Investment Flow Weak In South East Europe

OECD tells region to increase cooperation and intra-regional trade.

Southeastern European countries are failing to attract potential foreign direct investment (FDI) because the region still suffers from a poor image, an OECD report showed Jan. 24. "Actual FDI flows remain well below the region's potential, particularly in the Western Balkan countries," the report by the Organization for Economic Cooperation and Development said.

FDI inflows depend heavily on privatization.

At the same time Bulgaria, Croatia, Romania and Serbia attract 90% of investment to the region, pointing to a deepening regional split, it added. The OECD report studied government policies aimed at improving the investment environment in Albania, Bosnia-Hercegovina, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Romania and Serbia.

OECD advised local governments to improve skill-orientated education, encourage competition, intensify regional cooperation and intra-regional trade and step up the fight against corruption in order to avoid being marginalized. These countries "risk being squeezed between the Central Eastern European countries, which are increasingly active in high-value, more capital and technology intensive sectors, and low-cost, labor-intensive producers in Asia and North America", it added.

Copyright Agence France-Presse, 2007

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