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Danish Investment Soars In Eastern Europe

  • Anthony Georgieff

Copenhagen, May 30 (RFE/RL) - In a report just released in Copenhagen, the Danish Investment Fund for Central and Eastern Europe (IO) discloses that by the end of 1995 it had invested in a total of 141 projects in the region. With a total capital of 300-million, the IO ranks among the major Western investors in the former communist states.

Only last year, the IO spent 40 million dollars on investment in 11 Eastern European countries. By far, the biggest investment was made in Poland, followed by the Czech Republic.

The number of Danish-Polish joint ventures totalled 62, which makes the IO among the 15 largest Western investors in that country. The Czech Republic attracted four new investment facilities, bringing the total number of Danish-Czech joint ventures to 18. Russia and the Baltic states follow closely. At the bottom of the report is Slovakia, with just one investment.

The IO was created months after the fall of the Berlin Wall in 1989, and thereby became the first Western investment fund directly interested in Central and Eastern Europe. Primarily, its resources come from the Danish government, but private businesses in Denmark have in recent years increased their capital share on the investment market.

The IO works in close cooperation with other major western financial institutions such as the European Bank for Reconstruction and Development (EBRD), the Nordic Investment Bank (NIB) and the Nordic Environmental Finance Corporation (NEFCO).

The IO creates joint ventures mainly in sectors where Danish industry has traditionally been strong: medicines, telecommunications and environmental projects. Carlsberg Breweries, the largest beer producer in the world, has also invested in Eastern Europe and has opened up plants in Romania and Croatia.

The IO's report this week claims the investment fund's activities in the region have resulted in the creation of more than 2,000 local jobs.

Last year, the IO received additional government funds for the creation of a separate investment facility, Environment Investment. It has already started up environment projects in a number of East European states.

The philosophy behind the IO's activities is twofold: by making short and long-term investments in Eastern Europe, it directly promotes the development of market economy and democracy. And, once stable market forces operate in the region, Denmark's economy will start benefiting by increasing exports and further investment.