Foreign Direct Investment and Global Economic Crisis in the Western Balkans
Foreign Direct Investment and Global Economic Crisis in the Western Balkans

Summary/Abstract: Foreign direct investment (FDI) is the biggest developmental chance of companies from the Western Balkans and the best way to increase production, employment, export and living standard in the long term. FDI is the only form of international capital movement that could help production companies from the Western Balkans ensure domestic and international competitiveness of their products as well as increase the gross domestic product (GDP), build infrastructure and attract advanced technology. In general, all Western Balkan countries have high public spending, inefficient administration, poor investment in research and development and serious problems regarding the quality of education. The global economic crisis has resulted only in further decrease in gross domestic product (GDP), the rise in deficit, unemployment, a lack of liquidity in the real sector throughout the Western Balkans. With respect to Montenegro, a decrease in industrial production on the global level has particularly affected this country, since the Montenegrin export is largely based on the export of aluminum. Generally, all Western Balkan countries have already missed the opportunity given to them through FDIs in the period before the global crisis and it is an open question how these small countries, which depend on the benefits of European integrations and export, will recover from the crisis whose end can hardly be foreseen.

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