corruption to subnational administrations. The presidential proposal expands on the "50/50" demand previously championed by Santa Cruz and supported by seven other governorships, which sought an equitable distribution of national taxes starting in 2027.

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I will end centralism, but we will do it in an orderly manner.

Paz suggested that the reform should also involve a complete overhaul of the tax system and a new organizational vision for the state from the regional perspective. He proposed partially decentralizing education, with national curriculum elements retained while regions design specific content to meet local needs. The ultimate goal is to enable each department to bolster its economic potential and set its own development priorities.

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It is much larger than just dividing a few resources because, among the poor, what are we going to divide?