State capture risks have undermined the quality of democratic governance across Latin America. Authoritarian states such as Russia and China, in partnership with local enablers such as powerful business groups, political elites, and organized crime networks, have debilitated key institutions and redirected state resources to serve specific private or foreign state interests. Bolivia stands at the center of this institutional backsliding, where decades of clientelism, nepotism, and bureaucratic bottlenecks converge to derail economic development and democratic governance.
These challenges were the focus of the expert dialogue State Capture and Foreign Influence: Governance Vulnerabilities Ahead of Historical Elections, held in La Paz, Bolivia, on 15 September 2025, co-organized by the Center for the Study of Democracy (CSD) and Fundación Milenio. The event gathered leading EU and Bolivian policymakers, governance and energy experts, economists, and political scientists to examine the mechanisms of collusion between domestic captors and foreign influence. They also discussed the kinds of reforms that would be needed in the aftermath of what could become a historic second round of that is likely to end a nearly two-decades rule of the Movimiento al Socialismo (MAS) party.
Panelists highlighted the different dimensions and scope of state capture risks in Bolivia. Sara Gálvez, analyst from CSD’s geoeconomics program, explained how Russia exports its state capture model through corrosive capital, investments in strategic sectors, and disinformation campaigns amplified by local media.
Diego Ayo, a political scientist, Professor at the Universidad Mayor de San Andrés, pointed to how organized crime groups linked to cocaine smuggling have entrenched themselves in state institutions. He also noted that there has been a significant concentration of public procurement contracts in a few companies, and many of the tenders are now based on direct contracting.
Hugo del Granado, a former senior official at the Ministry of Hydrocarbons, described the state-owned oil and gas company, YPFB, as an opaque monopoly vulnerable direct political interference. He also discussed the lack of transparency in the publication of oil and gas production data, doubting the success of the recent exploration efforts that could have been a mechanism for shifting the company’s resources to well-connected private companies.
Franklin Pareja, a professor of political science at the University of San Andres, warned that the lack of a coherent and consistent legal framework in strategic sectors has deterred foreign investment and stalled industrialization in Bolivia.
Raúl Velasques, an independent energy and hydrocarbons expert, underscored the dramatic decline in gas production, down more than 50% in the past decade, and the absence of a long-term energy strategy. He added that the government’s current approach to developing the country’s vast lithium resources follows a similar pattern, deterring foreign commercial interest in the concessions.
The session concluded with a strategic foresight mapping exercise, where participants identified key state capture risks including the chronic weakening of government institutions, a divided and often co-opted civil society, lack of strategic vision, and persistent economic governance deficits, exploited by external authoritarian actors. The policy proposals of the different experts centered on strengthening the transparency strategic decision-making processes, sectoral diversification away from overreliance on energy and mining, countering disinformation, and reducing the political interference in the management of state-owned enterprises through new governance models of public-private partnership.
The message was clear: Bolivia’s democratic future depends on breaking the cycle of capture, rebuilding institutions, and anchoring the country’s development in regional trade and investment cooperation that enables the entry of constructive capital and the accelerates sustainable growth.
