Ministerial Statement
Pushing ahead with reform: removing obstacles to FDI in South East Europe

1. Ministers renew their commitment to the implementation of the Vienna Ministerial Declaration on “Attracting Investment to South East Europe: Common Principles and Best Practices” (July 2002) and agree to continue to strengthen regional co-operation in the investment policy area. In particular, they confirm their commitment to actively participate in the Investment Compact Monitoring Process and endorse the value of regional co-operation, sharing regional experience and peer review.
   
2. Ministers welcome the assessment of policy reforms made in the two editions (September 2002 and April 2003) of the Monitoring Instruments published since their last meeting. They note that, as indicated by the Monitoring Instruments, significant steps have been made in the area of investment policies and promotion, and that good progress has been made in other areas such as tax policy, regulatory reform, customs and SME support.
   
3. At the same time Ministers recognise the need to complete progress on priority reform targets, to bring the direct investment regulatory framework in line with best international practices and to improve the investment climate throughout the region. Ministers call upon the Country Economic Teams to establish new, performance-oriented, time-bound targets for reform in the context of the Investment Compact Monitoring Process.
   
4. Ministers value the contribution made by the international business community through their statement presented at the Ministerial conference. Ministers commend the valuable input provided by the international investors’ organisations to the policy reform process at the national level in many countries of the Region. In that context they also take note of the Belgrade Declaration of the Heads of State and Governments of the South East Europe Co-operation Process made in April 2003 which invites the Business Advisory Council of South East Europe to provide concrete proposals to that co-operation process. In particular, Ministers appreciate the steps taken by investors in the region to establish a regional network of international investor organisations, which will further strengthen policy dialogue and facilitate new investment.
   
5. Ministers recognise the value of regular and prior consultations with the business community, including representatives of the international business community, regarding policy priorities and effective solutions to investment policy issues, both at country level and regional level. This should include mechanisms for effective and regular consultation on the evaluation of existing policies as well as the introduction of new policy measures, and provide business feedback on the strategic direction of agencies dealing with infrastructure and investment policy implementation, including the investment promotion agencies, export credit agencies, SME and development agencies.
   
6. Ministers welcome the national treatment country reports prepared by the Investment Compact and call upon each participating State to follow the recommendations contained in these reports in the context of the Investment Compact Monitoring Process. In particular, they agree to take the following key measures over the next year, taking into account the legal situation in each country:
   • reduce licensing and approval procedures and special registration procedures, including reciprocity requirements for foreign investment to the level necessary for normal company law registration
   • take decisive steps with the view to allowing the acquisition of real estate by foreign investors for the purpose of investment
   • reduce reporting requirements for foreign investment for statistical purposes to a minimum necessary
   • establish transparent laws, regulations, procedures and practices regarding government procurement with a view to ensuring full national treatment
   • streamline measures relating to work and residence permits so as to allow the movement of key personnel for investment
   • promote the development of an effective services sector, in particular by removing obstacles to foreign direct investment in the areas of financial and professional services
     
7. Ministers confirm their resolve to implement the above-mentioned commitments and call upon the Investment Compact Project Team to update the list of exceptions to national treatment, monitor progress achieved in removing or reducing them, and prepare a report for their 2004 meeting at ministerial level.
   
8. Ministers recognise the importance of achieving further significant progress in the areas of regulatory reform, public and private governance, and combating corruption more effectively and encourage further work in these policy areas taking into account recommendations by the Investment Compact Project Team. Ministers agree that these areas should have a more central role in government policy and indicate that their 2004 meeting at ministerial level will be devoted to review progress achieved in these areas.
   
9. Ministers recognise that inadequate physical infrastructure constitute a significant obstacle to investment in South East Europe and call upon the Stability Pact member countries and international institutions to accelerate the implementation of programmes for the improvement of regional infrastructure, using the capacities of business networks such as the Business Advisory Council for South East Europe, in close co-operation with the Special Coordinator of the Stability Pact.
   
10. Ministers thank the co-chairs of the Investment Compact and the Stability Pact Special Co-ordinator for having promoted their 2003 meeting at ministerial level, and the Austrian Minister of Economic Affairs and Labour for having hosted it. Ministers express their appreciation for the leadership role played by the Regional co-chair, Romania, in the Investment Compact process. They also express their appreciation to the representatives of the international business community for their valuable inputs. Ministers agree to reconvene in mid-2004.

ADOPTED in Vienna, on the 11th day of July in the year two thousand and three:

Arban Malaj
Minister of Economy of the Republic of Albania

Mila Gadzic
Minister for Foreign Trade and Economic Relations of Bosnia and Herzegovina

Nikolay Vassilev
Deputy Prime Minister and Minister of Economy of the Republic of Bulgaria

Krunoslav Placko
Deputy Minister of Economy of the Republic of Croatia

Ilija Filipovski
Minister of Economy of the Republic of Macedonia

Veceslav Afanasiev
Deputy Minister of Economy of the Republic of Moldova

Mircea Geoana
Minister of Foreign Affairs of the Republic of Romania

Goran Pitic
Minister of International Economic Relations of the Republic of Serbia

Slavica Milacic
Minister of Foreign Economic Relations and EU Integration of the Republic of Montenegro