Introduction
The European New Markets, also referred to as the ENM, is a region that includes countries that are located in Central, Eastern and Southeastern Europe. It encompasses numerous states, including Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Montenegro, Poland, Romania, Serbia, Slovakia and Slovenia. These countries have become increasingly attractive to western investors in recent years, particularly due to their relatively low but rapidly growing levels of economic activity and an increase in both immigration and investment opportunities. Unfortunately, these opportunities have not been explored to their full potential due to many regional and cultural barriers that have emerge.
Regional Barriers
The main regional barrier encountered by investors in the ENM has been the lack of information available regarding the legal, social, political and economic systems in place in each of the various countries. Often, investors are unsure of where to proceed with their investments, as they are unable to properly understand the regulations and legislation that governs the economy of each country. Additionally, many investors have found it difficult to gain access to reliable information regarding the business environment and political situation in each of the countries. As a result, investors may be deterred from taking advantage of the potential opportunities that are presented in the ENM.
Cultural Barriers
Another issue that hinders the potential of investment opportunities in the ENM is the cultural barrier posed by language. Although the majority of people in the region are capable of speaking a common language, such as English, investors may be put off from making particular investments due to their inability to negotiate deals, understand the local customs and culture, or even properly communicate their ideas. Additionally, because many of the countries in the ENM are a former part of the Soviet Union or the Austro-Hungarian Empire, cultural differences between nations may lead to conflicts and misunderstandings.
Political Barriers
The political situation in the ENM can often be a contributing factor to the barriers to investment. For example, due to the past political regimes in the area, there may be a lack of trust between various regional countries. Additionally, the presence of organized crime or regional conflict can lead to an overall feeling of insecurity and an unwillingness of investors to take the risk of investing in the ENM. Additionally, there may be restrictions that have been placed on the type of investment that is allowed in certain countries, or a reluctance to engage in particular sorts of investments due to the fear of political repercussions.
Conclusion
Although the European New Markets present a great opportunity for investors, there are numerous barriers that are present that can hinder investments from taking place. These issues include regional barriers, cultural barriers, and political barriers, among others. As such, it is important for potential investors to be aware of the challenges they might face when venturing into the ENM and to take the necessary steps to ensure that their investments are properly secured and able to provide them with a return. By taking the time to understand the local environment, establish a reliable network of contacts, and research the region’s legal and political systems, investors can make well-informed decisions regarding possible investments and take advantage of all the potentially lucrative opportunities.
