Foreign Direct Investment in Transition Economies South Eastern Europe

Foreign direct investment (FDI) are considered to be one of the key instruments in the reform process of South-East Europe (SEE). The extent to which these countries conducted reforms towards market economy, restructuring and privatization of enterprises, achieved macroeconomic stability and positive growth rates, finished the volume of inflows of FDI and its structure. Romania, Bulgaria and Croatia have received most of the capital in the region, following the Montenegro and Serbia, while other countries have much lower income. Also, the structure of FDI in Bulgaria and Romania was more favorable than in other countries of this region and is more oriented towards the export and production activities. This is more attractive in these countries because of their membership in the European Union, reached the level of reforms, and favorable investment climate. Political and economic risks in Serbia is still very strong, unlike the situation in Bulgaria, Romania and Croatia, as a consequence of delays in reforms. Advancement in association with the European Union and economic and social reforms, Serbia can expect a greater inflow of FDI and the change of its structure in favor of greenfield investment, production and export activities.