News
"Roundtable on attracting and retaining investment in Bosnia and Herzegovina" IFC Group
06/21/2012
Excerpt from the introductory speech by the Minister of Foreign Trade and Economic Relations of BiH, Mr. Mirko Sarovic
Sarajevo, June 12, 2012, the Bristol Hotel
Dear Ladies and Gentlemen,
It is my honor and pleasure to greet you all on behalf of the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, and on my own behalf. I will avail myself of this opportunity to thank all of those who contributed to the organization of this event. The benefit of exchanging views, defining key priorities in improving the investment climate will be of multiple uses for the business community and society at large ....
….Investment environment as an important factor for foreign investment is a set of indicators of economic and market forces of a country, its natural resources development, infrastructure development, political stability, which certainly affects the potential investment rating of the host country as well as legislative openness and the efforts of government institutions to promote foreign investment.
Bearing in mind that Bosnia and Herzegovina, when it comes to the environment for the business community, according to rankings by the World Bank, as well as some relevant economic forums, is at the rear of the world, it is an urgent duty of all institutions at state and entity level to take necessary actions to improve the business climate with the ultimate goal to make business easier, simpler and more stable.
In this regard I wish to emphasize the cooperation of the Ministry of Foreign Trade and Economic Relations with the IFC, in terms of creating the environment more attractive for foreign investors, which was indeed very successful, and the fact that activities on a new project are in progress, which provides strengthening competitiveness in order to eliminate the regulatory and administrative barriers to doing business in BiH. This is an opportunity to once again sincerely thank them.
The Ministry has demonstrated an absolute commitment to approaching world practices and trends, including the new system of rules established by the European Union, and in terms of improving the regulatory framework, improving the business community and creating a favorable environment for foreign investors, the Ministry conducted a pilot project called "Assessment of the effects of changes in regulations" that refers to the Law on foreign Direct Investment Policy in BiH, which finally resulted in amending the Law on foreign Direct Investment Policy in BiH.
This simplified the procedure of registration of companies with an element of foreign investment in terms of reducing the time and registration procedures, reducing costs, and gave opportunities to invest in dedicated industry outside the 49% rule and to create a primary source of official information on foreign direct investment in Bosnia and Herzegovina by establishing electronic transmission of databases from courts throughout the territory of BiH to the Ministry.
Ladies and gentlemen, these are the fragments of some of the steps taken by MOFTER to ensure a more favorable business environment in the country. These steps are important but insufficient. This is an opportunity to emphasize that the stability of a country, primarily political, is a prerequisite for any foreign investment. Why would someone bring their money to an unstable society, to a country that has a crisis of institutions and provisional organs of government in a technical mandate, a country without a budget and with temporary funding? What would attract foreign capital if there are no credible partners in it, if the country has no long-term economic and political stability? This question is the foundation of every story about investment in BiH.
The second and equally important question is stable and predictable legislation. If this legislation is modern and attractive, that is for the better, but it must first be stable and predictable in continuity. Changing conditions for investors is the worst possible advertisement for potential investors. Look what is happening with some Turkish investors. Will they pull out from Bosnia and Herzegovina? If they do, are there any others who are going to do the same? Complicated legislation, long procedure without timelines, too much administration, are essential prerequisites for the occurrence of any corruption, and widespread corruption in the country will keep any serious investor away.
Ladies and gentlemen, in Bosnia and Herzegovina, since the year 2007, and for the next four years continuously until 2011, the foreign investments decreased dramatically. From 2.5 billion down to just over 300 million. These figures, these data, should be the key topic for any politician in BiH, more important than any other topic imposing on us today.
That is how I see this conference today - convinced that our attention will turn towards the future in this regard in order to improve the business environment.