Government Plans New Round of Privatisation

By , 02 Mar 2018, 09:55 AM Business
Government Plans New Round of Privatisation Government of Montenegro, B. Ćupić

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March 02, 2018 – The Government of Montenegro is planning to carry out a new round of privatisation and capital projects. At the recent Council Meeting for Privatization and Capital Projects, the Prime Minister of Montenegro, Mr Dusko Markovic, announced a plan that should stimulate the economy of Montenegro and provide new jobs, investments and competitiveness on the global market. 

The document entitled 'Decisions about privatisation plans in 2018' sets out the goals of privatisation, the concept and the conditions, and deadlines for their execution. Also, the document includes methods of privatisation and a list of public companies where the State is the significant shareholder or owner.

The Government of Montenegro aims to provide an ambient for the private sector to grow in Montenegro, as the economy is still stagnating after the economic boom in 2006. To do so, the Government of Montenegro, through this document, sets out many objectives which include: higher economic growth, job creation and employment, investment and export increase, higher income and growth of the living standard. Most recently, the Parliament of Montenegro discussed new measures for stimulating youth employment and bringing changes in the law where private enterprises that decide to hire a young person could relieve the employer from certain taxes and imposts. This measure is still debatable as it brings many questions to the table, but it seems that the Government of Montenegro and the Parliament see that the opportunity for economic growth lies in the private sector and business deregulation.

The new round of privatization puts two public enterprises in focus: the Institute “Dr Simo Milosevic” and HG “Budvanska rivijera”. The public tenders for privatization of those public enterprises will involve over 50 percent of shares which are now in possession of the State. The Institute “Dr Simo Milosevic” was one of the most famous rehabilitation centres in Montenegro while Hotel group “Budvanska rivijera” represents the number of hotels in Budva, among which the most famous are Hotel Palas, Hotel Aleksandar, Hotel Slovenska Plaza, Hotel Mogren, and Hotel Castellastva.

Beside the privatisation of public enterprises, the Council for Privatization and Capital Projects proposed measures of valorisation for some touristic places through the public-private partnership. The goals are to provide equally steady development of the northern and southern areas of the country. Though winter tourism has great potential, so far, its capacities weren’t used efficiently, forcing the economy of Montenegro to lose millions of euros. Summer tourism, on the other hand, has cycles, and it seems that from year to year the season is getting shorter. The big question appears to be how we must solve this problem and elongate the tourism period in Montenegro.

New measures could potentially stimulate the Montenegrin economy, but lessons from the past teach us that these measures are usually not carried out correctly. There are a few good examples, such as Lustice Bay and Porto Montenegro, but they are not enough. Montenegro needs capital investments and a private sector to achieve those goals.

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