ISSN 1800-8739
July 2012 A QUARTELY REPORT #41
CEED Consulting
Business Environment Macroeconomic Outlook Banking Sector Privatization and Investments Capital Market Business News Economic Freedom In the Spotlight Coming Up
MBO Summary Welcome Business Environment: The business environment in the second quarter of 2012 was characterized by liquidity problems and problems in financial support. The major laws that influenced business,
to the forty-first edition of which were adopted during the second quarter, were Law on Financial Collateral Arrangements, Montenegro Business Outlook. Law on Custom Tariffs, Law on Amendments to the Law on Road Transport, Law on Taxes on
Access to Certain Services of Common Interest and on the Usage of Tabacco Products and Electro-
MBO is acoustic and Acoustic Appliances. quarterly publication of pertinent Economic Freedom: According to the report “2012 Index of Economic Freedom“ published by economic indicators presenting a the Heritage Foundation, Montenegro’s economic freedom score is 69.5, making it’s economy the
72th freest. A brief analysis of the current situation in Montenegro have shown areas that could be
comprehensive view of improved, as for example: Property Rights, Freedom from Corruption and Government Spending. Montenegro’s In mentioned areas the score of Montenegro is lower than world’s average. business environment. Macroeconomic Outlook: The second quarter of 2012, at a macroeconomic level, was characterized by a slight reduction in economic activity: industrial production and the tourism sector This publication is both recorded declines in May when compared with figures in April (5.3% and 3.8%, respectively).
intended to serve international In April 2011, the Montenegrin budget recorded a deficit of €43.64 million; public debt at the end business people seeking investment opportunity in Montenegro. We welcome your comments.
of May was recorded as being €1,638.6 million. Negative trends were also recorded in the area of international economic relations.
Benking Sector: From end-February to end-April 2012, the banking sector recorded positive trends which were in part related to: growth of total assets of banks, loans and deposits, an improvement in the loan-to-deposit ratio, and asset quality parameters. During this period, the weighted average lending effective interest rate decreased slightly in comparison with the interest rate recorded in December 2011. In addition, when comparing figures with December 2011, the weighted average deposit effective interest rate increased slightly.
Experts Opinion: Rio+20: Conference on “The Future We Want“, Ms. Slavica Nikolić, Center For Enterpreneurship and Economic Development (CEED)
Capital Market: During the first half of 2012, the Montenegrin capital market was characterized by negative trends. This was followed by a decrease in the volume of trade and also in the number of transactions when compared with the same period of 2011. This indicates that the capital market crisis is not yet over. The greatest turnover was recorded in the area of company shares, followed by investment funds and bonds. In The Spotlight: Business Climate Survey in the SME’s Sector in Montenegro We introduce: Possibilities for Development of Clusters in Montenegro Kralja Nikole 27a/4, Business Center “Čelebić”, Podgorica, Montenegro Phone/Fax: +382 (0) 20 633-855, +382 (0) 20 620-611 web site: www.ceed-consulting.com e-mail: info@ceed-consulting.com
Interview: Mr. Aleksandar Pejović, Montenegro’s Chief Negotiator and State Secretary for EU Integrations
Privatization and Investments: Since the adoption of the 2012 Privatization Plan, the preparation of planned tenders has slowly started to take its course. The government concluded its agreement with SOCAR on a 90-year lease of the former military resort in Kumbor, near Herceg Novi. Several international companies have shown interest in taking over the Aluminum Plant in Podgorica and negotiations are currently in process. The Turkish company, Toshcelik, has bought the Nikšić-based steel mill and plans to invest €35 million in order to revive the company.
Montenegro General Info Area Position Length of border Coast line Length of beaches Climate Average temperatures of air Maximum sea temperature Average num. of sunny days Major Cities Albania Croatia
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Geographic information 13,812 km² 41º52’ - 43º42’ lat., 18º26’ - 20º22’ long 614 km 293 km 73 km Mediterranean 27.4Co (summer) 13.4C o (winter) 27.1Co 240 Podgorica (Capital), Niksic, Bijelo Polje, Bar Border Crossing Bozaj Debeli brijeg
Serbia
Kula,Vuče, Dračenovac, Dobrakovo,Čemerno, Ranče, Bijelo Polje, Bar
Bosnia and Herzegovina Sea border
Vilusi, Vracenovici, Scepan Polje, Metaljka ports and piers: Bar, Kotor, Budva and Zelenika
Population Population in country (2011) Number of households Source: Monstat
625,266 194,795 Census 2011 Transportation
Airports Railways Total railways length Total highway lenght
Podgorica and Tivat Bar (line to Italy: Bar-Bari, Bar-Ancona) and Kotor (line to Italy: Kotor-Barleta) Bar – Beograd and Podgorica- Niksic 249 km 5,174 km
Durmitor Biogradska gora Lovcen Prokletije Skadar Lake
39,000 ha 5,650 ha 6,220 ha 21,647 ha 40,000 ha
Ports
National Parks
July 2012
Business Environment Macroeconomic Outlook Prepared by: Mr. Darko Konjević, Montenegro Business Alliance (MBA) Capital Market Banking Sector The second quarter of 2012 continued to be characterized by problems inherited from the past. Privatization and Investments Liquidity problems and a lack of financial support presently dominate the Montenegrin economy. The budget was rebalanced as promised and some new taxes were also imposed to meet the state Economic Freedom budget. For the first time ever, the Central Bank of Montenegro published a list of companies Business News whose accounts had been frozen. Montenegro also received a date for starting negotiations with the EU. This confirms that Montenegro has good prospects and that foreign investments are In the Spotlight Coming up... quite secure in the country.
Business Environment in Montenegro
This quarter was characterized by the adoption of the following regulations that influence the business environment in Montenegro: Law on Financial Collateral Arrangements. The main reason for the adoption of this law is to secure the implementation of EU practices in Montenegro. Other goals mainly include: removing formal barriers for doing business in areas such as financial collateral arrangements connected to collateral, financial instruments, the payment of cash or credit balances. The law also aims to increase legal security, to decrease credit risk and to improve the general situation regarding financial and capital markets in the country. Law on Custom Tariffs. Due to changes in the harmonization system operated by the World Custom Organization, the Government of Montenegro proposed changes to the Law on Custom Tariffs. The parliament accepted these suggestions and adopted the changes. These changes were also part of the required criteria for membership of the European Union. Law on Changes of the Law on Road Transport. In order to decrease the cost for transport companies when applying for various different licenses, the Law on Road Transport was changed. The cost of obtaining licenses decreased by an average of 30%. The Law on Taxes on Access to Certain Services of Common Interest and on the Usage of Tobacco Products and Electro-acoustic and Acoustic Appliances. One law that generated productive discussions for both experts and non experts was this law on taxes. It appears that the main intention of the government was to collect additional revenue to support the state budget without increasing general taxes. Instead of imposing a general overall tax, they increased taxes on certain goods and services. Therefore €1 a month tax has been introduced for every SIM card (pre or post paid) that is used in Montenegro. The same applies to every cable TV connection and every electric meter. The law also proposes that a fee of €1 per square meter per month should be introduced for smoking areas in catering facilities. Budget Rebalance Due to an insufficient level of budget income and other circumstances regarding the budget of Montenegro the Ministry of Finance proposed that the 2012 state budget should be rebalanced. The budget rebalance was proposed both for current expenditure and for capital. The current budget, after the rebalance, was reduced by €11.27 million and the capital budget was reduced by €4.7 million. Cuts were made in almost every area with the intention of continuing to decrease public consumption in the future.
Business Statistics and Data Business Registration Statistics (Number of registered companies in Montenegro, as of 1st July, 2012)
353
Joint Stock Company Limited Liability Company
26,446
Part of a Foreign Company
437
General Partnership
61
NGO
295
Limited Partnership
430
Entrepreneur
17,185
Institution
1,125
Other
113
Total
46,445
Tax Rates 17%, 7% and 0%
Value Added Tax Corporate profit tax
9%
Personal income tax
9%
Source: Commercial Court
Economy Statistics Selected indicators
2011*
Population (625,082 in 2003)
2012**
625,266
Real GDP (billion) 2011 / May 2012
3.273
3.405
Negotiation Process for EU Membership Montenegro started the negotiation process to become a full member of the European Union on 29 June. This will be a long process which will involve adjusting national legislation and national habits to meet the demands of the EU. But this also shows that Montenegro and its economy are on the right track and that the initiatives implemented previously have yielded results. This is also important for foreign investors as it represents Montenegro in a positive way with a safe and stable environment for investment.
Real GDP growth 2011 / May 2012
2.5%
0,5%
Inflation rate (average annual CPI) 2011/ Jan-May 2012
0,1%
3,5
Unemployment rate 2011/ May 2012
11.56 %
Frozen Accounts Published Central Bank of Montenegro, for the first time ever, published a list of the companies whose accounts had been frozen. The list contained around 2,500 companies in Montenegro. Two conditions were imposed for the publication of the list of companies. The first was that companies listed should have had their accounts frozen for more than 30 days and the second was that their debt should exceed €10,000. The list will be published each month. The aim of the initiative is to increase the awareness of companies that are struggling; the aim is also to ensure that solvent companies avoid doing business with blacklisted companies. This initiative is questionable as it may influence the position of blocked companies by making their predicament even worse.
