Third time unlucky?

AGAINST the imposing ruins of Tiwanaku, capital of a pre-Inca empire, Evo Morales ceremonially began his third term in office as Bolivia’s president on January 22nd. The immensely popular Mr Morales, the country’s first leader of indigenous descent, won re-election in October with 61% of the vote and can boast a good economic record. GDP grew at an annual average rate of 5% in 2006-13. Last year Bolivia was the fastest-growing economy in South America. No doubt, he feels entitled to indulge in pre-Columbian pomp.

Mr Morales’s third—and, he promises, final—term in office is likely to be more testing. The biggest problem will be a drop in earnings from commodities. The government’s budget for 2015 is based on projections that the average price of oil will be $80 a barrel, well above the $50-60 most forecasters expect. That will affect Bolivia’s revenue from natural gas, which is the main export and provides nearly half of government revenue. The price of minerals, another economic mainstay, has also fallen.