Balkan Business Brief

Foreign investments of 300 million euros in Montenegrin real estate raise concerns among expert

Preliminary data from the Central Bank of Montenegro reveal a significant decrease in the inflow of foreign direct investments. The net inflow of foreign direct investments from January to August totals 286.06 million euros, which is 49.4% less than the previous year. Out of the total foreign direct investments of EUR 569.61 million, the largest portion, EUR 296.81 million, was invested in real estate. Additionally, 64.02 million euros were directed into banks and companies. Economic analysts express concerns primarily about the structure of these foreign investments. They emphasize that the notably smaller investments in the economy and production sectors do not particularly benefit the citizens, while the state gets only tax from it. Experts point out that investments in real estate represent trapped capital that does not generate new value or jobs.

They also point out that emigration, driven by global political and economic events, has led to an increase in GDP. However, this increase in GDP per capita does not necessarily indicate a significantly more favorable trend, as it does not directly benefit the population. These experts argue that a much more desirable situation is one where investments are channeled into technology, production capacities, and sectors that are less dependent on geopolitical situations. They also highlight the importance of domestic conditions, such as the predictability of the business environment and political stability. Investments in production capacity and technology act as catalysts for development.

What are the most successful companies in Serbia?

The Agency for Economic Registers of Serbia has recently published a report on the Top 100 companies, ranking them based on various factors including business income, net profit, business assets, capital, net loss, and total loss. Topping the list as the most profitable and successful company is the Oil Industry of Serbia, followed by Serbia Zijin Ming, Serbia Zijin Bakar, Telekom Serbia, and SCM Power. The Economic Register Agency has assessed that the growth trend of the domestic economy with increased profitability has continued, despite the challenging business environment, strongly influenced by political and economic tensions, an energy supply crisis, and accelerated inflation. According to the agency's statistical data, the top 100 companies with the highest business incomes collectively accounted for 29.9% of the total business income in the Serbian economy and employed 15% of the country's total workforce.

Regional е-commerce initiates expansion with aspirations to become an industry giant

Ananas e-commerce, a part of the Delta Group, has officially launched its long-anticipated online platform in North Macedonia, marking the beginning of its regional expansion. The company has underlined its commitment to becoming a significant player in the field of online commerce in North Macedonia, with the aim of contributing to the growth of the digital economy, employment, and the overall economy in the country. Previously, Ananas e-commerce acquired 100% ownership of the Payten company, which made it the proprietor of online shopping brands Grouper.mk and Paopao.mk . The company takes pride in its impressive results and statistics, revealing that an impressive 97% of shipments from their warehouse are delivered to the correct address the very next day. Furthermore, they highlight that the platform witnesses daily visits in the millions, with dozens of new traders joining the platform each day. It's worth noting that Ananas e-commerce represents a substantial project with an investment of approximately 100 million euros planned over the next five years. Delta Holding holds the ambition of establishing Ananas e-commerce as a regional giant in the online commerce sector.

Why Albania wants to introduce mandatory disaster insurance?

The Government of Albania has recently introduced a draft law for compulsory housing insurance against earthquakes. The reasons behind this proposal are crystal clear. Albania faces a high level of exposure to the risks posed by natural disasters, while voluntary housing insurance remains at a significantly low level. Additionally, in the previous period, a substantial 890 million euros were allocated from the state budget for reconstruction efforts. The development of a mandatory insurance system would considerably alleviate the budgetary burden in such cases.

The proposed draft law would encompass all insurance companies operating in the market. Furthermore, the Government of Albania is exploring the possibility of receiving support from the World Bank. This support aims to establish an optimal national earthquake insurance program and to make insurance premiums more affordable for citizens. Apart from housing insurance, Albania is also considering insurance schemes for the agricultural sector. This move is aimed at safeguarding farmers against financial losses resulting from natural disasters and shifting climatic conditions. The Minister of Finance of Albania emphasized that the core objective is to establish robust insurance schemes against natural disasters, what would give ability to transfer of risk to the world's largest reinsurance companies and enable quick interventions when necessary.

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