Net FDI (million) 2011/January-April 2012
389
13% 79.8
* Ministry of Finance ** Ministry of Finance, Monthly Macroeconomic Indicators, May 2012. Official currency
Euro
Source: Ministry of Finance, Central Bank of Montenegro, Monstat, Employment Agency of Montenegro
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Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up... Graphic 1. Country Comparisons World Average
59.5
Regional Average
66.1
Free Economies
84.7
Montenegro
62.5 0
20
40
60
80
37
40.4
100
Graphic 2. Rule of Law 100 80 60 40 20 0
43.4
40
Property Rights
Freedom from Corruption
Montenegro
World average
Graphic 3. Limited Government 100 80 60 40 20 0
91.3
76.9 59.8 31.7
Fiscal Freedom
Govrenment Spending
Montenegro
World average
Graphic 4. Regulatory Efficiency 100 80 60 40 20 0
69.2 64.7
86.1 61.4
Business Feedom Labor Freedom
Montenegro
81.2 74.4
Monetary Freedom
World average
Graphic 5. Open Markets 100 80 60 40 20 0
83.6
74.5 55 50.7
Trade Freedom
Investment Freedom
Montenegro
50 48.6
Financial Freedom
World average
Economic Freedom Prepared by: Mr. Darko Konjević, Montenegro Business Alliance (MBA)
Economic freedom in Montenegro - are we on the right track? For the last several years, economic freedom in Montenegro has been measured by the Fraser Institute and Heritage Foundation Index. The level has remained the same for a long time, but recently it has dropped lower. So what are we are doing wrong and why are we not using all of the available reforms to improve our situation regarding economic freedom? If we say that economic freedom is defined as the freedom to produce, trade and consume any goods and services acquired without the use of force, fraud or theft, then we can say that in Montenegro there are still obstacles which prevent the further development of the free market that could increase economic freedom. A brief analysis of the current situation in Montenegro, carried out by the Heritage Foundation Index, shows areas that could be improved. The following suggestions were made: Montenegro’s economic freedom score is 62.5 which makes its economy the 72nd freest in the 2012 Index of Economic Freedom published by the Heritage Foundation and the Wall Street Journal. Its score is the same as last year’s mainly due to deterioration in the areas of business freedom and labor freedom. The poor performance in these areas counteracted the modest improvements that were achieved in monetary freedom and in the management of public finance. Montenegro ranks 33rd out of 43 countries in the European region; its overall score is above the world average. In the category of rule of law Montenegro has still not achieved the necessary key points in order to improve its current ranking. As this area includes freedom from corruption and property rights, greater efforts should be made to improve this area. The Constitution of Montenegro and also its laws guarantee property rights; however, in some cases property rights, especially intellectual property rights, are not sufficiently protected in Montenegro. Also, in the area of corruption, there should be more transparency. This could be achieved by limiting the size of the government and by introducing clearer procedures. This would undoubtedly foil most of the present corruption. The category concerning government comprises fiscal freedom and government spending. Montenegro is highly regarded both in the region and on a wider scale regarding its level of taxes and also its introduction of a flat tax. The flat tax system has contributed to faster economic growth in Montenegro; therefore the Montenegrin government should maintain the present low flat tax system. The positive effects of government spending cuts have still not yet really been felt. Further economic growth and more activity in the private sector could still be seen as a result of the aforementioned cuts. The areas of business, labor and monetary freedom still challenge Montenegro. Procedures for setting up business in Montenegro have been streamlined and it is now possible to register a business online. Labor freedom continues to be a concern as the most recent changes in labor legislation have reduced the level of freedom in the labor market; this needs to be improved. Montenegro uses the Euro as a currency so monetary freedom is at a fairly high level. Trade freedom in Montenegro is at a high level and customs tariffs are relatively low. Nontariff barriers are still present and represent a potential threat to the level of trade freedom. New regulations in the area of investments provide further assurance to investors that they are welcome in Montenegro; the regulations also confirm that Montenegro is a good destination for investment. However, slow procedures, inadequate bureaucratic responses to investors, and a variety of other problems continue to create obstacles for investing in Montenegro. Financial freedom in Montenegro is made difficult by non-performing loans, illiquidity in the economy and the real estate sector. All of these issues will contribute the further deterioration of financial freedom in Montenegro. In conclusion, Montenegro is on the right road towards achieving a higher level of economic freedom. The main concern is that the level of economic freedom in Montenegro has stagnated over the last couple of years. The consequence of this is that the recent reforms are not reflected in the present measured level of economic freedom. Policy makers need to consider this when making decisions about reforms in Montenegro.
Source: The Economic Freedom of the World: 2012 Report
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July 2012
Macroeconomic Outlook The World Bank estimates that in six of the countries in the Western Balkans, including Montenegro, economic growth in 2012 will be slower than it was in 2011. The crisis continues to affect activities in industry, tourism and in the construction sector. Industrial production recorded a fall of 5.3 % during the period January-May 2012 in comparison with the same period last year. Major decreases in industrial output were recorded in the areas of electricity production (nearly 50%) and mining and quarrying (nearly 20%). The only increase in output levels was recorded in the manufacturing industry, particularly in the areas of pharmaceutical production and in the manufacture. Tourism During the period January-May 2012 72,031 tourists (of which 83.6% were foreigners) visited Montenegro, thus recording a fall of 3.8% in comparison with the same period last year. The decline was mainly due to a decrease in the number of local tourists. During the observed period, 337,496 nights were recorded, which was a decrease of 2.1% when compared with the same period last year. Budva, Herceg Novi and Ulcinj had the highest number of visitors. Inflation The annual inflation rate, measured by the Consumer Price Index (CPI), during the period January-May 2012 was recorded at a level of 3.5%. Significant price increases were recorded in alcoholic beverages and tobacco (24.6%). From 1 April 2012, new excise taxes will be implemented on coffee, gas and water. This will result in an immediate price increase for these products. According to the latest available international comparisons, Montenegro’s annual inflation rate (3.1%) was above the EU 27 level (2.7%) in April. Employment and Wages According to data from the Employment Agency of Montenegro, at the end of June, there were 29,443 unemployed (13,577 of which were women). Thus the unemployment rate was 12.69%. In May 2012, the gross average salary was €727; the average salary without taxes and contributions was €487. Higher salaries, without taxes and contributions, were recorded in the following sectors: electricity, gas steam and air conditioning supply (€869) and finance and insurance (€855). The lowest salaries were recorded in the trade sector (€334) and in construction (€381). Budget According to the Law on the Budget of Montenegro for 2012, revenue is projected to be €1,210,074,101.60, and expenditure is projected to be €1,252,724,789.74. However, in order to strengthen fiscal stability, the Ministry of Finance has proposed a revision of this budget which envisages a reduction in expenditure and an increase in taxes. Current budget revenue in April 2012 was €98.71 million, thus showing an increase of 10.1% in comparison with same month last year. The increase in revenue was due to the implementation of new excise taxes on coffee and soft drinks, as well as higher excise rates on tobacco and alcohol. Budget expenditure totaled €142.35 million, thus showing an increase of 41.8%. This resulted in the Montenegrin budget showing a deficit of €43.64 million in April. At the end of May, public debt amounted to €1,638.6 million (48.1% GDP). Foreign Direct Investments (FDI) During the period January-April 2012, net FDI inflow amounted to €79. 8 million, just 54.2% of its recorded value in same period last year. - FDI inflow: €121.4 million, mostly in form of sale of real estate (€62.2 million) - FDI outflow: €41.6 million, mostly in form of residents’ investments abroad (€22.7 million)
Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up... Graphic 6. CPI-monthly growth rate (base Ø2010) Feb-12, 1
1.0
Aug-11, 0.7
Jan-12, 0.8
Apr-12, 0.5
0.5 Oct-11, 0.2 0.0
May-11, -0.1
Mar-12, 0.4
Nov-11, -0.2
July-11, -0.3 Sept-11, -0.1
Dec-11, -0.2
-0.5 Jun-11, -0.5 -1.0
Graphic 7. Average salary without taxes and contributions (€) May-12 Apr-12 Mart-12 Feb-12 Jan-12 Dec-11 Nov-11 Oct-11 Sept-11 Aug-11 July-11 Jun-11 May-11
EUR 487 EUR 491 EUR 489 EUR 495 EUR 505 EUR 484 EUR 483 EUR 477 EUR 477 EUR 475 EUR 476 EUR 475 EUR 479 460
470
480
490
500
510
Graphic 8. FDI inflow structure (in million EUR) 0.5 22.5 51.2 25.8
External trade The total realized through foreign exchange during the period January-May 2012 amounted to €845.6 million. Total exports totaled €150.4 million, while total imports totaled €695.2 million. The export-import ratio of 21.7% was below last year’s average level (24.9%). Dominant exports in terms of products were: aluminum, mineral fuels/oils/waxes, wood and beverages. The majority of imported good/services also related to mineral fuels/oils/waxes, along with reactors, boilers, machinery and mechanical appliances, electrical machinery and equipment and vehicles.
