MercoPress. South Atlantic News Agency

Chile urges IMF to change financial aid conditions.

The president of Chile has called for the International Monetary Fund to change the conditions it imposes on countries seeking financial support.

Ricardo Lagos told a London conference on progressive governance this weekend that IMF pressure to reduce public spending at a time of contraction deepened economic difficulties and contrasted with the approach taken by developed countries. "The conditions they put normally are pro-cyclical not anti-cyclical," said Mr Lagos. "This is not the recipe that Europe or the US are following."

Chile's economy is still performing relatively strongly compared with its Latin American neighbors, but Mr Lagos said he wanted to speak for "those who have to go there under difficult conditions". Argentina and Brazil, whose presidents were also at the centre-left conference, have both sought large aid packages from the fund in the past 12 months. IMF relations with Argentina have been stormy although there are hopes that the fund will sign a three-year deal with Néstor Kirchner's government when a transitional agreement expires next month.

Mr Lagos also criticised the liberal economic policies introduced under the "Washington Consensus" as being necessary but not sufficient for development. Chile has been seen in some quarters as a model pupil, achieving rates of economic growth above the regional average during the 1990s. But Mr Lagos said its success had also reflected the vigour of social policies that had helped cut poverty levels in half during the decade.

Mr Lagos called for changes in the United Nations Security Council, following the divisions within the body in the run-up to the Iraq war. Chile abstained in the resolutions supporting the attack, a decision that at one stage seemed to imperil its free trade agreement with the US. That deal has now been signed but Mr Lagos said the experience has highlighted fundamental difficulties in the Security Council's structure. "I'm innocent enough to think we can have our policy according to what we think is correct in the world arena," said Mr Lagos. "[But] abstention is not a solution."

In an earlier interview with the Financial Times. Mr Lagos said Chile had made rapid progress in recovering from corruption scandals that had shaken confidence in public institutions widely regarded as among the cleanest and most efficient in Latin America. Legislation increasing public sector transparency, limiting the size of political contributions and reducing the number of political appointments of public positions had won cross-party backing and had been approved quickly.

The government also intends to press ahead with plans to investigate the repression that followed the military coup of 1973. Monthly pensions of about $300-$400 per month and other benefits for about 4,000 families of victims could be increased. The government was also looking into the possibility of financing memorials for those killed. It was also possible that psychiatric help would be offered to the perpetrators of the violence and their families. Partly because of the work of special judges appointed in 2001, Mr Lagos said, Chile "had made more advances in this area in the last two years than in the previous 28 years".