Balearic investment abroad beats levels of past ten years

Balearic investment abroad and foreign investment in the islands last year beat the levels of the past ten years, according to a report published by the Institute of Foreign Trade. Hostelry, company management and shares are the main destination of Balearic funds abroad, while money is attracted to the islands chiefly through the real estate sector. Balearic investment abroad has been growing by leaps and bounds over the past three years and last year it jumped by 700 per cent, thanks chiefly to investments in the hotel industry, and an increase in capital spent on company management and stocks. However, annual variations are not all that significant as the companies have a long period in which to notify their investments. Foreign investment in the Balearics last year came to 314.68 million euros, compared to Balearic investments abroad of 550.58 million euros. Ninety-two per cent of the foreign investments were in the real estate sector. In 2000, this sector accounted for just under 41 per cent of the total investments. There was a considerable drop in the amount of investment in transport and communications, which in 2000 accounted for 40 per cent of the total. The amount of money invested in the local hotel sector, 6.32 million euros, represented just two per cent of the total. The drop in these two sectors is attributed to the end of the process of integration of European tourist groups in hotel and travel agency chains. The money came mainly from Luxembourg (193.1 million euros), Germany (38.2 million) and the United Kingdom (32.1 million). Fifty-four per cent of Balearic money invested abroad, 305.11 million euros) went to the hotel industry, compared to 34 per cent in 2000. The amount invested in company management and stocks came to 245.42 million euros, compared to just 21'648 in 2000. Holland was the country which benefited most with 258.2 million euros. Croatia (7.5 million euros), Cuba (5.3 million), Tunisia (half a million) and Cabo Verde (3.5 million) benefited thanks to the expansion of their hotel industries. The figures do not reflect the drop caused by the events of September 11. Antoni Riera, director of the financial research centre of Sa Nostra, said that this is because investments do not react immediately to such events. However, all business sectors say that the terrorist attacks and the slow down of the world economy did lead to delays in decisions over foreign investments and this is likely to be reflected in figures for this year. A government spokesman said that the figures show that foreign investors have great confidence in the Balearics and their future.