Companies and banks
Intercompany debt
Real estate
Withdrawal of the capital
(Source: The Central Bank of Montenegro, Monstat, Ministry of finance of Montenegro, Employment Agency of Montenegro)
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Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up... Graphic 9. The structure of total banks’ assets 20.0 21.3 20.8
Up to 3 months
51.4 50.3 50.7
From 3 months up to 1 year 23.3 23.2 23.3
From 1 to 3 year 5.3 5.1 5.2
Over 3 years
0.0
20.0
February
40.0
March
60.0
April
Graphic 10. Structure of deposits 4.1 4.6 4.3
Financial institutions
28.9 28.3 28.7
Non-financial institutions 4.6 4.6 4.5
General Government
57.6 57.7 57.7
Households 1.3 1.3 1.4
Non-profitable organisations
3.4 3.5 3.4
Other 0.0
20.0 February
March
40.0
60.0
April
Graphic 11. Structure of deposits by sectors November 2011
92.9
December 2011
90.9
Corporate and household loans Banks and other financial institutions
Graphic 12. Interest rates April
3.12
March
3.14
February
3.08 0
9.61 9.64
Total Bank Assets and Liabilities From end-February to end-April 2012, total bank assets amounted to €8,317 million, while on a monthly level they amounted to €2,770 million. Total bank assets amounted to €2,780.4 million at end-April 2012, thus recording a decline on an annual level (4.4%). At end-February, end-March and end-April 2012, within the structure of total bank assets, loans recorded an increase, while monetary assets and deposits with depository institutions represented about 21%. In the structure of total bank assets, at end-February 2012, the highest monthly decrease was recorded by securities (5.9%). At end-March the highest monthly decrease was recorded by monetary assets and deposits with depository institutions (5.9%), while at end-April it was recorded in the areas of other assets (4.9%) and loss provisions to other assets (12.5%). In the structure of total bank assets, at end-February 2012, the highest monthly decrease was recorded by securities (5.9%). At end-March the highest monthly decrease was recorded by monetary assets and deposits with depository institutions (5.9%), while at end-April it was recorded in the areas of other assets (4.9%) and loss provisions to other assets (12.5%). In the same period, within bank liabilities, deposits represented the main share (about 65%), followed by borrowing (around 18.7%) and total bank capital (around 11.0%), whereas the remainder (5.3%) was other liabilities. At end-February and end-April, on a monthly level, the highest declines were recorded in the area of other liabilities (6.6% and 6.0% respectively). In relation to the previous month, at end-March, the highest monthly decline was recorded in the area of financial derivatives (12.3%). From end-February to end-April, within bank liabilities, deposits represented the main share (about 65%), followed by borrowing (around 18.7%) and total bank capital (around 11.0%), whereas the remainder (5.3%) was other liabilities. At end-February and end-April, on a monthly level, the highest declines were recorded in the area of other liabilities (6.6% and 6.0% respectively). In relation to the previous month, at end-March, the highest monthly decline was recorded in the area of financial derivatives (12.3%). At end-April, total bank capital amounted to €303.7 million, thus recording a slight decline on an annual level (0.7%).
Deposits
Loans
Total deposits amounted to €5,398 million from February to April 2012; on a monthly level they amounted to €1,799 million. At endApril, total deposits amounted to €1,809.3 million. Observing data from April 2012 and comparing it with April 2011, total deposits increased by 0.7%. From February to April 2012, within the deposit maturity structure, time deposits were dominant (around 62%), while demand deposits represented 38%. Within the structure of time deposits, the largest deposits were recorded in the area of short term investments; more specifically in investments with a maturity period of between 3 months to 1 year (about 50.8%). Large deposits were also recorded in the area of investments with a maturity period of between 1 to 3 years (approximately 23.2%). Observed on a sector basis, within the deposit structure, deposits made by individuals remained dominant and represented about 57.7% of the total amount.
From end-February to end-April 2012, total loans granted by banks amounted to €5,878.4 million, which at a monthly level represented €1,959 million. At end-April, total loans amounted to €1,971.5 million, thus showing a decrease of 5.8% when compared with the previous year.
Interest rates
9.65 10
The weighted average deposit effective interest rate The weighted average lending effective interest rate
Source: Bulletins of Central Bank of Montenegro January 2012 and December 2011
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Banking Sector
From February to April 2012, the weighted average lending effective interest rate (lending interest rate) was around 9.63%. The weighted average deposit effective interest rate (deposit interest rate) was around 3.11% during the same period.
The loan-to-deposit ratio amounted to 1.08 at end-February 2012, 1.10 at end-March and 1.09 at end-April 2012. Within the structure of total loans disbursed, corporate and household loans were dominant and represented 90.4% during the period February to April 2012. The remainder referred to banks, other financial institutions, public owned organizations, nonprofitable organizations and others.
Household deposits Total household deposits amounted to €3,112.9 million from end-February to endApril 2012, and on a monthly level amounted to €1,038 million. At end-April, total household deposits recorded an increase of 1.0% at a monthly level and of 7.6% at an annual level. From end-February to end-April 2012, in the maturity structure of household deposits, time deposits were dominant and were recorded as representing 68%.
July 2012
Expert’s opinion Author: Ms. Slavica Nikolic, Center for Enterpreneurship and Economic Development (CEED)
Rio+20: Conference on ‘The Future We Want’
Montenegro in Rio
One of the most important global events regarding environmental protection is the United Nations Conference on Sustainable Development (Rio+20). This year the event took place in Rio de Janeiro from 20-22 June 2012. The main objectives of the conference were to define new policies in the context of promoting a green economy and poverty reduction, and also to introduce an institutional framework for sustainable development. The final document, The Future We Want, was adopted, by consensus, at the summit. It anticipates improvements and stability in the areas of energy, food and water supplies in poor countries. It also anticipates the gradual abandonment of subsidies on fossil fuels and envisages better protection of the oceans. Within this document a wide range of activities is planned; these are to be implemented by the governments of member states, the business sector, industry, civil society and a variety of others.
Delegations from 188 countries including Montenegro gathered at the conference in Rio. Key results of the analyses on the potential for the Montenegrin economy becoming greener were presented.
Activities include: - Strengthening the United Nations Environment Protection Program (UNEP); - Establishing goals for sustainable development; - Providing a detailed description of the way that a green economy can be used as a tool for achieving sustainable development; - Promoting measures for reporting on sustainable business; - Overcoming the use of Gross Domestic Product (GDP) as the only measure of a country’s welfare; - Developing a strategy for financing sustainable development; - Adopting a framework for sustainable consumption and production; - Planting 100 million trees; - Recycling 800,000 tons of PVC (the most common type of plastic) per year etc. Member states also confirmed their commitment to sustainable development by promising to establish universal sustainable development goals; they also confirmed the importance of gender empowerment, rights regarding water and food, poverty reduction, the adoption of a ten-year framework for sustainable consumption and production; and the potential for a clean and green economy. One of the major results of the conference was that funds increased by over $513 billion, all of which was allocated to the area of sustainable development. These funds will be used in the areas of energy production, transport, green economy, mitigating the effects of natural disasters, desertification of water, forest and agriculture. Of the total amount, $323 billion will be allocated to the initiative Sustainable Energy For All. The main goal of this initiative is to ‘provide a global approach to modern energy services for every fifth person in the world; to reduce the wastage of energy by increasing energy efficiency, and to multiply available renewable energy resources on a global basis’. The first conference on sustainable development was held in 1992; at that event Agenda 21 was adopted together with an action plan to prevent global warming and to promote sustainable development. This document was of great importance for environmental protection. Twenty years later the results achieved were significantly lower than expected. During that time the world population increased by 30%, as did consumption per capita, gas emissions and the greenhouse effect, and the use of natural resources etc.
The aforementioned facts indicate the necessity for creating an action plan in order to stimulate the usage of green technology, to increase the percentage of renewable energy within the total production figures and to enable economic growth based on sustainable development rather than on the assumption that limited natural resources will last forever. One of the main reasons that people were against the activities mentioned above, including the development of a green economy, was the possibility that such action would decrease the GDP, employment, expenditure and earnings. Some studies have shown that green technology markets will reach at least $500 billion by 2050, i.e. in the next four years their growth rate will be 22% on an annual basis; this could, indeed, be considered the faster industrial revolution in history to date. In addition to the reduction of pollution resulting from gas emissions, one of the most positive results of moving towards green technology would be the new jobs that would be created by such an economy. This is one of the main incentives for further developing this concept. Some countries have already recognized the potential of a green economy and have invested significant financial assets in this area. The leaders in this area are China and Germany. Small countries, which are more flexible, may be particularly interested in basing their future development on the principles of sustainable development. However, the future will show to what extent opportunities are taken and used to enable people to live in a more environmentallyfriendly and sustainable way.
Representatives from Montenegro expressed their commitment to basing future development on the usage of sustainable natural resources; they also agreed to base tourism, agriculture and the energy sector on a sustainable green economy in the future. These three sectors were identified as being those with the greatest potential to create ‘green’ jobs and also to preserve natural resources. The conference delegates were brought up to date about the steps Montenegro has taken so far to stimulate a green economy; these include the inclusion of a new social and ecological component in the public procurement process and the creation of new credit lines to encourage female entrepreneurs in less developed areas. In addition to the above, in order to reinforce and support the concept of a green economy in Montenegro, future activities will be directed at improving knowledge and the capacity for strengthening links between education and the labor market, along with providing support for the adoption of the principles of sustainability in the national economy.
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Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up... 5.7% 15.2%
Bonds
Graphic 13. MONEX20
Looking at shares on an individual company basis, the highest monthly trade volume was recorded in March, during the first half of 2012; Aluminum Plant shares reached a volume of 3.98 million through a series of block transactions. Apart from this, the most traded shares during the last six months were those of Telekom Montenegro which achieved € 1.106 million on the A list.
14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Graphic 14. MONEXPIF 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Graphic 16. Turnover in PIF’s 900,000
16,000,000
800,000
14,000,000
700,000
12,000,000
600,000
10,000,000
500,000 8,000,000 400,000 6,000,000
300,000
4,000,000
200,000
2,000,000
100,000 0
Atlas Mont
Eurofond
HLT
MIG
Moneta
Trend
Volume
842,236
64,161
11,959
0
274,274
323,003
Shares
14,910,481
3,510,254
1,306,600
0
4,591,381
7,654,191
Source: Montenegro Stock Exchange (www.montenegroberza.com)
8
Trade on the Stock Exchange
During the first half of 2012, three types of securities were traded: company shares, privatizationinvestment fund shares and bonds which included Government bonds and Ministry of Finance bonds. The greatest turnover was recorded in the area of company shares (79.1%), followed by investment funds (15.2%). The total turnover of bonds amounted to 5.7%. All types of securities recorded a decline during this same period.
