Foreign investors' interest in Estonia has grown 19 pct - survey

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The interest of foreign investors toward Estonia has increased 19 percent compared with 2012, whereas in Lithuania the number of foreign direct investments dropped 7 percent and in Latvia 50 percent, a Baltic business attractiveness survey conducted by Ernst & Young Baltic AS shows.

«Last year improved our position in the overall scoreboard a bit. Compared with 2011 Estonia rose from place 29 to place 25 by the number of projects created with the support of foreign investments, and from place 30 to 29 by the number of jobs created as a result,» Taavi Pahapill, lead consultant at Ernst & Young AS, said at a presentation of the survey.

«By the number of jobs created we are still lagging behind Lithuania, where the biggest number of jobs, or 1,717, were created last year. In Estonia respectively 443 jobs and in Latvia 290 were created. On the other hand we shouldn't forget that our population number is significantly smaller than that of neighboring countries and if that had been taken into account Estonia would occupied an even better place,» said Pahapill.

Estonia continues to be an IT country and it shouldn't be a surprise that the biggest number of jobs created here thanks to foreign investment are in software development, where 183 jobs were created. In Lithuania meanwhile financial intermediation and science and technology stood equally high on investors' list of preferences with approximately 500 jobs in each, while in Latvia financial intermediation and the transport sector topped the list.

«Interestingly, investors clearly preferred Latvia and Lithuania as base for the so-called shared service function, as a result of which 162 jobs were created in Latvia and 499 in Lithuania. In Estonia no jobs were set up in the said field,» Pahapill said. «Probably our neighbors are able to advertise themselves more and better in that domain and this could be a place for thought for Estonia – that is, what opportunities could we have to make ourselves bigger than neighbors in the future.»

Even though the European economy is living difficult times, in 2012 the total volume of foreign investments across Europe declined just 2.8 percent in comparison with 2011 and foreign investments in absolute terms remained bigger than in the years before the crisis, it appears from the survey.

«On the other hand, 8 percent more jobs have been created with the help of foreign investors – that is 170,434 new jobs altogether,» Ernst & Young Baltic AS board member Ivar Kiigemagi said.

The survey suggests that investors' interest in Europe has increased remarkably and despite the continuing debt crisis 37 percent of investors ranked Western Europe as second on the list of investment destinations that are of greatest interest for them. «In Europe the attractiveness list is topped by the UK and Germany with respectively 697 and 624 projects,» said Kiigemagi.

The relative newcomers among the countries performing well on the scoreboard are Spain, Ireland, Belgium and Finland, all of which have braved complex economic conditions and surpassed expectations as far as the number of projects goes.

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