The Reagan administration, in a wholesale abandonment of U.S. efforts to use financial pressures against Latin American military regimes with poor human rights records, has decided that it no longer will abstain or vote against loans from international development banks to Chile, Argentina, Paraguay or Uruguay.
The decision means that during the month alone the United States will vote to grant $483.8 million in loans from the World Bank and Inter-American Development Bank to the four countries: $310 million to Argentina, $126 million to Chile, $40 million to Uruguay and $7.8 million to Paraguay.
U.S. support of these loans reverses the policy instituted by the Carter administration of opposing for human rights reasons all so-called "nonbasic human needs loans" by multilateral lending agencies to Chile and of obstaining on vote for similar loans to Argentina, Uruguay and Puraguay. The Reagan administration has made clear its desire to improve relations with the rightist, military-controlled regimes in all four countries on the grounds that they are bastions of anticommunist sentiment in Latin America.
Notification of the policy change was sent by the Treasury Department July 1 to Rep. Fernand J. St. Germain (D-R.I.), chairman of the House Banking Committee. It said the State Department, having reviewed the human rights situation in the four countries, had concluded that applicable U.S. laws do not require the United States to continue opposing loans to them.
Accordingly, the Treasury letter said, it is instructing U.S. representatives at the World Bank and the LADB to support pending loan requests form the four countries. It added: "The Department of State will explain the reasons for the change in vote and urge that the governments continue their efforts to improve the overall human rights situation in their respective countries."
The notification drew a protest from St. Germain to Treasury Secretary Donald T. Regan and Secretary of State Alexander M. Haig Jr. He noted that his committee had not been given adequate notice that the administration was "contemplating a change in policy so controversial as this," said that many members of Congress "are likely to object to this change" and warned that the administration's action "may make it inappropriate to move forward" on voting U.S. contributions to the banks "until hearings are held to explore this new feature of our policy."
In apparent anticaption of the protests the move is certain to provoke from human rights advocates, the State Department has drafted an eight-page "press guidance" suggesting how to deal with questions about the situation. The guidance, which has been circulated privately to press organs, contends that there have been "signficant human rights, improvements" in the four countries. It continuous:
"Human rights problems remain. But if we are to have a human rights policy that encourages further progress, we have to be willing to recognize the improvements that have occurred. . . . We will continue to make our concerns known through appropriate channels. . . ."
That follows closely the Reagan administration's often-enunciated intention of abandoning the activist approach of the Carter administration and pursuing a policy of distinguishing between "totalitarian" regimes such as the Soviet Union and "authoritarian" governments that may practice repression but are friendly to the United States.
Advocacy of that approach caused President Reagan's nominee for assistant secretary of state for human rights, Ernest W. Lefever, to be rejected by the Senate Foreign Relations Committee. He subsequently withdrew from consideration, and the post remains unfiled.
The State Department announced last week that Lefever has agreed to serve as a part-time consultant to Haig on matters involving terrorism and nuclear proliferation. Yesterday, Sen. Christopher J. Dodd (D-Conn.) raised in the Foreign Relations Committee the operation of whether Lefever's consultant position will involve dealing with human rights questions.
A spokesman for Dodd said he had obtained a commitment from Sen. Charles H. Percy (R-Ill), chairman of the committee, to send a letter to Haig asking for clarification of Lefever's role.