79.1% PIFs units
During the first half of 2012, the Montenegrin capital market was characterized by negative trends. This was followed by a decrease in the volume of trade and also in the number of transactions when compared with the same period of 2011. This indicates that the capital market crisis is not yet over. The greatest turnover was recorded in the area of company shares, followed by investment funds and bonds.
During the first half of 2012, turnover on the Montenegrin stock exchange amounted to only €9.99 million, thus showing a decline of 62.8% in comparison with the same period in 2011. The average monthly turnover during the first half of the current year was only € 1.66 million, which was much lower than the average monthly turnover in 2011 (€ 4.47 million). This indicates that the capital market crisis is not yet over. The decline in the turnover of the stock exchange during the first half of 2012 was also followed by a decrease in executed transactions. During the first half of 2012, a total number of 3,319 transactions was completed. This was 45% less than during the same period in 2011 (7,319 transactions).
Graphic 15. Turnover structure
Shares
Capital Markets
0
Stock Exchange Indices
MONEXPIF
The Montenegrin stock exchange uses the two indices, MONEX20 and MONEXPIF. In March 2012, the Montenegrin Board of Directors adopted a new methodology for calculating the indices MONEX20 and MONEXPIF. Their aim was that, through the adoption of a new method of calculating the index, a more accurate representation of the capital market situation could be reached. The new method that has been adopted for calculating the index is available on the official website of the Montenegrin stock exchange.
The value of this index has declined steadily with just a few oscillations since the beginning of 2012. It reached its highest level on 2 February with a total of 4.273 points. The lowest point was recorded on 21 June with 3.022 points. The index value was influenced in such a way that a similar trend was evident in all of the privatization investment funds.
MONEX20 The value of the Montenegrin Stock Exchange, MONEX20, upon which MSE’s 20 most liquid companies are traded, has decreased steadily since the beginning of 2012 with just a few oscillations. The highest value that was reached by MONEX20 during the first half of 2012 was recorded on 23 March with 9,807 points. The lowest value was recorded on 22 June with 8.408,56 points. Variations in index value have influenced all of the changes shown by shares represented in this index. In particular, the following have been most greatly affected: Telekom Montenegro, Jugopetrol Kotor, Prva Banka, Montenegrin Electric Transmission System and Container Terminal and General Cargo JSC Bar.
Privatization – Investment Funds on the Stock Exchanges The total volume of trade involving PIF shares during the half quarter of 2012 amounted to €1.516 million. This showed a decrease of 12% when compared with the same period of 2011 (about €1.721 million in trade volume). The significant increase in turnover in the privatization-investment fund was due to a series of block transactions in Atlas Mont shares which totaled €278,500. In total, during the first half of 2012, 732 transactions were made. These transactions represented a total of 31.972 million shares. The most actively traded shares during this period were Atlas Mont (14.910 million shares). The privatization-investment fond "MIG" JSC Podgorica has changed its name to "Society for Task Management and Real Estate Management MIG" JSC Podgorica. It started to trade its shares on the free stock market, by auction, on 27 March.
July2011 2012 April
1 concern 21 target markets insurance
40 companies employees &
20,000 agents 7,500,000 customers 16,500,000 contracts
Insurance of a New generation.
Plav KOTOR
9
Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up... Graphic 17. Business indicator 14.7
15
12.1
10
7.3
5 0 -5 -10
-3
-4.2
-8.3
-6.7
2011
2012
-11.3
-15
2009
2010 Current situation
Expectations
Graphic 18. Export indicator 30
26.5
24.1
20
12.8
10 0 -10 -13.3
-20 -30
-24.4 2009
-4.5
-3.9
2011
2012
-12.4 2010
Current situation
Expectations
Graphic 19. Employment indicator 4.9
6 4
2.8 0.9
2 0 -2 -4 -5.2
-6
2009
2010
2011
2012
Expectations
Source: Business Climate Survey in the Small and Medium-Sized Enterprise Sector in Montenegro
Business climate index
In the Spotlight Business Climate Survey in the Small and Medium-Sized Enterprise Sector in Montenegro A business climate survey has been carried out in the small and medium-sized enterprise sector as part of the Economic Development and Employment Programme implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, in cooperation with the Ministry of Economy and the Small and Medium-sized Enterprises Development Directorate (SMEDD). The Business Climate Survey started in 2009; since then it has been repeated on an annual basis. The Centre for Entrepreneurship and Economic Development (CEED) has seen in charge of the implementation of the survey. The purpose of the survey is to assess the current situation of small and medium-sized enterprises in Montenegro. Each year a specific topic is chosen for discussion. For the survey this year, corporate social responsibility was chosen as the topic on which to focus discussions. In previous years, topics have included women's entrepreneurship and innovation. The survey included a total of 472 companies. According to the existing structure of business entities in Montenegro, the sample was dominated by micro enterprises, mostly set up as limited liability companies, and the most practised activity was trade. The environment in which small and medium-sized enterprises operate has seen changing over time, and the current policy of the Montenegrin government is strongly oriented towards the improvement of the overall business environment. In addition to national policy, there are numerous NGO-sector initiatives, especially initiatives set up by business associations which aim to contribute to the improvement of the business climate. The main aim, however, remains to clearly identify issues that create limitations for businesses. Despite significant efforts to improve the business climate, the SME sector, for the fourth year in a row, stresses that business development has been significantly restrained by various administrative and regulative measures. Most of the restrictions occur at a national-level and include factors such as municipal taxes and levies and excessively long administrative procedures. The consequences of such barriers are felt more intensely during periods of crisis. The aforementioned list of barriers can be expanded by adding market barriers such as unfair competition, high labour costs and difficulty in the collection of receivables as a result of economic insolvency, which is of particular importance due to the crisis. The results of this year’s survey show that the Montenegrin economy has suffered from the stillpresent effects of the global economic crisis. This year’s survey showed that 93% of the SMEs surveyed had, to a greater or lesser extent, suffered from the consequences of the economic crisis. This is the highest percentage recorded so far in this research. The consequences of the crisis have impacted on the main business indicators, and in comparison with the year before the figures are as follows: • 57.2% of companies registered a monthly decline in revenue, • 54.6% of companies registered a decline in profit margins, • 50.6% of companies faced a reduction in the number of customers/clients. Despite fighting insolvency, very few companies (between one quarter and one fifth, depending on the year) applied for a loan; medium-sized companies were the most active in this domain. Also, very few companies (between one fifth and one sixth, depending on the year) established some form of cooperation with business support institutions; the organizations that were contacted most frequently were the Chamber of Commerce, the Employment Agency of Montenegro and the Union of Employers of Montenegro. Every fourth company that was interviewed was a member of some organization, most often the Employer’s Federation and Montenegro Business Alliance.
Companies’ perception of the business climate has varied from year to year. On the whole it has maintained a negative trend, although expectations regarding the future are optimistic. The general business situation as a whole achieved the most negative vote last year (-8.3 indicator); in the case of export businesses, however, the most problematic situation was recorded in 2009 (-24.4 indicator). It can be concluded that the negative evaluation of the current situation has diminished (reduced negative business climate indicator) and that expectations are now much more moderate (7.3 in 2012 compared with 12.1 in 2011, and 12.8 concerning exports in 2012 compared with 26.5 in the previous year). Expectations regarding the future business situation were the most optimistic in 2010 (14.7 indicator). Exporters’ expectations in 2011 for the following year were the most optimistic (26.5% indicator). Expectations regarding employment have shown variations on a year to year basis; in 2009 expectations were pessimistic, but subsequent years showed a positive trend and reached a maximum indicator value in 2010 (4.9).
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July 2012
We introduce Possibilities for Development of Clusters in Montenegro Clusters are defined as sectoral and geographical concentration of firms (mainly SMEs) that produce a distinctive range of identical or similar goods and services whilst facing similar opportunities and threats/risks. Intensive activity in the process of cluster development in Montenegro started in 2011 when mapping was done on the whole territory of Montenegro; 15 diagnostic studies were made. In May 2012, the Government of Montenegro adopted the "Strategy of Sustainable Economic Growth Through the Introduction of Clusters Until 2016 " along with an action plan for its implementation. The action plan divides the activities from the strategy to be implemented into the following areas: incubation phase, ie, implementation of pilot projects (up to the end of 2012), capacity building phase (during 2013), and full implementation of the strategy (2014 to 2016). Pilot projects, where CEED Consulting is included as the Cluster Development Agent, cover two potential clusters: I. Cluster for the collection and processing of mushrooms, II. Cluster for the organic production of buckwheat.
