Government of Montenegro
Ministry of Finance
Questionnaire
Information requested by the European Commission to the Government of Montenegro for the preparation of the Opinion on the application of Montenegro for membership of the European Union – ADDITIONAL QUESTIONS –
V Economic and structural developments and reforms
Minister: Igor Luksic V Economic and structural developments and reforms - Additional Questions - V Economic and structural developments and reforms - Additional Questions -
TABLE OF CONTENTS ECONOMIC CRITERIA...... 5 V Economic and structural developments and reforms...... 6 V Economic and structural developments and reforms - Additional Questions - V Economic and structural developments and reforms - Additional Questions -
ECONOMIC CRITERIA V Economic and structural developments and reforms - Additional Questions - V Economic and structural developments and reforms
2. Please provide a translation into English of the National Strategy of Sustainable Development 2010, and Economic Policy for 2010.
Please double click to open the whole document V Economic and structural developments and reforms - Additional Questions - 3. (Ref to Qs 2 and 3): With reference to the number of employed, data provided in tables under point 2 c) and 3 a) for the period 2004-2008 differ. Could Montenegro explain why?
2c.)
Employed persons by the activity sectors and by gender 2005 2006
Total Male Female Total Male Female
Total 178 815 105 635 73 179 178 365 100 250 78 114
Agricultural activities 15 432 8 977 6 455 12 135 7 105 5 030
Agriculture, forestry and water supply 15 223 8 768 6 455 11 902 6 872 5 030
Fishery 209 209 . 233 233 -
Non-agricultural activities 34 393 27 662 6 731 34 759 25 984 8 775
Mining and quarrying 1 710 819 891 3 352 2 899 453
Manufacturing 21 893 17 049 4 844 18 295 12 612 5 683
Electricity, gas and water supply 5 551 4 555 996 4 809 4 191 618
Construction 5 239 5 239 . 8 303 6 282 2 021
Service activities 128 990 68 996 59 994 13 1471 67 161 64 310
Wholesale and retail trade, repair 29 903 13 735 16 168 30 291 12 722 17 569
Hotels and restaurants 11 005 6 959 4 046 16 342 8 533 7 809
Transport, storage and 14 617 11 423 3 194 17 846 13 506 4 340 communications
Financial activities 2 224 1 009 1 216 1 781 781 1 000
Real estate activities, renting 4 494 2 900 1 594 3 808 2 207 1 601
Public administration and social 22 797 14 421 8 376 20 146 14 742 5 404 security
Education 13 463 4 362 9 101 12 875 3 385 9 490
Health and social work 12 243 3 955 8 289 12 589 3 419 9 170
Other community, social and personal 17 825 9 814 8 011 15 180 7 866 7 314 service activities
Households with employed persons . . . 613 - 613
Extraterritorial organisations and 418 418 . - - - bodies
Source:MONSTAT (Labour Force Survey) Note: the data for 2005 and 2006 are processed and they are given in the absolute amount. V Economic and structural developments and reforms - Additional Questions -
Employed persons, by activity sectors and by gender for 2007 (1000) % % Female Total Male Female Total Male Female
Total 212.7 121.7 91.0 100.0 100.0 100.0 42.8
Agricultural activities* {18.4} {11.} ((7.4)) {8.6} {9.0} ((8.1)) {40.3}
Non-agricultural 37.3 28.2 {9.1} 17.5 23.1 {10.0} {24.5} activities
Mining and quarrying; {23.3} {15.7} {7.6} 10.9 {12.9} {8.3} {32.6} Manufacturing
Electricity, gas and water {5.9} ((5.2)) . {2.8} ((4.3)) . . supply
Construction {8.1} {7.3} . {3.8} {6.0} . .
Service activities 157.0 82.6 74.4 73.8 67.8 81.8 47.4
Wholesale and retail trade, 40.3 {16.0} 24.3 19.0 13.2 26.7 60.2 repair
Hotels and restaurants {19.4} {10.3} {9.2} {9.1} [8.4} {10.1} {47.1}
Transport, storage and {21.9} {19.2} ((2.8)) 10.3 {15.7} ((3.0)) ((12.6)) communications
Financial activities ((4.1)) . . ((1.9)) . ((2.8)) {62.9}
Real estate activities, ((4.8)) ((2.7)) . ((2.2)) ((2.2)) . ((43.8)) renting
Public administration and {19.8} {13.6} {6.2} {9.3} {11.2} {6.8} {31.3} social security
Education {12.7} ((4.2)) {8.5} {6.0} ((3.5)) {9.3} 66.7
Health and social work {15.3} ((4.4)) {10.9} {7.2} ((3.6)) {12.0} 71.3
Other community, social {18.6} {10.7} {7.9} {8.8} {8.8} {8.7} {42.7} and personal service **
Source: MONSTAT (Labour Force Survey) V Economic and structural developments and reforms - Additional Questions -
Employed persons by activity sectors and by gender for 2008
(1000) % % Female Total Male Female Total Male Female
Total 221.9 126.7 95.1 100.0 100.0 100.0 42.9
Agricultural activities* 16.8 9.9 (6.8) 7.6 7.8 (7.2) 40.8
Non-agricultural activities 47.5 36.5 11.1 21.4 28.8 11.6 23.3
Mining and quarrying; 27.9 19.9 8.0 12.6 15.7 8.5 28.8 Manufacturing
Electricity, gas and water 6.1 (4.7) (1.4) 2.7 (3.7) (1.4) (22.5) supply
Construction 13.5 11.8 1.7 6.1 9.3 1.7 12.2
Service activities 157.5 80.3 77.2 71.0 63.4 81.2 49.0
Wholesale and retail trade, 45.6 21.0 24.6 20.5 16.5 25.9 54.0 repair
Hotels and restaurants 17.7 10.6 (7.1) 8.0 8.4 (7.4) 40.0
Transport, storage and 19.0 14.7 4.3 8.6 11.6 4.5 22.5 communications
Financial activities (3.8) (1.8) (2.0) (1.7) (1.4) (2.2) 53.7
Real estate activities, 6.4 3.7 2.7 2.9 2.9 2.8 42.3 renting
Public administration and 19.4 11.2 (8.2) 8.8 8.8 (8.7) 42.4 social security
Education 13.5 4.1 9.4 6.1 3.2 9.9 69.8
Health and social work 13.4 3.3 10.1 6.0 2.6 10.6 75.7
Other community, social 18.8 10.0 8.7 8.5 7.9 9.2 46.5 and personal services**
Source: MONSTAT (Labour Force Survey) V Economic and structural developments and reforms - Additional Questions -
Employed persons by activity sectors and by gender, the first quarter of 2009
(1000) % % Female Total Male Female Total Male Female
Total 212.5 122.1 90.4 100.0 100.0 100.0 42.5
Agricultural activities* (13.5) (9.9) (3.6) (6.4) (8.1) (3.9) 26.4
Non-agricultural activities 47.8 36.4 (11.4) 22.5 29.8 12.7 (23.9)
Mining and quarrying; 26.3 18.3 (8.0) 12.4 15.0 (8.8) (30.3) manufacturing
Electricity, gas and water 6.0 4.6 ((1.4)) 2.8 (3.8) ((1.6)) ((23.6)) supply
Construction (15.5) (13.4) . (7.3) (11.0) . .
Service activities 151.2 75.8 75.4 71.2 62.1 83.4 49.9
Wholesale and retail trade, 45.9 21.7 (24.3) 21.6 17.7 (26.8) 52.8 repair
Hotels and restaurants 16.3 9.1 (7.2) 7.6 7.4 ((7.9)) (44.1)
Transport, storage and 17.5 13.2 (4.3) 8.2 10.8 ((4.8)) (24.7) communications
Financial activities ...... (54.2)
Real estate activities, 6.3 (4.2) (2.0) 3.0 (3.5) (2.2) (32.3) renting
Public administration and 19.2 10.0 9.3 9.1 8.2 10.2 48.1 social security
Education 13.5 4.5 9.0 6.4 3.7 9.9 66.3
Health and social work 13.0 (2.6) 10.4 6.1 (2.2) (11.5) 79.7
Other community, social (15.9) ((8.8)) (7.1) (7.5) ((7.2)) (7.8) (44.5) and personal services**
Source: MONSTAT (Labour Force Survey) V Economic and structural developments and reforms - Additional Questions -
Employed persons by activity sectors and by gender, the second quarter of 2009
(1000) % % Female Total Male Female Total Male Female
Total 212.0 121.3 90.7 100.0 100.0 100.0 42.8
Agricultural activities* (14.6) (9.6) 4.9 (6.9) (8.0) 5.4 (33.7)
Non-agricultural activities 42.4 34.1 8.3 20.0 28.1 9.2 19.6
Mining and quarrying; 23.2 17.2 5.9 10.9 14.2 (6.6) 25.7 manufacturing
Electricity, gas and water 5.5 4.3 1.2 2.6 3.5 1.4 22.2 supply
Construction 13.7 12.6 . 6.5 10.3 . .
