The Cost of the Blockade
Recently, the media reported on the “Agreement for the Common Good of Bolivia,” which represents a significant shift in political discourse by including a call for the Plurinational Legislative Assembly to facilitate and accelerate the approval of international loans.
This change in stance is particularly noteworthy given that various political actors who had previously taken a critical position and promoted a systematic blockade of these loans in the Assembly have now joined, confirming that the legislative paralysis was not a circumstantial event but a deliberate strategy.
In the international context, external loans are widely used by states to complement public finances and foster economic development. For example, institutions such as the International Monetary Fund (IMF) and the World Bank (WB) provide financing lines with different objectives. The IMF focuses on loans to stabilize the balance of payments or strengthen international reserves, while the WB channels resources to development projects in sectors such as infrastructure, health, or climate change.
These resources allow states to respond more flexibly to both structural and cyclical challenges, facilitating macroeconomic stabilization without resorting to contractionary policies, and promoting public investment in strategic infrastructure that stimulates growth and attracts private capital, among other benefits.
In the case of Bolivia, when an international loan is approved, the funding agency disburses the funds in foreign currency (such as dollars or euros), which enter the Central Bank of Bolivia. The bank converts these funds into the national currency (Bolivianos) and delivers them to the final beneficiary, allowing projects to be financed without negatively affecting international reserves. However, this mechanism depends on prior approval by the Assembly, which currently has created a critical bottleneck.
The lack of timely approval of these loans has had direct and significant economic consequences. The liquidity injection could have financed projects that generate employment, alleviated foreign exchange speculation, reactivated productive chains, strengthened international reserves, ensured essential imports such as medicines, agricultural inputs, or hydrocarbons, and mitigated external inflationary pressures.
The legislative blockade has prevented these benefits, further deepening the country’s economic deterioration. As a result, several significant international loans remain stalled in the Assembly, including a USD 100 million loan from the Japan International Cooperation Agency, which offers extraordinarily favorable conditions: an interest rate of 0.01% and a four-year grace period.
The systematic obstruction of these resources has gone beyond political confrontation, becoming a mechanism of economic suffocation, which highlights an important lesson: the ungovernability caused by the political blockade in the Assembly has a cost, and today that cost is being borne by the citizens.
Author: Walter Marañon Quiñones
