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WITH THE FINANCIAL SUPPORT OF THE
EUROPEAN UNION
Working Group on Investment Policy and Promotion
Sarajevo, Bosnia and Herzegovina21 February 2013
1
2
FDI in the region
Review of Investment Policies and Investment Promotion
Ideas for regional co-operation
FDI inflows from 2000 to 2010 (EUR mn)
3Source: World Bank, 2012. The official OECD conversion rate for 2010 of 1.324 USD/ euro is used.
FDI as a % of GDP (2007 to 2010)
4
0%
5%
10%
15%
20%
25%
30%
35%
40%
2007 2008 2009 2010
Albania
Bosnia and Herzegovina
Croatia
Kosovo
FYR Macedonia
Montenegro
Serbia
Source: World Bank, 2012. The official OECD conversion rate for 2010 of 1.324 USD/ euro is used.
FDI by source in 2007
5Source: Vienna Institute for International Economic Studies, based on data from central banks. Update as of May 2012. No data available for Albania and Kosovo*.
FDI by source in 2010
6Source: Vienna Institute for International Economic Studies, based on data from central banks. Update as of May 2012. No data available for Albania and Kosovo*.
Western Balkan FDI by activity (NACE Rev 1)
7Source: Vienna Institute for International Economic Studies, based on data from central banks. Update as of May 2012. No data available for Albania, Montenegro and Kosovo* based on NACE classification.
Western Balkan FDI by manufacturing activity
8Source: Vienna Institute for International Economic Studies, based on data from central banks. Update as of May 2012. No data available for Albania, Montenegro and Kosovo* based on NACE classification.
9
FDI in the region
Review of Investment Policies and Investment Promotion
Ideas for regional co-operation
Investment Reform Index (IRI)
10
1
Dimensions Sub-dimensions
1 Investment Policy and Promotion
-
1.1 FDI Policy
1.2 Investment Promotion and Facilitation
5.3 ACAAs
Sub-Dimensions Indicators
1.1 FDI Policy
1.1.8 Intellectual Property Rights
Indicators Level of Reform
1 2 3 4 5
Investment Reform Index 2010
Covering priority dimensions related
to the Regional Framework for Investment:
1. Investment Policy and Promotion
2. Human Capital Development
3. Trade Policy and Facilitation
4. Access to Finance
5. Regulatory Reform and Parliamentary Processes
6. Tax Policy Analysis
7. Infrastructure for Investment
8. SME Policy
Development of IP Laws
IRI Monitoring framework
11
Investment Policy and Promotion
IRI assessment methodology – tripartite structure
12
Private Sector Independent experts
Government self-assessment
Results of Investment Policy and Promotion assessment in IRI 2010
13
Results of Investment Policy and Promotion assessment in IRI 2010
14
Albania• Simplifying administrative procedures
related to licenses• Reforming the tax administration and
enforcement of tax laws
Source: Foreign investor council white paper; chambers of commerce, other international organisations monitoring investment climate reforms in the Western Balkans; US State Department Reports.
Results of Investment Policy and Promotion assessment in IRI 2010
15
Bosnia and Herzegovina• Improving liquidation procedures• Clarify urban planning and construction laws
and transfers of construction permits between investors
Source: Foreign investor council white paper; chambers of commerce, other international organisations monitoring investment climate reforms in the Western Balkans; US State Department Reports.
Results of Investment Policy and Promotion assessment in IRI 2010
16
Croatia• Accelerate approval of business visas
Source: Foreign investor council white paper; chambers of commerce, other international organisations monitoring investment climate reforms in the Western Balkans; US State Department Reports.
Results of Investment Policy and Promotion assessment in IRI 2010
17
Kosovo*• Increase transparency and
fairness of public procurement activities
• Better organised and transparent tenders
Source: Foreign investor council white paper; chambers of commerce, other international organisations monitoring investment climate reforms in the Western Balkans; US State Department Reports.
Results of Investment Policy and Promotion assessment in IRI 2010
18
FYR Macedonia• Improving administrative
capacity to implement reforms• Removing unnecessary
administrative procedures
Source: Foreign investor council white paper; chambers of commerce, other international organisations monitoring investment climate reforms in the Western Balkans; US State Department Reports.
Results of Investment Policy and Promotion assessment in IRI 2010
19
Montenegro• Contract enforcement and
easing property registration • Improve the transparency and
delivery of construction permits localities
Source: Foreign investor council white paper; chambers of commerce, other international organisations monitoring investment climate reforms in the Western Balkans; US State Department Reports.
