Bolivian lawmakers approved on Friday (the 18th) a US$1.9 billion loan with the International Monetary Fund (IMF). This is a victory for the conservative government in its efforts to ease the country’s deep economic crisis, at a moment when unions threatened to resume protests.
A few hours after the loan’s approval by Congress, President Rodrigo Paz announced the immediate end of subsidies for diesel used by trucks, buses and tractors in Bolivia — a measure to meet the IMF’s demands. Gasoline, used mainly by private vehicles, would remain subsidized for now, although La Paz had already reduced this support in recent months.
Also read: Bolivia extends state of emergency by 90 days amid fears of new protests
The Senate ratified the IMF agreement one day after the approval by the Chamber of Deputies, overcoming the last legislative hurdle for the three-year financing program aimed at rebuilding dwindling international reserves and stabilizing the fragile economy, marked by high inflation and weak growth.
The IMF initially announced the deal at the technical level in July, after months of negotiations with Paz’s government — favorable to free market — which took power last year, ending almost two decades of socialist governments, as part of a wave of new Latin American leaders allied with the Trump administration.
The program still requires approval from the IMF’s Executive Board for the resources to be released. Economics Minister Christian Morales told the senators that the agreement would convey greater confidence to the government from other lenders, including the World Bank and the Inter-American Development Bank, and would help secure about US$5 billion in additional financing.
However, aid is conditioned on strict economic measures, including the elimination of fuel subsidies, which threaten to rekindle unrest in Bolivia, where weeks of road blockades in June and July paralyzed much of the South American nation as protesters demanded Paz’s resignation. On Thursday, Congress extended the state of emergency that Paz had decreed to free the roads during the protests for another 90 days. The measure allows military intervention and the suspension of some civil liberties. (AP)
