MBO Interview with Mr. Petar Ivanović, CEO of the Montenegrin Investment Promotion Agency MBO: Can you explain to our readers what MIPA is and what its role is? The Montenegrin Investment Promotion Agency - MIPA is a national agency that promotes foreign investment and facilitates economic development in Montenegro. It was set up in 2005 and serves as a platform for marketing foreign direct investment opportunities on behalf of the Montenegrin government. MIPA’s mission is to create partnerships with various stakeholders: foreign and domestic investors, the public and private sectors, international organizations and private individuals. Ultimately, through economic development, MIPA aims to improve the quality of life for all Montenegrin citizens.
Prof. dr Petar Ivanović, CEO of the Montenegrin Investment Promotion Agency (MIPA) Short biography: Prof. dr Petar Ivanović is a CEO of the Montenegrin Investment Promotion Agency and the professor at private university UDG. During 2009-10 he worked as the Chief Economic Adviser to the Prime Minister of Montenegro. Up-to-date he managed more than 40 international projects, including those in Afghanistan and on Kosovo, and over 100 surveys and projects in Montenegro. He participated at over 80 international conferences and at majority of them presented papers or delivered speeches. He owns a certificate to trade futures. Ivanović is honorary citizen of the Indianapolis, Indiana and member of the Mont Pelerin Society and the Philadelphia Society. He is on the List of Experts of The Heritage Foundation. He has published two books, a textbook and more than hundred economic papers. In the period 2005-09 he served as the president of Montenegrin Tennis Association.
MBO: What are MIPA’s plans in 2011? As always, to do what is necessary to attract as many foreign investors as possible, and to promote the country as the most competitive investment destination.
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MIPA has a variety of roles. It works on presenting Montenegro’s specific industrial and other concrete advantages to investors. It also conducts promotional activities aimed at target markets, and generally tries to improving the country’s image. Within this field, it coordinates and implements strategies designed to attract foreign investment, and finetunes individual strategies for certain industries. MIPA also provides professional services to foreign investors and helps to develop public-private partnerships. Finally, it supports initiatives aimed at developing investment, tries to stimulate green-field opportunities and works on increasing Montenegro’s competitiveness as an investment destination.
MBO: There are many investment promotion agencies throughout the world. Is MIPA different in any way? You are right; there are more than 10,000 economic development agencies in the world today, all competing for the same projects. Almost 200 countries are currently trying to attract FDIs. However, there are still only a limited number of productive, strategic and visionary investments. MIPA is trying to attract the attention of investors for such projects in Montenegro. At the same time, Montenegro is rapidly changing and is fast becoming the business platform of the Western Balkans. It has many projects that are under way, a record of consistent and strong economic development, its currency is the euro, it boasts competitive labor costs, has close proximity and access to the south east European market and offers emerging private universities and lifestyle advantages. Altogether, Montenegro is becoming a new business and living destination. I believe that MIPA is unique as it represents a good mixture of entrepreneurial approach, initiative and excellent communication along with a business mindset and work ethic that is easily understood by foreign investors. MIPA’s board also has strong support from the highest government officials including the prime minister and other key ministers.
MBO: Do you believe that you are on the right track and what are the main obstacles to further increasing FDI in Montenegro? The only way to see that we are doing our job well is to analyze the results that have been achieved. Since MIPA was established, foreign direct investment in Montenegro has grown each year, as have the number of registered foreign companies. The latter is very important, as typically, in countries in transition, large FDIs are concentrated in just a few companies. More and more foreign investors are cooperating with MIPA through the ‘After Care Program’, which shows that investors are not abandoned and that long-term cooperation is crucial for both sides. Also, present investors often operate as a bridge to new ones, and their opinions matter. Therefore, I would say that we are on the right track. However, we should always target higher goals. As for obstacles, we have to understand that every country in transition is not only a challenge for development, but also an opportunity for investors. It is all about the ratio between the risk and the reward. As for the obstacles that exist in Montenegro, they include issues such as labor law, the size of the market, the need to further strengthen the rule of law and administrative procedures. However, these obstacles are smaller in Montenegro than in neighboring countries. On the other hand, Montenegro already uses the euro as its currency, has a flat rate tax system with the lowest rates in the region (both corporate and personal income tax are 9%), treats foreigners as nationals, allow the repatriation of profit and most importantly offers a lot of business opportunities. As we continue, step by step, to work on removing the existing barriers, investors can focus on the opportunities that are available. Further proof that we are on the right track came just a few days ago when Montenegro was granted long-term Bb stable rating by Moody.