Almost one and a half billion marks in direct foreign investments were registered by the Central Bank of Bosnia and Herzegovina last year, which, as they announced, is the largest annual amount so far.
Although it sounds optimistic, the structure of investments, say economists, does not even indicate a significant economic momentum. The potential exists, but not the plans and economic goals, according to experts.
Gatherings of potential investors in Bosnia and Herzegovina almost as a rule give rise to optimism, point to potential, appeal to the creation of an environment. It is similar to the recently held gathering in Konjic aimed at investing the diaspora in the local community.
“If it wasn’t for Bosnia and Herzegovina, I don’t know if I would be able to survive in Germany, because there is a great demand for people there. What was the problem in Bosnia and Herzegovina that is not now, thank God, that the worker was not paid before, and the last few it has changed a lot over the years”, Nihad Tabak, an investor, says.
The structure of investments, when it comes to last year, however, shows that we are not using the potential enough, with the exception of the electricity production and supply sector, which leads the way with 200 million marks.
Most of the growth of foreign direct investments is a consequence of high reinvested earnings of existing non-financial and financial companies with foreign investments, while investments in the form of equity capital and other capital amounted to a total of 500 million BAM.
“The news about investment growth is good, but there is not enough investment in production, even though the economic conditions are tempting,” says economist Zoran Pavlović.
“When we look at all that, it is a very poor investment in BiH, bearing in mind the capacities we have in terms of the range of raw materials that are available to foreign investors, the price of electricity, which is very favorable and relatively stable”, economist Zoran Pavlovic says.
The authorities in charge of creating a business environment and legal framework are often only declaratively on the threshold of effective solutions.
“To be completely realistic, it is very difficult to expect them to invest their capital in a country where there is no legal security in a country where the security situation is not satisfactory despite the fact that they are tempted by the fact that the profit tax here is the lowest of most countries in the world”, PM of the Federation of BiH Nermin Niksic said.
There are no clear goals and objectives for attracting foreign investors that are implemented, are the warnings we often hear. However, there are no significant developments.
“No one deals with the economy here. Why? Because the bureaucrats live on VAT”.
Almost half of the investors come from three countries, Austria, Croatia and Serbia. Around 40 percent of foreign investments belong to the banking sector, telecommunications and trade, out of a total of 17.4 billion marks so far.
