Interview – Gordan Milinić – director of Foreign Investment Promotion Agency of Bosnia and Herzegovina

1. What is the current investor interest for Bosnia and Herzegovina?
According to the experience of FIPA and having in mind the number of meetings that we maintain through year with potential foreign investors, we can overtly say that there is an interest. Investors do show interest for investing in all business sectors starting from energy through the metal sector to the tourism, agriculture, wood industry, etc. What you should keep in mind is the fact that investment decisions are not taken overnight and that it is preceded by a large number of research studies, as well as negotiations. Also, no investment is realized within a few days or within a month. The realization of big projects can last up to several years. Researches shows that by the time of indicating of interest to making a decision to invest, takes between two to three years. What we lack is powerful media promotion of the country and its resources abroad in order to inform wider business community about our capabilities.

2. In your opinion, what are the most important advantages that B&H offers to investors?
First of all these are unused potential in the fields of energy, agriculture, tourism, metal sector, wood industry, etc.
When we talk about investment opportunities in B&H agricultural sector, first of all are highlighted: high percentage of unused land, favorable climate conducive to the cultivation of different crops of fruit and vegetables to the cultivation of cereals, medical and aromatic plants, as well as livestock, meat production and meat products, and milk and milk products.
If we talk, for example, about the production of berries, Bosnia and Herzegovina is becoming recognized in international circles of manufacturing of raspberries. According to the report the USDA – National Agricultural Statistics Service for 2015, B&H took a high 11th place in the world in production and export of raspberries, and 16th place in the world for the production of plums.
And if we talk about the metal sector, for example, with a focus on the industries of auto parts, there we point out the fact that in Bosnia and Herzegovina there is a large number of companies that manufacture various parts for European and global automotive industry. Nowadays B&H companies produce for brands such as: Companies products for brands such as Mercedes, Audi, BMW, Volkswagen, Toyota, Mazda, Opel, Ford, and Ferrari. Our strengths are also favorable geographical position, long tradition of industrial production, a large number of available industrial zones, attractive locations and manufacturing facilities, favorable legislation for foreign investors.
The existence of the treaty of the duty free trade or preferential status with almost all the major countries allows duty-free export of all products that are produced in B&H all around the world, is also a big advantage. At the same time we have a very large offer of cheap production and office space, acceptable costs of business, and availability of labor at reasonable prices.
Also, there is some support for investment and exports.

3. According to your experience what most investors deducted from investments in B&H?
First of all it is political instability that we witnesses past few years, particularly in 2016. It is directly related to the decline in investment in B&H, as evidenced by the foreign investors we talked to the last year, and that constantly emphasized that they don’t want to invest their money in politically turbulent areas.
Considering that the political instability is constantly present in B&H, and thus we have constant decline in the inflow of foreign investment, we have started to appeal to the media on political leaders to facilitate the arrival of foreign investors by ensuring political stability in the country, and then you will faster implement the necessary reforms related to the business environment to which appeal both, domestic and foreign investors.
Without these prerequisites, we will not be able to reach a significant level of foreign investment in B&H.

4. In which sector do investors invest most?
When it comes to the sector in which investors invest most, there stands out banking sector, manufacturing and telecommunications.

5. In accordance to previous experience from which countries come most investors in B&H?
The three most important countries investors in Bosnia and Herzegovina are: Austria, Serbia and Croatia.

6. Do you have any advice on how to overcome the existing barriers in attracting foreign investors and how to keep them in Bosnia and Herzegovina?
It can be by ensuring political stability in a country, by improving the business environment and working more on promoting the country abroad.
It is necessary to ensure terms for businesses that can operate without administrative difficulties and not to wait for six months for certain licenses.
Strive for establishing B&H business environment in line with the EU, from where most investors comes.

7. What are your predictions for the future when it comes to foreign investors?
If we run projects in the energy sector for which we have found investors in 2016, and if investors that are interested in the projects of highways and expressways in B&H reach an agreement with the relevant authorities, and if we intensely start with implementation of the announced projects in the field of tourism, we could record a significant increase in the inflow of foreign investment.
Forecasts of the B&H Directorate for Economic Planning on the inflow of foreign investments for 2017 are roughly at last year’s level, and they are based on the above projects.
However, I want to emphasize once again that if we continue with the political turbulence, investors will continue to go around in a wide arc, then we should not wonder why we have no investments.

8. How do you see Regional Project for Market Investments and Statistics – TIS?
There is no doubt that EU regional cooperation is treated as a key principle for political stability, security and economic development of the Western Balkan. It is a fact that many of the challenges we face are not only ours, but are common, have a cross-border dimension, which includes regional neighbors and requires continuous communication and open relations. Individually we are all small market and thus foreign investors watch us as a region, and often emphasize that one of the reasons for their presence in the region is to adopt the technology and to participate in changing the economy, based on the potential of small and medium enterprises in the region.
The project TIS is devised in a way it will significantly contribute to the communication of all relevant institutions and organizations in this field, exchange of information and experience, and of which particular importance is the promotion of the region, which will be done through TIS project.

Source: Horizon2024