Service activities 155.0 77.6 77.4 73.1 64.0 85.4 49.9
Wholesale and retail trade, 45.5 21.8 23.7 21.5 17.9 26.2 52.2 repair
Hotels and restaurants 18.2 8.0 10.2 8.6 6.6 11.2 56.1
Transport, storage and 17.1 12.8 (4.4) 8.1 10.5 ((4.8)) (25.5) communications
Financial activities (3.6) (1.9) (1.8) (1.7) (1.5) (1.9) 48.6
Real estate activities, 6.4 4.0 2.4 3.0 3.3 2.6 37.1 renting
Public administration and 19.1 10.4 8.7 9.0 8.5 9.6 45.7 social security
Education 13.6 4.8 8.8 6.4 4.0 9.7 64.5
Health and social work 12.8 (2.9) 10.0 6.1 ((2.4)) 11.0 77.5
Other community, social 18.8 11.2 (7.6) 8.9 9.2 (8.4) (40.4) and personal services **
Source: MONSTAT (Labour Force Survey) V Economic and structural developments and reforms - Additional Questions -
Employed persons by activity sectors and by gender, the third quarter 2009
(1000) % % Female Total Male Female Total Male Female
Total 217.8 123.6 94.2 100.0 100.0 100.0 43.2
Agricultural activities * 13.2 (7.4) 5.8 6.1 (6.0) 6.1 43.8
Non-agricultural activities 42.9 35.0 (7.9) 19.7 28.3 (8.4) 18.4
Mining and quarrying; 24.3 18.0 (6.3) 11.1 14.6 (6.6) 25.8 Manufacturing
Electricity, gas and water 5.6 4.7 (0.9) 2.6 (3.8) (0.9) (15.6) supply
Construction (13.0) (12.2) 0.8 6.0 (9.9) 0.8 (6.0)
Service activities 161.7 81.2 80.5 74.3 65.7 85.5 49.8
Wholesale and retail trade, 46.6 21.6 (25.0) 21.4 17.5 26.5 53.6 repair
Hotels and restaurants 20.4 (10.7) (9.6) 9.3 (8.7) (10.2) (47.3)
Transport, storage and 20.4 14.8 (5.6) 9.3 12.0 (5.9) 27.4 communications
Financial activities 3.9 ((1.3)) (2.6) 1.8 ((1.1)) (2.8) (66.5)
Real estate activities, (7.3) (5.0) ((2.2)) (3.3) (4.1) (2.4) 30.6 renting
Public administration and 19.2 10.5 8.7 8.8 8.5 9.3 45.4 social security
Education 13.5 (4.0) (9.5) 6.2 (3.2) (10.1) 70.4
Health and social work 12.8 (3.1) 9.7 5.9 (2.5) 10.3 76.1
Other community, social 17.7 10.2 (7.5) 8.1 8.3 (8.0) 42.4 and personal services**
Source: MONSTAT (Labour Force Survey)
* Agriculture includes forestry and fishery Explanation of symbols
** It includes households with employed persons, as well . it is not zero but it is extremely imprecise estimate (CV>=30) as
Extraterritorial organisations (( )) imprecise estimate (20<=CV<30)
{ } less precise estimate (10<=CV<20 )
CV: Standard error of estimate as percentage of estimate.
3a) V Economic and structural developments and reforms - Additional Questions -
Structure of gross value added in GDP for the period 2000-2007, at current prices, in %
Nace Rev 1. 2000 2001 2002 2003 2004 2005 2006 2007
A Agriculture, hunting and forestry 11.3 10.8 10.9 9.9 9.2 8.8 8.2 6.9
B Fisheries 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0
C Mining and quarrying 2.6 1.9 2.2 1.9 1.6 1.4 1.3 1.1
D Manufacturing 9.2 11.7 10.4 8.7 8.8 8.2 7.7 6.9
E Electricity, gas and water supply 5.5 5.3 5.4 5.8 5.7 4.7 4.1 3.0
F Construction 3.9 3.5 3.6 2.9 3.0 3.0 3.5 3.4
Wholesale and retail trade; repair of G motor vehicles, motorcycles and 12.8 11.3 11.8 10.9 10.2 10.5 11.1 12.0 personal and household goods
H Hotels and restaurants 2.5 2.2 2.3 2.3 3.0 3.0 3.0 3.3
I Transport, storage and communication 9.5 12.1 10.7 9.7 9.8 9.4 9.7 10.1
J Financial intermediation services 3.2 2.3 2.4 2.3 2.3 2.4 3.0 3.8
Real estate, renting and business K 11.6 11.8 12.0 12.2 12.4 11.6 11.4 12.8 activities
Public administration and defence; L 8.1 7.0 7.6 7.7 7.8 9.2 8.1 8.8 compulsory social security
M Education 4.4 4.0 4.1 4.1 4.3 4.2 4.1 3.6
N Health and social work 3.8 3.9 3.7 4.2 4.2 4.5 3.9 3.1
Other community, social and personal O 2.5 2.8 2.7 2.9 2.9 2.9 2.6 2.1 activities
Private households with employed P 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 persons
Q Extra-territorial organisations and bodies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total 90.9 90.6 89.8 85.5 85.2 83.8 81.8 80.9
FISIM -0.2 -0.1 -0.2 -0.1 -0.1 -0.1 -0.2 -0.4
Gross value added (basic prices) 90.7 90.5 89.6 85.4 85.1 83.7 81.6 80.5
Taxes on products less subsidies on 9.3 9.5 10.4 14.6 14.9 16.3 18.4 19.5 products
GROSS DOMESTIC PRODUCT (market 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 prices)
Source: MONSTAT V Economic and structural developments and reforms - Additional Questions -
Number of the employed by sectors, in %
Nace Rev 1. 2000 2001 2002 2003 2004 2005 2006 2007 2008
Agriculture, hunting and A 2.04 2.04 2.04 2.04 2.04 1.93 1.73 1.65 1.59 forestry
B Fisheries 0.04 0.04 0.04 0.04 0.04 0.07 0.08 0.07 0.08
C Mining and quarrying 3.19 3.19 3.19 3.19 3.19 2.83 2.76 2.40 2.24
D Manufacturing 18.31 18.31 18.31 18.31 18.32 17.99 17.28 16.43 14.64
Electricity, gas, and water E 3.83 3.83 3.83 3.83 3.83 3.81 3.73 3.58 3.63 supply
F Construction 4.79 4.79 4.79 4.79 4.79 5.24 4.54 4.25 5.31
Wholesale and retail trade; repair of motor G vehicles, motorcycles and 16.80 16.80 16.80 16.80 16.80 16.48 19.63 19.66 19.16 personal and household goods
H Hotels and restaurants 6.66 6.66 6.66 6.66 6.66 7.70 7.25 7.23 8.81
Transport, storage and I 9.86 9.86 9.86 9.86 9.86 9.52 8.05 7.26 7.70 communication
Financial intermediation J 2.32 2.32 2.32 2.32 2.31 2.09 2.06 2.01 2.09 services
Real estate, renting and K 3.27 3.27 3.26 3.27 3.28 3.51 3.92 3.42 3.39 business activities
Public administration and L defence; compulsory 6.51 6.51 6.51 6.51 6.51 6.60 6.86 11.24 11.22 social security
M Education 9.13 9.13 9.13 9.13 9.13 8.99 8.52 8.11 7.76
N Health and social work 8.09 8.09 8.09 8.09 8.09 7.76 7.97 7.67 7.43
Other community, social O and personal service 5.15 5.15 5.16 5.15 5.15 5.49 5.63 5.01 4.95 activities
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Total of the employed 140 762 141 112 140 100 142 679 143 479 144 340 150 800 156 408 166 221
Source: MONSTAT Health Fund –regular records The data in the table 3a) are data about number of employees from the administrative data source (Health Fund –regular records) while the data on employment under the item 2c) are from the Labour Force Survey. When it is about the data from the administrative data sources the term ‘employees’ implies all persons having entered into employment in enterprise, institution, organisation or individual employer, no matter if they entered in the employment at the permanent or temporary basis or if they are working full-time or less than full-time. Employees by the Labour Force Survey are defined as persons engaged in any kind of work for wage or profit during the interviewing week, even less than one hour. Payment includes cash payments or payments in kind no matter if the wage is paid off in a week when the work is performed or not. V Economic and structural developments and reforms - Additional Questions -
4. (Ref. to Q. 3): With reference to point 3 g), please provide a table showing the total number of employees having received training and their share on the total of employees (if possible by branch of activity) and please explain the methodology used to collect/elaborate these data. If possible, please provide also data on the number of companies having provided training to their employees and their share in the total number of companies.