Cluster for the collection and processing of mushrooms The cluster for the collection and processing of mushrooms is located in six municipalities of the northern region (Rožaje, Berane, Mojkovac, Kolasin, Bijelo Polje and Podgorica). The mapping process included 15 active companies in the business of collecting and processing mushrooms. This potential cluster is one of the largest mapped clusters in Montenegro. During the process of preparing diagnostic studies for this cluster, great potential for its development was observed. In Montenegro 13 types of mushrooms can be found, collected and processed; among these four species are dominant (about 80% of the total volume): Boletus edulis, Lactarius deterrimus, Morchella conica, Cantharellus cibarius. During the period 2009 - 2011, more than 3,000 tonnes of the aforementioned mushrooms were collected; every year more and more mushrooms are collected. This cluster may gain special advantage from exporting. During the period 2006-2011 almost every company had the opportunity to export a certain amount of mushrooms; some operated continuously during the whole of the observed perid. Looking back over the period 2006- 2008, exports were fairly stable. However, in 2009, the level of exports grew by 53%. Although it fell in 2010 (by almost 10% in comparison with 2009) due to the effect of the crisis in key importing countries, it is still significantly higher than it was in comparison with 2008 (57%). Considering the possibilities for the development of the cluster, which means primarily the development of the companies that make up the cluster, significant results can be achieved in the area of exports. This is because mushrooms from Montenegro are of high quality and their price in foreign markets (in retail) can reach 5-10 times more than they can in Montenegro. Of the total amount of collected mushrooms, about 40% are mushrooms for processing, while 60% are sold as fresh mushrooms. Over 45% of the total quantity of mushrooms were sold on the local market at prices ranging from 4-7 Euros / kg, while 55% were exported and reached prices of up to 20 Eur/kg (France). Table 1. Type of mushroom Year
Total
2009
2010
2011
Boletus
690 t
515 t
1.365 t
2.570 t
Cantharellus cibarius
240 t
270 t
462 t
972 t
Morchella conica
32 t
25 t
57 t
114 t
Craterellus cornicopiodes
15 t
12 t
32 t
59 t
-
10 t
10 t
1.926 t
3.725 t
Lactarius deterrimus TOTAL
986 t
822 t
Source: Agency for Environmental Protection of Montenegro
Cluster for organic production of buckwheat This cluster is located over seven villages in the territory of the Municipality Pljevlja. The cluster’s main product is flour obtained by grinding grain. Today, this cluster is made up of 26 manufacturers, represented by the same number of households. The main activity is agriculture and all of those who are involved are directly dependent on this type of production. Potentially there is also a cluster made up of NGO "Zdravko Zrno", NGO "Stara Kosanica" and NGO "Rodni Glibaći“. The potential for the production of buckwheat in this area is great. Capacity and income keep increasing. Arable land in the Municipality of Pljevlja increased by up to 245% during the period 2008 - 2010. In this cluster a trend of constant increase is evident in arable land area sown by buckwheat, a crop which increases the yield. In 2008 buckwheat covered 12 acres; only three years later the area increased to nearly 30 acres. Also, the number of producers of organic buckwheat production has nearly doubled from 14 in 2010 to 26 today. All these facts speak in favor of agricultural production and its potential for development and investment. The high nutritional value of cereals is also well known. Therefore, the local name for buckwheat is "golden grain". The price of buckwheat flour in relation to widespread wheat flour is several times higher in retail. Export activities have also recorded a positive trend. During the period 2006 - 2010, exports increased; export markets included mainly Albania, Germany, Serbia and Bosnia and Herzegovina. Table 2. Cereals and cereal preparations (exports) Exports Cereals and cereal preparations (in 000 EUR)
2006
2007
2008
1,843
1,037
1,734
2009
2010
2011
2,505
2,523
3,886
Source: Monstat
11
MBO Interview with Mr. Aleksandar Pejović, Chief Negotiator At the end of December, 2011, the Government of Montenegro appointed you as Chief Negotiator. Please introduce us to the main reforms that you have implemented so far. Which are the most significant for the negotiation process? In a very short period of time, Montenegro has implemented many reforms and has achieved quantifiable results regarding the fulfilment of its obligations arising from the seven key priorities that are defined in the 2010 European Commission’s Report. Work has continued regarding the successful fulfilment of obligations as detailed in the Stabilisation and Association Agreement. An emphasis has been put on the alignment of national legislation and institutional frameworks with EU regulations and standards, along with the enforcement of relevant policies. The positive EC Spring Report of 22 May along with the decision of the European Council on 29 June to start accession negotiations with Montenegro confirm the excellent results that have been achieved. These results also demonstrate a driving force that is willing to respond to future challenges with the same level of commitment and responsibility. Mr. Aleksandar Pejović, Montenegro’s Chief Negotiator and State Secretary for EU Integrations
Biography: Ambassador Aleksandar Andrija Pejović is the State Secretary for European Integration, the Chief Negotiator for Negotiations on the Accession of Montenegro to the European Union (since December 2011), and the National Coordinator for Instruments for Pre-Accession Assistance. For the last two years (since March 2010) Mr. Pejović has been Ambassador - Head of the Mission of Montenegro to the EU and (since October 2010) Permanent Representative Ambassador of Montenegro to the Organization for the Prohibition of Chemical Weapons in the Hague. Prior to his appointment as Ambassador to the EU, Mr. Pejović was Director of the Directorate for the European Union in the Ministry of Foreign Affairs of Montenegro for three years. In this position he was also fully engaged in cooperation between Montenegro and the EU. He was most specifically involved in political relations and in dialogue with the EU, but also contributed to the common foreign and security policy of the Union. Mr. Pejović has worked in the Ministry of Foreign Affairs since 2000. He has held responsibilities in several departments within the Ministry including multilateral affairs, bilateral affairs and the EU.
Concerning the negotiation process, I would like to recall that the government adopted the Decision Establishing Negotiating Structure for Montenegro’s accession to the European Union on 2 February 2012. This defines the negotiating structure and determines the competences of the six newly established bodies. Moreover, we have established working groups that will be responsible for negotiating chapters 23 and 24 which cover the areas of judiciary, fundamental rights and justice, freedom and security respectively. These are negotiable chapters that, due to their specific gravity, their importance for democratic capacity and because of their significance regarding the development of each individual society, are opened at the start of accession negotiations and, in line with the EC new approach, remain open until the very end of all negotiations. Explanatory and bilateral screening meetings regarding the aforementioned chapters were held during March and May. Representatives from various Montenegrin institutions and from relevant EC Directorates considered the current level of compliance achieved by our legislation when compared with the EU acquis.
At the first intergovernmental conference, held on 29 June, 2012, in Brussels, accession negotiations for Montenegro were formally opened. What steps have been planned for the forthcoming period? A very demanding and dynamic period lies ahead of us. Immediately after the Euopean Council adopted its decision to open accesion negotiations with Montenegro, we started to establish the first working groups which will work on the two negotiable chapters. As I stated previously, these chapters will remain open; initial screening on these chapters will take place in September and October, but they will remain under constatnt scrutiny until August 2013. After the groups have been established, training will be organised to ensure that all tasks are properly addressed. By the end of the year, the EC will prepare a report on the screening of chapters 23 and 24. The report will present guidelines which outline what is necessary in order to open negotiations on these two chapters. Subsequently, and in accordance with the EU new approach, we will start to prepare action plans for further work concerning specific areas of these two important chapters. In parallel with the negotiations, we will also have commitments arising from the Stabilisation and Association Process starting in July: meetings between the Stabilisation and Association Parliamentary Committee and the Stabilisation and Association Council, and also three more subcommittee meetings. Furthermore, the European Commission will present its regular annual Montenegro Progress Report in October. This will provide an overview of the situation in Montenegro in many areas and will also help us to resolve the problems that have been identified.
Could you tell us in which fields you expect to have the most difficulties in the negotiation process? What are the biggest challenges? The negotiation process represents a huge challenge by itself. It is important for us to continue to fulfil the European expectations in a qualitative manner, thus proving that Montenegro can become a credible partner of the EU. This will be accomplished if we continue to achieving quantifiable results in all areas. Regarding the concrete challenges that we will face, I can say that strengthening our administrative capacity to take over and implement the EU acquis will certainly be a major challenge.
12
July 2012
Does Montenegro have the administrative capacity to respond to the challenges of the negotiation process? In what way could the administrative capacity be improved? Certainly. Montenegro has a relatively young, but very flexible, state administration that has so far borne the greatest burden of the European integration process. It has also proved that we are able to cope with the task. In addition to the state administration, there are also professionals in parliament and in the NGO sector, along with representatives from the business community, trade unions, universities and other civil society organisations. It is important to reitterate that European integration is a project that concerns the entire society; all segments will be involved in the process in accordance with their respective competencies. Of course, as the process progresses, the need for new specific knowledge and skills along with expertise will arise. During negotiations we will be required, in time, to develop expertise in areas where it is presently lacking, and will thus strengthen our staff.
In your opinion, which are the most demanding chapters for Montenegro and why?
negotiations, one of the most important goals concerning economic policy is to strengthen economic competitiveness in order to improve our ability to cope with competitive pressure in the European Union. I believe that the outcome of the negotiations will ensure conditions that include a stable financial and macroeconomic environment, a competitive market economy, strong industrial and agricultural sectors as well as educated and flexible labour force. I would like to stress that Montenegro has prepared the first preaccession economic programme and that this has already been included in the pre-accession economic dialogue. The preparation of this programme has already proved to be useful in that it helped to identify priorities, it coordinated activities in all areas and resulted in the keeping of records concerning obstacles for long-term economic growth, and it took into consideration the consistency of pre-accession priorities and key documents relevant to EU policy. During the forthcoming period, we will focus on: the promotion of sustainable development and on the improvement of the competitiveness of the Montenegrin economy, on increasing investment, on restructuring production, on the sustainability of public finances and on the further implementation of structural reforms based on the Europe 2020 Strategy.
