US$1bn worth of multilateral loans stuck in Bolivia’s congress

Eleven multilateral loans totaling just over US$1bn are still awaiting approval by Bolivia’s legislature because of political infighting that’s “strangling” the local economy, according to President Luis Arce. 

“We call upon the plurinational legislative assembly, for the sake of the people, to stop strangling the economy. You’re not harming the government, you’re harming all of Bolivia,” Arce said in a recorded address.

Bolivia is in the midst of a deep economic and political crisis marked by scarcity of both fuels and foreign currency, clashes within the ruling MAS party and depressed exports.

Arce claims that some of the financing stuck in congress could help address the economic difficulties.

According to the legislature's website, some projects affected by the current dispute are: 

Uyuni-Landmark LX highway: Sections 1 to 3. The bill to greenlight the US$223mn loan from Latin American development bank CAF was submitted to congress in March and was approved by the lower house in June after a group of locals from Potosí province threatened to storm the legislature if the financing was not given the green light, local news outlets reported. The bill is now in the senate. 

The project entails three highway stretches totaling 120km in Potosí department. Works also include two overpasses, accesses to the towns of Río Grande and Julaca, and five new bridges.

La Paz and El Alto lineal park: The Inter-American Development Bank (IDB) approved a US$30mn loan for this project in January and the bill to approve it was submitted to congress that same month.

The project involves a 16km lineal park linking capital La Paz and neighboring city El Alto, which will include bicycle lanes and footpaths. 

Norte Integrado-Yapacaní highway: The bill to authorize the US$35mn financing from CAF was submitted to the national assembly in March. 

The project, which also involves US$3.4mn in local funding, entails paving a 30km stretch near Yapacaní in Santa Cruz department.

The stretch is part of the planned 91.9km Faja Norte highway.

Caracollo-Colomi highway, Confital-Bombeo stretch: Shortly after Arce’s address, senate head Andrónico Rodríguez said the bill authorizing a US$176mn CAF loan for this project was approved by congress in December and is awaiting the president’s signature.

However, the bill was originally passed during a congressional session that was later declared void by the constitutional court which declared that Rodríguez was not authorized to hold senate votes during a legislative recess. 

The project involves widening a 44.6km stretch of the road in Cochabamba department. 

Rodríguez is part of the Evista faction of the MAS party that backs former president Evo Morales and has been clashing with Arce’s administration for over two years, with road blockades and even physical altercations between lawmakers. 

The other loans involve programs promoting climate resilience, sustainable land administration, water management and job generation, among others

Arce said one of the operations, a US$100mn loan from Japanese development agency JICA for COVID-19 relief, would help the government purchase diesel and partially alleviate shortages.