The following table presents all available data related to the training of employees. V Economic and structural developments and reforms - Additional Questions -
Table 1 Results for respective training of employed persons
Activity Responsible for activity Focus group Accomplished result Year of realisation
Seminars for members of Chamber of Commerce Chamber of Commerce of Employees in business subjects 16 activities 2007 of Montenegro Montenegro and social partner institutions 320 participants
10 round tables Round tables and conferences for members of Chamber of Commerce of Employees in business subjects 3 conferences 2007 Chamber of Commerce of Montenegro Montenegro and social partner institutions 443 participants
Workshops for members of Chamber of Commerce Chamber of Commerce of Employees in business subjects 2 activities 2007 of Montenegro Montenegro and social partner institutions 53 participants
Union of Employers of Montenegro, Employers – members of Union of 2 conferences Conference for employers “Aleksandrija”, International Employers of Montenegro, 2007 Organisation of Employers Entrepreneurs 103 participants
Union of Employers of Montenegro, Representatives of government, National Voluntary Service Zid, 2 round tables Round tables public and private sector, 2007 Fondas, Centre for Development of Entrepreneurs 51 participant Non-Governmental Organisations
145 seminars
Seminars, foreign language courses and round Human Resource Management 4 round tables State employees and civil servants 2007 tables for state employees and civil servants Authority 32 language course 1.986 participants
2 seminars Private sector and employers in Seminars and conferences Montenegro Business Alliance 1 conference 2007 the construction and real estates 115 participants
Directorate for Development of Realisation of education programme for Representatives of small and Small and Medium Sized 254 participants 2007 entrepreneurs medium sized enterprises Enterprises V Economic and structural developments and reforms - Additional Questions -
Activity Responsible for activity Focus group Accomplished result Year of realisation
1546 trained teacher Teachers and directors of pre- Training for teachers and directors of schools for Education Office and Vocational primary school institutions, primary 45 trained directors 2007 implementation of reform solutions Education Centre and secondary schools 78 organised seminars
Employees in the companies that Training for notable employer Employment Office of Montenegro engage Employment Agency of 667 participants 2007 Montenegro
Seminars for members of Chamber of Commerce Chamber of Commerce of Employees in business subjects 16 seminars 2008 of Montenegro Montenegro and social partner institutions 399 participants
9 round tables Round tables and conferences for members of Chamber of Commerce of Employees in business subjects 3 conferences 2008 Chamber of Commerce of Montenegro Montenegro and social partner institutions 366 participants
Workshops for members of Chamber of Commerce Chamber of Commerce of Employees in business subjects 6 workshops 2008 of Montenegro Montenegro and social partner institutions 132 participants
Union of Employers of Montenegro, Employers – members of Union of 2 trainings Training Social Accountability of Enterprises Centre for Development of Non- 2008 Employers of Montenegro Governmental Organisations 26 participants
174 seminars 24 computer courses Seminars, courses of foreign languages and Human Resource Management computer courses, round tables for state State employees and civil servants 42 language courses 2008 Authority employees and civil servants 4 round tables 2.306 participants
Private sector and members of 7 seminars Seminars Montenegro Business Alliance 2008 Chamber of Commerce 180 participants V Economic and structural developments and reforms - Additional Questions -
Activity Responsible for activity Focus group Accomplished result Year of realisation
Directorate for Development of Realisation of education programme for Representatives of small and Small and Medium Sized 430 participants 2008 entrepreneurs medium sized enterprises Enterprises
2740 trained teachers Teachers and directors of pre- Training for teachers and directors of schools for Education Office and Vocational primary school institutions, primary 146 trained directors 2008 implementation of reform solutions Education Centre and secondary schools 126 organised seminars
Employees in companies that Training for notable employer Employment Office of Montenegro engage Employment Agency of 897 participants 2008 Montenegro
Directorate for Development of Realisation of education programme for Representatives of small and Small and Medium Sized 140 participants 2009 entrepreneurs medium sized enterprises Enterprises
Seminars for members of Chamber of Commerce Employees in business subjects 15 seminars Chamber of Commerce of 2009 of Montenegro and social partner institutions 395 participants Montenegro
5 round tables Round tables and conferences for member of Employees in business subjects 2 conferences 2009 Chamber of Commerce of Montenegro Chamber of Commerce of and social partner institutions Montenegro 199 participants
Employees in business subjects Chamber of Commerce of Montenegro Journal 12 issues published 2009 Chamber of Commerce of and social partner institutions Montenegro
2 round tables Entrepreneurs of Montenegro and Round tables and seminars for members of Union Union of Employers of Montenegro Former Yugoslav Republic of 5 seminars 2009 of Employers of Montenegro Macedonia 183 participants V Economic and structural developments and reforms - Additional Questions -
Activity Responsible for activity Focus group Accomplished result Year of realisation
193 seminars 22 computer courses
Seminars, foreign language courses, round tables Human Resource Management 41 language courses State employees and civil servants 2009 and trainings for state employees and civil servants Authority 2 round tables 34 trainings 2.665 participants
3 trainings, 2 modules with 3 days Representatives of local Trainings on the EU funded projects Centre for Development of NGOs respectively 2009 governments 38 participants
Trainings for contact persons from state institutions Contact persons from state Trainings 12 days Centre for Development of NGOs 2009 – EU funds project proposal writing institutions 96 participants
Trainings for representative of Red Cross of Representatives of Red Cross of 1 training Montenegro (strategic planning and project Centre for Development of NGOs 2009 Montenegro proposal writing) 20 participants
Training on importance of entrepreneurship, Directorate for Development of Representatives of small and 9 training cycles developing the entrepreneurial culture and Small and Medium Sized 2009 medium sized enterprises assisting to start the business Enterprises 334 participants
3447 trained teachers Teachers and directors of pre- Training for teachers and directors of schools for Education Office and Vocational primary school institutions, primary 122 trained directors 2009 implementation of reform solutions Education Centre and secondary schools 165 organised seminars
Source: Vocational Education Centre, Annual Report of Employment Office of Montenegro Review of percentage share of the employed having participated in the training is given in the following table Table 2
Number of the employed Number of the employed by % of employees having having participated the Labour Force Survey participated in the training training
2007 212 700 5 583 2.6
2008 221 900 7 622 3.4
2009 214 1001 7 6392 3.6
Sources: Labour Force Survey 2007-2009, Employment Office of Montenegro – Annual Report on Work 2007 and 2008, Vocational Education Centre Methodology used for drafting the data in the Table 2 is the following: percentage of employees participated in the training is calculated as ratio between the number of participants (number of participants has been received with the sum of participants from the Table 1 for respective year) and the number of employees by Labour Force Survey for the observed year. The data on the number of employees been trained differ to a certain degree from the data provided in the previous answer because of availability of more comprehensive data. It can be seen from the given table that the percentage of employees participated in training in 2007 amounts 2.6%, i.e. that this percentage in 2008 increases to 3.4% i.e. to 3.6% in 2009. We would like to remark that having in mind that there is no official statistics about trainings of employed persons, the available data can be divided into trainings in public sector, and other trainings of employed persons (enterprises in private and state ownership, civil sector, etc), please look at the Table 3. Table 3 Ratio of trainings conducted within the public sector and other trainings of employed persons
Number of Number of employees in % from the total employees from % from the total public sector number of employees other sectors number of employees participated in participated in training participated in participated in training training training 2007 3 577 64.1% 2 006 35.9% 2008 5 192 68.1% 2 430 31.9% 2009 6 234 81.6% 1 405 18.4% As it can be observed, based on the total number of employees participated in training with results in the Table 1, 64.1% on the total number of trainings was conducted in the public sector during 2007. The mentioned percentage in 2008 amounted 68.1%, while it was 81.6% in 2009. When considering other trainings, their share on the total trainings of the employed amounts 35.9% in 2007, 31.9% for 2008, while 18.4% is for 2009. Nevertheless, it should be considered that, because of limited data sources, the actual number of employees participating training is probably significantly higher, because there is a large number of trainings organised by the civil society.
