April 2011
MBO: What are the areas and industries that are of greatest interest to foreign investors? Recently, the greatest interest in Montenegro is as a hub for regional business. Stability and safety, the openness of our economy, access to regional markets, free trade and special trade agreements, such as the one with the Russian Federation, low inflation and the euro are attractive incentives for anyone thinking about the Western Balkans or South East Europe as a location for business. As for specific sectors, there is interest in the areas of energy, finance and insurance, tourism, the service industry, the development of infrastructure. Most recently interest has been shown in the areas of industry, construction and trade.
MBO: MIPA was one of the organizers of the recent US-Balkan Business Summit in Baltimore in the USA. What was the main idea behind the organization of this summit? Its main goal was to present the Western Balkans as a region that is large enough to attract big US firms. The importance of this event was that it showed that Western Balkan countries can work together. The presence of two presidents and a number of high governmental officials sent a clear message to any US investors that might be interested in the region as a whole that it is ready for another wave of economic development, and that the political obstacles that existed in the past no longer exist. It is time for economic revitalization. Additionally, this event also showed that there are some Western Balkan companies that are big enough to be interested in the US market for export. It was an important first step, but many more still need to be made in the future.
MBO: Do you have a promotional plan for the rest of the year? We are trying to maximize the small funds we posses to promote investment as much as possible. As well as attending MIPIM in Cannes (the largest real estate fair in the World) and the Business Summit in Baltimore, MIPA was present at several events throughout the region: the Brown Forum in Dubrovnik, the 2nd International Business Forum in Sarajevo and various other business events in Zagreb and Ljubljana. Together with the Ministry of Sustainable Development, we will make a presentation about investment opportunities in Milan in June, and in Munich in October. We will also make presentations in Paris in May and in Hong Kong in November
with the Ministry of Economy. It is very likely that, supported by interested investors and partner organizations, MIPA will also manage to conduct business forums in Rome, London, Moscow and Madrid. With such diversification we are trying to show how open we are to attract investors from different part of the globe, which is crucial for further economic development. Although forums and events are very important, they are not the only promotional tools. Publications and web sites are also very important. Therefore, MIPA will update all of its publications and will also prepare new ones. It will also further extend its web site which has, particularly over recent months, recorded a significant growth in visitors.
MBO: Recently MIPA organized a meeting between a group of twenty new foreign investors and the prime minister of Montenegro. How would you evaluate success of this meeting? The fact that there was a group of twenty new investors who were all interested in completely new projects in Montenegro is the best example of interest that we can give. It also reflects very positively on MIPA’s capacities. The meeting was not formal, but was very focused and pragmatic. For example, US Bechtel, supported by JP Morgan, the US EXIM Bank and OPIC, clearly presented its interest in developing the first highway in Montenegro. Marsh, the world’s leading insurance broker, is interested in expanding its activities to Montenegro. The Spanish company Fersa is ready to invest in the first wind farm, while another Spanish company, Assignia, is ready to invest in infrastructure development, particularly railroad reconstruction. Martifer Solar from Portugal is interested in investing in the first solar plant, while Eco Oil is interested in setting up a company that will ensure the permanent cleanliness of Boka Bay, which is under UNESCO protection. The NBGI Private Equity Fund is ready to support medium size projects in Montenegro, and Engel and Volkers are looking for partners in the area of real estate development. Turkish Global Investment expressed interest in the privatization of certain port facilities, while the French company Segemcom has already decided to open a representative office in Montenegro. This indeed is MIPA’s job: to bring investors to Montenegro and to put them in contact with the relevant governmental institutions that have a mandate to make decisions about such projects. It would be shame to lose any of those opportunities.
MBO: You mentioned a highway. Bearing in mind the strong impact of such a project on the Montenegrin economy, do you believe that its construction will start this year? MIPA doesn’t have a role in deciding who will be awarded the government contract. Such a role lies in the hands of the Ministry of Transport. I can only note that, for several years, we have talked about two different models for infrastructure development. The Ministry advocates a PPP model, but MIPA advocates stage-by-stage development. We are not such a big country and the whole highway system in Montenegro is only around 350 km in total. That is less, for example, than the distance between Zagreb and Split. It is pity that we have wasted over four years waiting for the completion of a PPP tender which has achieved no results. Meanwhile, we could at least have completed part of the highway.
MBO: Recently, the parliament of Montenegro adopted a new Law on foreign investment. What are the main amendments that have been made? The new law further defines the national treatment that foreign companies in Montenegro will receive, except in two areas: (a) the production and trade of military equipment and (b) development of cross border zones. MIPA is recognized as key institution for the promotion of investment, and for encouraging cooperation between investors, the state and local authorities. MIPA is authorized to generate statistics on foreign investment and investors, to collect any necessary data and to provide various analyses in the area of FDI, to prepare investment promotion strategies and to modify promotional plans, etc. In addition, beside its board, MIPA now has a council which is headed by the prime minister. This is in charge of ensuring the harmonization of various country strategies.
Jovana Tomasevica 2A, 81000 Podgorica, Montenegro Phone/fax: (+382 20) 203-141, 203-140 Web: www.mipa.co.me e-mail: info@mipa.co.me
11