Bolivia’s Congress Greenlights $1.9 B IMF Program Amid Union Backlash

In a session that felt more like a showdown than a routine vote, Bolivia’s Congress gave the green light to a $1.9 billion loan agreement with the International Monetary Fund on Friday. The approval cleared the last legislative hurdle for a three‑year financing program that the conservative government says is essential to shore up dwindling foreign reserves and curb runaway inflation.

The Senate ratified the deal just a day after the lower house had already endorsed it, effectively sealing the pact that was first announced at staff level in July. While the IMF’s executive board still has to give the final nod before any money reaches Bolivian accounts, the domestic political win was already being celebrated in the Palacio Quemado.

President Rodrigo Paz, a newcomer who rose to power after two decades of socialist rule, called the vote “a historic step” and a “resounding signal of political maturity, unity and economic certainty.” He was joined on the podium by Economy Minister Christian Morales, who told senators that the IMF program would act like a catalyst, encouraging other lenders—such as the World Bank and the Inter‑American Development Bank—to unlock roughly $5 billion in additional financing.

But the celebratory tone was far from unanimous. The Bolivian Workers’ Central, the country’s main labor federation, and a string of other unions erupted in criticism, warning that the loan’s attached conditions—most notably the planned removal of fuel subsidies—could ignite new protests. In recent months, the government has already begun cutting the long‑standing subsidies, with a full phase‑out slated for January.

Those cuts come against a backdrop of chronic fuel shortages that have plagued Bolivia since 2023, when a slump in natural‑gas exports cut off vital dollar inflows. Selling imported gasoline and diesel at subsidized prices has strained public finances, prompting President Paz to promise a re‑direction of those funds toward domestic oil and gas exploration.

Union leaders, still smarting from June‑July road blockades that paralyzed large swaths of the country, see the IMF deal as a recipe for more hardship. “When you pull back subsidies, people feel the pinch in their daily lives,” one union spokesperson said, echoing fears that living costs will surge just as the global fuel market is being nudged higher by the ongoing war in Iran.

Adding to the tension, Congress extended a state of emergency for another 90 days—a measure that allows the military to intervene in protests and temporarily suspends certain civil liberties. The emergency was originally declared by President Paz to clear blocked roads during the earlier demonstrations, and its renewal signals how volatile the situation remains.

Politically, the vote also underscored the shifting balance of power in Bolivia. Although Paz’s Christian Democratic Party does not hold a majority, centrist and right‑wing legislators rallied behind the IMF pact. Meanwhile, the Movement Toward Socialism (MAS), which once dominated the chambers under former president Evo Morales, now controls just two seats in the 130‑member lower house and none in the 36‑member Senate.

Looking ahead, President Paz warned that “difficult decisions lie ahead” as the world’s fuel prices continue to climb. The administration hopes the IMF agreement will provide a fiscal lifeline, but the path forward will likely be littered with social friction as workers and ordinary citizens brace for the promised austerity.