JUNE 1982 - VOLUME 3 - NUMBER 6
Bolivia: IMF Measures Bring Strikes, Violence
The International Monetary Fund (IMF) and its economic policy requirements have once again taken their toll - this time in Bolivia.
Six people were killed and 11 wounded in Cochabamba, Bolivia, on April 15 when police opened fire on a group of demonstrators protesting Bolivia's recent adoption of austerity measures which the IMF requires in order for the country to qualify for a loan.
On March 23, the Bolivian government decided to adopt a floating exchange rate for the peso, and to abolish all subsidies on rice, sugar and milk. The adoption of these measures has resulted in a 75% increase in consumer prices, which touched off a series of paralyzing strikes led by the outlawed labor union, Central Obrero Boliviano.
The changes in economic policy were part of an attempt by the government of President Celso Torrelio to meet the IMF's requirements for a $220 million two-year loan. "The effective rate of devaluation so far this year is now 6507o," says one official at the Bolivian embassy in Washington. "This, together with the removal of most food subsidies, heads [the country] in the direction of meeting IMF policy demands."
IMF officials arrived in La Paz, the capital city of Bolivia, on May 3 to report on the state of the Bolivian economy since austerity measures were adopted. The Fund will decide on the basis of the findings whether to give Bolivia the loan.
The Bolivian economy is in desperate need of assistance. It is on the verge of default with many of its creditors, and its GNP growth rate is currently less than the 1% rate of last year.
But IMF assistance may be too costly for the current government. By the end of April, several political groups in the country were calling for the resignation of Torrelio because of the unpopular economic steps.
- Shelley Brubaker