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November 24, 2017 www.intellinews.com I Page 10
concentrated in the financial services sector despite what UNCTAD says is “significant potential” in manufacturing. “With its competitive labour costs and proximity to European and emerging markets in Asia
and North Africa, the region is strategically placed to attract efficiency-seeking FDI in the manufacturing export sectors and their value chains,” says the report. “This includes the automotive sector, in which cars have been produced since the 1950s.”
Despite drawbacks such as its small and fragmented markets, the region has other advantages such as a combined market size of 21mn people, a young workforce and economies that are either EU candidate countries or potential countries.
In terms of policy, UNCTAD also points to “significant progress in investment policy reform across the region and the end of a harmful fiscal race”.
Still, further progress is needed if the 2020 Strategy goals are to be met, for example in
easing restrictions on trade and improving regional cooperation.
“Enhanced regional cooperation is of crucial importance to enhance FDI in Southeast Europe as we aim to guide the region to meet the strategic needs of investors and avoid the race to the bottom,” commented Goran Svilanovic, secretary general of the Regional Cooperation Council (RCC).
Another proposal from UNCTAD is the creation of a regional investment promotion platform. “Taking a regional approach to investment attraction makes sense,” said James Zhan, senior director of investment and enterprise
at UNCTAD. “Multinational firms and investors operate and invest regionally, based on strategic decisions about market size, regional production networks and infrastructure links.”
Rather than see FDI attraction as a zero-
sum game, economies can benefit by pooling resources and offering a joint value proposition to investors, Zhan added.
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