Last year, three billion euros of foreign direct investments entered Serbia, and the net inflow amounted to 2.9 billion euros.
In the fourth quarter alone, the inflow reached as much as 1.2 billion, although a good part, 400 million euros, came from the sale of Komercijalna Banka, which was concluded at the beginning of last year.
And with those almost three billion, investments in 2020 recorded a drop of 20 percent compared to 2019.
On the other hand, that decline is an exceptional result, considering that foreign direct investments fell by as much as 42 percent globally.
According to UNCTAD’s Global Investment Trends Monitor, FDI has fallen from 1.5 trillion dollars in 2019 to 859 billion dollars last year.
Such a low level of global investment flows has not been seen since the 1990s and is about 30 percent lower than in the period after the global financial crisis of 2008-2009.
The largest decline in investment inflows occurred in developed countries, as much as 69 percent.
FDI fell 49 percent in the United States and 71 percent in Europe.
On the other hand, investments in growing economies have decreased by only 12 percent and for the first time, investments in the less developed part of the world have reached 72 percent of global FDI.
The largest investments in the world came to China – 163 billion dollars, compared to 134 billion in the United States, and this country even recorded a growth of FDI of four percent in 2020.
UNCTAD is pessimistic about investments this year as well, and due to the uncertainty regarding the pandemic, it estimates a further decline of five to 10 percent.
One of the reasons is that less developed countries will have less funds to attract investors due to high borrowing to fight the coronavirus pandemic.
In recent years, Serbia has imposed itself as a serious destination for foreign direct investment at the regional level.
According to the advertising of the Development Agency of Serbia, 31 billion euros have arrived in our country since 2007.
After a record 3.6 billion in 2019, investments in the past reached 2.9 billion.
The whole region is doing quite well, considering that the decline in FDI in Southeast Europe was 28 percent, two and a half times smaller than at the European level.
The question remains whether this trend will continue.
Milorad Filipovic, a professor at the Faculty of Economics in Belgrade, points out that we are keeping pace for now, but also that there is great uncertainty.
“Investments in our country have fallen far less than in the world, and that is a consequence of the fact that many of them were already agreed or started earlier. The subsidy policy has had effects for attracting those investors to whom it means. On the other hand, in this region we have long been leaders in attracting investments and it seems that there is this attraction of a large regional player, compared to Macedonia or Albania. Apart from Romania, which has been recording high growth for years, we are becoming a regional industrial center,” Filipovic said.
Milojko Arsic, also a professor at the Faculty of Economics in Belgrade, estimates that our region is among the least developed parts of Europe, and average salaries are lower than in China.
“It can be expected that multinational companies will move production intended for the European market to this region. We can also take advantage of China’s investment activity. We have become a good investment destination and this cannot be explained only by subsidies. One of the reasons is that we have two business environments in Serbia. One applies to domestic entrepreneurs and the other to foreign investors and privileged companies. They are protected from bureaucracy and obstacles that domestic businessmen have,” says Arsic, Danas reports.
