Investments in the economy from abroad in 2022 are 26 percent lower than in the previous year, according to the state Foreign Investments Promotion Agency (FIPA). The war in Ukraine had the greatest influence on the decline of foreign investments, they add.
In the first nine months of last year, foreign companies and individuals from abroad invested about 840 million BAM (close to 430 million euros) in Bosnia and Herzegovina (BiH). FIPA states that the BiH economy is still recovering from the impact of the COVID-19 pandemic.
However, analysts and representatives of the business community, on the other hand, claim that BiH is less and less interesting to investors due to the unstable political situation and complicated bureaucratic and legal procedures.
All stimulus measures are nullified by political instability
Director of the Union of Employers’ Associations of Republika Srpska (RS), Sasa Acic, points out that in the last few years, a number of parafiscal levies have been abolished in that BiH entity, and that certain tax burdens have also been reduced.
But even that, as he says, did not help to attract foreign investors.
“There is also the favorable price of electricity as an advantage. It is obvious that all these tax and other resource effects are nullified by political instability and legal uncertainty”, says Acic, who says that the picture of the situation is even more devastating when looking at the structure of foreign investments.
On the other hand, the Association of Employers of another entity, the Federation of BiH (FBiH), apart from political instability and slow bureaucracy, sees the lack of manpower as a key problem.
Too many institutions, too few results
BiH has a state ministry for economic relations, it also has a state agency in charge of attracting foreign investments. There are also ministries that deal with this issue at entity levels and in cantons in the FBiH.
The work of all these institutions would have to be more active and coordinated in order to attract foreign investments, says the executive director of the Association of Economists SWOT, Sasa Grabovac.
“Firstly, the rating of our country is certainly a bad image, which is characterized by an unstable political situation, and therefore capital does not like any uncertainty. Our country is also known for its complicated administration, so we need to work on the country’s image, and above all on improving procedures and everything that not only foreign but also domestic investors complain about,” Grabovac points out.
He adds that the situation in Ukraine certainly affected the situation in BiH, Slobodna Evropa reports.
E.Dz.
