There is a great interest of the diaspora in investing capital and knowledge in the home countries, but it is necessary to remove certain restrictions, reduce investment risks and establish bridges of cooperation in order to use this significant potential of economic development.
This was assessed at the panel entitled “The role of the diaspora in economic development”, during which the participants of the Conference on the Economy of Montenegro 2022 had the opportunity to hear successful stories that testify to the great potential of the diaspora from established businessmen Hajriz Brčvak, owner and director of MIH – GmbH, Germany, co-owner of several companies in Montenegro, Vladan Todorović, owner and director of Advanced Security Technologies from Serbia, Srđan Plamenac, member of the Montenegro – Germany Alliance, Lilijan Sulejmanović, founder and owner of the Bardo brand from Bosnia and Herzegovina, and Anto Medić, director and co-owner of Pulsar Laboratories from Croatia. The moderator was Sanjin Arifagić, regional director for Southeast Europe of Financial Markets International.
Arifagić said that we are living in a time in which the global diaspora has never been bigger, and which over the years has sent home about 708 billion USD.
– The Western Balkans is a fertile migratory area, which has been especially pronounced in the last 10-15 years, and a fifth of the population of the Balkans actually lives somewhere else – said Arifagić.
According to him, the impact of the departure of young people and profiled staff to the EU, which we badly need, is being felt, and this further leads to reduced economic growth in the countries of the region.
– It is necessary to try to find a solution on how best to include all the resources we have outside our countries and contribute to the economic development of the Western Balkans – he concluded.
Vladan Todorović believes that in the Western Balkans there are certain limitations in terms of the level of investment risk, which is one of the main problems.
He believes that political and numerous institutional restrictions are a big problem for diaspora investment, and that overcoming them would greatly facilitate the operational part.
– Strategic investment, not only in terms of money, but also knowledge and business networks represent a great potential of the diaspora – assessed Todorović.
Hajriz Brcvak believes that the Western Balkans should adapt to the European business system, which has fewer restrictions for investors. He states that there are numerous opportunities, potentials and interest of the diaspora to invest in Montenegro and the homeland in general, but that there is an empty space between the wishes and the very beginning.
– We must all work together to make that start easier for someone who wants to invest, and I believe that the state will do everything to make it possible, with the help of the Chamber of Commerce – said Brčvak.
According to him, the establishment of a special ministry for the diaspora would be of great importance, which would contribute to greater investor confidence.
– Diaspora is the biggest resource that the Balkan countries have and Montenegro should use it, because a lot of money is brought to it every year. Regardless of the crisis, the diaspora brought and invested the earned money, and these are not small sums, from 400 to 700 million EUR annually. That should be used better – he said.
He emphasizes that the second or third generation of the diaspora must not lose contact with the homeland, which is a big risk. He believes that the diaspora can transfer significant knowledge and experience gained abroad, which we really need.
Lilijan Sulejmanović points out that there is a great desire in the diaspora to contribute to the development of the region, which we have not yet been able to use to a sufficient extent.
– I think this is a key period to think about how to connect with the diaspora and to strengthen that bridge towards them. We cannot expect that all generations of the diaspora will want to invest here, and we must strengthen its passive investment through “angel” networks, for which improvement of the regulatory framework is key. The importance of passive investment should be equally considered as active – said Sulejmanović.
She sees the possibility of the diaspora’s contribution not only to the professionalization of the service sector, but also to the development and improvement of products for the domestic and foreign markets.
According to her, it is absolutely necessary for the countries of the Western Balkans to have a strategic vision of development, to know what they want to invest resources in and to base their legal and political structure on that.
– We must not ignore the potential of agriculture and we need to have a vision of how to use its significant potential – she said.
Srđan Plamenac believes that there is interest in investing in Montenegro, the diaspora invests a lot in real estate and helps relatives and family, but it is still insufficient.
– It is necessary to form municipal offices in Montenegro, so that the diaspora can unite and pool capital – he pointed out.
As favorable conditions for investing in Montenegro, he cites the profit tax, which amounts to only 9% and can be a good prerequisite for investment.
Plamenac also pointed to the importance of European funds, citing the example of Croatia, which received 3.9 billion from them, and only 20% of that amount would be enough for Montenegro.
He proposed to the Chamber of Commerce of Montenegro to organize an investment conference, which would bring together important investors from the diaspora, and he supported the idea of Brčvak on the establishment of the Ministry for the Diaspora, which should have a significant impact on his work.
Ante Medić believes that production and export are key for future economic development.
– A paradigm shift is necessary. Tourism and services are seen as primary industries here, but we must work to develop critical technologies and components for larger industries. That’s where I think the future is, because the service industry is leading to cheaper labor. Producing a physical product and placing it outside is the formula for success. For long-term growth, it is necessary to invest in technology and knowledge, and products that can be competitive on the world market. Such investments also require the education of the investor himself. Lifelong education is necessary in order to know what to invest in and how – states Medić.
He adds that it is necessary to design special financial instruments that would attract investments and especially “angel” investors, local media writes.
