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Foreign investments/ The region consolidates with manufacturing centers, we become a "real estate" economy

2026-04-30 07:10:00, Ekonomi CNA

Foreign investments/ The region consolidates with manufacturing centers, we

A recent World Bank analysis of the Western Balkans highlights that as several countries are consolidating as manufacturing centers, Albania, along with Kosovo and Montenegro, are moving towards real estate when it comes to Foreign Direct Investment (FDI).

“More important than levels, FDI in the WB6 has undergone a noticeable structural shift. The region’s economies can be broadly grouped into manufacturing-oriented destinations, Serbia, North Macedonia and Bosnia and Herzegovina, and services-oriented destinations, Albania, Kosovo and Montenegro, where tourism and real estate dominate,” the report says.

The same underlines that there is a qualitative improvement within industries in the Western Balkan countries where substitutions are being made from a lower value to a higher one.

“Bosnia and Herzegovina has shifted from food and beverages to automotive and transport equipment, North Macedonia has moved towards higher-tech machinery and equipment, while Albania has seen electrical equipment replace textiles as the main FDI subsector . ”

FDI is no longer generating high employment

One element that the World Bank brings to the report is employment resulting from foreign direct investment. Its levels have fallen compared to a decade ago and this, according to the WB, is also related to investments that have a higher added value.

“However, the number of jobs created by new FDI projects has followed a downward trend in most economies, with only Bosnia and Herzegovina and Kosovo registering marginal growth.

In Albania, for example, annual job creation was close to 9,000 in the period 2010–2014, while in the years 2022–2025 it was around 3,700.

In Serbia, the average number of new jobs from FDI fell from around 21,000 per year in the period 2010–2013, to around 10,000 in 2022–2025.

In North Macedonia, the annual average fell from around 5,800 in the period 2010–2016, to approximately 2,200 in the years 2019–2025 (These trends may reflect the gradual saturation of labor markets in the Western Balkans, where unemployment has fallen significantly over the past two decades, but the decrease in the intensity of job creation by FDI may also be related to an ongoing sectoral shift, with an increasing share of investments directed towards higher productivity and higher value-added activities).

Step by step, Albania is moving towards medium value-added sectors

According to the WB, “jobs created through new greenfield FDI (investments starting from scratch) were concentrated in high- and medium-value-added sectors. This trend became particularly pronounced from 2021 onwards, suggesting that, while FDI is creating fewer jobs, the foreign investment projects themselves are of greater scale and sophistication.

Serbia and Albania have approximately 80 percent of jobs from FDI in high value-added sectors, while Bosnia and Herzegovina, North Macedonia and Kosovo have around 75 percent.

Montenegro is a notable exception, with only 37 percent of FDI jobs in high value-added activities and a larger share in medium value-added sectors, although it has shown signs of improvement in the most recent period.

Several economies, including Albania and Bosnia and Herzegovina, have also shown a recent shift towards medium-value-added sectors, underscoring the importance of continued investment promotion strategies that prioritize quality over volume,” the report highlights. /Monitor