1 The data for 2009 represent average of the first three quarters of 2009. 2 The data do not include trainings for notable employer of Employment Office of Montenegro. V Economic and structural developments and reforms - Additional Questions -
5. (Ref. to Q. 5): Please provide detailed information about the adoption of economic policy of the country. In particular specify if it is an open process and how its openness is ensured. Please describe how the National Council for Sustainable Development is involved and which relevance it has for the development process.
As it was said in the answer to the basic question under the number 5, Montenegro defines and establishes strategic aims, directions and parameters for national economy development under strategic development documents and special development strategies of certain sectors. These documents, that basically represent consistent macroeconomic development framework, create a basis for defining economic policy by which strategic directions for country development become operational and implemented. Creating and adoption process of economic policy that is under responsibility of the Government of Montenegro, starts in the current year by the preparation of documents Strategic Priorities of Economic Policy of Montenegro for the following year. At the proposal of the state administration body responsible for proposing the economic policy, strategic priorities of economic policy for the following fiscal year are determined by the document, and they are adopted by the Government not later than 30 April of the current year. Based on this document, report on the realisation of macroeconomic and fiscal policy for the current year with the proposal of targets and directives for fiscal policy in the following year is prepared that serves as a basis for planning the main categories of receipts and expenditures for the following three fiscal years. Creating the concept of economic policy with main targets, directions, development dynamics and mechanisms for implementation is determined significantly by the economic movements in the current year which are analysed under the quarterly reports about realisation of the current economic policy. Observed trends and deviations from the projections determined by the current economic policy with Government conclusions in view of their examination, represent directive and framework of relevant information that economic policy for the following year is based on. Process of determining the economic policy is open process which includes all relevant stakeholders of social and economic activity, while the balanced interest of social partners is provided. As it was reported before, legal obligation of Central Bank of Montenegro is realised in view of preparing the recommendations for Government of Montenegro on the economic policy in the current year for the following year, and established practice in submitting proposals and suggestions to the Government for preparation of economic policy for the following year by the Chamber of Commerce of Montenegro, as well as by Union of Employers of Montenegro, Montenegro Business Alliance and Independent Trade Union of Montenegro. In view of preparation of economic policy for the following year, a special annual meeting is organised regularly in the Chamber of Commerce of Montenegro consisting of representative of all branch associations of the Chamber of Commerce of Montenegro and banking sector with line representatives of Government, with participation of the president of Government. In this manner, economic policy creators receive authentic and original information of importance for drafting the economic policy. Ensuring regularity and transparency of those procedures, Government of Montenegro exactly wants to make preparation process of economic policy recognised as an open and transparent procedure. Strategic orientation for sustainable development, expressed in the National Strategy for Sustainable Development and laws and other acts implementing this relation in practice, represents basic guideline for defining the economic policy. The National Council for Sustainable Development (NCSD) is not directly involved in the very preparation process of economic policy. But, drafting the economic policy is based on principles of sustainable development contained in the National Strategy for Sustainable Development.
21 V Economic and structural developments and reforms - Additional Questions - National Strategy for Sustainable Development is adopted together with the Action Plan (AP) for the period 2007 – 2012. These documents define strategic tasks and individual measures for 24 areas. The general aims are: 1. Accelerate economic growth and development and reduce regional development disparities; 2. Reduce poverty; ensure equal access to services and resources; 3. Ensure efficient pollution control and reduction, and sustainable management of natural resources; 4. Improve governance system and public participation; mobilise all stakeholders, and build capacities at all levels; 5. Preserve cultural heritage and cultural diversity. The National Council for Sustainable Development (NCSD) acts as an advisory body of the Government of Montenegro consisted of representatives of all societal structures (government, local governments, academies, business sector, non-governmental organisations and independent experts for certain areas of sustainable development). The main mission of NCSD is to have an influence with advises on sustainable development policy of the Government of Montenegro. Some of the most important strategies and policies that have been examined by NCSD until now are as follows: Energy Development Strategy until 2025, National Strategy for Integrated Coastal Area Management, Spatial Plan of Montenegro until 2020, National Forest Policy of Montenegro, etc. Among other issues, NCSD has also supported cultural and natural heritage preservation and protection programmes; promoted the development of economy based on sustainable use of natural and human resources; and supported introduction of sustainable development issue in education programmes. Tasks of NCSD and the Office for Sustainable Development (OSD), as a secretariat of NCSD are as follows: 1) Monitoring the implementation of the National Strategy for Sustainable Development of Montenegro, as well as implementation of tasks from the document Directions for Development of Montenegro as an Ecological State, as basic strategic documents; 2) Analysing strategic development documents and priority investment programmes in terms of its harmonization with the Strategy for Sustainable Development of Montenegro; 3) Support the process of civil society, local governments, scientific-professional institutions, and business sector inclusion together with state bodies in the process of defining and implementation of the policy and the Strategy for Sustainable Development of Montenegro; 4) Enhancing the cooperation of Montenegro with relevant international community actors in defining and realisation of sustainable development policy and programmes, and aims of ecological state; 5) Support the Government in: (a) Implementation of the UN Commission on Sustainable Development policy, documents adopted at the UN conferences on sustainable development, as well as EU policies, global agreements and conventions; (b) Drafting and implementation of legal regulation, policy, measures and indicators about sustainable development, harmonised with the European and world standards; (c) International participation in the implementation of sustainable development policy; (d) Ensuring wider understanding of sustainable development in society and its importance for the future of Montenegro. Implementation of the National Strategy for Sustainable Development of Montenegro is monitored continuously. The Office for Sustainable Development in cooperation with other sectors in the Government, especially with the Ministry of Spatial Planning and Environmental Protection which was the main coordinator of drafting and adoption process of the very Strategy for Sustainable Development, prepares annual progress reports on implementation of the Strategy for Sustainable
22 V Economic and structural developments and reforms - Additional Questions - Development. The annual progress reports are analysed by the NCSD, and afterwards adopted by the Government of Montenegro.
6. (Ref. to Q. 6): Please provide additional information on the coordination between line ministries and finance ministry in for the formulation and implementation of economic policy.
Preparation and implementation of economic policy as transparent and complex process imply the coordination between the line ministries and Ministry of Finance in accordance with the Decree on Organisation and Method of Operation of State Administration (Official Gazette of the Republic of Montenegro 54/04,... 32/07, Official Gazette of Montenegro 6/07, 16/07, 43/08, 68/08, 4/09, 14/09 and 43/09) beside other responsible for preparation of economic policy proposals, guidelines for its drafting and drafting the annual and the middle term macroeconomic framework, with the estimate of basic economic proportions, balance and aggregates aimed at defining economic and development policy. Ministry of Finance as the coordinator of overall preparation process of economic policy is the initiator of conceptual setting of documents with primary aims, directions and development dynamics that fundamentally rely on the orientations of strategic development documents. The mentioned ones are controlled in the interaction with the line ministries. Elaboration of the economic policy concept envisages also elaboration of sector dimension of development. In regards with it, Ministry of Finance in cooperation with the line ministries monitors implementation of sector development strategies and annual action plans for their implementation from the aspect of their influence on macroeconomic movements and overall development. Actually, envisaged activities under action plans for realisation of certain sector development strategies represent a basis for defining aims, tasks and measures of economic policy in certain economic sectors. At the same time, macroeconomic framework of activities and measures for the coming year is established in the Ministry of Finance, and in relation with it, realisation of envisaged projects and activities is coordinated with the objective possibilities in the following year in the framework of determining the process of fiscal policy and the very budget frame. The accent on the coordination of sector policies and establishment of integration mechanisms into macroeconomic development framework is also emphasized in the implementation phase of economic policy and monitoring phase. Quarterly reporting of the Government about realisation of current economic policy measures and periodical reports on realisation of certain sector development strategies, and information on realisation of certain important projects have function to monitor the realisation of plans for development. Determined deviations from the adopted policy, dynamics, and other conditions provide opportunity, depending on the need, also for adoption of additional economic policy measures. The consistency of macroeconomic and sector aspect of development is attempted to be provided in the whole process.
