MBO Interview Could you single out one reform that has been made to the Montenegrin economic system which has resulted in positive changes that benefit national companies? Reform processes, launched by the government of Montenegro to improve the business environment, have been initiated in almost all areas of business. Within this comprehensive and complex process, I believe we should outline the positive effects that have come out of the reform of the fiscal system, and from policies aimed at reducing tax rates and other charges that are burden to business operations. Recently, tax rates on income, company profits, compulsory social security contributions and other similar taxes were reduced, and this had a beneficial effect on reducing costs in the business sector. Mr. Velimir Mijušković, President of the Chamber of Economy of Montenegro
Biography: Mr. Velimir Mijušković was born in 1950 in Danilovgrad. He graduated from the School of Economics in Podgorica. During his professional career, he was: Director of the Inspection Services of the Municipality of Danilovgrad; General Director of the Construction Department of the Municipality of Danilovgrad; General Director of the Crafts and Communal Services; General Manager of the company “Žitopromet AD Spuž”. He was Vice-President of the Montenegrin Chamber of Economy until 2008, when he was elected President. Mr. Mijušković is actively involved with the following government bodies in Montenegro:
It is well known that many countries, when confronted with the global financial crisis, have resorted to increasing the level of VAT. This did not happen in Montenegro. Consequently the level of this tax, which was already among the lowest in Europe, remained at the same level; something which I find very positive. Despite the positive changes that have resulted from the reform process, businessmen still face problems associated with complex procedures, whose scope and duration in terms of time undoubtedly remain as obstacles to business. However, when talking about the reform of the Montenegrin economic system, this process should not be limited to just a single area of procedures, as it has a much broader scope. In my opinion, Montenegro has one problem which is the cause of many others, and that’s a poor usage of the available resources. However, if we put this factor in the center of our attention, it could only be a generator of further development.
Montenegro is currently in the negotiation process for gaining accession to the European Union. How do you think this process is affecting the private sector in Montenegro? The process of negotiations regarding accession to the European Union, amongst other things, implies an acceptance of new rules that essentially harmonize national legislation with the so-called EU acquis. It is known that the EU’s goal during the process of negotiations is to encourage state candidates to complete reforms in order to improve legal and economic systems to the point where they meet the level of standards and principles embedded in the foundations of the EU.
Regarding the economy of Montenegro, this means that it will be necessary to apply such measured to all of the provisions to which the state is bound. It will also mean coping with the pressure of competition that is inherent in the demanding European ‘road’. To make deep and Privatization and Capital Investment real changes that result in qualitative steps forward for the entire unit, it is crucial to influence Council; Sustainable Development the most mobile, most adaptable and most vital segment of society - the private sector. Trends Council; Council for the Elimination of that we have learned through our experiences in human history clearly confirm that, without Business Barriers a developed private sector, we cannot aspire to enter the arena of developed countries, as will and Higher Education Council. be assumed by EU membership. Therefore, Montenegro’s ambition to integrate itself into the system must include a vision of the development of our society based on a strong private sector.
Montenegro has recently become a member of World Trade Organization (WTO). Could you highlight the main benefits of this membership for the private sector? Bearing in mind that the rules, as defined in the WTO agreements, have been applicable in our country for three years now. This dates from the time of entry into the Stabilization and Association Agreement, CEFTA and other bilateral agreements with Russia and Turkey, through which Montenegro generates over 80 percent of its foreign trade exchange; and consequently much less importance was given to WTO membership. However, it is a key steps in the process of institutional integration into the contemporary system of international economic relations. It is also an important element for supporting the process of internal economic reforms, and is also a necessary step in the process of accession to the EU. Summarizing the benefits of our membership in this organization, we should primarily keep in mind that WTO is not an institution of "free trade", but is rather a system of rules that promote open and fair competition. These guidelines must also now be adhered to by the Montenegrin economy. This includes an obligation to function using the principles of a non-discriminatory trading system; a system that regulates the rights and obligations of all its members. As a member of the WTO, each country has the assurance that its exports will be treated by the same precisely stated laws as those from other countries. Inclusion in the basic institution of a universal trading system must bring advantages to its members. With international trade functioning in a free and predictable manner, WTO represents to its members a framework for increasing the standard of living, an increased level of employment, a steady level of growth in real income along with an increase in demand, an increase in the level of production, an increase on the level of foreign trade and services, a reliable level of sustainable development, environmental protection whilst also maximizing world reserves, and a level of economic development that conforms with the needs and interests of all countries, irrespective of their different levels of development.
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