AmCham Executive Lunch 'FDI as an opportunity for economic recovery'

The American Chamber of Commerce in Croatia (AmCham) held an executive lunch entitled “FDI as an Opportunity for Economic Recovery.” Given that the world is currently facing disruptions in global supply chains, rising inflation, rising prices of food and energy products, as well as shifts in the geopolitical landscape, the goal of the event was to exchange opinions and best practices of ways to attract foreign direct investment directed at export markets that will result in sustainable economic growth and the strengthening of Croatia’s competitiveness, along with creating a favorable business environment.

In her introductory speech, Nataša Mikuš Žigman, State Secretary at the Ministry of Economy and Sustainable Development, stated: “Foreign direct investments play an important role in Croatia’s economic development, and they are a powerful mechanism of economic growth. They also significantly contribute to achieving sustainable development goals, as well as a digital and green transformation of the economy. The consequences of the war in Ukraine, together with climate disturbances, have created significant pressures on the economy and investments. This is why, besides direct interventions aimed at alleviating the rise in electricity and heating prices, programs with which we want to encourage a transition into an energy-efficient economy and more widespread use of renewable energy sources are central to our work. We also plan to continue reforms aimed at relieving the economy of its administrative and fiscal burden, which is why I am especially pleased that, according to a study conducted by AmCham, up to 82% of companies that participated in a survey plan to expand their business operations in Croatia in the next three years.”

“With regards to foreign direct investment in Croatia, there are two positive messages that are worth noting. Positive post-COVID growth in investments has been recorded in Croatia, as in the rest of the world. Another, perhaps even more important message is that key criteria for choosing investment sites are changing. It is no longer the size of the domestic market that matters most, but rather the regulatory and economic environment, as well as the quality of human resources,” Branko Žibret, Partner and Managing Director at Kearney, said in his introductory speech.

The introductory speeches were followed by a panel discussion between the head of the Directorate for Internationalization at the Ministry of Economy and Sustainable Development Bojan Batinić, Policy & Public Affairs Senior Manager for the Adriatic Cluster at Pfizer Urška Lakner, Senior Economist at the World Bank Josip Funda, and Regional Director for Central Eastern Europe at Vertiv Igor Grdić. The panelists emphasized the importance of private sector investments, especially foreign direct investments that incorporate the Croatian economy into global value chains and that are export-oriented. Job creation, the transfer of technology, knowledge, and work models, and ultimately increased productivity are only some of the benefits of such investments.

“Croatia has a rich history, a strong domestic pharmaceutical industry, plenty of knowledge and experience, and well-educated people. Recognizing the potential and knowledge of our team at Savski Marof in the field of biotechnology and the pharmaceutical industry, including production facilities, quality control laboratories, and other infrastructure, has led to a new investment worth €100 million in partnership with the Swedish biopharmaceutical company Sobi,” stated Urška Lakner, Policy & Public Affairs Senior Manager for the Adriatic Cluster at Pfizer.

Josip Funda, Senior Economist at the World Bank, added that boosting productivity is the key to increasing the growth potential of the domestic economy. Foreign direct investments can also be of use, but in his view, they are no longer essential at this point in time. It is much more important to increase the productivity of the domestic business sector through greater investment in new technologies, research and development, management skills, and human capital in general, but it is also essential to improve the integration of the business sector in global value chains.

“The rise of investing in data centers caused by digitalization, but unfortunately also by the COVID-19 pandemic, has led to more significant investments in the markets of Western Europe and the Middle East. A significant increase in investments in data centers has been recorded throughout the year 2021/2022 in the CEE region, which includes Croatia. This demonstrates that the technology sector and the digital transformation in Croatia offer great potential and have valuable local talent, which is why it is important to continue the efforts to attract new foreign investments in this field,” concluded Igor Grdić, Regional Director for Central Eastern Europe at Vertiv.

The event was attended by more than 100 people from the public and private sector.