Bolivia's October presidential runoff, following the August election that ended two decades of leftist governance, has become a contest not only between centrist and right-wing political traditions but also over the management of the country's vast and underdeveloped lithium resources. The second round pits centrist senator Rodrigo Paz, who led the first vote with 32%, against right-wing former president Jorge "Tuto" Quiroga, who secured 27%.

The outcome is likely to determine the future of agreements worth more than $2bn that the outgoing leftist government signed with Russian and Chinese firms to extract lithium from the Salar de Uyuni salt flat. These contracts, intended to give Bolivia a foothold in the global electric battery market key to energy transition efforts, have been paralysed by legal disputes and political infighting. A local court in Potosí suspended the deals in May following a petition from indigenous organisations who argued that exploratory activity had begun without environmental studies or formal consultation.

The legal action, filed by the Central Única Provincial de Comunidades Originarias de Nor Lípez, represents more than 50 communities in the Uyuni region. Their complaint pointed to the risk to water sources and demanded enforceable environmental guarantees before industrial-scale extraction. Fundación Milenio, a Bolivian think tank, also raised concerns over the financial asymmetry of the contracts, noting that state firm Yacimientos de Litio Bolivianos (YLB) could be left paying for infrastructure built with foreign technology that might prove unmanageable without outside operators.

Quiroga has made opposition to these agreements a central campaign issue. He has pledged to annul the contracts with Russia’s Uranium One and China’s CBC, arguing that they were negotiated “behind the back” of local authorities and lacked legislative approval. His proposed response is to draft a new mining law that prevents what he calls “favouritism” in the allocation of strategic resources, AFP noted. The candidate, educated in the United States, has also advocated a shift away from ties with Moscow and Beijing in favour of closer cooperation with Western partners.

Paz, by contrast, has presented himself as a moderate alternative focused on stabilising the domestic economy. He told AFP that he rejects the notion of “strict austerity” but accepts that major fiscal adjustments are unavoidable. He pledged to cut $1.2bn annually in fuel subsidies and to reduce a further $1.3bn in what he termed “superfluous spending.” Paz also proposed tax incentives to encourage citizens to deposit dollars currently held in cash, though he ruled out seeking an immediate international bailout.

Both candidates face a public frustrated by long-running shortages of fuel and hard currency, alongside inflation that reached 24.8% year-on-year in July, the highest since at least 2008. The economic downturn is widely attributed to underinvestment in gas exploration after years of dependence on hydrocarbon exports, once the engine of Bolivia’s growth under former president Evo Morales – a divisive figure who was barred from running on various criminal charges.

While the government insists the deals maintain national ownership of resources, their lack of legislative approval, combined with judicial and community opposition, leaves their future uncertain. For voters, the dispute highlights a deeper choice: whether to embrace Quiroga’s plan for a radical overhaul of Bolivia’s state-led economic model or Paz’s more gradualist approach to fiscal discipline.

Whichever path is chosen in October, Bolivia’s attempt to transform its “white gold” reserves into an engine of recovery is now tightly bound to questions of governance, transparency and public trust.