Bolivia’s Congress Greenlights $1.9 B IMF Loan Amid Union Threats

On Friday, a hushed buzz turned into applause in La Paz’s legislative chambers when both houses finally ratified a $1.9 billion loan agreement with the International Monetary Fund.

The Senate voted a day after the lower house had already given its nod, clearing the last legislative hurdle for a three‑year financing program that aims to replenish dwindling foreign‑exchange reserves and steady an economy bruised by soaring inflation and sluggish growth.

President Rodrigo Paz, whose market‑friendly administration took power last year after almost twenty years of socialist rule, hailed the vote as a “historic step” and a “resounding signal of political maturity.” He told reporters it was a moment of “unity and economic certainty” for the nation.

Economy Minister Christian Morales told senators the IMF money should act like a catalyst, encouraging other lenders – the World Bank, the Inter‑American Development Bank and even private creditors – to line up roughly $5 billion in additional financing.

But the deal is not without controversy. Its strict conditions, most notably the gradual elimination of fuel subsidies, have already ignited the ire of the Bolivian Workers’ Central and other unions. They warn that cutting subsidies will push living costs higher and squeeze already‑strapped families.

That warning isn’t idle speculation. Earlier this year, the government began easing the country’s famously generous fuel subsidies, and plans are now on the table to end them entirely by January. The move is intended to free up cash for oil‑and‑gas exploration, a sector that has suffered from declining natural‑gas exports and chronic fuel shortages since 2023.

Unions have already staged road blockades in June and July, paralyzing large swaths of the country and demanding Paz’s resignation. In response, the president declared a state of emergency, extended for another 90 days, allowing the military to intervene and temporarily suspend certain civil liberties to clear the roads.

Politically, Paz’s Christian Democratic Party does not command a majority in Congress, yet centrist and right‑leaning legislators rallied behind the IMF pact. The once‑dominant Movement Toward Socialism, the party of former president Evo Morales, now occupies only two seats in the 130‑member lower house and none in the 36‑member Senate.

With global fuel prices climbing amid the ongoing conflict in Iran, Paz warned that “international prices are forcing us to make complex choices.” The IMF program, still pending approval by the fund’s executive board, could be the first step toward economic stabilization – or, if the subsidy cuts trigger widespread unrest, a catalyst for renewed turbulence.