In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
In the absence of an adequate domestic savings, foreign investment is the main opportunity for the development of the economy. Austria and Hungary remain today the main investors. Investments of the countries of the former Yugoslavia are low given their commercial presence in the country. The investments target mainly heavy industry (mining, metallurgy, oil refining), light industries (textiles, food) and construction (cement, brick, marble), and more recently services (banking, insurance, telephone). In 2013 FDI only reached USD 135 million.
However, conditions reserved for foreign investment in this country are among the best offered in the Balkans. There has been a significant effort to harmonize economic and social laws and regulations with the EU criteria, standards and practises and these efforts are progressing steadily.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|FYROM||Eastern Europe & Central Asia||United States||Germany|
|Index of Transaction Transparency*||9.0||7.0||7.0||5.0|
|Index of Manager’s Responsibility**||7.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||7.0||5.9||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||468||93||334|
|FDI Stock (million USD)||4,781||4,943||5,534|
|Performance Index*, Ranking on 181 Economies||129||-||-|
|Potential Index**, Ranking on 177 Economies||130||-||-|
|Number of Greenfield Investments***||25||32||25|
|FDI Inwards (in % of GFCF****)||21.9||4.2||14.2|
|FDI Stock (in % of GDP)||46.0||51.6||54.0|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
The country has also signed agreements of free trade with Turkey and Ukraine.
In 2001, FYROM signed with the European Union an Association and Stabilization agreement and since 2005 the country has been recognized as a candidate state to the European Union.
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Last Updates: October 2014