Interview with Budimir Raičković, President of the Board of Directors of Finance Plus and of the Montenegrin Managers’ Association, for the daily newspaper Dan — 5 January 2021.
1. Expectations of the New Government on Economy and Business Aid
At this moment it is clear that the Montenegrin economy is, simply put, fighting for survival.
We expect the new Government, within its means, to do everything it can on short-term measures to support business — but also to work on measures that, in the medium and longer term, would help overcome the situation that defines us as a highly import-dependent economy.
We expect the Government to strengthen consultations with business organizations — so that, on a partnership basis, the best and most efficient solutions can be jointly found.
Priorities
For the economy to progress, we need:
- Simple regulation
- Stability
- A high-quality and efficient public administration service
We expect the Government to pay particular attention to all forms of tax relief for the economy — and, together with the business community, to design and implement projects oriented toward exports — that is, production and processing.
Digital Transformation
We have repeatedly expressed the expectation that there will be genuine digital transformation of the administration and the economy. Beyond fast and efficient government services for citizens and business, we see numerous business opportunities here too.
Domestic Companies and Foreign Investment
- We expect the Government in all tenders to find legal ways to give priority to domestic companies
- In attracting foreign investment, economic diplomacy should play a stronger role — we expect reforms in this sector
- An analysis of the functionality of the various advisory councils and the inclusion of business organizations
2. Were the Three Aid Packages Enough?
The aid packages delivered so far, given the state of the economy, were far from enough to cover the losses incurred.
Unfortunately, the reality is that public debt and the budget deficit tie our hands when it comes to the kind of aid that business truly needs. We consider state aid to business to be an investment — and only with stronger support can business create new value and fill the budget.
Unfortunately the current socio-political situation is diverting attention from the key topic — how to preserve jobs, economic substance, and reach a green branch when it comes to the economy.
3. Is a Fourth Set of Measures Needed?
The economy needs continuous support — both in tourism and hospitality and in the other heavily affected sectors.
Pronounced illiquidity, falling revenues and indebtedness of the economy are problems that must be addressed urgently. Particular focus should be placed on support measures for small and medium-sized enterprises.
Although the situation is complex, it could serve as a good basis for Montenegro to unite all its knowledge, potential and resources in the direction of economic recovery.
4. How Long Will the Recovery Take?
Estimates of the time to recovery are highly uncertain.
- In a scenario where the COVID vaccine proves effective and there are no new global disruptions — the flow of people, goods and capital will increase
- In 2021, with a favorable health picture, we could move toward more positive economic indicators
- Recovery will not be fast — but as a small system we have the opportunity, through joint action, to accelerate that process
- Restructuring the economy and removing a range of weaknesses is not a short-term task
5. Montenegro Airlines and Airports
We are witnesses to how the status of Montenegro Airlines and the announced possible closure sparked a strong debate — and was treated through a more political-emotional than economic prism.
I believe the focus should be on high-quality and objective economic analyses. Montenegro must certainly do everything to have its own healthy and sustainable airline. The management of that company must be prudent and oriented toward positive business results.
Poor road infrastructure makes us heavily dependent on air transport — and every effort must be made to find a sustainable and lawful solution.
As for the fate of the Airports — the state should, whenever possible, retain in its hands the resources and companies of strategic importance.
6. What Will 2021 Look Like in Economic Terms?
2021 will be filled with challenges — but I hope that together we can place the economy in focus and move toward its recovery.
The Montenegrin Managers’ Association will intensify communication with the Government — particularly toward:
- Creating a stimulating tax environment
- Simple and predictable tax policy and legislation
- Raising the efficiency of services for business and citizens
- Stronger support for entrepreneurship
Particular focus should be placed on further reforms of the education system which from the earliest days will stimulate creativity, innovation and the entrepreneurial spirit — and thus create a quality pool of talent for the economy.
Interview published in the daily Dan, Tuesday, 5 January 2021.
