As Director General of FIPA, how are you witnessing the reconstruction process of Bosnia-Herzegovina?
The reconstruction process is still under way. I am glad to witness that most of the infrastructure has been recovered and that new projects are well advanced. There are still some new projects to be undertaken such as the railways, the roads, but for the most part the large infrastructure works and the production lines in the big companies have been repaired. So, reconstruction in general is well under way; needless to say that the infrastructure collides with the general overall economic performance of Bosnia-Herzegovina. This means that we are facing a double transition of sorts, from war to peace and from a state to a market oriented economy.
In most ex-socialist countries these processes have taken a long time…
True, and size has been an important factor. Bosnia is a small country so it is fair to say that we are progressing at an acceptable pace. Since we have a newly formed Government made out of moderate political forces, we now have an opportunity to stabilize the country on the long term as well as to put the economy at the forefront of our priorities. The only way that this country can reform itself and move towards future regional and EU integration is through the economy.
EU integration is an issue that has become top priority. There seem to be some bottlenecks however as to the way that foreign and domestic policy should be conducted due to the different levels of administration present in this country. How is this hindering the reform process?
We do have these political dilemmas among certain parties and government leaders but I don't think that it will matter that much. The Government intends to focus on the economy. While we focus on the need to do business and unify the regional market (which in Bosnia is quite small: 3.7 million people) by integrating ourselves within Southeast Europe, please remember that it is a market of over 130 million people, then I think political nuances will disappear. Every Government wants to follow the road of the economy, and we cannot afford to leave behind the train towards economic development. The regional economy will move forward into a new phase and my thinking is regional rather than at a micro level. Certain municipalities or cantons that do not move forward will be left behind within the economic development. If certain areas disagree with the general overall direction of policies then their leaders will have to explain to their constituencies why they were left behind in the economic progress. So, it is best for every political body to follow the general direction that the economy is taking. During the last two months I noticed that municipalities understand the need to move ahead on the economy. For example, next month we are beginning a media campaign to show the positive elements of privatization.
What are presently your main challenges?
Technically, to establish FIPA as an agency which will fulfill any enquiry coming from investors. In order to reach this goal, I will need another two to four months. This country is famous for establishing everything as a priority. I have had offers from Hungary, the United States and Trieste to help in setting up and organizing the agency in order to make it a top-level one-stop shop for investors. My priority would be to produce material that will present our organization and what we have to offer. This will be done through brochures, the website. I also need to work hard in alerting businesses that I will offer them a highway of communication for opportunities by putting their products and offers on our web. This business matchmaking is one of the challenges that this agency will be undertaking. Apart from that, I want to reach out potential investors and eventually be their link towards this market. I am also planning to produce market studies for foreign investors, market studies that they will need in order to invest in this country.
What importance do you attach to the United States and its potential market?
The U.S. market is extremely interesting for us. I was there recently, consulting business leaders on how to address the American market for Bosnia's products and business opportunities, and I realized that our image has been deteriorated by the war. I am sure that there is plenty of businesses interested in investing here. There are also certain personalities who are a natural point of contact between Bosnia and American investors. The American Chamber of Commerce in Bosnia also offers a lot of potential and I plan to work in close collaboration with them.
| The current privatization process shows that there is a great deal of companies currently on the verge of being sold. What interesting opportunities would you point out for our readers?
Bosnia is not a huge market itself. However, by investing in Bosnia, you can be at the forefront of the creation of a new market in South Eastern Europe, a market with over 130 million consumers. The legal structure is slowly being implemented and therefore the administrative guarantees will be there. Bosnia also offers unlimited opportunities for joint ventures in the export area and one of the advantages is that there is a total lack of tariffs applied for exports towards the European Union market. Bosnia is also strategically connected to the Mediterranean Sea, and other transport infrastructure includes railways and roads connecting to the heart of Europe.
More specifically, privatization is offering an opportunity of over 2000 companies that are up for sale. Quite a few of them are not in a productive state, which means that they need some sort of cash injection and Bosnia offers an abundance of premises and sites. On top of this we have competitive prices and skilled workers at competitive wages. There are important opportunities in the hydroelectric generation system. Large industrial production such as aluminum and steel are also strategic sectors here. Agriculture and food processing is also an interesting opportunity. The timber industry is also a strategic sector. This country also offers opportunities due to its geographical particularities, for example the southern part of the country has a Mediterranean climate and is used to having three crops a season. We are famous for a number of cheeses, wines, etc… Furthermore, Northern Bosnia has important tracts of land that produce great quantities of wheat.
How can FIPA raise awareness about these investment opportunities?
Sarajevo was the place of birth of the Stability Pact, which is geared towards the future integration of this region into the EU. We offer every service to potential investor: from initial information gathering to administrative assistance. And if there is a service that we cannot offer we will make sure that we find out where the potential investor can obtain it. Once an investor makes the decision to invest we will help him with all the administrative paperwork.
As a last question, is the moment ripe to invest in Bosnia-Herzegovina?
I think that the moment is getting there. Not only does privatization offer you great opportunities, but it is also true that those that come first reap the most benefits. For that matter it is good to follow the local and regional businessmen such as the Slovenians, the Germans and the Italians whom are quite experienced at investing in this part of the world. A potential investor should look at why they are investing in the areas that they are investing in. As we are a country in transition and we are under the influence of the international community, which is helping us achieve economic reforms, there are many guarantees that are offered to investors in the administrative, judicial and other levels.
If it takes a few months for the investor to reach us after this interview is published, the situation will have changed for the better from the moment that we are talking. There are a number of laws that are being introduced by the Government that will considerably make this place a safe investing destination. We also have international banks present and our currency is pegged to the Deutsche Mark, which provides it with financial safety. I am sure that in the next year or two, Bosnia will be a better and modernized country. Therefore I am sure that it is an interesting moment for Bosnia and there are quite a few opportunities for investors now.
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