Bolivia’s government has received congressional approval for a $1.9 billion loan agreement with the International Monetary Fund (IMF), a major step in its efforts to stabilize the economy. This agreement is part of a three-year program aimed at replenishing the country’s foreign currency reserves and addressing high inflation and slow economic growth. The deal was approved by both chambers of Congress after months of negotiations with Bolivia’s new government, which took power last year under President Rodrigo Paz. The government has been promoting market-friendly reforms, a shift from nearly two decades of socialist policies. A key component of the agreement involves the elimination of diesel subsidies, which has raised concerns about potential public unrest. President Paz announced that diesel used in trucks, buses, and tractors would no longer be subsidized, while gasoline subsidies for private cars remain, though they have been reduced in recent months. The move is intended to reduce the financial burden on the government, which has been struggling with a shortage of foreign currency needed to import fuel. This shortage has led to chronic fuel shortages since 2023, disrupting transportation and economic activity. The IMF staff-level agreement was announced in July after extensive discussions with Paz’s administration. However, the program still needs final approval from the IMF’s executive board before the funds can be released. Economy Minister Christian Morales said the agreement would help Bolivia secure an additional $5 billion in financing from other international lenders, such as the World Bank and the Inter-American Development Bank. However, the deal comes with conditions, including the removal of fuel subsidies, which could lead to increased living costs and public discontent. The opposition to the IMF loan has come from labor unions and political groups, who argue that spending cuts required by the agreement will worsen economic hardship for many Bolivians. Despite this, the agreement received support from centrist and right-wing lawmakers, even though President Paz’s Christian Democratic Party does not hold a majority in Congress. Meanwhile, the former ruling party, the Movement Toward Socialism, has seen its influence decline significantly in recent years, holding only a few seats in Congress now. To manage potential unrest, the government has extended a state of emergency, allowing for military involvement and temporary restrictions on civil liberties.