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Deal lets U.S. investors back into Yugoslavia
  
BELGRADE, July 21 (Reuters) - The U.S. government's Overseas Private 
Investment Corporation signed a deal on Saturday to boost private U.S. 
investment in Yugoslavia and support its economic reforms. 

The OPIC agreement also allows a $150 million Southeast Europe Equity Fund, 
managed by Soros Private Funds Management, to start doing business in 
Yugoslavia. 

"Today's agreement not only signals the green light for the U.S. investors 
but indeed is a signal to the entire international investment community that 
Yugoslavia is open for business," Peter Watson, OPIC president and CEO, told 
reporters. 

The pact replaces a previous one signed in 1973 with the former six-member 
communist federation. OPIC, a U.S. government agency facilitating private 
investment, has not been active in Yugoslavia since the break up of the old 
state in 1991. 

The deal comes as discontent with reforms grows and people fear massive job 
cuts as the federation of Serbia and Montenegro struggles to reshape the 
economy and woo investors after a decade of sanctions, isolation and 
mismanagement under the rule of ousted leader Slobodan Milosevic. 

Dragisa Pesic, Yugoslav outgoing finance minister and prime minister 
designate, welcomed the OPIC deal. 

"I am happy to have signed the agreement and opened space for more intensive 
economic ties between our two countries. I believe the investment support 
will help Yugoslavia's economic development," said Pesic, who will assume the 
post next week. 

Pesic is a member of Montenegro's opposition Socialist People's Party (SNP), 
which quit the last government in protest at Serbian reformers' decision to 
hand former Yugoslav president Slobodan Milosevic over to the U.N. war crimes 
tribunal. 

But the SNP agreed to form a new cabinet with Serbia's reformers in return 
for a new government structure, with an equal number of ministers from Serbia 
and Montenegro so neither side can outvote the other. 

"This is a very good time to commit the confidence of the United States in 
the reform process that you are undertaking," Watson said after the signing 
ceremony. 

"This is the beginning and we look very much forward to working with you and 
making your reform process a success," he said. 

13:04 07-21-01


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