Overview of Regional Investment Promotion and Facilitation Schemes -Possible Applications in the SEE 10 th Meeting of the South East European Investment Committee Sarajevo, April 2012

Dynamic Regional Cooperation – an Asset Political criteria – Stability element – Regional dialogue promotion – Continuous stability and cooperation Economic reasons – Cross border initiatives improve business environment, attract investments and support development

SEEIC Work Programme Objective 1: Create a common regional vision for economic development in South East Europe – SEE 2020 Objective 2: Increasing competitiveness of the region through joint targeted action Objective 3: Present the region as an attractive investment destination – Development of regional investment promotion mechanisms – Developing communication aspects of SEEIC (efforts to reaching out to the investor public)

Investment Promotion Tools What investors need to see in the Region: – Openness to foreign investment – Right to private ownership and establishment – Full protection of property rights – Liberalized foreign exchange markets – Conducive earnings repatriation conditions – Stable, transparent and predictable regulatory framework – Simplification of investment establishment procedures – National treatment status – Right to national and international impartial arbitration in the event of a dispute with government

Common Regional Investment Promotion Tools What national IPAs promote: Competitive location Competitive workforce Industrial heritage Friendly business environment Fiscal incentives Labor incentives Financial incentives Investment facilitation assistance National treatment FTAs, double taxation agreements, bilateral investment protection agreements Similarities: Industrial compatibilities Infrastructure, physical and other linkages Similar challenges and issues

MoU between Investment Promotion Agencies National IPA contribution to a better promotion of the investment potential of the Region Contribution of human and institutional capacity – At the level of management – At the level of employees The Need for Cooperation The need to revive Regional Network of National Investment Promotion Agency in the SEE Region

Network rotating management Continuous meetings – IPA management meetings – Working groups – Peer reviews Mapping industrial compatibilities and sub-sector profiles Joint incentives, specifically designed for regional investments projects Regional supply chain for successful investment facilitation and utilization of FTAs (3 rd markets) The Need for Cooperation

The Roadmap to Regional Investment Promotion Regional Image Building – Re-branding the image of SEE so as to leverage the region globally and build a perception of an ideal business location. – Production of investment promotion materials Policy Advocacy – For reforms/ initiatives in institutional, legal and regulatory frameworks that create and improve an enabling environment for investment – Identifying the views of the private sector Investment Generation/Creation – A focused approach on identified sectors of the regional economy that act as selected growth pillars The key challenge: mobilization of financial resources for packaging the projects and securing of the consensus of the members on determining the priority policies and industrial sectors of a regional character.

Regional Image Building Regional investment promotion website Regional investment promotion newsletter Regional sector-specific brochures Investment projects database Joint investor outreach events

Policy Advocacy Provision of transparent, streamlined and simplified investment policies, rules, procedures and administrative processes Elimination of investment barriers Liberalization of investment rules and policies Creation of competitive investment regimes Harmonization of monetary and macro economic policies relating to investment Access to finance

Expected Outcomes Attracting greater and sustainable levels of investment in the Partner States Creation of a larger and more competitive investment area Strengthening the bonds of integration Enhanced socio-economic development in the region Increased benefits from EU integration processes Complementing support to national investment promotion initiatives Higher outturn of competitive products and services Greater regional market deepening Promotion of free flow of critical factors of production among the Partner States yielding accelerated cross border investments.

Challenges Agreement to a more comprehensive MoU with regional goals in line with national priorities Putting together and rolling out a programme for regional investment promotion strategy, policies, and identifying priority cooperation sectors for joint promotion Financial resources: investment promotion is an expensive exercise Human capital resources

Overcoming the Challenges: Need for Regional Cooperation Competition COOPETITION Cooperation Core partners: RCC/SEEIC, IPAs, Business and Donor Community, Intl organizations, Sub- regional initiatives, Economic Diplomacy Network Focused and intensive investment promotion campaigns for SEE Partner States at national and SEE-wide (supranational/regional) levels

Thank you for your attention! Dragana Đurica Project Leader for the South East Europe Investment Committee (SEEIC) e: