Political stability, co-operation and reforms will lead to foreign investment in the region, officials said.
By Igor Jovanovic for Southeast European Times in Belgrade -- 31/03/14
Balkan states must work together to draw investment, Serbia Prime Minister Ivica Dacic said. [European Bank for Reconstruction and Development]
After years of severe economic crisis, Southeast European countries are eyeing reforms and mutual co-operation in order to become more attractive to foreign investors.
"Now is the key moment for Balkan countries to attract more foreign investment," EU Enlargement Commissioner Stefan Fule told the prime ministers of Southeast Europe last month at a meeting organised by the European Bank for Reconstruction and Development in London.
None of the Western Balkan countries currently have a functioning market economy, he said. The countries are strained by high unemployment, large budget deficits and public debt.
The prime ministers, in a pledge to improve business conditions, signed an agreement worth 10.5 million euros to support small- and medium-sized enterprises in the region.
Serbia Prime Minister Ivica Dacic told SETimes that in order to attract foreign investment, the region needs stability and mutual co-operation first.
"No one will invest in instability. The Balkan states must organise to realise what the common interest is. If they fail to do so, it will benefit some other regions, not ours," Dacic said.
Serbia plans to pass 21 reform laws by the end of June in an effort to improve business conditions.
Aleksandar Vucic, who is expected to become the country's next prime minister, said new legislation governing labour, bankruptcy proceedings, civil servants and investment permits would be passed.
"The plan is for us to work hard over the next two years and form a national priority plan," said Vucic.
Economist Sasa Djogovic, an associate with the Institute for Market Research, told SETimes that the incoming Serbian cabinet would have to dedicate itself seriously to reforms in order to turn the state into a competitive place for foreign investment.
"The government will not be able to wrap up all of those reforms in four years, but at least at the end of the term it will be seen that there are social and economic prospects in the country," Djogovic said.
In Bosnia and Herzegovina (BiH), the energy sector is perceived as the greatest chance for investment.
"Bosnia and Herzegovina has extremely high hydro potential that is used up to 35 percent, along with wind and sun potential and possible oil and natural gas beds. According to analyses, our country also has about 50 million tons of 'black gold,'" said Vjekoslav Bevanda, chairman of the BiH Council of Ministers.
Drawing investors to the region requires political stability and investment in infrastructure, he said.
"Infrastructure projects are of regional importance, such as the Adriatic-Ionian motorway and the Ionian Adriatic Pipeline. We need to join forces with other countries of the region and only thus can we be stronger and more competitive in the European and global markets," Bevanda told SETimes.
Cvetko Smilevski, the founder of Macedonian Business Academy Smilevski, agreed.
"Improving the economic situation can occur only in the long run by providing long-term certainty to investors. It requires solving a very difficult political issue: eradicating or at least drastically reducing corruption and introducing the rule of law in the region. In the short-term measures should be continued with the benefits for investment but without discrimination against domestic investors," he told SETimes.
Correspondents Bedrana Kaletovic in Sarajevo, Klaudija Lutevska in Skopje and Nedjeljko Rudovic in Podgorica contributed to this report.
What other measures can countries take to foster foreign investment? Share your ideas in the comments section.