Serbia & Montenegro must further reform its basic market institutions in order to raise investment inflow, speed up economic growth and reduce poverty, the World Bank and the European Bank for Reconstruction and Development (EBRD) said in a recent publication entitled "Building Market Institutions in South Eastern Europe."

According to the publication, Serbia-Montenegro attracted a little over $1.7bn in foreign direct investment (FDI) between 1989 and 2002, trailing far behind East European countries.

However, the state union's per capita FDI jumped from $20 in 2001 to $67 in 2002, while all other countries in the region saw a significant drop. In order to improve its investment-friendly environment and encourage business development, Serbia-Montenegro must tighten its financial discipline and implement bankruptcy legislation.

The state union must improve financial transparency and implement international accounting standards in order to allow its companies to grow and develop, the publication said.

(NewsBase 21.vi.04)