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PM Marković meets with entrepreneurs from Podgorica: Government's economic policy was successful in this mandate, even exceeded our expectations

PM Marković meets with entrepreneurs from Podgorica: Government
Published date: 13.08.2020 23:12 | Author: PR Service

Ispis Print

Prime Minister Duško Marković reminded tonight that the Government did not accept proposals and offers at the beginning of its mandate, not even from international creditors, which would be a restriction for investments, development and new jobs, and assessed that the Government's economic policy was successful and even exceeded our expectations.

"You remember, I am talking only about this period of the mandate for which I am responsible, that at the beginning of 2017 we were in a situation to stabilise our public finances, to ensure macroeconomic stability as much as possible in accordance with our overall capacities and potentials, to regain the trust of international financial institutions and on that basis try to create strategic policies that are developmental, which are strategic, which should have aimed at starting the economy, accelerated development, employment growth in Montenegro and of course the standard of living. Have we succeeded in that - I think we have and we have even exceeded our expectations. The situation, let me remind you, was not great, our finances were vulnerable on every basis, the budget deficit was extremely high, over 5.8 or close to 6 percent, large public debt, unsettled and unconsolidated administration to respond to such challenge. The messages and expectations were also very pessimistic. I often repeat this because we need to be reminded not only of the results but also of the capacity and our own strength and potential that exists among us and in Montenegro in general. I was told then by the International Monetary Fund that we do not have the answers and knowledge at the national level to respond to such a challenge, that it is necessary to turn to the IMF, withdraw that portfolio in a four-year period of 320 million dollars, as far as I remember, in order to make our public finances sustainable and of course to make serious cuts in rehabilitating our local and state administration, and especially in reducing costs and expenditures. These demands were to reduce pensions between 10 and 15 percent, to reduce salaries in the public sector between 10 and 15 percent, to reduce public administration by 20 percent, to increase all types of burdens, including taxes and contributions. It was a model that we easily rejected, telling our international partners that we would try to gather domestic experts and try to create a domestic recovery programme, and I hope based on that principle and accelerated development in the country. You have witnessed that period and those results. In just two or three months we managed to recover and consolidate our public finances, to finance current expenses even then and in that short period only from original revenues, we regained our international credit rating, our entry into international financial markets was very good and productive from the aspect of borrowing and the price of that debt. This allowed us to direct part of that money to the capital budget for development and investment throughout the country in various sectors and of course repaying the huge government debt whose annuities ranged between EUR 300 and 500 million in these three years. This has shown that Montenegro has experts and determination in the state administration," said PM Marković at tonight's session of the Council for Improving the Business Environment of Podgorica Capital City.

The Prime Minister said that the Government received the support of the economy for this policy and that this energy helped to start creating new value in Montenegro, helped our economic growth rates to be among the highest in Europe, contributed to a significant reduction in unemployment and employment growth.

"It filled the budget, and we did not spare those funds for development and we turned Montenegro into a construction site wherever we had the conditions, from Herceg Novi to Gusinje," said the Prime Minister.

He added that in that period, our country recorded an inflow of over EUR two billion in foreign direct investment, to which significantly contributed our membership in NATO.

"Thanks to a well-designed economic policy, we have made our economy even more productive and able to create new value. This has enabled us both economic growth and improvement of standard of living," said Prime Minister Duško Marković.

Positive reactions to Government packages of measures

The Prime Minister said that the coronavirus pandemic affected the economy of the whole world, so it stopped our growth as well.

"The coronavirus continues to spread, the health crisis continues to have a devastating effect on our economy, on the economic substance. Nobody has an answer to that anywhere," said the Prime Minister.

He added that he was encouraged by the fact that he had the opportunity to hear these days throughout Montenegro positive reactions to the packages of measures and the effectiveness of the implementation of these measures and the assessment that they have preserved our most valuable companies and companies whose work is suspended.

The Prime Minister assessed the Government's packages of measures as successful, saying that in the second package, EUR 40 million were distributed for 65,000 employees in Montenegro, i.e. 163,000 salaries, in just one hundred days. "It was distributed without a single written request, without waiting for a decision, without going to the bank or the post office to withdraw money. We took such an approach and such a solution that the Ministry of Economy with its capable team was able to accept the application on the same day and practically check and make a decision in a couple of hours and that the Ministry of Finance pays money to those for whom it was intended in just a few days. In this situation as well, we have shown that we have internal potentials and capacities that can respond to such a crisis and such problems," said PM Marković. 

The Prime Minister said that the third package of economic measures worth EUR 1.2 billion has short-term and long-term effects.

"It is not only a stabilising and social, but also a particularly strong development instrument for our economy, employees and citizens," said the Prime Minister.

EUR 60 billion in international aid to the region

The Prime Minister assessed as encouraging the fact that the EU has shown its internal strength and allocated significant funds for the recovery of the economies of member states and third countries.
"Ten billion euros have been allocated for that package, international financial organisations, and above all, the International Monetary Fund has provided an additional 14 billion. That is the amount of money that will be an incentive for financial international creditors to enter with additional amounts of money for the Western Balkans. It will amount to approximately EUR 60 billion and Montenegro has already applied for ten projects from that fund by 4 August, which will be spent on the development of infrastructure that is primarily aimed at regional connectivity – transport infrastructure that includes roads and railways, energy, projects for environmental protection and of course IT as a branch that has yet to experience affirmation in Montenegro and I hope very soon through what we have proposed in the third package of measures we can turn IT into a new digital industry" – said Prime Minister Duško Marković.

President of the Chamber of Economy of Montenegro and entrepreneur Vlastimir Golubović and entrepreneur Žarko Burić especially praised the Government's third package of measures.

The Prime Minister and the Ministers of Economy and Finance, Dragica Sekulić and Darko Radunović, answered the questions of the entrepreneurs.