ANALYSIS OF THE DYNAMICS OF FOREIGN DIRECT INVESTMENT INFLOWS AND PROSPECTS OF FUTURE INVESTMENT TRENDS IN THE REPUBLIC OF SERBIA

Studies of the dynamics of foreign direct investment inflows in the transition countries in the last decade of the 20th century have shown that those countries that have had successful model of privatization and that are quickly implement the necessary reform processes, had a greater inflows of foreign direct investment. However, in the Republic of Serbia, as the country of late transition, inward foreign direct investment flows gains in intensity after 2000, establishing a certain level of macroeconomic and political stability and opening the door for the entry of foreign capital through the channel of privatization. Given that in the period before the outbreak of the global financial and economic crisis, foreign direct investment has played an important role in the transition model of growth of the Serbian economy, the aim of this paper is, based on the analysis of dynamics in the foreign direct investment inflows in the Serbian economy and by comparison with countries of the Western Balkans region, to contribute to identify the position of the Republic of Serbia as an investment destination. In addition, the intention is to draw attention to exhausted possibilities of privatization to encourage the inflow of foreign direct investment and to provide recommendations regarding the activities of competent authorities towards encouraging those forms of foreign direct investment that will support the growth and development of the Serbian economy in the future.