MBO#41

July 2012

A QUARTELY REPORT #41

CEED Consulting

Business EnvironmentMacroeconomic OutlookBanking SectorPrivatization and InvestmentsCapital MarketBusiness NewsEconomic FreedomIn the SpotlightComing Up

ISSN 1800-8739

2

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, which were adopted during the second quarter, were Law on Financial Collateral Arrangements, 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-acoustic and Acoustic Appliances. Economic Freedom: According to the report “2012 Index of Economic Freedom“ published by 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 improved, as for example: Property Rights, Freedom from Corruption and Government Spending. In mentioned areas the score of Montenegro is lower than world’s average.

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 both recorded declines in May when compared with figures in April (5.3% and 3.8%, respectively). In April 2011, the Montenegrin budget recorded a deficit of €43.64 million; public debt at the end 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

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.

GeoGraphic information

Area 13,812 km²Position 41º52’ - 43º42’ lat., 18º26’ - 20º22’ longLength of border 614 kmCoast line 293 kmLength of beaches 73 kmClimate MediterraneanAverage temperatures of air 27.4Co (summer) 13.4C o (winter)

Maximum sea temperature 27.1Co

Average num. of sunny days 240Major Cities Podgorica (Capital), Niksic, Bijelo Polje, Bar

Border crossinG

Albania Bozaj Croatia Debeli brijeg

Serbia Kula,Vuče, Dračenovac, Dobrakovo,Čemerno, Ranče, Bijelo Polje, Bar

Bosnia and Herzegovina Vilusi, Vracenovici, Scepan Polje, MetaljkaSea border ports and piers: Bar, Kotor, Budva and Zelenika

monteneGro General info

MBO SummaryWelcome

to the forty-first edition of Montenegro Business Outlook.

MBO is quarterly publication of pertinent economic indicators presenting a

comprehensive view of Montenegro’s

business environment. This publication is

intended to serve international business people seeking

investment opportunity in Montenegro.

We welcome your comments.

population

Population in country (2011) 625,266Number of households 194,795Source: Monstat Census 2011

transportation

Airports Podgorica and Tivat

Ports Bar (line to Italy: Bar-Bari, Bar-Ancona) and Kotor (line to Italy: Kotor-Barleta)

Railways Bar – Beograd and Podgorica- NiksicTotal railways length 249 kmTotal highway lenght 5,174 km

national parks

Durmitor 39,000 haBiogradska gora 5,650 haLovcen 6,220 haProkletije 21,647 haSkadar Lake 40,000 ha

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: [email protected]

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July 2012

Prepared by: Mr. Darko Konjević, Montenegro Business Alliance (MBA)

economy statistics

Source: Ministry of Finance, Central Bank of Montenegro, Monstat, Employment Agency of Montenegro

Business Registration Statistics (Number of registered companies in

Montenegro, as of 1st July, 2012)

Joint Stock Company 353Limited Liability Company 26,446Part of a Foreign Company 437General Partnership 61NGO 295Limited Partnership 430Entrepreneur 17,185

Institution 1,125

Other 113Total 46,445

Tax Rates

Value Added Tax 17%, 7% and 0%

Corporate profit tax 9%Personal income tax 9%

Business Environment in Montenegro Business EnvironmentMacroeconomic OutlookCapital MarketBanking SectorPrivatization and InvestmentsEconomic FreedomBusiness NewsIn the SpotlightComing up...

Selected indicators 2011* 2012**

Population (625,082 in 2003) 625,266

Real GDP (billion) 2011 / May 2012 3.273 3.405

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

1 1 . 5 6 % 13%

Net FDI (million) 2011/January-April 2012

389 79.8

* Ministry of Finance ** Ministry of Finance, Monthly Macroeconomic Indicators, May 2012.

Official currency Euro

Business statistics and data

Source: Commercial Court

The second quarter of 2012 continued to be characterized by problems inherited from the past. 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 budget. For the first time ever, the Central Bank of Montenegro published a list of companies 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 quite secure in the country.

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 RebalanceDue 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.

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.

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.

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Business EnvironmentMacroeconomic Outlook

Capital MarketBanking Sector

Privatization and InvestmentsEconomic Freedom

Business NewsIn the Spotlight

Coming up...

Economic Freedom

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. Non-tariff 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.

62.5

84.7

66.1

59.5

0 20 40 60 80 100

Montenegro

Free Economies

Regional Average

World Average

Graphic 1. Country Comparisons

40 3743.4 40.4

0

20

40

60

80

100

Property Rights Freedom from Corruption

Montenegro World average

Graphic 2. Rule of Law

91.3

31.7

76.959.8

0

20

40

60

80

100

Fiscal Freedom Govrenment Spending


Graphic 3. Limited Government

69.286.1 81.2

64.7 61.474.4

020406080

100

Business Feedom Labor Freedom Monetary Freedom


Graphic 4. Regulatory Efficiency

83.6

55 50

74.550.7 48.6

020406080

100

Trade Freedom Investment Freedom

Financial Freedom


Graphic 5. Open Markets

Prepared by: Mr. Darko Konjević, Montenegro Business Alliance (MBA)

Source: The Economic Freedom of the World: 2012 Report

5

July 2012

Macroeconomic Outlook

Graphic 6. CPI-monthly growth rate (base Ø2010)

Business EnvironmentMacroeconomic OutlookCapital MarketBanking SectorPrivatization and InvestmentsEconomic FreedomBusiness NewsIn the SpotlightComing up...

