* Pinera rules out Brazil-type taxes on investment inflows
* Wants to expand trade liberalisation with EU
(updates with later speech, paragraphs 9-12)
By Sujata Rao
LONDON, Oct 18 Chile is worried about the rapid
strengthening of its currency but is not planning Brazil-type
taxes on investment inflows, the country's President Sebastian
Pinera said on Monday.
"We are very much concerned," Pinera told reporters on the
sidelines of a conference in London. "Of course we are worried
because the peso has appreciated a lot in the past two months
... there are some sectors which are suffering a lot."
"But at the same time we are going through a phase of very
high copper prices and very good terms of trade. And Chile is
growing faster than the rest of the world, therefore it's
normal to see the peso appreciate," he added.
Chile, the world's top copper producer, has seen its peso
CLP= strengthen 15 percent since June to two-year highs
against the dollar. Huge doses of monetary and fiscal stimulus
in the United States and the prospect of more to come is also
prompting investors to put their cash into emerging markets.
The peso's appreciation has fuelled speculation Chile will
be the next emerging economy to impose curbs on overseas
Asked if Chile planned measures like Brazil's tax on
foreign investment in local bond markets, Pinera said: "No."
"We are thinking of other measures ... like strengthening
the openness of the capital account. That will allow more
Chilean investment to go abroad and it will put some pressure
on demand for forex and that will improve our exchange rate."
EXPANDING TRADE WITH EU
Pinera, on a European tour planned well before last week's
dramatic rescue of 33 trapped miners, pledged to tighten mine
safety in Chile, even if it meant extra costs for owners
Speaking later at the London School of Economics, Pinera
said Chile wanted to invoke an "evolving clause" in a 2002
agreement with Europe to further liberalise trade.
"I hope that Europe will also be ready for that and we will
have the support of Spain and England and I hope that before
the end of this week we will get the support of France and
Germany," said Pinera, who goes on to visit Paris and Berlin
He was met by a small group of chanting demonstrators
protesting Chile's use of anti-terror laws against indigenous
Chile and Britain released a joint communique pledging to
strengthen cooperation in renewable energy and to increase
trade and investment. In the communique, Britain gave its
backing for Chile to negotiate an "open skies" aviation
liberalisation agreement with the EU.
Earlier Pinera told an investment conference his country's
economy would expand this year by at least six percent --
higher than the finance ministry's projection of 5.1 percent
"Last year our economy went down one percent. This year we
grow 6 percent or more," he said.
Pinera said that while the economy is recovering well from
last year's slump and February's earthquake, the country needed
growth rates of 6 percent at least to eliminate poverty.
Pinera said doubling Chile's power generation capacity was
key to accelerating economic growth.
Asked about a figure of $30-35 billion cited by analysts
for investment in power generation capacity, he said:
"In that area. It's absolutely necessary, otherwise energy
will put a brake on our development," adding that Chile would
focus on hydro-electric and other renewable power sources.
(Additional reporting by Adrian Croft; Editing by Andrew