The negotiating process itself is very demanding, dynamic and complex. Considering the chapters that require the most negotiation, and bearing in mind the experience of other countries that were included in the previous expansion round, particularly Croatia, as well as our own initial assessment, it seems that the Could you describe the involvement of the private sector in areas that will be especially demanding include: Judiciary and the negotiation process? What importance does this have? Fundamental Rights; Justice, Freedom and Security; Agriculture How will its involvement affect the future? and Rural Development; Protection of the Environment; Energy; Fisheries; Transport; Regional Policy and Industry. There are As I stated before, the European integration process is a project a total of 35 different chapters; each has different requirements. that concerns the entire society. As you are aware, Montenegro At some point it will be necessary to strengthen administrative is the first country to include representatives from NGOs in the capacity, to establish new institutions, to employ new people, and negotiation process; they will be involved as members of the to allocate greater financial resources for the realisation of certain working groups that will work on chapters 23 and 24. projects. Concerning the other chapters, we launched a public invitation In your opinion, and in the experience of other countries, in February asking representatives from the civil sector to come will the opening of negotiations have an impact on foreign forward and to participate in working groups to prepare for investments in Montenegro? If yes, please specify in which negotiations. This invitation is still open for applications and will remain so until 13 July. The chapters to be discussed and prepared way? for negotiation include: Public Procurement, Science, Research, The opening of accession negotiations is a sign that a country has Education and Culture. already achieved quantifiable results in a great number of areas and that it is moving in the right direction. The forthcoming By forming working groups we are guided by the principles of negotiations will represent a mechanism that provides the best professionalism and by the contributions that individuals provide possible way of transforming our society in accordance with in these areas. We strive to ensure that the best possible levels European standards and values. It will also create conditions for of coordination and success are achieved, as well as involving a better standard of living for our citizens which is, of course, the representatives from all relevant institutions and organisations. I believe that the working groups will include representatives primary goal of the European integration process. from the private sector. They will work on harmonising national The implementation of comprehensive reforms, primarily the legislation with the EU acquis, as well as preparing strategic strengthening of the rule of law through the establishment of documents. I also invite members of the business community to professional institutions, the building of administrative capacity, apply for membership in the negotiation groups. the protection of rights and freedom, will directly influence the strengthening of economic growth. Every success along the What are your expectations regarding the duration of the European path will be an important sign for foreign investors. negotiation process between Montenegro and the EU? By improving the business environment, by attracting foreign investment, we will create conditions that will enable us to create It would not be wise to talk about the length of negotiation process. new employment and we will therefore improve the standard of We will only be able to tell more precisely how much time will be required after we have completed the screening process. Only living standard for our citizens. then will we see where we stand in relation to the harmonisation of Could you point to the chapters that refer to economic national legislation with the EU acquis. Personally, I believe that development? What are Montenegro’s biggest challenges this will not be until mid 2013. For now, our priority is to continue with the implementation of reforms and with the realisation of in this area? quantifiable results as we have done so far. The progress that is achieved in all of the negotiable areas will influence our future economic development. Under the accession
13
Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up...
Privatization and Investments Agreement Achieved with SOCAR to Provide Encouragement for the Development of Tourism in Montenegro The Government of Montenegro and the State Oil Company of Azerbaijan (SOCAR) signed an agreement on a long-term lease for the Orijen Battalion barracks in Kumbor. The site will be rebuilt into a tourist resort. The document was signed in Podgorica by Gafar Gurbanov (SOCAR) and by the Minister of Sustainable Development and Tourism, Predrag Sekulic. The Azerbaijani group is committed to invest at least €52 million during the first four years of the lease, or €258 million during the first eight years. It will also pay a fixed rent of €1 per square meter, in advance, for 45 years of the lease, along with a variable rent of 5% of profits.
Turkey's Toscelik to Invest €35 Million in Montenegro's Steel Mill Turkey's Toscelik, part of Tosyali Holding, will invest €35 million in Montenegro's steel mill and will increase its number of workers along with its annual output. At the official takeover on 12 June the Tosyali President, Fuat Tosyali, said that his plan for the steel mill was to turn it into a regional leader in the production of steel and to take advantage of Montenegro's geographical position to start delivering products within the region. Toscelik bought the Niksic-based steel mill after four previous auctions had failed. He paid €15 million which was half of what was originally asked for in January.
EBRD Finances the Construction of a Cable Car from Kotor to Cetinje The European Bank for Reconstruction and Development (EBRD) is ready to support the construction of a cable car from Kotor to Cetinje. It has approved a loan of €150,000 for technical support; to provide an audit and to update the existing feasibility study. The royal capital’s ambition is to launch a bid for tenders by the end of the year in order to start the implementation of the project as soon as possible. The cable car will start in Cetinje and will pass through Lovćen and finish in Kotor. It will be 15 km long with four stops. The first will be in Cetinje, near the summer stage, the second will be at Ivanova Korita, the third will be at Kuk and the fourth will be in Kotor.
Investors from Slovenia Show Interest in Lipska Cave Slovenian investors have shown interest in the famous Lipska Cave (Lipska Pecina) in Cetinje. The investment group says that it is interested in developing the touristic value of the cave, and also nearby Cetinje, through direct investment and marketing activities. Lipska Cave, one of the largest in all of the former Yugoslavia was once a touristic gem of the region. According to the valorization model for Lipska Cave that was proposed to the government, in terms of tourism purposes, it would offer a new product which is always very valuable in the tourism market.
Government to Provide €36 Million for a Plan to Restructure Montenegro Airlines The Montenegrin government is set to pump €36 million into its national carrier in order to carry out a restructuring plan. The government has also ordered the country’s two international airports, Podgorica and Tivat, to write off Montenegro Airlines’ debt which totals €9.7 million. In return, the state owned airports will be given a certain amount of shares in the national carrier. The Montenegrin carrier already receives €400,000 from the state budget on a monthly basis. Montenegro Airlines, which keeps most of its business operations as a closely guarded secret, was forced to suspend flights to Priština and Skopje due to unpaid fees last year. The Montenegrin government has already written off over €3 million of the carrier’s debt and issued state guarantees for a €9.6 million loan in 2011. Recently, the carrier has been lobbying for an open sky policy across the former Yugoslavia; this would allow it to launch flights from Belgrade to other countries.
14
July 2012
Privatization and Investments Montenegro Seeks Strategic Partner for KAP The Montenegrin Prime Minister, Igor Luksic, said that the government is determined to resolve ties with its Russian partner, EN+ Group which belongs to the Russian billionaire, Oleg Deripaska, regarding the aluminum plant KAP. It was recalled that in February the government took over the troubled aluminum plant, KAP, including €132m in debts. The owner, Deripaska, failed to revive the smelter after taking a majority of the stake in 2005. Montenegro owns a 58% stake in KAP along with its Russian partner. Montenegro aims to seek a strategic partner with which it can work in a similar way to another Montenegrin company, Niksic Steel Mill. Several companies showed interest in taking over the KAP. German HGL Group started negotiations with the Russian owner of the aluminum plant about taking over their stocks. The Government of Montenegro was only prepared to confirm that it had enabled contact between the Germans and the Russians and that negotiation were in progress. Toshcelik, a Turkish company, which recently bought Niksic Steel Mill for €15.1 million and announced increase of production, is also interested in taking over KAP.
French Company, Vichy, Interested in Igalo The French company, Vichy, is interested in buying the Institute Dr Simo Milosevic in Igalo. It is also interested in investing in the health institution according to the president of the company, Jerome Phelipeau. He added that Vichy wants to put Montenegro on the same level of investment as Brazil, Mauritius, China, Morocco, and Qatar. Phelipeau said, "If we succeed in doing that, Montenegro will be, in addition to France, the only country that offers the complete range of our services." According to Phelipeau, Igalo’s resources are respectable; people are already trained and experienced in Vichy’s field of business. Phelipeau explained that his company does not want to come to Igalo for quick profit, but rather to stay for a long time.
Canada Interested in Building Hydro Power Plants in Montenegro Canada is interested in the hydropower potential of Montenegro. In an interview on Montenegro’s National Television, the Canadian ambassador, Roman Vashchuk, said that a bid to build hydropower plants through private-public partnership had already been submitted to the Montenegrin government. Vashchuk said that a Canadian corporation, REV, is planning to build a hydropower plant in Serbia, and that it has proposed a similar project to the Montenegrin government. He said that the Canadian government would support the eventual agreement. He also disclosed that the Canadian corporation, REV, was considering the construction of a second block in the thermal power plant at Pljevlja and that negotiations were ongoing. According to unofficial information, Chinese investors have also shown interest in this project.
Greeks Invested €43 Million in Sveti Stefan So Far The Company Adriatic Properties, owned by the Restis group of companies, invested €43 million into the project “Sveti Stefan Aman resports” - showed independent auditor’s report hired by the European Bank for Reconstruction and Development. In the first phase of the project implementation Adriatic Properties invested €33 million for refurbishing hotel complex Sveti Stefan and Miločer, while €10 million was covered from the EBRD’s loan. In the second phase, which anticipates development of the hotel Queen’s Beach, Adriatic Properties plans to invest €22 million, while the rest (€49.6 million in total) would be covered from EBRD’s loan. Adriatic Properties requests 30% decrease of annual lease and the extension of the lease period. Annual lease amounts to €1.6 million. Greeks claim that, due to unexpected circumstances, they suffered considerable material losses. However, the lease for the last nine months has not been paid yet, thus the current debt amounts to €1.3 million. What seems to be problematic in the whole situation is the fact that almost five years after signing of the lease contract, the plan for the Hotel Queen’s Beach has not been adopted yet and permits for Sveti Stefan Block 25 are in delay. Lease Contracts for Sveti Stefan, Miločer and Queen’s Beach were concluded on January 15th, 2007 for the period of 30 years, and Greeks stated they would leave ‘the Saint’ only if they receive €50 million compensation.