7. (Ref. to Q. 7): Please describe in more details plans to enhance the reliability, regularity and mutual compliance of statistical data
A key precondition for realisation of defined plans in relation to enhance the reliability, regularity and mutual compliance of statistical data will be fulfilled by adoption of amendments to the Law on Statistics and Statistical System of Montenegro during 2010. New law will define: (i) concept of the official statistics; (ii) role of Statistical Office of Montenegro – Monstat as the coordinator of statistical system; (iii) reduced number of the official statistics producers; (iv) adopt concept of the EU statistics quality, (iv) obligation to submit the data from administrative sources, what will create legal basis for mutual compliance of statistical data and centralisation of the official statistics within Monstat. Implementation of the Law and application of
23 V Economic and structural developments and reforms - Additional Questions - centralised model of the official statistics will imply an increase of financial and human resources of Monstat.
8. (Ref to Q. 8): With reference to public finances, the Pension and Disability Fund is well explained in the text. Please provide a similar explanation, including the balance sheet indicators, for the other 4 Funds: Health Insurance, Employment, Compensation and Development.
Health Insurance Fund of Montenegro System of Health Insurance in Montenegro The concept of financing of the compulsory health insurance in Montenegro is shaped in the manner that it is made accessible to all social strata. Functioning system of health insurance is based on the principle of mutual harmonization of interests of the insured persons (insurees), persons who are obligated to pay contributions (contributors) and rights established by law. In its exercise of public authorities, Health Fund of Montenegro is the carrier of the mandatory and voluntary health insurance in Montenegro and is obligated to provide for the rights of the insured persons in line with the financial capacities. Insured persons (insurees) receive health care in the health institutions with which the HIF has concluded the agreements. Obligations provided by the law, which are related to the collection of contributions are being integrated inside the Tax Administration of Montenegro. The basic sources for financing of the mandatory health insurance are the contributions. Besides contributions the MNHIF receives funds realized through other Budget revenues, funds under conventions, indemnification, interest rate and from other sources, in accordance with the law. The persons obligated to compute and pay contributions, bases for computing of the contributions, rates of contributions, payment deadlines and other issues related to payment of the contributions for compulsory social insurance are set out by the Law on Contributions for Compulsory Social Insurance (OG MN 13/07 and 79/08). Contributions for the compulsory social insurance in the sense of the mentioned law are: contributions for compulsory health insurance, contributions for compulsory pension&disability insurance and contribution for insurance against unemployment. Contributions for mandatory health insurance are the revenue of the Health Insurance Fund of Montenegro. The Law on Contributions for Compulsory Social Insurance establishes the rates at which the contribution for mandatory health insurance is paid on the prescribed contribution base, and they amount to: contribution rate for health insurance of employees in year 2009 was 10.5% of which 5.5% is charged to employer and 5% to the employee, whereas law foresees further decrease during year 2010, when the rate should amount to 9% of which 5% would be charged to employer and 4% to employee. The salary constitutes the base for computation of contributions, or - in appropriate cases as provided by the law, collective agreement and employment contract – compensation of salary, whereby the base may not amount to less than lowest monthly contribution base. The lowest monthly contribution base is the basic salary on which the contributions for one calendar month of insurance are computed and paid, prescribed by the general collective agreement for the corresponding qualification level category, and expressed in gross amount. Entrepreneurs who independently engage in business activity pay contribution at the rate of 10.5%, while the base for computing of the contribution is made up of the taxable income from self- employment in accordance with the legislation governing tax on income of physical persons, whereby the base may not be lower than average monthly salary in Montenegro for the month for which the contribution is being paid. For self-employed contributors who pay tax as an annual lump-sum amount, the base for computing contributions consists of 50% of average monthly salary of Montenegro. Rate of contributions for health insurance of insurees who are working in agriculture also amounts to 10.5% (9% - as of 2010), while the base amounts to 12% of the
24 V Economic and structural developments and reforms - Additional Questions - monthly gross salary received in the preceding year by one employee in Montenegro, according to the data of the statistics office. Rate of health insurance contributions for the recipients of pension based on the law on pension&disability insurance amounts to 19%, while the computation base is equal to the amount of pension. Employment Office pays contributions for health insurance of unemployed persons who are recipients of the monetary compensation at the rate of 5.0%, computed on the amount of compensation. The Health Insurance Fund of Montenegro receives the highest portion of contributions for health insurance for the employees in commerce & industry and public services (real and public sector). Health insurance contributions of the employees are paid by the employers simultaneously with the payment of salary or monetary compensation. Besides revenues from contributions, significant source of revenues (ca 20%) are general revenues from the Budget out of which the health care is provided for the unemployed persons who are not recipients of monetary allowances and for refugees, as well as the coverage of the deficit of funds needed for financing of health care due to lower realization of revenues in consequence of reduced contribution rate. (Budget of Montenegro pays contributions for health insurance of the unemployed persons who do not receive monetary allowance at the rate of 5.00% on the base equal to the amount of minimum price of work in Montenegro in the month for which the contributions are paid.) Health Insurance Fund of Montenegro‘s means are public funds from which in Montenegro only the rights pertaining to compulsory health insurance are covered, while the amendments of the Law on Health Insurance are underway, which shall regulate in more detail the procedure for introducing the voluntary – supplementing health insurance. The only private means included in the system of health care are those received from participation of the insured persons in costs of the use of health care, covering less than 1% of total expenditures for health protection. Expenses for health care include funds spent for outpatient treatment as well as for stationary treatment in health institutions within and outside of the public health system of Montenegro, funds spent for medications issued on prescription and medical drugs and medical material (medical items) used in health centers and hospitals, as well as expenditures for orthopedic-technical aids and instruments. Expenditures for other rights ensuing from the health insurance, i.e. for compensation of salary during the temporary inability for work – sick leave -, travel expenses during period of using of the rights ensuing from health care in the country and abroad - are also provided for from the funds of Health Insurance Fund. For the time being, official records are not kept on costs of health care in private sector. However, in the most recent years certain activities were conducted related to setting up of the National Health Accounts (NHA) which shall in future make possible for us to establish such records. It is our estimation that ca 10.0 mil. € or 0.30% GDP are appropriated annually for health promotion and prevention in Montenegro (Public Health Institute funds, work of advisories, all prevention examination in primary health protection and similar). We are of the opinion that the answer provided to previously cited question covers in largest part the answer to question you posed in relation to public finances (compared to the answers provided by Pension and Disability Insurance Fund). In order to improve the text, we are submitting the supplementing information, general explanation of the system of health insurance, rights ensuing from health care and health insurance, as well as information on revenues generated, since we previously covered the expenditures of the Fund. 1) Health Insurance System Health care system in Montenegro is of particular strategic significance as it affects essentially the entire social and economic development, wherefore the state guarantees the right to health care in its highest legal act. Establishment of the system of health insurance, as a significant segment of social security of the citizens, ensues from the health insurance development strategy, health care development strategy, as well as other important development strategies of the state of Montenegro. By health insurance the state undertakes the obligation to cover all negative consequences of the risk in case of illness, pregnancy, injuries, accidents at work and loss of salary that exceed the citizens’ resources, thereby reducing their financial risk. Thus, this area of social activity is a constituent element of Government of Montenegro’s institutional reforms which
