Bolivia’s Congress has approved a $1.9 billion International Monetary Fund programme for President Rodrigo Paz, unlocking a path to external financing while trade unions warn that fuel-subsidy cuts could reignite street protests.
The vote on Friday, 18 September 2026, is a legislative win for Paz even though his Christian Democratic Party lacks a majority. Centrist and right-wing parties that now dominate Congress after the long-ruling leftist MAS was reduced to just two seats in the 130-seat lower house and none in the Senate backed the package, according to Associated Press reporting carried by Al Jazeera and other outlets.
The loan still needs approval from the IMF’s Executive Board before any money is disbursed. Officials say the arrangement should also help unlock roughly $5 billion more from the World Bank and other lenders.
A gas economy short of dollars
Bolivia once earned billions from natural gas exports. Years of underinvestment have collapsed production, leaving the country short of the hard currency needed to import fuel. Successive governments spent heavily to keep petrol and diesel cheaper for households — cheaper even than in Saudi Arabia, one of the world’s largest crude producers — a subsidy that drained foreign reserves and fed a black market in smuggled fuel.
Under the IMF programme, described as Bolivia’s first multi-year arrangement with the fund since 2006, Paz must keep cutting those subsidies and rein in spending. He has already raised fuel prices and plans to scrap the subsidy entirely by January. Paz framed Friday’s vote as a “historic step,” while warning that the Iran war’s effect on global fuel costs is forcing “complex choices.”
Politics after MAS’s collapse
The congressional arithmetic matters as much as the economics. MAS’s near-wipeout in the legislature removed the traditional left’s blocking power and allowed a cross-party majority to advance an austerity-tinged IMF path. Paz, described in coverage as an ally of US President Donald Trump, is using that opening to re-anchor Bolivia with international lenders after years of reserve stress.
Congress also extended a state of emergency — declared earlier to clear road blockades — for another 90 days on Thursday, underscoring how quickly economic policy and public order have become entangled.
Unions threaten a return to the streets
The Bolivian Workers’ Central, the country’s main union federation, has denounced the plan, arguing that subsidy cuts will push up living costs for struggling families. In June and July, weeks of road blockades paralysed much of the country as protesters demanded Paz’s resignation. Those memories shape the political risk premium on the IMF deal: legislative approval is necessary, but social consent remains contested.
Education workers and other public-sector groups have already been visible in street actions in La Paz in mid-September. Whether Friday’s vote triggers a new wave of blockades will depend on how fast prices rise, how the emergency powers are used, and whether Paz can sell the programme as a bridge to cheaper imported fuel rather than as permanent austerity.
What to watch next
Three checkpoints now define the story. First, the IMF Executive Board must still green-light disbursement. Second, the January deadline for ending fuel subsidies will test household budgets and union mobilisation. Third, any additional World Bank and multilateral financing will show whether Friday’s vote truly unlocks the broader $5 billion package officials have described.
For Latin America’s energy politics, Bolivia is a case study in what happens when a gas exporter loses dollar inflows and tries to exit price controls under an IMF umbrella. For Paz, the congressional win buys time and credibility with creditors. For unions and low-income households, the same vote is a countdown to higher pump prices — and, they warn, to another season of protest.