15
Privatization and Investments Upcoming Tender
Chinese Want to Build the Second Block of the Thermo Power Plant The second block of the Thermo Power Plant Pljevlja is to be built by Chinese companies. This project is designed to be a joint venture of Montenegro and China and includes the construction of the second block of the thermo power plant and the extension of the Coal Mine capacities. The project is worth €330 million, which is a €190 million higher than predicted by the Strategy for Energy Development until 2025, according to which the construction of the second block should be completed by the end of the next year. The Expert team from Chinese company China Gezhouba Group International Engineering Co. Ltd visited coal mine and TPP Pljevlja and Maoce pit, with the aim of informing about the basic technical and exploitation performances of the terrain and their specificity. The team expressed readiness to start the operational process of the project, through collection of data for development of the Feasibility Study and Project proposal, which will be the basis for further negotiations between the Government of Montenegro and Chinese companies. Source: Government of Montenegro
Open Tenders
Request for Expressions of Interest for the Sale of the Container Terminal and General Cargo at Bar The Government of Montenegro has decided to privatize the Container Terminal and General Cargo, a joint-stock company at the port of Bar (CTGC), to sell its state shares (62%) and to give CTGC a concession for the use of port area. With this privatization initiative, the government aims to develop its port sector and to generate additional economic activity. The privatization has been supported by EBRD, the European Bank for Reconstruction and Development. The Government of Montenegro, through the Ministry of Transport and Maritime Affairs, has invited prospective bidders to submit expressions of interest in purchasing government shares in CTGC. Prospective bidders must submit qualification documents by 1 August, 2012, before 16:00 p.m. Source: Government of Montenegro
Tender for the Construction of a New Tobacco Plant “Novi Duvanski Kombinat” (New tobacco company) a joint stock company based in Podgorica, announced a public invitation for the selection of a main contractor to carry out “turn-key” construction work for building a new plant. The shareholders of Novi Duvanski Kombinat are the Government of Montenegro and the Capital City of Podgorica. The core business of the joint stock company is to purchase, produce and sell tobacco and tobacco products. Any interested local or foreign entity, as well as any consortium, may participate in the tender process. The deadline for the submission of bids is 2 August, 2012, 16:00 (local time). The deadline for completing construction work is 28 February, 2013. Source: www.noviduvanski.me
Closed Tenders
Single Bid for the Privatization of Zora Dairy
The Second Attempt of the Sale of Ulcinj Saltworks Failed
The Montenegrin firm, Simsic Montmilk, has filed the only bid in the tender process for the privatization of the Berane-based dairy company, Zora. Simsic Montmilk has offered to pay €250,000 ($307,500) for Zora Dairy and to invest as much again in the business over a five-year period. The company has also agreed to assume all of Zora's obligations. During the following 15 days, the tender commission will review the offer and come up with a recommendation. The Privatization and Capital Investment Council has launched a call to invite both local and foreign investors to submit bids for a 99.56% stake in the Berane-based Zora Dairy. The potential buyer has been offered 582,560 shares of the Berane company which is owned by the Government of Montenegro.
The public auction for the sale of “Bajo Sekulić” Saltworks in Montenegro under starting price of €232 million has failed since there were no interested bidders. This is the second attempt of the sale with no bidders to apply. The bankruptcy proceedings have been started, total debt of the company amounts €3 million, out of which €1.7 million refers to credits, and electricity debt is €300.000, while the rest goes on receivables of suppliers and employees. In the meantime, the Parliament of Montenegro adopted a new Spatial Plan, which re-zoned the grounds of the Ulcinj Saltworks into land designated for tourist accommodations. This was followed by the loss of concession for salt exploitation this year.
Source: Government of Montenegro
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Source: Government of Montenegro
July 2012
Company presentation: Global Ports Holding About GHP
Security & Safety
Global Ports Holding (GPH) is a unique port group and operator in Turkey, established in April 2004 as a part of the Global investments holding (GIH). The Global Ports Group has developed a portfolio of strategically located ports in Turkey, each providing exceptional hinterland access with strong market demand fundamentals. This group is currently managing three leading cruise and commercial ports in its portfolio: Ege Ports-Kuşadası, Bodrum Cruise Port and Port Akdeniz-Antalya, and GHP manages 50% of the cruise traffic of Turkey.
Global Ports Holding has benchmarked its services with international quality standards and has emphasized security and safety. GPH has maintained standards of security at its terminals and port territories that meet or exceed those generally adopted in the industry. Global Ports Holding's state-of-the-art facilities, well-trained workforce and exceptional security support its highly efficient, world-class operations, which are compliant with both globally accepted industry standards and its own stringent internal guidelines. In particular, to meet the demands of shipping and cruise clients, Global Ports Holding has made security a core area of operational excellence.
Table 3: Port Akdeniz Cargo Handlings Port Akdeniz: The Port of Antalya
Ege Ports: The Port of Kuşadası
Bodrum Cruise Port
Total wharf length (meters): 1,732
Total wharf length (meters): Total wharf length (meters): 1,437 660
Port area (m2): 166,778
Port area (m2): 23,000
Port area (m2): 22
Max draft (m): -10
Max draft (m): -19
Total ship capacity (per year): 800
Total ship capacity (per year): 2,970
Total ship capacity (per year): 2,000
Date of acquisition: 2008
Total handling capacity (TEU/year): Date of acquisition: 2003 400,000
Investment term: 16 months
Date of acquisition: 2006
Concession term: 30 Years
Concession term: 12 years
Concession term: 30 Years
Concession ends: 2033
Concession ends: 2019
Concession ends: 2028
Facilities: Scala Nuova Shopping Mall (4,600m2)
Shareholding Structure:
Facilities: Marina
Shareholding Structure:
GPH (60%)
Shareholding Structure:
GPH (72.5%)
Local partner (30%)
GPH 99.8%
RCCL (27.5%)
Setur (10%)
Services GPH's proactive and dynamic marketing campaign targets container shipping lines, cruise lines and travel agencies. For its commercial business, GPH performs extensive market research and hosts industry presentations in each respective port's region to meet with prospective customers. GPH management actively promotes containerization, which results in higher margins for the port and creates economic incentives for container shipping lines to add the port to their itinerary. This is achieved through marketing efforts and effecting upgrades to the ports' container handling capacity.
Port Akdeniz Cargo Handlings Port Akdeniz Antalya’s location and its surrounding mineral wealth and mining operations have enabled the port to position itself as a strategic gateway for exporters to diverse global markets for cement, clinker, alluminium, marble and chromium. The rise in exports of these goods in turn increased the demand for the Turkish port. In order to cope with this increasing demand, substantial investments in infrastructure,
equipment and labour efficency have been made. The major increase in volume was caused by containers, therefore GPH has bought two mobile harbour cranes in the last three years, along with many forklifts and reachstackers. These investments made their operations much more efficient. In 2011 GPH invested in warehouse for stocking goods - an area of 50.000m2, made it totally flat and concrete to ıncrease the area of our container freight station along with more efficient container stocking. Future plans of investment inculude a new terminal for liquid bulk handling and the lengthening and dredging of piers. Graphic 20. Port Akdeniz Cargo Handlings
Awards Over the years, the Group’s success has been recognized with numerous awards: In July 2007, Kuşadası Cruise Port was named the Best Cruise Port in Turkey and awarded a Golden Anchor, beating out 499 other nominees across nine categories. In May 2008, Ege Ports was awarded Cruise Terminal of the Year by Lloyd’s List in its 2008 Turkish Shipping Awards. In October 2010, Ege Ports was nominated as Europe’s Leading Cruise Port by the World Travel Awards. In November 2010, Port Akdeniz – Antalya received the “Logitrans 2010 Logistics Award” at the 4th Logitrans Transport Logistics Exhibition owing to the increase recorded in its container volume by 122% compared to previous year’s numbers and ranked as the 240th in the world ranking. In March 2011, Port Akdeniz- Antalya well received the prestigious “Most Improved Terminal Facilities” award, owing to its significant progress in port operations and management within a short period of time. Head Offices Global Ports Holding Rıhtım Caddesi No: 51 Karaköy 34425 Istanbul – Türkiye Tel: +90 (212) 244 4440 Fax: +90 (212) 244 6047
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Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up...
