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US Abstains on Chile Loan Request

February 8, 1985

WASHINGTON (AP) _ The United States, in a signal of displeasure over the lack of progress toward a democratic transition in Chile, abstained on a $130 million loan request in the Inter-American Development Bank, U.S. officials said today.

The officials said the decision to abstain was made after close consultations with members of Congress and Chile’s democratic opposition, who felt the the United States should give tangible evidence of its impatience with continued repression in Chile.

Thursday’s vote on the loan request followed Chile’s decision last week to extend a state of siege, intially imposed in November, for an additional 90 days. Chilean President Augusto Pinochet has said a hard-line approach is required because of repeated terrorist acts by leftist groups.

The abstention was largely symbolic since the loan request was backed by other bank members and won final approval. The loan is aimed at providing foreign exchange to Chilean industrial firms which manufacture products for export.

The Reagan administration generally has supported Chilean loan requests in international lending institutions and Thursday’s vote represented a departure from past policy.

According to the officials, the United States recently opposed an oil and gas loan requested by Chile, but that vote reflected the U.S. view that such projects should be carried out with the use of private funds.

The officials, who spoke only on condition they not to be identified, said the United States opposes all such requests in international lending institutions.

In response to press questions, the State Department said human rights and other considerations were taken into account in Thursday’s vote.

″Our policy toward Chile has been and remains to promote the restoration of democracy,″ the official response said. ″We continue to encourage dialogue on the political transition between the Chilean government and democratic opposition as essential to this process.″

Under the state of siege, strict curbs on the press and public gatherings have the effect of precluding opposition political activity. Hundreds of opposition leaders have been confined to an Army camp.

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