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Foreign Direct Investment in the Western Balkans Marco Ranieri CIRPET - Research Centre on Transition and Developing Countries Department of Economics.

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Presentation on theme: "Foreign Direct Investment in the Western Balkans Marco Ranieri CIRPET - Research Centre on Transition and Developing Countries Department of Economics."— Presentation transcript:

1 Foreign Direct Investment in the Western Balkans Marco Ranieri CIRPET - Research Centre on Transition and Developing Countries Department of Economics University of Turin (Italy)

2 Foreword Western Balkans: Croatia, Bosnia Herzegovina, Serbia (Kosovo), Montenegro, Macedonia, Albania +Slovenia => CIRPET Research “Economic relations between Italy and former Yugoslavia” (2007) Research financed by Unicredit Group and Intesa San Paolo and supported by Regional Agency for Investments, Export and Tourism-Piedmont Aim: to provide practical information for Italian companies interested in the target area Main sources: EBRD Transition Report and “on the field” research 1/33

3 As the Eastern EU enlargement for the moment is stopped (Turkey and European Neighborhood Policy-ENP countries left), the focus is on the Western Balkans Europe’s next high-value location for manufacturers => the Western Balkans can be a valid production platform Why the Western Balkans? 2/33

4 Relations with EU and NATO 3/33

5 Macroeconomic data (2006) 4/33

6 Despite some differences… Per capita GDP US$ Slovenia – BiH Unemployment 5,6 % Slovenia – 41% BiH Inflation rate 2,5% Slovenia, Albania – 12,5% Serbia 5/33

7 5 Common Location Key Advantages 1.Highly competitive overall cost structure (labor, land and utilities cheaper than new EU member countries) 2.Labor availability, cost and quality (well educated and experienced workforce, technical expertise) 3.Strategic location and proximity (Adriatic access and adjacent to both Western and Central Europe) 6/33

8 4.Local availability of raw materials and supply network (wood, metals, agricultural products) 5.Improving fiscal and incentive regimes (regulatory, fiscal and tax reforms and investor incentives) 7/33

9 Commercial Indicators 8/33

10 Main features All countries register trade and current account deficit Slovenia and Croatia are the most open economies Almost all the trade is with EU and neighboring countries => foreign investors should act with a “regional approach” (opportunity to serve a “regional” market) 9/33

11 FDI flows ( ) 10/33

12 Main features In all countries there were some years with decreasing flows, due to internal factors (e.g. Albanian rise in Macedonia) or external (general decrease of FDI in ) BUT => The general trend is positive 11/33

13 FDI flows and stocks ( ) 12/33

14 Main features Croatia has an exceptional capacity to attract FDI: more than 13 billions US$ (higher per capita stock) Slovenia is the richest country and the most open to world trade BUT has a low stock of FDI, due to national aversion to privatize some sectors (e.g. Nova Ljubljanska Banka). Outward investment Montenegro has an high per capita stock Albania has the lowest per capita stock Positive expectations for Serbia (Fiat-Zastava) 13/33

15 Countries’ most interesting sectors for FDI 14/33

16 Slovenia Tourism Construction Infrastructure and logistic Privatizations (insurance, public utilities, TLC) Wood processing industry Plastic industry Information and communication technology. 15/33

17 Croatia Tourism Information and communication technology (Siemens, Ericsson are already present) Pharmaceutics (Pliva-Barr Pharmaceuticals USA, Belupo, GlaxoSmithKline) Biotechnology (project for a tech-park in Varaždin) Business services (processing data, call centers, data entry, telemarketing, back office). 16/33

18 Bosnia Herzegovina Textile and footwear industry Metals (Birac Zvornik, Aluminium Mostar, Bh Steel Company-Mittal Zenica) Automotive (Skoda, Volkswagen) and mechanics Wood processing industry and agriculture Tourism (mountains-Sarajevo Olympic Games) Information and communication technology Privatization (TLC, public utilities) Infrastructure. 17/33

19 Serbia Mechanics Specialized manufacture (e.g. jewelry) Furniture production Privatization Other manufactory sectors Automotive and supply chain (Zastava in Kragujevac) 18/33

20 Fiat - Zastava On 28 July 2008, Fiat signed a letter of intent, undertaking to take control of the automobile division, investing 700 mln. euro in return for a 70% stake in the company (currently owned by the state) and an additional 100 mln. euro of investment from the Serbian government 19/33

21 Montenegro Tourism and infrastructure (e.g. PortoMontenegro) Wine industry Privatization (public utilities e.g. Telecom Montenegro-Matav and ProMonte-Telenor) Automotive (Daido Metal Kotor). 20/33

22 Macedonia Textile and footwear industry Informatics and telecommunications (software production, etc. USAid wireless Project) Business services (data entry, data processing) Chemical industry Agriculture, food and beverage processing industry Tourism. 21/33

