IMF Announces Plans to Cancel $251 Million in Bolivian Debt

The International Monetary Fund announced yesterday plans to cancel the $3.3 billion in debt owed to it by 19 countries. Among these is Bolivia, with a debt cancellation of $251 million.

This is clearly a policy that has been in motion at the Fund for a while and has no connection to Sunday’s election results. I haven’t had time to take a close look at this. Here are some questions that, perhaps, some of our commenters can answer:

1. Are there any conditions that Bolivia has to meet before the debt forgiveness becomes final?

2. Are there conditions that Bolivia has already agreed to?

3. What happens if President-elect Morales decides to take action that the IMF is clearly not pleased with, like canceling a flurry of foreign oil company contracts?

The IMF has a clear history of heavy handedness in Bolivia (see our recent report, Deadly Consequences) so it is reasonable to ask these questions.