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.

TourismDuring 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 WagesAccording 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).

BudgetAccording 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)

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.

(Source: The Central Bank of Montenegro, Monstat, Ministry of finance of Montenegro, Employment Agency of Montenegro)

May-11, -0.1

Jun-11, -0.5

July-11, -0.3

Aug-11, 0.7

Sept-11, -0.1

Oct-11, 0.2

Nov-11, -0.2

Dec-11, -0.2

Jan-12, 0.8

Feb-12, 1

Mar-12, 0.4

Apr-12, 0.5

-1.0

-0.5

0.0

0.5

1.0

Graphic 7. Average salary without taxes and contributions (€)

EUR 479EUR 475

EUR 476EUR 475

EUR 477EUR 477

EUR 483EUR 484

EUR 505EUR 495

EUR 489EUR 491

EUR 487

460 470 480 490 500 510

May-11Jun-11July-11Aug-11Sept-11Oct-11Nov-11Dec-11Jan-12Feb-12

Mart-12Apr-12

May-12

Graphic 8. FDI inflow structure (in million EUR)

22.5

25.8

51.2

0.5

Companies and banks Intercompany debt

Real estate Withdrawal of the capital

6





Coming up...

Banking Sector

Graphic 11. Structure of deposits by sectors

Graphic 9. The structure of total banks’ assets

Graphic 10. Structure of deposits4.1

28.9

4.6

57.6

1.3

3.4

4.6

28.3

4.6

57.7

1.3

3.5

4.3

28.7

4.5

57.7

1.4

3.4

0.0 20.0 40.0 60.0

Financial institutions

Non-financial institutions

General Government

Households

Non-profitable organisations

Other

February March April

Graphic 12. Interest rates

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

Total deposits amounted to €5,398 million from February to April 2012; on a monthly level they amounted to €1,799 million. At end-April, 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.

Loans

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.

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, non-profitable organizations and others.

Interest rates

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.

Household deposits

Total household deposits amounted to €3,112.9 million from end-February to end-April 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%.

20.0

51.4

23.3

5.3

21.3

50.3

23.2

5.1

20.8

50.7

23.3

5.2

0.0 20.0 40.0 60.0

Up to 3 months

From 3 months up to 1 year

From 1 to 3 year

Over 3 years

February March April

92.9

90.9

November 2011

December 2011

Corporate and household loans

Banks and other financial institutions

9.65

9.64

9.61

3.08

3.14

3.12

0 10

February

March

April

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

7

July 2012

Expert’s opinionAuthor: Ms. Slavica Nikolic, Center for Enterpreneurship and Economic Development (CEED)

Rio+20: Conference on ‘The Future We Want’

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.

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.

Montenegro in Rio

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.

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.

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 environmentally-friendly and sustainable way.

8

Capital MarketsBusiness EnvironmentMacroeconomic Outlook




Coming up...

Graphic 14. MONEXPIF

Graphic 13. MONEX20

Graphic 16. Turnover in PIF’s

April 2011

Insurance of a New generation.

KOTOR

Plav

1 concern

21 target markets

40insurance companies

20,000employees & agents

7,500,000 customers

16,500,000 contracts

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.

Trade on the Stock Exchange

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).

During the first half of 2012, three types of securities were traded: company shares, privatization-investment 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.

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.

Stock Exchange Indices

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.

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.

MONEXPIF

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.

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.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

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

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

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

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

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Graphic 15. Turnover structure

79.1%

15.2%

5.7%

Shares PIFs units Bonds

Source: Montenegro Stock Exchange (www.montenegroberza.com)

9

July 2012April 2011

Insurance of a New generation.

KOTOR

Plav

1 concern

21 target markets

40insurance companies

20,000employees & agents

7,500,000 customers

16,500,000 contracts

10

In the SpotlightBusiness EnvironmentMacroeconomic Outlook




Coming up...

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 still-present 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.

Business climate indexCompanies’ 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).

Graphic 17. Business indicator

Graphic 18. Export indicator

Graphic 19. Employment indicator

-15

-10

-5

0

5

10

15

2009 2010 2011 2012

-4.2 -3

-8.3 -6.7-11.3

14.712.1

7.3

Current situation Expectations

-30

-20

-10

0

10

20

30

2009 2010 2011 2012-24.4

-12.4

-4.5 -3.9-13.3

24.1 26.5

12.8

Current situation Expectations

-6

-4

-2

0

2

4

6

2009 2010 2011 2012

-5.2

4.9

2.80.9

Expectations

Source: Business Climate Survey in the Small and Medium-Sized Enterprise Sector in Montenegro

11

July 2012

We introduce

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).

