Opening borders economically and fostering better cooperation in the region is essential to produce environmental surroundings to draw in large companies. We must remember the need for connectivity, improved trade facilitation, and upgraded transport infrastructure for deeper regional and global integration, especially inside the Western Balkans and the Eu.
“IFC props up European Union accession path of the Western Balkans countries helping them address their main development constraints. Our support is aimed at increasing the business environment, private sector development and competitiveness, and regional cooperation and connectivity. IFC supports the governments from the region in privatizing state-owned enterprises, either in an advisory capacity or by financing acquisition by investors. It's our goal to see privatization happen through competitive and transparent tenders”, said Thomas Lubeck, IFC Regional Manager for CEE about business climate, cooperation and regional rise in an outgoing interview, just for Diplomacy&Commerce magazine.
In your opinion, what needs to be done to result in the Western Balkans region more appealing to investors?
The WB countries must continue improving their investment climates. The region is severely hit by the COVID-19 pandemic, some countries more than other medication is. Within the medium term, the outlook is improving for that region's growth, however it remains far below its potential. From your perspective, tackling of structural issues must be accelerated. The challenges are remarkably similar over the countries-limited fiscal space, state-owned enterprises rivaling or replacing the non-public sector, and burdensome administrations and bureaucracies. These lead to suboptimal levels and excellence of private investment, high informal employment, and low labor market participation. The present COVID crisis has additionally highlighted the significance of internet speeds in addition to digital delivery of goods and services.
Over recent years, IFC has worked closely with assorted companies to introduce good corporate governance practices that can help attract investments to local business owners in the international market. I'm glad more and more companies begin to see the benefits of good corporate governance practices. By attracting foreign investors and partners, these businesses obtain a competitive advantage, increase financial returns, and provide shareholders with greater security on their investments.
Where do you see main potential for the region's growth?
The Western Balkans growth model was vulnerable before the COVID-19 pandemic. Recently, private consumption in the area taken into account more than 60 % of GDP. Consumption growth in some countries was fueled by higher public spending, one-off wage policies, near double-digit development in household lending, and remittance inflows. This raised questions about the sustainability of the consumption-driven growth.
However, development of purchase of the location in 2023 has been limited. What Serbia along with other countries need are more export-oriented foreign direct investments, particularly in higher domestic value-added production. FDI of this nature is tough to draw in and is heavily dependent on a good and predictable business environment.
Opening borders economically and fostering better cooperation in the area is very important to produce the environment to attract large companies. We must not forget the requirement for connectivity, improved trade facilitation, and upgraded transport infrastructure for deeper regional and global integration, especially within the Western Balkans and also the Eu.
You have lived in Serbia within the last six years and have witnessed many alterations in the business environment here as well as in the region. Have you seen improvements and to what extent?
Serbia has advanced four places on the World Bank's Doing Business rankings for 2023 and currently occupies the 44th place among 190 countries listed. Of
