Professional paper
SUCCESS OR FAILURE OF THE IMPLEMETED STRATEGY ON ATRACTING FOREIGN CAPITAL IN THE FORM OF FDI IN THE REPUBLIC OF MACEDONIA
Irena Kikerkova
orcid.org/0000-0002-8394-8504
; Ss. Cyril and Methodius University
Abstract
The actual strategy on attracting FDI in Macedonia was first implemented about 8 years ago. It is based on the creation of special zones (Technological Industrial Development Zones – TIDZ) which are exempted from the regular customs and fiscal area of the economy. Companies performing within the TIDZ are benefiting from abundant incentives and subsidies if their output is exported to foreign markets. The government, beside the lawfully published incentives available for the investors within the TIDZ, silently kept its discretional rights to provide additional incentives on a case-by-case approach in negotiations with strategic foreign partners. However, with FDI stocks of only about 4.900 million American dollars, which is slightly more than 250 American dollars per capita, Macedonia remains to be among the least attractive countries for foreign investors in Europe. After 8 years of implementation of this strategy the government makes an open propaganda on its positive results. Economists in the country, however claim that its results are very disputable, especially because almost all important data needed for the analysis of its total economic effects are either not available or are not given transparently. Therefore, the total costs of the expensive promotion campaign of the strategy can only be estimated. But the implications of the strategy are also not satisfactory in terms of its effects upon the employment rate, technological spill-over, state-budget sustainability and sustainability of the long term economic growth. The gravity of the consequences of the implemented strategy on FDI attraction deserves an effort on its analysis by all available means, as well as publication of the results thereof.
Keywords
Republic of Macedonia; foreign direct investment; FDI-strategy; Technological Industrial Development Zones (TIRZ); sustainable economic growth
Hrčak ID:
191316
URI
Publication date:
21.12.2017.
Visits: 1.568 *