YearTotal

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

Lactarius deterrimus - - 10 t 10 t

TOTAL 986 t 822 t 1.926 t 3.725 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.

Exports 2006 2007 2008

Cereals and cereal preparations (in 000 EUR)

1,843 1,037 1,734

2009 2010 2011

2,505 2,523 3,886

Source: Monstat

Table 1. Type of mushroom

Table 2. Cereals and cereal preparations (exports)

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.

12

MBO Interview with Mr. Aleksandar Pejović, Chief Negotiator

Biography:

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.

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.

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.

Mr. Aleksandar Pejović, Montenegro’s Chief Negotiator and State

Secretary for EU Integrations

13

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?

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 areas that will be especially demanding include: Judiciary and Fundamental Rights; Justice, Freedom and Security; Agriculture and Rural Development; Protection of the Environment; Energy; Fisheries; Transport; Regional Policy and Industry. There are a total of 35 different chapters; each has different requirements. At some point it will be necessary to strengthen administrative capacity, to establish new institutions, to employ new people, and to allocate greater financial resources for the realisation of certain projects.

In your opinion, and in the experience of other countries, will the opening of negotiations have an impact on foreign investments in Montenegro? If yes, please specify in which way?

The opening of accession negotiations is a sign that a country has already achieved quantifiable results in a great number of areas and that it is moving in the right direction. The forthcoming negotiations will represent a mechanism that provides the best possible way of transforming our society in accordance with European standards and values. It will also create conditions for a better standard of living for our citizens which is, of course, the primary goal of the European integration process.

The implementation of comprehensive reforms, primarily the strengthening of the rule of law through the establishment of professional institutions, the building of administrative capacity, the protection of rights and freedom, will directly influence the strengthening of economic growth. Every success along the European path will be an important sign for foreign investors. By improving the business environment, by attracting foreign investment, we will create conditions that will enable us to create new employment and we will therefore improve the standard of living standard for our citizens.

Could you point to the chapters that refer to economic development? What are Montenegro’s biggest challenges in this area?

The progress that is achieved in all of the negotiable areas will influence our future economic development. Under the accession

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 macro-economic 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 pre-accession 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.

Could you describe the involvement of the private sector in the negotiation process? What importance does this have? How will its involvement affect the future?

As I stated before, the European integration process is a project that concerns the entire society. As you are aware, Montenegro is the first country to include representatives from NGOs in the negotiation process; they will be involved as members of the working groups that will work on chapters 23 and 24.

Concerning the other chapters, we launched a public invitation in February asking representatives from the civil sector to come forward and to participate in working groups to prepare for negotiations. This invitation is still open for applications and will remain so until 13 July. The chapters to be discussed and prepared for negotiation include: Public Procurement, Science, Research, Education and Culture.

By forming working groups we are guided by the principles of professionalism and by the contributions that individuals provide in these areas. We strive to ensure that the best possible levels of coordination and success are achieved, as well as involving representatives from all relevant institutions and organisations. I believe that the working groups will include representatives from the private sector. They will work on harmonising national legislation with the EU acquis, as well as preparing strategic documents. I also invite members of the business community to apply for membership in the negotiation groups.

What are your expectations regarding the duration of the negotiation process between Montenegro and the EU?

It would not be wise to talk about the length of negotiation process. We will only be able to tell more precisely how much time will be required after we have completed the screening process. Only then will we see where we stand in relation to the harmonisation of national legislation with the EU acquis. Personally, I believe that this will not be until mid 2013. For now, our priority is to continue with the implementation of reforms and with the realisation of quantifiable results as we have done so far.

14

Privatization and InvestmentsBusiness EnvironmentMacroeconomic Outlook




Coming up...

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.

15

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.

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Privatization and Investments

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

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

CLOSED TENDERS

Single Bid for the Privatization of Zora Dairy

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.Source: Government of Montenegro

The Second Attempt of the Sale of Ulcinj Saltworks Failed

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

Company presentation: Global Ports Holding

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July 2012

Security & Safety

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.

About GHP

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.

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.

Head OfficesGlobal Ports Holding

Rıhtım Caddesi No: 51Karaköy 34425 Istanbul – Türkiye

Tel: +90 (212) 244 4440Fax: +90 (212) 244 6047

Company presentation: Global Ports Holding

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): 1,437

Total wharf length (meters): 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): 400,000 Date of acquisition: 2003 Investment term: 16 months

Date of acquisition: 2006 Concession term: 30 Years Concession term: 12 yearsConcession 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%)

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.

Graphic 20. Port Akdeniz Cargo Handlings

Table 3: Port Akdeniz Cargo Handlings

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Coming up...

Business newsMontenegro 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

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-on-year 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

Bulgaria and Montenegro to Cooperate on SME Promotion

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 World Bank Guarantees €100 Million Loan for Montenegro

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

The XVII Regional and Traditional Economic Forum in MiločerSeptember 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, eco-tourism 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.

Visit of Swedish ambassadorsSeptember 11-12, 2012

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.

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Front page picture:

Photography provided by CSTI for project “Photography Adventure“

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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.

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MBO#41

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