Borrower Snapshot
On February 17, the Central Bank of Bolivia (BCB) announced the repayment of USD 351.5 million to the International Monetary Fund (IMF). This news caused a stir given the context of the global economic and financial crisis, in which the vast majority of countries are seeking loans to mitigate the crisis caused by the coronavirus, which virtually paralyzed economic activity.
Given the global situation, it seems unprecedented for a country to return funds that had been granted to it. This is when comments from various actors emerged, describing this move as a major mistake, arguing that these resources could have been used to reactivate the Bolivian economy. However, such comments completely overlook the procedures that exist in the country for assuming such a significant commitment as financing from an international organization.
It is difficult to speak of economic reactivation when the loan managed by the Añez government has proven to have been carried out in a disastrous manner. In April 2020, the amount stood at USD 327.2 million; due to exchange rate variations, this loan would have increased to USD 346.7 million, to which USD 4.7 million must be added for the payment of interest and commissions. In this way, in just nine months, the loan arranged by the previous government caused damage of USD 24.3 million to the Bolivian state.
Likewise, the irregularities are evident. This loan did not comply with the necessary legal procedures; however, by June 2020, the Vice Minister of Treasury and Public Credit reported that these resources were already in accounts at the BCB and that the country was paying interest on them. In September of the same year, it was stated that these resources were not a loan, but rather a “return of the country’s contributions.” If that were the case, there would have been a misappropriation of Bolivians’ resources, since the Central Bank of Bolivia was already paying interest “on its own resources,” an unprecedented case in economic history.
Continuing with the illegality surrounding these resources, none of the ministers of economy under the Añez administration recorded these funds in the General State Budget, neither as a loan nor as a return of IMF quotas. As established by our legislation, no state entity may spend resources that are not budgeted. This means that members of the Añez regime were aware of the illegality of these funds and, in order to access them, used an inappropriate instrument—not external credit, but Special Drawing Rights (SDRs)—a technical mechanism to bypass the necessary legal procedures.
This loan is just a snapshot of the poor management carried out by the Añez government, and the return of these resources to the IMF is a necessary action due to the serious irregularities committed, the significant economic damage suffered, and the violation of both administrative and legal procedures that were not followed, all of which warrant the corresponding punishment in accordance with the Criminal Code.
Author: Walter Marañon Quiñones
