MercoPress. South Atlantic News Agency

President Lagos questions IMF policies

Chilean president Ricardo Lagos, who this week will be visiting Argentina, questioned the current policies of the IMF and World Bank, and suggested Latinamerican countries coordinate foreign policy, following the recent experience of Chile and Mexico during the Iraq crisis.

"The time has come to ask ourselves is the IMF, the multilateral institutions that rule us are the most adequate for today's world", said President Lagos in a long interview in Santiago with the Argentine press in anticipation of his trip next Thursday to Buenos Aires.

The Chilean president recalled that the IMF and the World Bank are institutions that were created in the forties of last century, and "it would be important that the IMF understands that it's not possible to have a major international financial crisis every year".

"Be it, Brazil, Russia, Turkey, Argentina or Mexico?.each of these crisis questions the whole international financial system", underlined Mr. Lagos who was particularly critical of the IMF policy of dealing economic reforms and financial assistance with governments individually, "when the crisis that weaken us are international".

Mr. Lagos pointed out as most positive for Latinamerica the recent policy coordination experience of Chile and Mexico, who as non permanent members of the United Nations Security Council had to endure the coalition's pressure and even so refused to support military intervention in Iraq.

"Why can't we act in the same way with international policy and economic policies, replacing individual action with concerted efforts?" asked president Lagos. "If we don't have a strong position in international forums, these financial crises will keep hopping from country to country".

As to Chile's economic success, contrary to the rest of the continent, President Lagos said is was closely related to anti cyclical policies, "when the economy is flat, copper prices plummet, oil is climbing, and activity contracting I can, and must, spend more. Conversely when consumption is up, I must restrict expenditure, therefore softening cycles".

"It's the same they do in the rich northern hemisphere countries, anti cyclical policies, so why does the IMF insist with other proposals", said Mr. Lagos who also questioned the fact that Chile is pointed out as "the best of the class".

"Yes, that is so because we have government policies to combat poverty, improve education, health, and housing. If not it could turn out into a disaster. You can go on national television and say the "country is growing" but what happens if the man in the street doesn't feel it has reached him".

Further on President Lagos pointed out that the IMF perception is not the only possibility, "Russia managed to come out with its own system, so did Malaysia".

The feeling in Latinamerica is that during the nineties "we did all our homework, but even so we run into trouble, and that is because we forgot government policies for the needy. The market forgets the needy".

"If you leave economics on its own you will have an unequal society because that is how the market works. However a society not only has consumers but also citizens, citizens who demand 12 twelve years of schooling for all children, drinking water for the whole community, and the difference is between those of us who feel the community must be built by citizens, and those who feel that is the job of consumers", underlined Mr. Lagos.

As to the coming thirtieth anniversary of the September 11, 1973 bloody military coup that toppled the first elected Socialist president (Salvador Allende) of Chile, president Lagos said that "there's no future without knowing what happened yesterday". "Over half of the Chilean population were not born or too young to remember, but I think that what is happening, the remembrance and impact of those events is very positive for Chile".