Key facts
- Opposition to Bolivia's $1.9 billion IMF program is growing due to concerns over fuel shortages and subsidy cuts.
- Civic groups, unions, and business leaders are demanding transparency regarding the IMF negotiations.
- The IMF agreement requires approval from Bolivia's Congress and the IMF's Executive Board.
- Fuel shortages and rising costs have already led to protests and roadblocks.
- Uncertainty surrounding the IMF deal has caused the boliviano to weaken on parallel markets.
Opposition to Bolivia's proposed $1.9 billion International Monetary Fund (IMF) program is intensifying as civic groups, unions, and business leaders increasingly connect fuel shortages and subsidy cuts to the financing agreement. Representatives from nine organizations met recently to call for eased costs, adding pressure on President Rodrigo Paz's administration ahead of congressional approval.
Leaders in Santa Cruz, a key economic hub, have accused the government of using the IMF deal to justify subsidy reductions before the program is finalized. Agustín Zambrana, vice president of the Pro Santa Cruz Committee, demanded transparency regarding the IMF negotiations. The government's position was further complicated when Presidential Minister Fernando Aramayo initially labeled a diesel pricing measure as an IMF "condition" before retracting the statement.
Bolivia has a history of deep-seated opposition to the IMF, stemming from memories of austerity and hardship in the 1980s and 1990s. While no organized bloc in Congress is currently against the agreement, growing public resistance, particularly from industry, could complicate efforts to secure support for any additional unpopular measures. The government's task is made more difficult by the recent departure of former Economy Minister Jose Gabriel Espinoza, who had led the negotiations.
Uncertainty surrounding the IMF deal and external financing has led to increased demand for dollars, causing the boliviano to weaken on parallel markets. Investors, who had previously seen Bolivia's bond prices rise on hopes of economic turnaround, are now adopting a more cautious stance. Analysts suggest that the protests and recent changes in the economic team indicate a broader challenge of governability for President Paz, raising questions about his ability to implement the necessary reforms required by the IMF program.