Bolivia opens political battle over $1.9 billion IMF loan and reform package

Bolivia’s proposed $1.9 billion agreement with the International Monetary Fund has formally entered the country’s legislature, opening a politically contested phase for President Rodrigo Paz’s economic program.

The bill was read in the Chamber of Deputies and sent to its Planning Commission for review. The agreement, reached at the technical level on July 29, would provide 1.369 billion Special Drawing Rights through a 36-month program under the IMF’s Extended Fund Facility. The deal is not yet approved. It still needs authorization from Bolivia’s legislature and subsequent approval by the IMF executive board.

The two figures refer to the same proposed financing. Special Drawing Rights are the IMF’s accounting unit, while the $1.9 billion figure reflects their approximate value in U.S. dollars. Deputy Chamber Second Vice President Rodrigo Antonio confirmed that the bill had entered the legislative process.

The government says the funds would strengthen international reserves and improve the availability of foreign currency as Bolivia moves toward a more flexible exchange-rate system. Economy Minister Christian Morales said the resources would help maintain the flow of dollars to the market and support exchange-rate stability. The government also expects IMF backing to unlock additional financing from the World Bank, the Inter-American Development Bank and other multilateral institutions. The IMF estimates that the program could help mobilize more than $5 billion over 36 months.

The proposal has drawn criticism from civic, union and productive-sector groups, which link the announced reforms to higher diesel costs and fuel-supply problems. The diesel subsidy, fiscal deficit and exchange rate remain central points of contention as lawmakers begin their review.

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The loan bill with the International Monetary Fund, for an amount of $1.369 billion, is intended to support the comprehensive economic reform program