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By:
Team of Hukumindo
Previously, the www.hukumindo.com platform has talk about "Step-by-Step Guide How to Set Up a Company in Indonesia as a Foreigner", "Legally, Islands in Indonesian Territory Cannot Be Bought or Sold", you may read also "Parking for Just a Few Hours Costs Millions" and on this occasion we will discuss about 'Bolivia is Struggling With a Risk of Defaulting On Its Foreign Debts'.
Bolivia is currently struggling with an economic crisis that is at risk of defaulting on its foreign debts. Adding to the social and economic unrest among the people. Bolivian President Luis Arce Catacora said the risk of defaulting on its debts would increase if the country did not immediately obtain new funding sources. "We are trying not to default. We have the intention to pay our debts, but what if we do not have the resources?" Arce said in an interview at his office in La Paz, Bolivia's capital. Bolivia's debt has reached US$13.3 billion or equivalent to IDR. 218.06 trillion (exchange rate of IDR. 16,396/US dollar). Most of this debt comes from the Inter-American Development Bank, the Latin American and Caribbean Development Bank (CAF), the World Bank, and China. According to the World Bank, the amount of debt that is burdening Bolivia represents more than 37% of its gross national income. The last time the country defaulted on its debts was 41 years ago in 1984.[1]
On the other hand, Arce admitted that the government did not get permission from parliament to seek new loans worth US$ 1.8 billion or IDR. 29.51 trillion from multilateral institutions. Meanwhile, according to him, the country needed US$ 2.6 billion or IDR. 42.62 trillion in December for fuel imports and foreign debt payments. "We made the worst deal as a country. Because when a country has foreign debt, you pay principal and interest to creditors, and that dollar outflow is compensated by the inflow of new disbursements from new debt, which is not happening," he said.[2]
It should be noted that Bolivia is home to 12 million people and the majority of the population is indigenous. They are one of the poorest countries on the continent despite having abundant natural resources such as gas and lithium. This condition began in 2023 when the state-owned oil and gas company, YPFB, said Bolivia was running out of natural gas due to a lack of investment in new exploration. Even though natural gas is the country's most important export product. The sharp drop in natural gas exports has caused foreign exchange reserves to plummet, leaving Bolivia unable to import enough of the heavily subsidized fuel for the domestic market. Inflation has continued to hit a record high of 18.4% year-on-year in May, the highest in nearly two decades, and the local currency, the Boliviano, has continued to lose value.[3] And if you have any legal issue in Indonesia territory, contact us for business inquiry, feel free in 24 hour, we will be glad to assist you.
*) For further information please contact:
Mahmud Kusuma Advocate
Law Office
Jakarta - Indonesia.
E-mail: mahmudkusuma22@gmail.com
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References:
1. "Negara Ini Terlilit Utang Rp 218 T, Presidennya Bingung Mau Bayar Pakai Apa", finance.detik.com, Ignacio Geordi Oswaldo, 21 Jun 2025, Diakses pada tanggal 28 Juni 2025, Link: https://finance.detik.com/berita-ekonomi-bisnis/d-7975368/negara-ini-terlilit-utang-rp-218-t-presidennya-bingung-mau-bayar-pakai-apa.
2. Ibid.
3. Ibid.