25 V Economic and structural developments and reforms - Additional Questions - are in part implemented through the obligations of the state assumed in the processes of Euro- Atlantic integrations and EU accession. Establishment of the system of health insurance, as a significant element of social security of the citizens, ensues from the health insurance development strategy, health care development strategy as well as other important development strategies of the state of Montenegro. Through health insurance the state undertakes the duty to cover all negative consequences of risk in cases of illness, pregnancy, injuries, accidents at work, loss of salary, which surpass the abilities of the citizens and thereby to reduce their financial risk. Thus, this part of social activity is the constituting element of the Government of Montenegro’s institutional reforms, which are realized, amongst other, within the framework of the of Euro-Atlantic integration and EU accession processes. One of the basic goals of each society is the healthy citizen – individual who, through his work and knowledge, influences the development of the social community. Hence, the basic principle of the health care social model is that health is not the market good, but the common good. Accessibility of health care is one of the rights guaranteed by the constitution, which is provided for everyone, regardless of their health, social or economic condition and status. The aim of each state, including Montenegro, is to have healthy population which, through its work, shall contribute to the state development level growth, and thereby to the living standard of all citizens. As consequences of the general social importance of health care and health insurance, the state is the main bearer of health care and health insurance policies. State influences the development of this area by appropriate legal regulation as well as provides resources for the health care. State invests significant efforts in planning, development and management of the system of health care and health insurance, in order to, within available means, provide for efficient, rational, high quality and accessible system for all of its citizens. Optimized and efficient system of health insurance provides higher quality basis for unimpeded growth and development, with weight being put on improvement of the quality of health care and health insurance accompanied by simultaneous reduction of health insurance costs and optimization of medical and administrative procedures. Health insurance system in Montenegro is not independent and separated from social system, and thus it cannot be presented as independent from financial, political, social and demographic tendencies. Establishment of stable and sustainable health insurance system is a complex task on which Montenegro is permanently actively engaged. On one side there is a state which is responsible for certain level of condition of the population’s health, legal regulation and organization of health institutions, which also must maintain the balance and aim towards reduction of costs and relieving of the burden from the economy, while on the other side there are citizens, to whom their health security is of ever increasing importance. Accepting the compromise between the social partners, economy and state, in the area of health care is indispensable and often very difficult, as it is the most essential interests of the citizens that are at issue. For the purpose of creating the more efficient and sustainable system, it is indispensable to build the partnership with private sector. It is also necessary to raise the awareness of the citizens regarding the obligation of health preservation, as well as regarding necessity of higher level of personal participation in the costs of realizing of the rights from mandatory health insurance. The amount of participation is determined by the Decision on participation of the insured persons in the costs of use of health care (OG of RMN 34/91, 91/93) and Decision on valuation of the amount of participation of the insured persons in the costs of using the health care (OG RMN 3/01). Insured persons out of the funds of Compulsory Health Insurance realize the right to health care and other rights based on health insurance. The status of insured person is determined by the Fund, on the basis of application for mandatory health insurance, and it is demonstrated by the prescribed document - health insurance card, issued by the Fund. Certification of the health insurance card is provided by the Fund on the basis of evidence that the person obligated to pay contributions had settled all of its due liabilities under the compulsory health insurance within the time limits prescribed by the law. Depending on who is the contributor of the health insurance contributions for an individual insuree, all insurees are classified in the records by the basis of
26 V Economic and structural developments and reforms - Additional Questions - insurance (employees, unemployed persons, pensioners, agricultural insurees, refugees, others). In year 2008, there were 642,744 insurees, recorded by categories-insurance bearers. Rights from mandatory health insurance are: 1) right to health care; 2) right to the salary compensation during temporary incapacity to work; 3) right to compensation for travel expenses related to the use of health care. The right to health care at the expense of compulsory health insurance includes the following: 1) medical measures and procedures for improvement of health, prevention, fighting and early detection of diseases and other health disturbances; 2) medical examinations and other types of medical assistance in order to establish, monitor, and check up health condition; 3) medical treatment of the sick and injured and other types of medical assistance; 4) medical treatment out of the Republic and abroad; 5) prevention and medical treatment of mouth and teeth diseases (treatment of mouth and teeth diseases in urgent medical conditions and prevention and cure of the mouth and teeth diseases of children up to completed 15 years of age, women during pregnancy, persons older than 65 years of age); 6) medical rehabilitation; 7) medications and medical means; 8) medical-technical devices (prosthesis, orthopedic and other devices, dental-prosthetic assistance and dental materials and restorations Following is not considered to be health care: 1) medical examinations in order to establish health condition, body imparity, and disability in the procedures before other organizations and authorities; 2) medical examinations for employment, enrolment in educational institutions and training courses, obtaining medical certificate for driver’s license, court and other proceedings, and in other cases when examination is not undertaken in terms of health protection; 3) medical examinations of the employees assigned by organizations to work abroad, in accordance with the special law, as well as measures of preventive health care for trips abroad and medical examinations for such trips. Insured persons who are employees are entitled to compensation of salary during temporary incapacity to work, after the 60th day of temporary incapacity for work, charged to funds of compulsory health insurance, in the case if they are: 1) temporarily incapable to work due to an illness or injury 2) Incapable to work due to a medical examination; 3) Isolated as germ-carriers or due to occurrence of contagion in their environment; 4) assigned to care of the diseased immediate family member, in accordance with the general act adopted by the Fund; 5) incapable to work due to a voluntary donating tissue or body organs; 6) assigned as escorts of sick person referred for treatment or medical examination to other place, or during their stay as an escort in the stationary institution in accordance with the general act of the Fund; The insured persons as well as their escort in the case of need are entitled to reinstatement of travel expenses in connection to use of health care covered from funds of compulsory health insurance, when such person is referred or invited by the selected doctor, or competent MD board, to other place in connection with realization of health care or for the purpose of assessment of temporary inability to work. Insured persons in Montenegro realize health care most often in the
27 V Economic and structural developments and reforms - Additional Questions - health institutions in Montenegro which are within the public health system on primary, secondary and tertiary levels, according to the established network of health care institutions. Network of health care institutions of Montenegro consists of: - 18 public health centers - Institute for urgent medical assistance - 7 general hospitals - 3 specialized hospitals - Clinical Centre of Montenegro - Public Health Institute and - Pharmacist Institution of Montenegro Stomatological health care at primary level has since 1st January 2008 been displaced from public health centers and organized as private activity. Agreements were concluded with 121 teams of stomatologists in 109 private stomatological offices. Employment Office of Montenegro The activity of the Employment Office is regulated by Law on Employment (OG RMN 5/2002, 79/2004 and 21/2008) and, in principle, it consists of the rights and obligations of the unemployed persons as well as of rights of employers on the labor market, that is, providing of information on vacancies and conditions of employment in the country and abroad, mediation in employment, insurance in case of unemployment, professional orientation, implementation of programs and measures of active employment policy. Employment Office of Montenegro is financed from general revenues (Budget of MN transfers) and revenues designated for special purpose. Special purpose revenues consist of: - revenues from contributions for insurance in case of unemployment - revenue from stamp duty for employment and work of foreigners - revenues from sale of financial and non-financial assets - revenues from repayment of credits for self-employment - other revenues. The Program of employment of trainees with high education according to the Government’s Program and measures of passive employment policy (monetary allowances to unemployed persons) is financed from general revenues. O V E R V I E W Of the revenues and expenditures realized over the period between 2004-2008 In mil. EUR
description 2004 2005 2006 2007 2008
1. Total receipts 11.29 23.23 26.70 29.32 31.37
2. Total expenditures 11.53 18.81 30.63 27.39 30.90
3. Total receipts.-total expenditures 1-2 -0.24 * 4.42 -3.93 * 1.93 0.47
5. Total receipts/GDP 0.67 1.27 1.24 1 1.01
6. Total expenditures/GDP 0.69 1.03 1.42 1.02 1.00
* In years 2004 and 2005 expenditures exceeded generated receipts; the deficit was financed from revenues carried forward from preceding year. In the period between years 2004 and 2008, the revenues of the Employment Office were increased by 177.85% (that is, from 11.29 mil. EUR in year 2004 to 31.37 mil. EUR in year 2008).
28 V Economic and structural developments and reforms - Additional Questions - Significant growth of the revenues was attained, as follows: - by 131.35% (from 4.06 mil EUR to 9.41 mil. EUR) from contributions for unemployment insurance, due to remarkable economic expansion, increase of the number of the mandatory contributors, reduction of grey economy; - by 366.49% (from 1.12 mil. EUR to 5.23 mil. EUR) from stamp duties for employment and work of foreigners, due to increase of employment of foreigners in Montenegro. The growth of the transfers from the Budget of MN is also noticeable, since the increase of number of monetary compensation beneficiaries was continuous, while the decrease was observed in growth of the revenues from sale of privatization shares by 94.37% in respect of year 2005 (from 7.52 mil. EUR to 0.40 mil EUR).
