#1Regional Cooperation Council CEFTA Central European Free Trade Agreement SECRETARIAT "Western Balkans Regional Investment Policy and Promotion" Implementing the Investment Policy Aspects of the SEE 2020 Strategy WORLD BANK GROUP 1 Trade & Competitiveness#2• Objective: contribute to... Key Project Data • . an increase in direct investment (foreign and intraregional) of $60 million (baseline year 2015) by 2020; an increase in firm level investment leads and commitments of 10% by 2019 (baseline year 2015), both region-wide. Context: support with the implementation of the, Integrated Growth' pillar of the SEE 2020 Strategy and National Economic Reform Programmes (2015). Geographic scope: Albania, Bosnia and Herzegovina, FYR Macedonia, Kosovo, Montenegro and Serbia. Project partners: CEFTA, RCC and the EC. Time frame: 3 years + (Q2/2017-Q2/2020). Funding envelop: €2,5 million Regional Cooperation Council S CEFTA Central European Free Trade Agreement SECRETARIAT WORLD BANK GROUP Trade & Competitiveness 2#3Project Context This project is designed as part of the umbrella Program for Investment Climate and Agribusiness Competitiveness in Western Balkans (P599992). Objectives: • increased investment in the region by $85 million; increased productivity of the agribusiness sector by 15%; increased competitiveness of (SMEs) by reducing costs of business operations The project will leverage and complement existing WB projects and engagements as well as other donor programs in the region The work will leverage existing analysis by UNCTAD, OECD and other donors, in particular: • • UNCTAD: regional and country-level Investment Policy Reviews OECD: regular monitoring of the implementation of the SEE 2020 strategy Regional Cooperation Council CEFTA Central European Free Trade Agreement SECRETARIAT WORLD BANK GROUP Trade & Competitiveness 3#4Regional Cooperation Council Greater convergence of regional investment policies and alignment with EC standards Project Objectives Removal of barriers to regional trade and investment Higher degree of regional convergence Greater connectivity and development of RVCS Effective integration into Global Value Chains Support with EU accession process . • Unlocking of higher levels of FDI and intra-regional investment Faster economic growth Enhanced job creation CEFTA Central European Free Trade Agreement SECRETARIAT Economic impact WORLD BANK GROUP Trade & Competitiveness#5Project Components The Western Balkans Regional Investment Policy and Promotion project - Three core components I. Regional investment reform agenda & framework II. Horizontal investment policy reform implementation III. Targeted investment promotion Regional Cooperation Council CEFTA Central European Free Trade Agreement SECRETARIAT Focus on implementation • . Stocktaking of IP barriers Categorization and rationalization of issues Regional reform dialogue Implementation of reforms on economy level Closing implementation gaps Peer to peer learning Private sector engagement Increase effectiveness of regional investment promotion efforts Targeted investment promotion Identification of regional value propositions Greater convergence of regional investment policies WORLD BANK GROUP Trade & Competitiveness 5#6In driving the reform agenda, the project will focus on key Areas That Matter Most For The Private Sector In SEE. The investment policy lifecycle Linkages & Spillovers Vision & Strategy Attraction & Promotion Monitoring & Evaluation Entry & Establishment Retention & Protection Supporting/related policies CEFTA Central European Free Trade Agreement Regional Cooperation Council Connectivity Sector policies IIAs WORLD BANK GROUP Trade & Competitiveness 6#7Methodology Initial mapping of IPP issues in the region Mapping of key IPP issues based on a desktop research of three primary resources: Private Sector perceptions collected through business and investor associations (Foreign Investor Councils, AmCham reports, BIG4 reports) & Existing research and analytics by international and regional organizations (EC country reports, UNCTAD analysis, OECD, etc.) Internal project documentation of WB T&C engagements in the region Categorization The matrix is built upon the Investment Life Cycle concept used by IPP Issues - highlights Vision and Strategy: countries seem to lack a coherent strategy or even a vision on how to effectively convert Investments into catalysts of mid and long term economic development. Retention and Protection: serious deficits in investment protection, specifically implementation of investor guarantess in practice (de facto) as opposed to legal protections. Regional Cooperation Council ICEFTA Central European Free Trade Agreement SECRETARIAT WORLD BANK GROUP Trade & Competitiveness 7