ANALYSIS
However, as a region surrounded by the Black and
Adriatic seas, key central-European economies and
Turkey, one might expect Southeastern Europe to
have had more success attracting FDI than it has.
World Bank data2 show that developing Europe and
Central Asia have consistently attracted substantially less FDI than developing countries in East Asia
& Pacific as well as Latin America & the Caribbean for
the last 20 years, as shown in the following graphic.
While attracting FDIs to the region certainly has
the potential to reduce the region’s stubbornly high
unemployment rates, brain drain and a host of other
economic woes, it is unlikely to be a panacea all on its
own. Today, FDIs employ a tiny fraction of the region’s
private sector workforce and over 54% of jobs created by FDIs since 2009 have been in the automotive
sector 3. Also, many of the region’s biggest value FDIs
in the last 20 years have been in the form of acquisitions of inefficiently run public assets, which sometimes resulted in job losses rather than growth.
The real challenge is getting more companies to
consider investing in the region at all, rather than in
2 Foreign direct investment, net inflows data set available at:
http://data.worldbank.org/. Note that the country’s included
in the World Bank’s “Developing Europe & Central Asia” group is
not equal to SEE countries referred to in this article.
3 EY’s European Investment
Monitor 2014.
each
country individually.
Every
country in the region
now has a national investment promotion agency,
whose job it is to promote its
country’s competitive advantages to potential investors. A
casual perusal of their web sites
reveals how each organization would
like their country to be seen by this audience. In addition to claims about the quality of their
workforces, economic stability, low costs and investment incentives, virtually every agency’s elevator
pitch includes location and access to much bigger
markets in the immediate neighborhood. This recognizes the fact that the region’s combined GDP is
just under USD $600 billion and its combined population less than 65 million people (that’s 10 countries’ combined figures that are less than Turkey’s
alone).
Continued on page 34
UPCOMING EVENT
Don’t Miss AmCham’s
“Customer Service as a Marketing Tool” Seminar
Thursday, February 26th, 2015
10:00 – 14:00 at the M6 Educational Centre in Skopje
Barbara Operschall, longtime CEO of Best Western Central
Europe in Vienna, Austria will cover the following topics:
• Tea