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November 24, 2017 www.intellinews.com I Page 9
SEE economies lag behind on attracting FDI
bne IntelliNews
The aspiring EU members of Southeast Europe are struggling to attract foreign direct investment (FDI), with only Albania and Serbia reporting a significant increase above 2010 levels as of 2016, finds a new report from
the United Nations Conference on Trade and Development (UNCTAD).
The study looks at progress in the Western Balkans 6 countries plus Moldova towards
the goals set in the SEE Strategy 2020, which envisaged a 103% increase in FDI to the region above the 2010 level by the end of the decade.
Slightly over halfway towards this date, however, “progress has been limited”, the report says, with an average increase of just 27% recorded as of 2016, a year that saw a slight y/y decline in FDI inflows.
Overall, “inflows to the region have partially recovered from the postcrisis low of $3.8bn in 2012, but they remain far from the peak of $8.7bn in 2008,” according to UNCTAD.
It also reveals significant differences between countries, with only Albania surpassing pre- crisis annual volumes of investment in 2016. Both Albania and Serbia have seen investment rally above the 2010 level recently, while in Bosnia & Herzegovina, Montenegro, Moldova and Kosovo, FDI inflows in 2016 were below the Strategy 2020 base year of 2010.
The report also points out that the region has performed poorly compared to its regional peers. “The decline in FDI inflows experienced by the SEE region between the periods 2007– 2011 and 2012–2016 has been markedly stronger than the decrease seen in transition economies (excluding SEE), and in the EU, in both absolute and relative terms,” it says.
In 2016, global flows of FDI declined by 2%, while the decline in the seven SEE countries was considerably higher at 5%.
FDI into the region also remains