Europe must strive to stay ahead in face of FDI decline, debate says
Addressing the debate, Slovenia's Economic Development and Technology Minister Zdravko Počivalšek said that the country was a reliable FDI destination, willing to implement reforms to become even more welcoming for investors.
Investors who are already present in Slovenia have recognised this, and 40% of them have decided on additional investments.
He also said that by the end of June, FDI in Slovenia reached EUR 1.4 billion, while the figure was just over EUR 721 million in the first half of 2018, according to data from Banka Slovenije, the country's central bank.
James Zhan, director of investment and enterprise at UNCTAD, presented a survey showing a 19% drop in FDI on the global level to 1,200 billion US dollars. What is more, FDI inflow to Europe has dropped by 73% to 100 billion dollars, the lowest level since the 1990s.
Aleš Cantarutti, a state secretary at the Slovenian Ministry of Economic Development and Technology, said that in order for Europe to catch up with the US, China and the rest of Asia, the continent must focus on new solutions and show more cooperation.
Rastislav Chovanec, a state secretary at Slovakia's Economy Ministry, believes the EU's problem lies in the fact that it is a collection of different languages, laws that are similar, but not necessarily compatible.
He believes European countries have become lazy, especially compared to China. Even the startups launched in Europe are usually bought by US companies. Countries are not compatible and need to go back to basics, develop sectors with potential from the ground up.
Nonetheless, European countries are attractive for FDI due to their fiscal systems, the rule of law, regulatory transparency and qualifications, according to Luka Vesnaver, partner-in-charge of financial advisory services at Deloitte Slovenija.
The debate also touched on FDI screening, a mechanism introduced by the EU and some member states to protect strategic sectors. Valerio De Luca, executive president of Global Investors Alliance, praised the mechanism, saying that some investments lacked transparency and were plagued by too many risks.
Boštjan Skalar, executive director of the World Association of Investment Promotion Agencies, said that the screening system could contribute greatly to sustainability of investments.
But this mechanism is used above all by countries that are not in dire need of investments, whereas developing countries say more regulation would deter FDI, he noted.