Results of Investment Policy and Promotion assessment in IRI 2010
20
Serbia• Better regulation of
monopolies• Encourage bankrupt
entrepreneurs to initiate bankruptcy proceedings and enacting amendments to the Insolvency Law
Source: Foreign investor council white paper; chambers of commerce, other international organisations monitoring investment climate reforms in the Western Balkans; US State Department Reports.
Results of Investment Policy and Promotion assessment in IRI 2010
21
Common points for improvement• Accurate land title registration and cadastres• Transparency in policy design and implementation, especially at sub-national level• Accelerating administrative procedures• IP enforcement• Monitoring and evaluation of investment promotion• Expanding role of IPAs to act as one-stop shops
22
FDI in the region
Review of Investment Policies and Investment Promotion
Ideas for regional co-operation
Investment Policy
23
Peer learning exercises on several topics, for example:•Experiences with investor-state arbitration•Restitution processes and procedures•Digitisation of cadastres and land registers•Experiences with FDI incentive programmes and their evaluation
Enhance the transparency of investment policy design. For example, upcoming laws, regulations or administrative procedures could be presented and discussed at the SEEIC or WGIPP. This would allow policy makers to receive comments from investment policy experts from the region prior to enacting legislation.
Development of regional best practice guidelines for specific areas of policy, such as updating land registries or even evaluating the costs and benefits of investment attraction programmes.
Investment Promotion
24
Regional investment promotion strategy – a tailored regional strategy/approach targeting international investors in sectors or niches who could fit into Western Balkan value chains .
A regional exhibition – a touring exhibition which would visit foreign markets and highlight a specific sector or niche area in each of the seven Western Balkan economies.
Organisation of visits to Western Balkan – Western Balkan IPAs could organise joint visits of foreign investors to the region ,with a stop in each economy. This would save time and money for the foreign investor.
Co-location in foreign markets – Western Balkan IPAs could identify cities where they could save money and build on information synergies (e.g., the Scandinavian Tourist Board in Asia-Pacific has joint offices in Tokyo and Beijing).
25
Thank you for your attention
Milan Konopek
Project Manager - Regional Competitiveness Initiative
OECD Investment Compact for South East EuropePrivate Sector Development Division
Organisation for Economic Co-operation and Development (OECD)
Annex
26
FDI Policy
27
National Treatment – national treatment restrictions on entry and operation of FDI
Admittance of personnel – limitations on entry of specialised personnel to support FDI Transfers – restrictions on capital transfers in and outside of host economy FDI incentives – transparent application of incentives with monitoring and evaluation
Performance requirements – requirements, such as local-content, on investments
Land ownership – ability of investors to own land (urban and rural)
Titling, cadastre and restitution – up to date cadastres and land registers, restitution process completed
Intellectual Property Rights – enforcement of IP laws Expropriation – clear rules for expropriation and efficient legal process
International Investment Agreements – what is contained in bilateral investment treaties
International Arbitration – signatories to New York Convention and ICSID Convention
Investment Promotion and Facilitation
28
Strategy – contents of an investment promotion strategy
Institutional Support – level of support provided by the investment promotion agency
Monitoring and Evaluation – whether the investment promotion strategy is evaluated
FDI-SME linkages – programmes to support commercial linkages between FDI and local firms
One stop shop – whether investors can submit and receive approval for all administrative procedures in one place
Client Relationship Management - the degree to which investment promotion agencies keep track and follow up with foreign investors
Policy Advocacy - whether the investment promotion agency advocates on behalf of investors
Aftercare services – whether investment promotion agencies provide support to foreign investors after their establishment
Transparency
29
Publication avenues and tools – whether laws and administrative procedures are
codified and published
Prior notification and stakeholder consultations - whether investors are notified in advance of changes to laws and
procedures
Procedural transparency - whether legal procedures are transparent, are their opportunities for appeals
Privatisation and Public Private Partnerships
30
Privatisation strategy - existence of a privatisation strategy
Privatisation consultations – are stakeholders prior to a privatisation
Restrictions on foreign investor participation in privatisation – restrictions on foreign investors
PPP units – is there a unit in government to lead PPP development
PPP legislation - is there legislation covering PPPs, not just concessions
PPP consultations - are stakeholders consulted prior to PPP being launched
PPP cost benefit analysis - is there an assessment of a PPP
PPP monitoring - is the PPP monitored and evaluated?