FDI strategy of Serbia and Croatia "simple, and sad"

How to be competitive and attract foreign investment? In Serbia, the answer is simple and sad - cheap labor, Germany's state-run Deutsche Welle is reporting.

Izvor: Deutsche Welle

Thursday, 28.01.2016.

12:13

FDI strategy of Serbia and Croatia
(Thinkstock)

FDI strategy of Serbia and Croatia "simple, and sad"

"For years, we have felt that investors are a bit tired of the Balkans," Roman Rauch, a representative of the Austrian Chamber of Commerce in Croatia, told the paper.

"Croatia's trump card can primarily be cheap labor.. Foreign companies therefore arrive with their daughter-companies which employ simple workforce. Italian companies such as Calzedonia and Benetton and sew their clothes here, Austrian suppliers of auto parts manufacture leather upholstery for car seats," Kurier writes.

"Serbia is primarily an extended production line for EU firms, with the duty-free regime agreed with Brussels as a great advantage. Now even an occasional textile company moves from Turkey to Serbia, because wages are lower here," said representative of the Austrian Chamber of Commerce Erika Teoman-Brenner.

EU companies consider Serbia to be "like a little China in the neighborhood," she said, and added, "the prospect of EU accession should give an additional impulse for new investment. "

The Austrian newspaper noted that both Serbia and Croatia have many reforms ahead of them: "The inflated state sector must be reduced, indebted and uncompetitive state firms must be trimmed down according to the market economy yardstick. This means above all one thing: unemployment, now at 20 percent, will increase further."

According to the article, it is reasonable to fear that young Serbs will be increasingly leaving the country. "From the statistical point of view Serbia is the second country in the world when it comes to emigration," Teoman-Brenner has been quoted as saying.

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