SARAJEVO, Dec 10 (Reuters) - Western Balkans countries
should work together to attract foreign investors, as capital
inflows have fallen sharply this year in all countries except
Montenegro, foreign investment promoters said on Thursday.
The foreign direct investment (FDI) in the region amounted
to 4.5 billion euro ($6.62 billion) in Jan-Sept, a deep decline
from the previous year, mainly due to the global economic
downturn and the grim outlook for the region still outside the
European Union.
"We have realised that big investors do not eye the
countries individually but rather the region as a whole," said
Petar Ivanovic, a Montenegro investment promotion agency
official.
Montenegro was the region's only country that continued to
enjoy a boom in investment, for the fifth consecutive year,
thanks to its liberal taxation policy and promotion of
public-private partnerships, especially in tourism, Ivanovic
said.
"Montenegro has attracted 726 million euros in foreign
direct investment (FDI) in the first nine months of this year,
which is six percent up from 2008 all together," Ivanovic said.
He added that FDI is expected to reach 951 million euros by
the end of 2009 and may exceed 1 billion euros in 2010 if all
agreed projects are implemented.
Ivanovic said however that individual economies were too
small and there was a need to identify joint projects and
harmonise business legislation to keep investors' interest.
The network of agencies from Serbia, Croatia, Montenegro,
Bosnia, Macedonia and Albania will next year create a joint web
site to promote investment possibilities, regularly exchange
data and hold meetings with potential investors.
In Serbia, FDI fell by 60-70 percent to 1.5 billion euros
while Croatia received 900 million euros, down from 3.3 billion
euros in the whole of 2008: most investment went to financial
and retail sector rather than production.
"In future we must focus on green-field investments," said
Bozica Lapic, the deputy head of its foreign investment
promotion agency.
Haris Basic, the head of Bosnia's agency, said that apart
from the global economic downturn, political instability and
stalled privatisation processes were the main reasons behind a
40 percent fall in FDI.
The countries of the region have for years relied on foreign
investment for growth and a lack of it has weighed on their
economies.
Economic growth in Bosnia is expected to shrink by 3.5
percent. In Serbia, the economy is expected to contract by 3
percent and Croatia's and Montenegro's economies by close to 6
and 4 percent respectively.
($1=.6799 Euro)
(Editing by Daria Sito-Sucic and Rupert Winchester)
By Maja Zuvela (Source: in.reuters.com )
