US abstains in Chile loan vote. Goal is to signal Pinochet without losing clout

By withholding its support for a new international bank loan to Chile, the United States has sent a warning to the military regime of President Augusto Pinochet Ugarte to reform its record on human rights and to accelerate a transition to democratic rule. But critics of a US decision yesterday to abstain rather than vote against a $250 million World Bank loan say Washington has blunted the impact of its message to General Pinochet.

Critics concede the decision to abstain primarily represents a tactical shift. But they complain that the vote is an extension of a US policy that has sent mixed signals to Santiago.

``This was a real opportunity for the US to make it crystal clear that it disapproves of the Pinochet government and its continued massive abuses of human rights,'' says Peter Hakim, executive director of the Inter-American Dialogue.

``We have little leverage with Chile,'' comments one State Department official. ``By abstaining, we've demonstrated we're willing to back up our position, but it also gives us some place to go if the Chileans don't respond.''

Last summer, Elliott Abrams, assistant secretary of state for Latin American affairs, surprised members of the House Banking Committee by announcing that the US would oppose new loans to Chile from multilateral banks. State Department officials say the decision was evidence of US frustration with the human-rights abuses of the Pinochet regime.

The announcement was part of a major shift in US policy that began last year with the appointment of Harry Barnes as US ambassador to Santiago. Ambassador Barnes, an outspoken critic of Chilean human rights abuses, has distanced himself from Pinochet by opening channels to noncommunist opposition groups.

In March the US also was the author of a resolution condemning Chile before the United Nations Human Rights Commission.

Yesterday's decision to back away from an outright veto of Chilean loans was partly a concession to Treasury Department officials who were eager to avoid punishing a country that has been a model debtor. Some State Department officials have also been concerned that, by retarding economic development in Chile, ending loans might hurt the Chilean people more than the regime.

In coming weeks the US plans to abstain from voting on several proposed loans to Chile totally over $600 million.