User:Ericcabaniss/Bolivia and the International Monetary Fund

The IMF and Bolivian government have cooperated to achieve social reforms and economic growth since 1945. These efforts have involved strategies aimed at reducing poverty, increasing social equity, improving the education system, healthcare system, and expanding social services to rural populations and underserved urban communities. Structural frameworks for these changes have included strengthening property rights through the judiciary, improvements to tax collection agencies, and other means of increasing efficiency in the public sector.

Background

Bolivia became a member of the International Monetary Fund on December 27, 1945. Its first IMF stabilization plan took place from 1955 to 1964. Bolivia has had 19 arrangements with the IMF.  Along with many other nations, Bolivia participated in the Brady Plan restructuring agreements of the 1980s, utilizing dollar denominated bond conversion mechanisms to resolve its debt crisis. Between 1994 and 2001, Bolivia received approximately $178 million in loan disbursements from the IMF Poverty Reduction and Growth Trust. The IMF regularly provides analyses evaluating the performance of Bolivia's domestic financial institutions, including in its domestic bank restructuring and reforming pension schemes. In December 2005, Bolivia was one of 19 countries to receive 100% debt relief as a consequence of the Multilateral Debt Relief Initiative.  With the aid from this initiative, the Bolivian government paid off its loans to the IMF through repurchases and repayments between 2005 and 2007. The IMF forgave Bolivia of $251 million, coinciding with the election of Evo Morales. As of December 2019, Bolivia has no outstanding debts to the International Monetary Fund. The IMF continues to evaluate the Bolivian economy's economic performance, citing its hydrocarbon and mining export performance as responsible for growth economic growth and fiscal revenue.

Criticisms

Protests have occurred in Bolivia in relation to IMF and World Bank related market reforms, loan conditions, and structural adjustments. Criticisms have been levied toward the IMF regarding its motives, actions and ties to U.S. foreign interests. Social tensions have been attributed to frustrations regarding the lack of demonstrable economic improvement expected of structural reforms. In 1998, the Bolivian government agreed to the privatization of “all remaining public enterprises,” including water and gas. The companies that gained ownership of the water resources increased prices. Domestic unrest resulted in the Cochabamba Water War. Discontentment with austerity measures and privatization has resulted in protests that have been met with the use of state emergency measures. In 2000, large waves of protests erupted from rural Bolivians over public sector cutbacks, a decline in per capita income, and a rising rates of unemployment. With the election of Evo Morales to the Bolivian Presidency in 2006, the Bolivian government pursued economic growth and financial stability with the intent to reduce its relationships to international lending institutions, specifically the IMF and World Bank.