UNDP Black Sea Trade and Investment Promotion Programme (BSTIP) The UNDP Black Sea Trade and Investment Promotion Programme (BSTIP) aims at promoting trade and investment linkages among the BSEC countries (

Investment Potential in the Black Sea Region Giuseppe Belsito UNDP Regional Programme Coordinator Thessaloniki, 12 November 2009 UBCCE FORUM United Nations Development Programme UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Investment Climate for BSEC 1. Characteristics of Economies Diverse characteristics in the region: Three countries (RUS, TUR and GRC) account for 4/5 of BSEC economic output Smaller states are more outward orientated than larger countries Five countries have current accounts balanced or surpluses AZE, GRC, ROM, RUS & TUR account for over 80% of inward foreign investment stock; Notably large FDI outward stock from RUS UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Investment Climate for BSEC 2. Regulations governing international transactions UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Investment Climate for BSEC 3. Legal Framework UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Inward FDI in BSEC (2007) US$ Millions Source: UNCTAD (2008) World Investment Report 2008, Geneva UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Inward FDI Performance (2008 WIR ranking) Note: ranking out of 141 countries Source: UNCTAD (2008) World Investment Report 2008, Geneva UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Inward FDI Performance (Methodology) Ranks countries’ FDI inflows relative to the size of their economy, with a coverage of 141 countries, using average flows from 2005 to UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Inward FDI Potential (2008 WIR ranking) Note: ranking out of 141 countries Source: UNCTAD (2008) World Investment Report 2008, Geneva UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Inward FDI Potential (Methodology) Based on a composite index of 12 variables which are believed to determine attractiveness for investment. No weights attached to each. 1.GDP per capita 2.GDP Growth over last decade 3.Share of exports in GDP 4.Telecom indicators 5.Commercial energy usage 6.R&D Expenditure 7.Tertiary education level 8. Country risk 9. World market share in exports of natural resources 10. Market share of imports of parts and components 11. Market share of exports of services 12. Share of world FDI inward stock UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Results from trade simulation UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Specific sectors where a high intra-regional Trade & Investment potential exists Agro-food Products Fish and seafoods, fresh frozen or chilled Nuts and fruits, fresh or dried Sugar and sweeteners Chocolate and cocoa based products Pasta and cereal based products Textiles and Clothing Cotton yarn and fabrics Yarn and woven fabrics of synthetic materials Knitted or crocheted fabrics Women and men’s clothing Footwear UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

(…) Paper Products Paper products Printed paper based materials Leather Products Bovine or equine leather, raw Articles of leather Articles of apparel, clothing accessories of fur skin Metal Products Construction materials of iron or steel Iron or steel based tubes, pipes, grills etc.. Copper based articles Wood Products Logs and lumber, panels and plywood Household and office furniture UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Indicative potential in cross border services trade Based on competitiveness, size of trade flows and commitments made in the WTO, the following sectors have a high trade potential UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Indicative cross border investment potential in BSEC (M&A, greenfield) Banking and financial services Computer services Construction Health services Mining and energy Telecommunications Transportation & logistics UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)

Thank you… For further enquiries, please contact UNDP Black Sea Trade and Investment Promotion Programme (BSTIP)