23 Albania Textiles and garments Shoe manufacture and leather processing Agribusiness Business services (processing data, call centers, data entry, telemarketing, back office, etc.) Infrastructure and tourism. 22/33

24 Automotive Sector 23/33

25 Food and Beverage Sector 24/33

26 ALBANIA Agency for Foreign Investmentwww.albinvest.gov.al Albanian Centre for International Tradewww.acit-al.org Chamber of Commerce of Tiranawww.cci.gov.al Ministry of Economywww.mete.gov.al Ministry of Financewww.minfin.gov.al Ministry of Foreign Affairswww.mfa.gov.al National Bank 25/33

27 BOSNIA HERZEGOVINA Bosnia Herzegovina (BiH) Agency for statisticswww.bhas.ba Central Bankwww.cbbh.ba Directorate for European Integrationwww.dei.gov.ba EPPU Officewww.eppu.ba European Regional Economic Development Projectwww.eured-bih.org Foreign Investment Promotion Agencywww.fipa.gov.ba Investment Guarantee Agencywww.igabih.com Ministry of Foreign Affairswww.mfa.gov.ba Federation of Bosnia Herzegovina (FBiH) Agency for Privatization of FBiHwww.apf.com.ba Chamber of Economy of FBiHwww.kfbih.com Investment Bank of FBiHwww.ibf-bih.com Srpska Republic (SR) Agency for SMEs of SRwww.rars-msp.org Chamber of Commerce of SRwww.komorars.ba Directorate for Privatization of SRwww.rsprivatizacija.com Institute of Statistics of SRwww.rzs.rs.ba 26/33

28 CROATIA Central Bureau Of Statisticswww.dzs.hr Chamber of Commerce (Zagreb)www.zg.hgk.hr Chamber of Economywww.hgk.hr Croatian Bank for Reconstruction and Developmentwww.hbor.hr Croatian National Bankwww.hnb.hr Croatian Privatization Fundwww.hfp.hr Hitro Servicewww.hitro.hr Istrian Development Agencywww.ida.hr Ministry of Economywww.mingorp.hr Ministry of Foreign Affairswww.mvpei.hr Ministry of Tourismwww.mmtpr.hr Trade and Investment Promotion Agency 27/33

29 MACEDONIA Agency for Foreign Investmentswww.investinmacedonia.com Agency for Promotion of Entrepreneurshipwww.apprm.gov.mk Chamber of Commercewww.mchamber.org.mk Free economic Zoneswww.fez.gov.mk Governmentwww.vlada.mk Macedonia competitiveness activitywww.mca.org.mk Ministry of Economywww.economy.gov.mk Ministry of Financewww.finance.gov.mk Ministry of Foreign Affairswww.mfa.gov.mk National Bankwww.nbrm.gov.mk Privatization Agencywww.mpa.org.mk Secretariat for European Affairswww.sei.gov.mk State Statistical Officewww.stat.gov.mk 28/33

30 MONTENEGRO Centre for Entrepreneurship and Economic Developmentwww.visit-ceed.org Central Bankwww.cb-mn.org Governmentwww.vlada.cg.yu Institute for Strategic Studies and Prognoses Investment Promotion Agencywww.mipa.cg.yu Montenegro Business Alliancewww.visit-mba.org Statistical Officewww.monstat.cg.yu 29/33

31 SERBIA Agency for Investment Promotion in Central Serbia Agency for Privatizationwww.priv.yu Agency for SMEswww.sme.sr.gov.yu Chamber of Commercepks.komora.net Foreign investors councilwww.fic.org.yu Government of Serbiawww.srbija.sr.gov.yu Ministry of Foreign Affairswww.mfa.gov.yu Ministry of International Economic Relationswww.merr.sr.gov.yu National Bank of Serbiawww.nbs.yu Serbia Investment and Export Promotion Agencywww.siepa.sr.gov.yu Statistical Officewebrzs.stat.gov.rs 30/33

32 SLOVENIA Agency for Entrepreneurship and Foreign Investments Agency for Foreign Investmentswww.investslovenia.org Biz Opportunities Exchange Systemwww.borza.org Central Bankwww.bsi.si Chamber of Commercewww.gzs.si Ministry of Economywww.mg.gov.si Ministry of Financewww.mf.gov.si NLB-Nova Ljubljanska Banka Public Institutionswww.gov.si Statistical Office 31/33

33 Other websites Balkan Academic News (Central European University-Budapest) Many other links on the Balkans at disposal on demand 32/33

34 Marco Ranieri CIRPET Research Centre on Transition and Developing Countries Department of Economics University of Turin (Italy) 33/33 Thank you for your attention!


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