STRUCTURE RECEIPTS AND EXPENDITURES OF THE EMPLOYMENT OFFICE FOR THE PERIOD 2004-2008 IN %
D e s c r i p t i o n Realized Realized Realized Realized Realized
2004 2005 2006 2007 2008
Share in total receipts:
1. Contributions for employment 36.03 22.06 22.84 26.05 30.01
2. Transfers from the Budget of Montenegro 24.98 24.90 28.96 25.31 37.54
3. Repayment of the self-employment credits 22.94 12.54 11.15 14.68 11.55
4. Receipts from sale of financial and non-financial assets 2.95 32.38 15.16 12.87 1.31
5. Stamp duties for employment of non-residents-foreigners 9.94 5.40 7.03 11.82 16.69
6.other receipts and credits with banks 3.16 2.72 14.86 9.27 2.90
T O T A L : 100.00 100.00 100.00 100.00 100.00
Share in total expenditures:
1.Active employment measures * 33.37 43.39 50.08 37.49 39.54
2. Passive employment measures- monetary compensation to unemployed 12.91 22.50 17.78 20.74 28.64
3. Gross salaries and other personal earnings 23.27 17.26 15.96 16.51 16.41
4. Costs of materials, services, interest rates and rent payment 17.39 13.68 9.96 11.33 8.71
5. Capital expenditures 6.57 3.17 1.47 1.25 5.21
6.Repayment of credits to financial organizations 5.06 4.75 12.68 1.49
7. Purchased shares 1.43
T O T A L: 100.00 100.00 100.00 100.00 100.00
*Active measures of employment include expenditures for: - financing, or co-financing of the opening of new work positions/jobs; - co-financing of the programs of public works; - scholarships; - establishment of the fund of work; - compensation of the portion of costs to maintain productive work posts; - investment credits for employment on the basis of production and other capacities; - co-financing of seasonal employment (in tourism and hospitality sector, construction business, agriculture and similar);
29 V Economic and structural developments and reforms - Additional Questions - - co-financing of the salaries paid to trainees; - preparing of the employment program for specific categories of unemployed persons (persons with disability, persons who have been unemployed for longer period of time); - preparing of the program of geographical and professional mobility of work force; - co-financing of education and training; - co-financing of adaptation of space and technical equipment for employment of persons with disability; - preparing of program of adjustment of work posts for specific categories of unemployment; - other measures in accordance with the act of the Office. From the structure of revenues and expenditures during the period between years 2004 – 2008, it is evident that the share of expenditures for active and passive employment policy measures was increased in the total expenditures, while the share of current expenses (expenses for gross salaries of employees of Employment Office, for material, services, interest rates and other items) is significantly reduced. Main sources of growth in expenditures in year 2008 were revenues from contributions, revenues from stamp duties for employment of foreigners, revenues from repayment of the credits for self- employment as well as transfers from the Budget of Montenegro.
DEVELOPMENT FUND Changes of ownership in the economy of Montenegro were initiated by the Law on Social Capital in year 1990 (OG SFRY 46/90). However, it was only later, through adoption of the Law on Ownership and Management Transformation (OG MN 2/92 and 27/94) that the transformation of the state owned capital was intensified when it was formally distributed to workers and state owned funds: Development Fund of MN, Republic Fund of Pension and Disability Insurance and Employment Office of MN. In this process, the Development Fund of MN became shareholder in large number of enterprises (more than 370 enterprises) which opted for the model of transfer of portion of the state owned capital to funds. By adoption of the Law on Development Fund (OG MN 46/92), the legal preconditions were created to establish the Fund which started to operate only in year 1995. Formed as an independent legal person which was to operate on the basis of the principle of profit generation – self-financing – the Fund started with its activities in the field of economic development, restructuring of the ownership in the economy and capital market development. By the time when the Fund was organized as a joint stock company, i.e. until the process of Fund’s transformation was finalized, the Government of Montenegro appointed the director and board of directors of the Fund. Development fund of MN was founded in year 1995 in the process of ownership and management transformation of the economy of Montenegro. Mission of the Fund consists in promotion of economic development of Montenegro through: - Private business and entrepreneurship development; - Restructuring of ownership and management in companies and national economy as a whole; - Capital market and corporate management culture development. Basic goals of the Fund are: - Privatization of Montenegro’s economy; - Achieving higher levels of efficiency in business operation of the companies; - Creation of advantageous environment for investments of both domestic and foreign partners; - Integration in international economic and financial institutions; - Growth of national income and living standard of Montenegro’s citizens. Until present moment, the results of ownership transformation on the one, and investment support through profitable projects on the other side, place Development Fund of Montenegro on the list of institutions that played crucial role in creating future sustainable development of Montenegro.
30 V Economic and structural developments and reforms - Additional Questions - - Adjustment of the privatization process to circumstances which followed Montenegrin economy transformation process, imposed the necessity of adoption of the respective legislation; - Within that scope, the efficient implementation of the role of the Development Fund of Montenegro in the transformation and privatization processes of Montenegrin economy was defined by following laws and regulations: - Law on Development Fund of Montenegro (OG MN 46/92) - Law on Ownership and Management Transformation (OG MN 2/92 and 27/94) - Law on Privatization of Economy (OG MN 23/96, 6/99 and 42/04) - Decree on sale of shares and assets through public tender (OG MN 8/99,59/03) - Decree on sale of shares and assets through public auction (OG MN 20/04) - Decree on conversion of foreign currency savings of citizens into bonds (OG MN 70/04) - Decision on Privatization Plan for Year 2007 (OG MN 44/07 ) - Decision on formation and composition of the Privatization Council (OG MN 33/98, 72/04) - Decision on formation of the commission for follow up of accessibility to public and transparency of the privatization procedure (OG MN 25/00). - Law on Business Organizations (OG MN 06/02). - Law on Business Organizations Insolvency (OG MN 06/02, 01/06). Development Fund, which until year 2008, had the status of extra-budgetary fund, while it was the state fund in the period between 2008-2009, shall not be planed as an integral part of the budget of Montenegro, but shall be transformed into Investment and Development Fund of Montenegro in the form of joint stock company owned by the state of Montenegro. Bearing in mind significant changes in Montenegrin economy (in the banking sector, capital market, priorities and needs of economic development, overall economic environment, legal regulation) the need occurred to transform the Fund and adjust its goals to further economic development and to economic policy conducted by the Government of Montenegro. Significant reasons for transformation result also from the current position of the Development Fund which is characterized by inconsistencies in the laws and regulations (recommendation of the SAI, need to harmonize with the Business Organizations Law with regard to the form of business organization, incapacity to apply certain regulations prescribing financial reporting, inadequate organization structure and similar). Newly established subject shall have following objective which constitutes basis for the future Fund’s development: 1. Support to realization of infrastructure and environment related projects, 2. Balancing of regional development , 3. Support to the sector of micro, small and medium size enterprises, 4. Realization of the privatization process of the capital which is still in the Fund’s portfolio, 5. Realization of past placements.
