The main findings and recommendations of the draft Investment Policy Review of Bosnia and Herzegovina were discussed amongst UNCTAD experts, representatives of the institutions of Bosnia and Herzegovina, the local and international private sector and of the country’s development partners at a meeting held in Sarajevo on 25th March.
The Latin Bridge in Sarajevo
This new UNCTAD Investment Policy Review (IPR) recognizes the large untapped potential to attract much higher levels of foreign direct investment (FDI) to Bosnia and Herzegovina, as well as to diversify the flows and sources of investment beyond traditional sectors and investors. In this regard, the IPR calls for streamlining and harmonizing business licensing and operational procedures throughout Bosnia and Herzegovina to increase the predictability, clarity and transparency of the business environment.
Policy cooperation and coordination among key policy-makers across the country would also contribute to reducing the risks of unhealthy competition for investment among various levels of Government and avoid a harmful race to the bottom, particularly in the granting of fiscal concessions and incentives.
Mr. Dragiša Mekic, Assistant Minister of Foreign Trade and Economic Relations of Bosnia and Herzegovina, underlined the timeliness of the IPR recommendations and elaborated on the need to carry out important reforms to improve the investment climate.
The index of investment activity remains very low, and Bosnia and Herzegovina still struggles to stimulate investment. The complexity of the investment environment is particularly problematic for the development of small and medium-sized enterprises, as pointed out by Mr. Yuri Afanasiev, United Nations Resident Coordinator in Bosnia and Herzegovina.
Enhancing the effectiveness of the investment promotion efforts is also a key requirement to increasing the visibility and attractiveness of the country as an investment destination. By adopting clear, strategic guidelines on investment, including target sectors, source countries and expected benefits as well as coordinated actions amongst the various stakeholders, the investment promotion efforts could become more effective.
"Our objective with this IPR was to identify realistic and helpful proposals that would contribute to achieving the country's potential and its national development objectives" said Mrs. Chantal Dupasquier, Chief of the IPR programme of UNCTAD.
The IPR analyzes the legal and regulatory framework for investment and provides concrete recommendations to improve the attraction of FDI, and its impact on sustainable development. The IPR was carried out through two fact-finding missions in 2014.
UNCTAD´s Investment Policy Reviews provide an objective evaluation of the country´s legal, regulatory and institutional framework for FDI to attract increased foreign and direct investment, as well as how to maximize the benefits from it.