Policy cooperation and coordination, harmonization of business procedures and more effective investment promotion efforts are essential for Bosnia and Herzegovina to unlock its untapped potential to attract foreign direct investment (FDI) and help the country achieve its development goals, says UNCTAD's Investment Policy Review.
The Investment Policy Review (IPR) of Bosnia and Herzegovina was discussed with the member States of UNCTAD and several representatives of the international investor community at an intergovernmental meeting organized in Geneva on 3 December 2015.
“FDI is one of the key levers for sustainable economic growth. We are committed to attracting new and keeping existing investments” said Bosnia and Herzegovina's Assistant Minister of Foreign Trade and Economic Relations Dragiša Mekic, who led the country’s delegation to Geneva. Mr. Mekic said that the IPR will be a key tool in assisting the authorities of Bosnia and Herzegovina in addressing challenges regarding the business environment.
The IPR highlights that know-how across various sectors, openness to FDI, a well-educated workforce, competitive labour costs, easy access to and affordability of energy, low levels of taxation on businesses and preferential trade access to European markets are amongst the many comparative advantages that Bosnia and Herzegovina possesses. Nevertheless, investment in the country remains very low and it has struggled to stimulate investment activity. Bosnia and Herzegovina’s IPR highlights recommendations to address these issues.
UNCTAD Secretary-General Mukhisa Kituyi said that “the objective now is to turn the analysis of the IPR into actions that favor investment in the people and prosperity of Bosnia and Herzegovina”. The IPR underlines the importance of streamlining and harmonizing business licensing and operational procedures throughout Bosnia and Herzegovina, increasing the predictability, clarity and transparency of the business environment, and enhancing investment promotion efforts. Harmonization of the different fiscal regimes within the country, for instance, would reduce the risks of a “race to the bottom” in the provision of investment incentives and ease procedures for compliance by investors.
“Enhancing investment promotion, the cooperation among stakeholders in the country, its effectiveness, and ultimately its visibility as an investment destination [are key objectives]. We therefore support UNCTAD’s analysis,” the Deputy Director of the Foreign Investment Promotion Agency (FIPA) of Bosnia and Herzegovina, Blaženka Miškovic, said.
The intergovernmental presentation was well attended and prompted lively discussions, notably with the private sector representatives established in Bosnia and Herzegovina who shared their experiences, saying that “the IPR has to be taken seriously”. Several member States of UNCTAD commended Bosnia and Herzegovina for the IPR and expressed their appreciation to UNCTAD for its valuable work in this area.
UNCTAD IPRs are demand-driven and provide concrete and action-oriented recommendations aimed at attracting higher levels of FDI to foster economic and social development in recipient countries. The programme has several phases, commencing with the preparation of the report, followed by technical assistance to support the implementation of the recommendations, and ultimately the conduct of an implementation assessment. The IPR of Bosnia and Herzegovina, presented in draft version in Sarajevo on 25 March 2015, is the 39th IPR published by UNCTAD.