The enthusiasm regarding Arab investment in Bosnia and Herzegovina, which was particularly pronounced three to four years ago, has subsided strongly, while capital inflow from these countries has been very modest over the past two years, according to the Sarajevo-based website Indikator.
The Central Bank of Bosnia and Herzegovina's foreign direct investment statistics show that a total of KM 717.6 million has been invested as of 2018 from three key Arab countries investing in Bosnia and Herzegovina - Saudi Arabia, Kuwait and the United Arab Emirates.
This is only five percent of the total KM 14.29 billion invested since 1994, since foreign direct investments have been kept on record.
Of these three countries, Saudi Arabia invested the most – KM 281.7 million, followed by Kuwait with KM 235.3 million, while the UAE invested KM 200.6 million.
Over the last two years, slightly less than KM 100 million of foreign direct investments has arrived from these countries, since the balance at the end of 2016 was KM 620 million.
Last year, Saudi Arabia's investment balance increased by KM 11.6 million, Kuwait's by 11.7, while the UAE's balance remained at the same level compared to the previous year.
Beside the three key countries, investments in Bosnia and Herzegovina also come from other Arab countries, such as Omar, Bahrain, Qatar, but there is no separate record for them. Instead, they are categorized as "other countries", totaling KM 371.3 million in foreign direct investment, accounting for 2.6 percent of total foreign direct investment.
Some of the ostentatiously announced multi-billion-dollar projects, primarily in the real estate sector, are not being realized or are progressing slowly.
The media often point to the project of the residential settlement Buroj Ozone on Mt. Bjelasnica, 20 kilometers away from Sarajevo, which has not progressed despite numerous announcements from investors - but there are a number of other similar projects whose construction was planned throughout the outskirts of Sarajevo, as well as in other areas in B&H.
In addition to the traditional obstacles faced by investors in B&H, it appears that a significant impact on the "cooling" of Arab investments was a campaign of the authorities three years ago to detect foreigners, mostly from the Gulf countries, who were buying real estate in Bosnia and Herzegovina on behalf of fictitious firms, and then frequently rented it to other foreigners who were not registered residents.
This is not the case now to such an extent, the Service for Foreigners' Affairs confirms.
Many potential investors probably didn't have enough information about B&H, or were misinformed, and entered into projects riding the wave of increased interest in B&H without proper knowledge and preparation.
And while the announcements of potential real estate boom have dwindled, it seems that the best investments that came from the Arab countries were those directed into agriculture such as Zeraa Agriculture Investment investing in Brcko-based Bosnaplod d.o.o. and Hepok from Mostar or Al Shiddi Group investment into startup airline FlyBosnia.