Business news Montenegro Moved Up 4 places in the Global Enabling Trade Report 2012 According to the Global Enabling Trade Report published by the World Economic Forum, Montenegro is ranked 39. It improved its position by 4 places compared with 2010. Montenegro holds a better position than most of the countries in the region: Croatia (46), Italy (50), Macedonia (61), Serbia (71), and Bosnia and Herzegovina (80). The core content of the report is the Enabling Trade Index which measures the extent to which individual economies have developed institutions, policies, and services, and the way in which these economies facilitate the free flow of goods over borders to reach their intended destinations. The report has been produced with the support of following institutions: the Global Express Association (GEA), the International Air Transport Association (IATA), the International Trade Centre (ITC), the United Nations Conference on Trade and Development (UNCTAD), the World Bank (WB), the World Customs Organization (WCO), and the World Trade Organization (WTO). Source: www.mipa.co.me
Montenegro Committed to a Green Economy and Sustainable Development Prime Minister Igor Lukšić opened a two day national conference entitled ‘How to Achieve Sustainable Development and a ‘Green’ Economy in Montenegro’. The conference took place in Kolašin on 24-25 April. In his opening address, Mr. Lukšić testified the government’s readiness to deal with the challenges of climate change and sustainable development. Prime Minister Lukšić said that Montenegro’s transformation into a ‘green’ country should be based on tourism, agriculture and energy; the three sectors with the greatest ‘green’ potential and with the best potential for growth in employment in Montenegro. He added that the fact that the business sector is not currently involved in sustainable development may be a major reason that is is not being adequately implemented. Source: Government of Montenegro
Moody’s Agency Confirms Montenegro Ba3 Credit Rating Moody’s credit rating agency has confirmed that Montenegro has a Ba3 credit rating with a stable outlook; together with last year's outlook, which indicated an improvement from negative to stable, this is confirmation that the government is striving to maintain fiscal stability within the economy. The fact that the previous credit rating has been maintained is a significant achievement, especially at the present time when credit rating agencies are lowering the ratings of many European countries almost on a monthly basis. Moody’s monitors and evaluates a large number of indicators in its reports. Montenegro has achieved better results than other countries with the same rating: GDP per capita (this indicator is 2.5 times higher in Montenegro), the percentage share of direct foreign investments recorded in GDP (the indicator is much better), interest paid on revenue, etc. The report produced by this reputable international credit agency is an additional incentive for Montenegro to further implement policies aimed at stabilizing public finances and creating conditions for positive economic trends. Source: The Government of Montenegro
IFC Lends €10 Million for Infrastructure Development in Montenegro IFC, a member of the World Bank Group, has lent €10.7 million to the capital city, Podgorica, to refinance a bridge construction. The city of Podgorica took the original loan in the midst of the 2009 crisis. This new loan is part of a multi-year partnership with IFC and the city of Podgorica and includes: co-financing road investments, helping refinance debt, and providing advisory services to help the city improve its road management policy. In 2010, IFC gave a €10 million loan to Podgorica to help the city to finance its eastern bypass highway. IFC plans to extend another €14.3 million loan to the municipal government to finance a southwestern bypass highway that has been planned; this will reduce travel times and costs for approximately 50,000 people each day. Source: Balkan Business News
Montenegro’s PM and IRENA’s Director General Talk about Energy Development Montenegro’s Prime Minister, Igor Lukšić, and the Director General of the International Renewable Energy Agency (IRENA), Adnan Z. Amin, discussed Montenegro’s large energy potential and abundance of water, wind, and solar energy which could allow it to become a regional hub for the exchange of experience in the area of renewable energy. Mr Amin underlined that he was glad that the Government of Montenegro recognizes the country’s full potential through its strategic policies and documents. He noted that this could be a viable formula for the entire region. The International Renewable Energy Agency is to provide technical and expert support to Montenegro with the aim of achieving full and sustainable use of the country’s renewable energy resources. Source: Government of Montenegro
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July 2012
Supportive Institutional Framework and Increased Competitiveness Crucial for the Growth of the Montenegrin Economy Montenegro's Prime Minister, Igor Lukšić, stated at the opening of the conference, The Montenegrin Economy – The Way to Economic Growth, which took place in Budva on 29-30 May 2012, that the continuity of economic growth is the key to prosperity. He also said that it is the most effective way to combat unemployment, poverty, budget deficit and public debt. Prime Minister Lukšić said that factors such as abundant natural resources, a well-trained workforce and the availability of new technology can all positively affect economic growth, but are not sufficient alone. A supportive institutional framework, which suggests that structural reforms and cutting red tape will be necessary, is of paramount importance if a country wishes to advance economically and to encourage entrepreneurs, innovation and investment. Source: Government of Montenegro
Bulgaria and Montenegro to Cooperate on SME Promotion
The World Bank Guarantees €100 Million Loan for Montenegro
Bulgaria’s government approved a memorandum of understanding between Bulgaria’s Executive Agency for the Promotion of Small and Medium-Sized Enterprises and Montenegro’s Directorate for the Development of Small and Medium-Sized Enterprises. Both sides are to cooperate on the organization of events promoting SMEs such as planning exchange visits for entrepreneurs, arranging for people to participate in business forums and seminars, and promoting commercial fairs, exhibitions and other activities that will enhance economic partnership between the two countries. Source: www.mipa.co.me
The Ministry of Finance has announced that the World Bank has guaranteed a loan of €100 million for Montenegro. The loan will be repaid over a period of seven years in almost equal installments. Representatives from the World Bank said that they consider that public finances in Montenegro are stable. The Montenegrin Central Bank and IMF believe that the economic situation in Montenegro has improved, but that there are still numerous challenges and that reforms still need to be implemented. Source: www.vibilia.rs
Montenegro and Albania Signed Agreement on 11 Cross-Border Projects The Ministry of Foreign Affairs and the European Integration and EU Delegation to Montenegro signed an agreement on eleven projects which will be implemented under the umbrella of the cross-border cooperation program between Montenegro and Albania over the course of the next two years. Financial resources from the cross-border cooperation program will be provided for projects in the area of economic development. There will be a special emphasis on tourism but projects in the areas of environmental protection and social cohesion will also be given support. Projects in Montenegro are worth a total of €1.4 million. Source: Montenegro Ministry of Foreign Affairs and European Integration
EBRD Cuts Forecast for Montenegro’s Growth Rate The European Bank for Reconstruction and Development (EBRD) has cut the anticipated 2012 economic growth rate for Montenegro by almost a half, thus reducing it from 1.6 to 0.8% of GDP. EBRD, in its Regional Economic Prospects, assessed that Montenegro’s economy is still struggling to recover from the effects of the crisis. The country’s current account deficit remains high, industrial production is volatile and credit growth is still negative on a year-onyear basis. The continued uncertainty over the future of the aluminum complex KAP, which has been making significant losses, is another source of concern. However, the country has significant long-term potential in the energy sector. Source: Government of Montenegro
SSICG Rates the Business Environment in Montenegro at 5.8 The Montenegrin Foreign Investment Council (SSICG) rated the business environment in Montenegro at a level of 5.8. This indicates that the current situation is comparatively good, but that there is still room for improvement in certain important fields. At a press conference presenting the annual publication of the White Book, the Chairman of the Council, Szabolcs Horvath, stated that ‘the current situation is comparatively good, but that there is still room for further improvement in some of the key fields on which the rating is based’. Source: MNNews
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Coming Up… The XVII Regional and Traditional Economic Forum in Miločer September 10-13, 2012
Miločer Economic Forum will take place in Hotel “Maestral” Pržno in September 10-13, 2012. This years Forum is organised in cooperation with the Association of Economists and Managers of Montenegro and with International Chairmen’s Forum from United Kingdom. The main topics in this year’s panel discusions will be the following: economic growth based on green economy and green entrepreneurship, ecotourism and business in the protected areas in Montenegro, green energy, architecture, urbanism, statistical measure of new growth, trade in food and wine, financing green economy-international sources. Miločer Economic Forum is a traditional event wich gathers well known academics, professors, experts, businessmen, politicans as well as talented students and high school students coming from Montenegro, the region, the EU, the USA and the Middle East.
CEED Consulting
www.ceed-consulting.com
Visit of Swedish ambassadors September 11-12, 2012
CEED’s Strategic Partner
In order to exchange experiences between domestic mentors for women entrepreneurs and their Swedish colleagues, Center for Entrepreneurship and Economic Development (CEED) and the Chamber of Commerce of Montenegro (PKCG) will host from 11 to 12 September five Swedish ambassadors for women’s entrepreneurship. Visit of ambassadors is realized within the project “Network of mentors for women entrepreneurs in Montenegro” which is launched to support entrepreneurship. Swedish ambassadors visit will be an opportunity for exchanging experiences between the two countries while encouraging and supporting women to engage in entrepreneurial activities, and improve business through personal and professional development.
National Network of Mentors for Women Entrepreneurs The Center for Entrepreneurship and Economic Development (CEED) in partnership with the Montenegrin Chamber of Commerce, financially supported by the EU (DG Enterprise and Industry), is implementing the project “Network of Mentors for Women Entrepreneurs in Montenegro”. The objective is to encourage and inspire women to develop their own businesses through personal and professional development. By creating the “Network of Mentors for Women Entrepreneurs”, Montenegro have became a member of the European Network of Female Entrepreneurship Mentors implemented in 17 countries: Albania, Belgium, Cyprus, Macadonia, Greece, Hungary, Ireland, Italy, Croatia, Netherlands, Romania, Serbia, Slovakia, Spain, Turkey, Great Britain and Montenegro. Within the project, a set of the practical training is taking place on a monthly basis by the end of the year. By now, the following topics were presented: communication basis, time management, employing and motivating key people, recognizing opportunities for business, business plan development, market research and marketing plan development. The next training Family business management is to be held on 12th of September, 2012 in Podgorica. After 15 years of experience, today CEED Consulting is the leading business consulting company in Montenegro which helps clients improve their business operations, further develop and perfect both their service and product and meet the need of their customers. We integrate our business development and project management services, providing solutions for setting up and growing your business activities in Montenegro. Focusing on customer care, our team emphasizes quality of service, which we are continually striving to improve. Loyalty and dedication transpire through our unique and professional approach to advising our clients. Implementing international standards of business practice, CEED Consulting relies on its expert knowledge of the local market to provide tailored solutions based on accurate and timely information. We are professional, flexible and different! And always dedicated to you! CEED Consulting Team
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CEED Consulting
Affiliate of US Chamber of Commerce www.cipe.org
Editor in chief Ivana Božanović info@ceed-consulting.com
MBO Team Dragana Radević Mihailo Zečević Darko Konjević Vesna Bojanović Jelena Međedović Jasna Žarković Jovana Stojković Slavica Nikolić Nikša Bulatović Darko Pekić ASSOCIATE Charlotte Rimmer, Editor
Front page picture: Photography provided by CSTI for project “Photography Adventure“