Invest in the Western Balkans

Project Origin

• After a decade of conflict and subsequent economic decline, the countries of the Western Balkans found significantly lagging behind in attracting foreign investment compared to their Central and Eastern European neighbors. Despite significant improvements in the investment climate, the flows of foreign direct investments (FDI) into the Western Balkan region in 2003 were at a very low level compared to the neighboring countries, especially in terms of "greenfield" investment projects.
• The region was suffering from a poor image internationally, along with political instability in parts of the region combined with a weak business climate.
• The Invest in the Western Balkans (IWB) program was initially launched in 2004 as the European Investor Outreach Program, with support for the Austrian Ministry of Finance and European Commission with the objective to promote foreign direct investment to the Western Balkan region. Program implementation ended in September 2009.
• The IWB program worked with the governments and investment promotion intermediaries (IPIs) to help the economies of Serbia, Bosnia, Croatia, Albania, Macedonia, Montenegro and, latterly, Kosovo to capture increased FDI by strengthening capacities of the national IPIs and by providing access to leading European investors.

Project Implementation

• Assisting client IPIs in implementing targeted investment promotion activities aimed at generating FDI capable of generating sustainable jobs and higher value exports;
• Strengthening institutional capacity and effectiveness of the IPIs in the region, including peer-to-peer networking and learning events;
• Through the work with IPIs, improving the region’s image as a credible business location among the investors in Europe and beyond;
• Encouraging dialogue between the private and public sector to identify policy issues that needed to be tackled in order to improve the region's FDI competitiveness.

Project Outcomes and Impacts

• 54 investor outreach events were implemented in 17 countries with an aggregate audience of over 1000 potential investors. The events, implemented in partnership with the regional IPIs and with investor intermediaries, generated 200 serious enquiries which ultimately led to 55 site visits to the region. There have been 10 investment decisions so far, creating 450 jobs, with others still in the pipeline.
• IWB achieved significant improvements in the capacity of the targeted IPIs. All six national IPIs improved their performance as measured by the IC AS Global Investment Promotion Benchmarking (GIPB) study from 2006-2008, with the Croatian IPI being among the top reformers globally.

Global Investment Promotion Benchmarking (GIPB) Results 2006 and 2008

IPI	2006 Baseline score	2008 Update score
AlbInvest	36%	51%
SIEPA Serbia	59%	67%
FIPA Bosnia	47%	54%
Croatia Invest	25%	70%
Invest in Macedonia	47%	63%
Invest in Montenegro	38%	51%

The activities of IWB raised the profile of the region as an investment location with an extensive number of investors, strengthening the investment pipeline of the participating IPIs by generating interest from potential investors in strategic sectors.

The program also provided valuable feedback to policy makers directly from investors on the state of competitiveness of the region in attracting mobile green field FDI. For example, as a result of difficulties encountered by prospective investors to Macedonia in relation to visas and work permits, construction permits and financial administration, the IWB program was able to convene high level meetings with the Deputy Prime Minister to draw these issues to the attention of policy makers. The GoM subsequently decided to establish a formal investor aftercare servicing program.