REGIONAL COOPERATION AND ECONOMIC INTEGRATION

Table 5: FDI p.c. (current US dollars)
CEFTA-2006 TRADE COOPERATION
Country 1997 2007
Albania 15.38 150.57
Bosnia and Herzegovina 0.27 530.19
Croatia 116.54 1,108.16
Macedonia, FYR 7.92 156.03
Moldova 21.54 145.72
Montenegro - 1,461.94
Serbia 96.73 421.23
CEFTA 2006 55.84 492.08
Bulgaria 61.85 1,175.09
Romania 54.16 440.18
Source: The World Bank, International Monetary Fund, World Economic Outlook
Database, April 2009
Further analysis provides a brief recapitulation of FDI inflows to the Western Balkans by
the country of FDI origin and by activity that was most attractive for foreign investors. First
thing that can be noticed is that Austria is the major investor in the region. Its share in each
country’s total FDI inflows ranges from 7.1% for Montenegro to 32.9% for Bosnia and
Herzegovina. The second country that has a large share in Western Balkans’ FDI inflows
(although not in Croatia) is Greece, with the share in total FDI stock (2004-2007) of 54.2%
for Albania, 13.7% for Serbia (FDI inflows 2000-2008), and 9.9% for Macedonia (FDI
inflows 2003-2008). Germany, Slovenia and Italy also play a significant investment role for
countries of Western Balkans. Regarding activities and sectors, financial intermediation
is the most interesting sector for foreign investors. For Croatia, 41.7% or 7,212.1 mil
EUR are invested in financial intermediation (except insurance and pension funds) in the
2000-2008 period; for Serbia, financial intermediation has a share of 30.8% in total FDI
inflows 2004-2008, that is 4,620.3 mil USD; in Bosnia and Herzegovina total investment
in financial intermediation for the 2004-2008 period amounts to 2,627.0 mil KM or 38.1%;
investment in banks and companies is the main target for foreign investors in Montenegro
with 1,339.1 mil EUR or 46.3% of total 2001-2008 gross FDI inflows; investment in
the financial intermediation accounts 395.0 mil EUR or 23.8% of Macedonian total FDI
inflows 2003-2008; and finally, the share of monetary and financial intermediation in total
FDI stock between 2004 and 2007 amounts 29.7%. Other sectors that attract the most
FDI inflows to each Western Balkans country are: real estate activities, wholesale trade,
commission trade and retail trade, post and telecommunications and production of food
and beverages (Table 6).
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