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NewsAmCham’s opinion on Montenegro stays unchanged, but future is brighter

AmCham’s opinion on Montenegro stays unchanged, but future is brighter

Members of the American Chamber of Commerce in Montenegro (AmCham) rated the business environment in Montenegro in the last two years at 5.65, which, when compared with previous results, is a continuation of the negative trend that began with the coronavirus pandemic.

This is lower than the rating from the previous report for the period 2019 – 2020, when it was 5.8. The report was presented by the executive director of AmCham, Marko Miročević.

As he stated, for the main reasons for dissatisfaction with the business environment, AmCham members cite political instability in the country, which strongly affects investments, the rule of law and obstacles in creating a competitive and fair market, as well as frequent changes to important systemic laws that introduce legal uncertainty.

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Speaking about optimism in the coming period, a large percentage of companies are unanimous in their assessment that there is a positive perspective. Especially high expectations are in the sectors of information and communication technologies (ICT), energy and tourism. The dominant risks are political instability, which dominates, followed by the decline of the economy, inflation, the war in Ukraine and the unpredictability of the market – Miročević said.

He also presented the ratings of member companies in the areas of rule of law, gray economy, taxation, health and environment.

In the area of ​​the gray economy, the members emphasized that a systemic approach to suppressing the gray economy must be a priority of the Government, and they added that the regulation in the field of labor relations should be improved in terms of greater flexibility in wage contracting. The members said that the tax policy must be predictable and competitive.

Miročević emphasized that it is important to note that the report was made before the Government came out with the Draft Law on Solidarity Contribution and that, if the members had been aware of it, the perception would have been worse.

Prime Minister Dritan Abazović said at the “Open with the Prime Minister” event that the Law on Solidarity Contribution, which is currently in draft form and under public discussion, concerns only companies that have made extra profits.

Therefore, no company that did not make an extra profit will be covered by it – Abazović said at the Open with the Prime Minister event organized by the American Chamber of Commerce (AmCham) .He explained that extra profits and even several times higher revenues were achieved by companies from certain industries, mainly due to the coronavirus pandemic, but also events related to Ukraine.

Considering that everyone else showed solidarity and that many companies had to shut down, let those who made extra profit to a small extent show solidarity and willingness to return part of it through the state budget to strengthen the overall economic climate – Abazovic said.
He added that Montenegro Is not a country that invented it.

When citizens and the business community see the extra profits of certain companies, I think they will change their opinion about taxation. If your profit in one year was five million and suddenly it becomes 38 million, maybe it’s okay to pay two or three million more in taxes compared to the previous period – Abazović believes.

He claims that It is not true that this law “attacks” business and that something is being tried to be taken by force from the business community, as could be heard. Some ambiguities can be resolved through better communication. The Ministry of Finance and the entire Government have an obligation to carry out broader consultations with the business community and other relevant entities when they want to start such processes – explained Abazović.

When asked by the president of the AmCham Board of Directors, Svetlana Vuksanović, who led the conversation, whether the unexpected change in the law sends a bad message to investors, he replied that communication with the economy in Montenegro is good, but that there is certainly room for improvement.

We have a great involvement, like never before, of the economy in actions organized by the Government – said Abazović. When Vuksanović was asked to comment on the continuation of the negative trend when it comes to the evaluation of the business environment, he emphasized several facts.

The gross domestic product (GDP) of Montenegro exceeded five billion for the first time in history at the end of last year. Growth at the end of last year was 6.1%. Foreign direct investments have exceeded EUR 1 billion and are the largest in the history of Montenegro, if we exclude the year 2009 when Elektroprivreda (EPCG) was sold – Abazović announced.

He also said that the number of open companies has increased drastically, that good results have been recorded in tourism, while unemployment in the fourth quarter of last year was 13 percent, which is the lowest since the state has kept these statistics.

If it’s a worsening of the environment, I don’t know what to say. We are witnessing today that Montenegro has a great struggle for labor force and that this year will probably be a record year when it comes to tourism. I do not think that any investor avoids Montenegro. The report is more a consequence of the fears that members have due to general unpredictability – said Abazović

He said that he was still pleased by the optimistic view of the members for the next period. Commenting on the increase in wages in the public sector, Abazović explained that this growth should be accompanied by the efficiency of public administration and that, if this does not happen, there will be a problem.

Vuksanović said that she expects this report on the business environment to be a useful tool for investors as well as for government representatives. According to her, this year’s AmCham report represents a thorough analysis of various sectors of the economy in Montenegro, with numerous recommendations given by member companies, 49 of them, which employ over 5.7 thousand people and have invested in Montenegro since the beginning of their operations. More than EUR 1.75 billion.

The Ambassador of the United States of America (USA), Judy Rising Reinke, assessed that Montenegro is at a turning point and that it is important to discuss the country’s future. Trust is needed, which implies transparency and predictability. The goal should be that citizens and investors have confidence in the policies implemented by the Government – concluded Reinke.

 

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