STRANE DIREKTNE INVESTICIJE U BOSNI I HERCEGOVINI: OD ZABLUDA NEOLIBERALIZMA DO POKRETAČA EKONOMSKOG RASTA
FOREIGN DIRECT INVESTMENTS IN BOSNIA AND HERZEGOVINA: FROM THE DELUSIONS OF NEOLIBERALISM TO DRIVERS OF ECONOMIC GROWTH

Author(s): Anto Domazet
Subject(s): National Economy, Economic history, Economic policy, Economic development, Transformation Period (1990 - 2010), Present Times (2010 - today)
Published by: Akademija Nauka i Umjetnosti Bosne i Hercegovine
Keywords: foreign direct investment (FDI); neoliberalism; Bosnia and Herzegovina; promotion of FDI; privatization and restructuring;
Summary/Abstract: The research problem treated in this paper refers to inadequate scale and unfavourable structure of foreign direct investment (FDI) in Bosnia and Herzegovina, especially since the emergence of the global financial crisis. The aim of this work is to point out the errors and limitations of the neoliberal concept in transition of the country, reflected in the belief that the liberalization of the economy will fuel the wave of FDI that will ensure economic growth and development, employment, investment, exports and the restructuring of state-owned enterprises and generating new business. FDI in BiH have contributed to the restructuring of some large state-owned enterprises, the emergence of new enterprises and employment growth, and have contributed to improvement of the international investment position of BiH, but these results are far below expectations and below the potential level of FDI in BiH. Based on the analysis of secondary sources from the fields of FDI and analysis of the theoretical framework of FDI, new approaches are suggested in the implementation of policies to promote FDI in BiH covering three key areas. The first area relates to the improvement of the business environment to attract foreign investors, in which national framework plays an important part, as well as the industrial framework and the profile of potential investors. The second area relates to the building of institutions that carry out the process of promotion, and the third area covers promotional activities, including the post-investment services for investors. The contribution of work is reflected in the critical observation of existing policies and their impacts, and recommendations for effective policies for FDI promotion, which take into account the theoretical essence of FDI, advanced international practice in the area of FDI and the specificities of the decentralized constitutional structure of Bosnia and Herzegovina, which indicates the need for an integrated approach of the state, entities, cantons and local communities (cities and municipalities) in the promotion of FDI.

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