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U.S. Joins New International Investor Group : MIGA to Insure Against Losses From War, Riots

June 19, 1986|Associated Press

WASHINGTON — The United States on Wednesday signed an agreement to become involved with a new international body that would insure investors in foreign countries against loss from war, riots and other risks.

The involvement of the United States was the key factor in the establishment of the Multilateral Investment Guarantee Agency, or MIGA.

James W. Conrow, deputy assistant secretary of the Treasury, signed for the Reagan Administration, obligating the United States to a $22-million contribution. The United States was the 28th country to sign, bringing the total of capital promised for the agency to $443 million out of a projected $1.08 billion.

Meeting in Washington

A. W. Clausen, president of the World Bank, immediately called a conference in September to set up rules and policies for the agency. The meeting was expected to take place at the bank's headquarters in Washington.

Ibrahim Shihata, a vice president of the World Bank, has been been in charge of the negotiations.

Clausen is leaving his job at the end of this month. He proposed setting up MIGA in his first speech to the member governments in 1981, when he took over from Robert McNamara, a former U.S. secretary of defense.

"MIGA is now firmly on the way to realization," Clausen said in a statement. "We hope that this will lead to . . . the initiation of operations in 1987."

Investors who take out policies with MIGA will be protecting themselves against expropriation, breach of contract or a decision by the host government to freeze their funds, as well as against damage to their property from war or civil strife.

Conable to Head

MIGA also will give advice to investors and promote international commercial agreements.

Barber Conable, who takes over as head of the World Bank in July, will head MIGA.

Eventually, MIGA is expected to sustain itself from the premiums paid for the insurance.

The U.S. government now has its own agency to do a similar job, the Overseas Private Investment Corporation (OPIC), one of the few federal agencies that turn a profit.

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