Year-on-year net inflows of FDI to Montenegro were down by 47% between January and November 2023 at €397m ($432m), the country’s central bank has said.

In addition, total FDI inflows declined by 25% year on year, while FDI outflows increased by 25% to $421.59m.

News about the drops in inflow levels comes despite the growing influence of non-EU actors such as China, Russia, Turkey and the United Arab Emirates (UAE) in the Western Balkans region in the past few years.

However, according to the German Institute for International and Security Affairs, the FDI projects announced in the region do not seem to have contributed significantly to economic development there.

Among the reasons given is the phenomenon of “state capture”, where governments in the region (including Montenegro’s) favour investment from abroad based on interests shaped by political corruption. In a 2022 report published by Transparency International, the country ranked 65th out of 180 countries tracked worldwide, its score going down by one position from 2021 (64).

Other Western Balkan countries are not faring better either when it comes to direct investment. Last year in November, Kosovo’s state bank reported net FDI inflows of $548m between January and August 2023, or just 0.7% higher compared to the same period last year ($554m).

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