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LA PAZ, Bolivia (AP) — Bolivian lawmakers approved a $1.9 billion loan agreement with the International Monetary Fund on Friday, delivering the conservative government a key victory in its efforts to ease the country’s deep economic crisis as unions threatened renewed protests.
The Senate ratified the IMF agreement a day after the lower house approved it, clearing the final legislative hurdle for the three-year financing program aimed at replenishing dwindling foreign reserves and stabilizing the ailing economy marked by high inflation and weak growth. The IMF first announced the staff-level agreement in July after months of negotiations with Paz’s market-friendly government, which took power last year after nearly two decades of socialist rule. The program still requires approval from the IMF’s executive board before funds can be disbursed.
President Rodrigo Paz, part of a wave of new Latin American leaders allied with the Trump administration, welcomed the vote as a “historic step” and “resounding signal of political maturity, unity and economic certainty.”
Economy Minister Christian Morales told senators that the deal would give other lenders, including the World Bank and the Inter-American Development Bank, greater confidence in the government and help it secure about $5 billion in additional financing.
But the conditions attached to the agreement, including the elimination of fuel subsidies, threaten to reignite unrest in Bolivia, where weeks of road blockades in June and July paralyzed much of the South American nation as demonstrators demanded Paz’s resignation. Congress on Thursday extended for another 90 days a state of emergency that Paz had declared to clear roads during the protests. It allows for military intervention and the suspension of some civil liberties.
The Bolivian Workers’ Central, the country’s main labor federation, and other unions have voiced fierce opposition to the IMF loan, warning that the government spending cuts required under the deal would drive up living costs and deepen hardship for struggling families. In recent months, Paz has eased Bolivia’s long-generous fuel subsidies and announced plans to eliminate the benefits entirely by January.
Although Paz’s Christian Democratic Party lacks a majority in Congress, the centrist and right-wing lawmakers that dominate both chambers rallied behind the deal. The Movement Toward Socialism, the party that dominated Bolivian politics after the former coca growers’ union leader Evo Morales won the presidency in 2005, now holds just two of the 130 seats in the lower house and none in the 36-member Senate.
