FOREIGN INVESTMENT ROLE IN ECONOMIC DEVELOPMENT OF MACEDONIA
FOREIGN INVESTMENT ROLE IN ECONOMIC DEVELOPMENT OF MACEDONIA

Summary/Abstract: Foreign investments are of particular importance to any national economy, but they have even more importance on economies such as Macedonia’s economy. Such economies are known by insufficient accumulation and need of financial resources coming from abroad. Small economies such as Macedonia’s economy, along with policies for fostering domestic investment, are also build strategies for attracting foreign investment. With such policies, the development strategy relies on exports through which competitive capacity in the international market increases, foreign exchange is provided and economic development is stimulated. The Republic of Macedonia throughout the transition period has claimed to attract foreign investments. Political problems (non-recognition of nationality by Bulgaria, the church by Serbia, religion and nation by Greece) and economic problems (failed privatization, high corruption, and inefficient judicial system) were an obstacle to foreign investors. In recent years, the Macedonian government has developed a policy of offensive marketing for foreign investment. Such a strategy was backed up by numerous fiscal and monetary favors. Such stimuli resulted in the growth of foreign investment in the free economic zones, although they did not come as it was expected. The paper presents the advantages and disadvantages of foreign investments in Macedonia's economy starting from cost-benefit analysis. Unequal conditions between IDH and domestic investments in Macedonia's economy were introduced. The regressive equation analyzes the scales of GDP and foreign investments in the Macedonian economy for the period 2000/2016

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