1. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 30 –External Relations Bilateral screening: Chapter 30 PRESENTATION OF MONTENEGRO Brussels, 12 June 2013

2. Chapter 30: External Relations M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Foreign Direct Investment in Montenegro Mira Radunovic Central bank of Montenegro mira.radunovic@cbcg.me

3. 3 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations Foreign direct investments Source: Central bank of Montenegro Montenegro recorded high inflow of net foreign direct investments, especially in period 2007-2009.Montenegro recorded high inflow of net foreign direct investments, especially in period 2007-2009. Factors that had the biggest impact on the inflow of FDI were the privatization process and attractiveness of the Montenegrin coast.Factors that had the biggest impact on the inflow of FDI were the privatization process and attractiveness of the Montenegrin coast. FDIs have largely affected the economic development.FDIs have largely affected the economic development. Chart – Net FDI flows in Montenegro

4. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations High share of FDI inflows in GDP - above 10%.High share of FDI inflows in GDP - above 10%. The level of net FDIs rose to above 20% of GDP between 2007 and 2009, reaching the highest level in 2009 to 35.8% of GDP.The level of net FDIs rose to above 20% of GDP between 2007 and 2009, reaching the highest level in 2009 to 35.8% of GDP. Foreign direct investments Source: Central bank of Montenegro Chart – Net FDI inflows in % GDP

5. 5 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations FDIs as drivers of economic growth, but also as the factor of the trade deficit and current account deficit FDI vs import of goods Chart – FDI vs CA deficitChart – FDI vs import of goods Chart – FDI vs CA and trade deficit

6. 6 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations FDI inflows in Montenegro by region Source: Central bank of Montenegro Chart –Geographical breakdown of FDI inflow in period 2007-2012* *Source of data is ITRS and data are shown by country of payments.

7. 7 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations FDI inflows in Montenegro in 2011 and 2012 Source: Central bank of Montenegro (ITRS) Chart –FDI inflows in 2011 Chart –FDI inflows in 2012 *Source of data is ITRS and data are shown by country of payments.

8. 8 Chapter 30: External Relations M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Conclusion FDI inflow is a factor that had a great impact on economic growth and macroeconomic stability in previous years.FDI inflow is a factor that had a great impact on economic growth and macroeconomic stability in previous years. The highest FDI were in area of tourism, real estate, energy sector, telecomunications, banking sector and construction.The highest FDI were in area of tourism, real estate, energy sector, telecomunications, banking sector and construction. High correlation between FDI and trade of goods and services.High correlation between FDI and trade of goods and services. High potential for FDI in future - the energy sector and tourism industry in Montenegro have potentials for attracting greenfield investments.High potential for FDI in future - the energy sector and tourism industry in Montenegro have potentials for attracting greenfield investments.

9. 9 Thank you for your attention! QUESTIONS?