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Fact Sheet: U.S. Support for Southeast European Stabilization

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News and Press Release
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The U.S. Department of State issued the following fact sheet March 30 on U.S. support for southeast European stabilization, in conjunction with the regional funding conference in Brussels of the Stability Pact for Southeast Europe:

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U.S. Department of State
Office of the Spokesman
Press Statement
March 30, 2000

FACT SHEET

U.S. SUPPORT FOR SOUTHEAST EUROPEAN STABILIZATION

The United States is strongly committed to the stabilization and revitalization of Southeast Europe and to creating the conditions for its integration into Euro-Atlantic institutions. To advance this objective, the United States joined with European partners last summer to launch the Stability Pact for Southeast Europe. The Pact aims to strengthen democratization, economic development and security in Southeast Europe through regional cooperation. For fiscal year 2000 the United States has $77.65 million available for "quick start" regional initiatives supporting Stability Pact goals. These projects will begin within one year. This amount is separate from our bilateral assistance program, which also reinforces Stability Pact goals. U.S. priorities within the Stability Pact are to promote trade and investment, attack crime and corruption, hasten refugee returns, support democracy and respect for human rights, and strengthen regional security cooperation.

The United States has taken several important steps, described below, to support the Stability Pact's objectives and implement commitments made by the President in Sarajevo, as well as to advance ongoing efforts within the OSCE and NATO that promote regional stability and cooperation. These efforts are in addition to the role the United States is playing in fostering peace and security in Kosovo and Bosnia.

Promoting Trade

In November 1999 the U.S. Administration proposed for congressional consideration the "Southeast Europe Trade Preference Act" (SETPA), which would implement, in part, the President's commitment to the countries of Southeast Europe at the July 1999 Sarajevo Summit. SETPA would authorize the President to extend duty-free treatment for five years to a number of products that are currently not eligible under the GSP program, notably iron and steel products, agricultural products, footwear, glasswear, ceramics, automobiles, bicycles and clocks and watches. (The only product area not to receive additional coverage under SEPTA is textiles and apparels.) SETPA is patterned after the Andean Trade Preference Act (ATPA) of 1990.

The United States is actively encouraging the countries of Southeast Europe to take the steps necessary to integrate into the World Trade Organization (WTO). The United States and Hungary are hosting a regional conference on Southeast Europe and the WTO in Budapest on April 5-6, 2000.

Encouraging Private Sector Investment

The Overseas Private Investment Corporation (OPIC) currently provides more than $65 million in financing and insurance for projects in Bulgaria, Croatia and Romania. OPIC-supported investment funds have invested almost $19 million in Southeast Europe.

OPIC has considerably increased its efforts to facilitate investment in the region. A $200 million line of credit for U.S. investment in Southeast Europe has been made available. On March 29, OPIC concluded an agreement that extends OPIC programs to the Republic of Montenegro. OPIC has also proposed to make its programs available in Kosovo through a bilateral agreement with UNMIK. In addition, it has opened an office in Zagreb to serve as the focus for its regional efforts.

OPIC is also launching a Southeast Europe private equity fund, totaling up to $150 million, which will provide capital for new business development, expansion, restructuring and privatization to U.S., local or other foreign firms in Albania, Bulgaria, Bosnia and Herzegovina, Croatia, Macedonia, Romania, Slovenia and Turkey.

Encouraging the Development of Small- and Medium-sized Business (SMEs)

At U.S. initiative, the European Bank for Reconstruction and Development (EBRD) is establishing a Trust Fund for Southeast Europe. The U.S. intends to provide $50 million for this initiative, which is to be funded over four years; EBRD co-financing is anticipated at $80 million. The United States is in the process of transferring its initial contribution of $10 million.

The EBRD Trust Fund will finance: 1) policy dialogue to identify and remove constraints on development of private enterprises, particularly small- and medium-sized enterprises; 2) technical assistance to promote sound business practices and good governance at participating banks; and 3) loans to SMEs through eligible local banks.

Promoting Business Opportunities and Cooperation

The U.S. Agency for International Development (USAID) established the Global Technology Network-Balkans (GTN/B at www.usgtn.org), an Internet-based clearinghouse connecting Southeast European companies seeking local trade partners, companies in other Southeast European countries, and trade with United States business. GTN/SEE offers an electronic bridge for Southeast European enterprises interested in joint ventures, strategic alliances, investments, suppliers and new markets. GTN/SEE is a joint effort among Southeast European business and trade organizations, and USAID.

At the July Sarajevo Summit, European and U.S. leaders committed themselves to developing specific means to allow the active participation of firms and non-governmental organizations from the region in procurement for reconstruction and development. To meet this objective, USAID has been working with the EBRD to establish a "Support Facility for Local Contractors and Suppliers." The initiative involves the provision of working capital and other assistance to enterprises in Southeast Europe, and the establishment of an information database. "Buying local" helps to promote employment in the region, private sector development, and greater regional economic integration and growth.

Fostering Regional Economic Cooperation

The United States also promotes regional cooperation through continued support for the Southeast European Cooperative Initiative (SECI); provision of technical assistance and feasibility studies to prepare regional infrastructure projects for European or IFI investment; assistance to Southeast European states on WTO accession, commercial law and trade development; support for microenterprise; and efforts to develop a regional labor market and strategies for labor redeployment.

Bolstering Regional Security Cooperation

Within the Euro-Atlantic Partnership Council, the United States is working with the Political Military Steering Committee to implement SEEI activities ranging from regional workshops on democratic control of armed forces to mine removal. The United States has endorsed a NATO contribution to a Stability Pact sponsored effort, to be financed by the World Bank, to retrain redundant military officers in Romania and Bulgaria.

To promote the Stability Pact's objectives of regional security and stability, the United States also participates actively in the Southeastern Europe Defense Ministerial (SEDM) process. The SEDM process brings together four NATO allies (the United States, Greece, Italy, Turkey) and five partners (Albania, Bulgaria, Macedonia, Romania, Slovenia) to cooperate on a variety of security-related issues in the region, including: improved capabilities to support peacekeeping and peace support operations through the Multinational Peace Force for Southeastern Europe (comprised of all SEDM members except the United States and Slovenia); a multinational task force of military engineers to render assistance in humanitarian emergencies and natural disasters; a Crisis Information Network to build data bases and exchange information relevant to such emergencies and disasters; and enhancement of Civil-Military Emergency Planning capabilities.

Finally, the United States has a variety of bilateral security assistance and cooperation agreements with countries in the region that support their efforts to reform their defense establishments in a manner consistent with the Stability Pact's objectives.

Fighting Crime and Corruption

The United States is working closely with the countries of Southeast Europe to reduce corruption on a local and national level through a wide range of bilateral activities and through its support for the Stability Pact's Anti-Corruption Initiative.

The United States is placing a Regional Legal Advisor in every Southeast European state to advise governments and implement training of judges and prosecutors. The United States is supporting the World Bank's Trade and Transport Facilitation program in Southeast Europe by undertaking a program of customs reform, including efforts to reduce corruption in the customs services.

The United States continues to support the SECI Anti-Crime Center in Bucharest and is working with the countries of the region to establish task forces on trafficking in women and narcotics.

The United States supports the OECD's Anti-Corruption Network for Transition Economies; funds World Bank diagnostic studies; works with NGOs to build a regional network to monitor, publicize, and exchange information on corruption and how to combat it; supports the International Law Enforcement Academy in Budapest; and supports the efforts of the International Law Institute in Prague to provide practical skills training for reform-minded lawyers and jurists.

Assisting Refugees

The United States continues to provide substantial assistance to refugees and internally displaced persons in Southeast Europe to return home through support for international organizations, such as the United Nations High Commissioner for Refugees (UNHCR), as well as international non-governmental organizations (NGOs). On March 9, Secretary Albright announced that the Department of State would support NGO projects in Bosnia and Croatia to repair one hundred war-damaged homes on each side of the border.

Promoting Democracy

The United States supports national and regional efforts to strengthen democracy throughout Southeast Europe. This assistance promotes good governance through programs promoting fiscal decentralization, legal reform and training of local government officials; advances human rights activities through various initiatives including programs for Roma and Sinti; and supports regional efforts to review the teaching of history in Southeast Europe. The United States is also helping to launch a regional economics faculty and to establish a regional school of political studies. U.S. assistance will strengthen media by contributing to the creation of a regional news agency and a faculty of journalism in Montenegro. The United States continues its support for non-governmental organizations (NGOs), including women's NGOs, and for efforts to build an NGO regional network.

Supporting Democratic Change in the Federal Republic of Yugoslavia

The United States is supporting projects to assist the Serbian democratic opposition in its struggle to end the dictatorial rule of Slobodan Milosevic. The United States also actively participates in the Hungarian-led "Szeged Process," which promotes ties with opposition-governed municipalities in Serbia.

The United States is also supporting the democratic efforts of the Government of the Republic of Montenegro to advance economic and political reform.

U.S. Assistance

For 2000, the overall amount of U.S. assistance available to the region is $624 million, which includes bilateral programs with Southeast European countries and regional initiatives. This amount includes $150 million that was pledged for Kosovo last November. The Administration has requested from the Congress funding for the region for 2001 as well as additional funding for this year. This request is subject to Congressional approval.

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(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)