COMPENSATION FUND By virtue of the Law on restoring of the taken away property rights and on compensation (OG RMN 21/04 and 49/07), which entered into force on 8 April 2004, the conditions, manner and procedure for restoring of the ownership and other property rights and indemnification of the former owners were regulated in respect of the rights which were taken away in favor of the people’s, state’s, social or cooperative property, that is, the state created standardized conditions for removal of the consequences caused by adoption and implementation of the so called revolutionary laws in the years following the ending of the II World War until the entry into force of the Law on Amendments of the Law on Expropriation (OG SFRY 5/68). Subject to restoring of the taken away property and indemnification under mentioned law were forests and forested land, olive groves, apartment buildings, apartments, business buildings, business premises, buildable land and enterprises. Thus, the Law on restoring of the taken away property rights and compensation established the obligation that property rights taken away in favor of people’s, state, social or cooperative property
31 V Economic and structural developments and reforms - Additional Questions - shall be restored to former owners, or, should the restoring not be possible, to compensate the former owners in accordance with the Law. In creating the conditions for implementation of this obligation the law defined sources of funds from which the compensation was to be made. According to the Law, the Compensation Fund is a party in the procedure and executes final decisions of the Commissions for Restitution and Compensation (in cases where the compensation in bonds or monetary compensation are applicable), an hence, for such purpose, it is bound to issue bonds and care to the lawful, economic and rational utilization of the means intended for compensation of former owners. According to the provisions of the mentioned law, the administrative procedures of first instance, in which it is decided on the applications for restitution submitted by the parties – former owner, his legal heir or successor – are conducted by the Commissions for Restitution and Compensation formed by the Ministry of Finance. According to the Law, the procedure is carried out before three Commissions for Restitution and Compensation: in Podgorica, Bar and Bijelo Polje. Compensation Fund is formed by the Government of Montenegro by virtue of the Decision on formation of the Compensation Fund (OG of RMN 57/04). Compensation Fund has the capacity of a legal person within the scope of its activity, and cares to the providing of the means for compensation of former owners for rights taken away in favor of people’s, state, social or cooperative property, as well as provides for lawful, economic and rational utilization of the funds intended for compensation of former owners in accordance with the Law and Statutes of the Fund. Fund carries out the following activities: 1. provides for efficient, rational and lawful realization of rights of former owners, 2. provides for lawful, economical and rational utilization of the funds intended for compensation of former owners in accordance with the Law; 3. keeps the records on the rendered decisions, on the payment of the monetary means, on the issued confirmations for acquiring of the bonds, on the bonds sold as well as on the repayments effected; 4. undertakes measures for regular collection of the Fund’s revenues; 5. adopts general acts on the basis of the Law and the Statutes; 6. carries out other activities in relation to implementation of the restitution procedure before commissions as well as in relation to realization of the rights of former owners in line with the Law. Sources of funds of the Fund for Compensation are set out by Article 44 of the Law on restoring of the taken away property rights and compensation and it is the duty of the Fund to care for providing the funds and their rational utilization, as follows: 1. 10% from the sale of state property 2. 10% from the sale of shares of state owned funds 3. 7% of the funds of companies or parts of companies being privatized. 4. Revenues realized on the basis of collection of re-valued amount paid by former owners; 5. Bonds issued by Montenegro; 6. Shares, which, under the laws and regulations governing privatization of economy, were allocated for compensation of former owners; 7. Funds received from credits as well as other funds allocated by international organizations for this purpose; 8. Revenues from sale of state owned property which was transferred to the Compensation Fund; 9. Other sources. According to the Law on Budget, the Compensation Fund as a spending unit disposes of planned budgetary means (salaries, expenditures for material and services, capital expenditures and repayment of the compensation to former owners).
32 V Economic and structural developments and reforms - Additional Questions - Article 22 of the Law on restoring of taken away property rights and compensation, provides that compensation is paid to former owners–heirs in annual installments, the payment of which is due on 15 July of each year, on the basis of final decisions, submitted to the Compensation Fund by 31 December of preceding year, depending on the availability of means in the Compensation Fund, until their final repayment. Schedule of repayment of the compensation to former owners who have acquired that right on the basis of final decisions of the Commissions, is determined by the Government of Montenegro for each year. From the date of entry into force of the Law on restoring of taken away property rights and compensation, between 8 April 2004 and 31 December 2009, the Fund was delivered and submitted the total of 1003 final decisions by the Commissions, the total value of which amounts to 175,294,391.41 EUR. From mentioned amount, from the date of entry into force of the Law until 31 December 2009, the Fund repaid in cash the amount of 17,320,052.08 EUR to former owners on the ground of compensations determined by final decisions. Provisions of the Article 25 of the Law set out, amongst other, that the compensation may be repaid in bonds, if so requested by former owner. In the period from year 2006 until April 2007, on the basis of the Decision on I-st Issue of Bonds of the Republic of Montenegro on the basis of compensation to former owners, the Compensation Fund’s bonds F0001 were sold in the amount of 26,330,466.00 EUR, by which amount the liability of the Fund toward former owners was reduced. In the period between the second half of year 2007 until the end of year 2009, based on the Decision on II-nd Issue of Bonds of the Republic of Montenegro on the basis of compensation to former owners (OG RMN 52/07), the bonds F002 in total amount of 73,510,032.00 EUR were issued, while 75,121,814.00€ were realized, i.e. sold. By the Decision on conditions and procedure of redemption of the claims of Montenegro by the citizens’ foreign currency savings bonds and by bonds of former owners on the basis of compensation for taken away property rights (OG MN 17/08 and 48/09), the legal and physical persons were given the opportunity to redeem their claims by bonds F002 of the restitution in total value of 12,515,596.00 EUR. Government of Montenegro – Ministry of Finance also redeems bonds issued on the basis of compensation, so that, by 31 December 2009, it redeemed the bonds in the value of 17,151,719.00 EUR. Provisions of the Article 25 of the Law, entitle former owner to use bonds, amongst other purposes, for payment of their tax liabilities which are the revenue of the Republic. On such ground, since starting of the implementation of the Law until 31 December 2009, the customs duty in the amount of 162,686.00 EUR was settled, while tax was paid in the amount of 51,149.00 EUR with the Tax Administration. The value of bonds F002 which is irreversible, and by which the liability of Fund towards former owners as of 31 December 2009 could be reduced is 30,747,322.00 €.
9. (Ref. to Q. 9): Pleas answer to the following questions: Is there an adequate flow of revenue for municipalities in order to finance their competencies? Is there a mechanism of redistribution of resources among the municipalities? Is the central budget expected to finance municipalities? If so, according to which criteria?
The system of the local self government in Montenegro consists of: - Historical Capital Cetinje - Administrative Capital Podgorica - 19 municipalities
33 V Economic and structural developments and reforms - Additional Questions - Rights and obligations of local self government are defined by provisions of two systemic laws, as follows: - Law on Local Self Government - Law on Financing of the Local Self Government
Law on Financing of the Local Self Government defines rights and obligations of the local government in the area of finances. Provisions of this law, amongst other, regulate sources of financing of the units of local self government, under following chapter of mentioned law:
II Sources of Funds – Sources of funds of municipalities are the following: - Own funds - Common funds - Equalization fund - State Budget funds
Own Funds of the units of local self government, according to the provisions of the Law are the following: 1. municipal taxes, in accordance with this Law; 2. tax on games of chance and entertainment, in accordance with special law; 3. fees for use of municipal roads, in accordance with special law; 4. residence stamp duty in accordance with the special law; 5. local administrative stamp duties, in accordance with the special law; 6. local communal stamp duties, in accordance with special law; 7. fees for use of buildable land and fees for development of buildable land, in accordance with special law; 8. fee for protection and promotion of environment, in accordance with special law; 9. revenues from assets owned by municipality and income from property rights; 10. revenues from companies and other legal persons owned by the municipalities, i.e. in which the municipality holds stakes or equity; 11. monetary fines imposed in the procedure on misdemeanors, as well as property gain confiscated in such procedure; 12. revenues from concession fee for carrying out of communal activities and revenues from other activities subject to concession which the municipality may conclude in accordance with the law; 13. revenues realized by local government authorities, services and organizations in exercising of their activities; 14. revenues from interest rate on deposits; 15. revenues from self-contributions introduced for the territory of respective municipality; 16. revenues resulting from donations and subsidies and 17. other revenues set out by the law. Common revenues of the units of local self government, according to the provisions of the Law, are the following: 1. revenues from the tax on income of physical persons, 2. revenues from tax on sale of real estate, 3. Revenues from concessions fees and other fees for use of natural resources subject to award by the State. 10% of revenues realized on its territory on the basis of the tax on income of physical persons belongs to municipality. By exception, Historical Capital receives 15% of the revenues from tax on income of physical persons realized on its territory. Through the authorized payment system bearer the funds are paid directly to municipalities’ budget accounts. 50% of revenues from tax on sale of real estate realized on its territory belong to the municipality. 30% of the revenues from concession and other fees (hereinafter referred to as: fees) for use of natural resources located on respective
34 V Economic and structural developments and reforms - Additional Questions - municipality’s territory. Natural resources include: forests, waters, watercourses, mineral resources, sand, gravel, and stone.
III Financial equalization of the municipalities
Financial equalization, or leveling of financing of municipalities is effected through Equalization Fund (hereinafter referred to as: the Fund). Fund’s means are provided out of revenues originating from - tax on income of physical persons to the amount of 11% of total revenues collected from such tax; - tax on sale of real estate to the amount of 20% of total revenues collected from such tax. Through the authorized payment services bearer the funds are credited separately to the special account of the Fund. The right to use Fund’s resources belongs to those municipalities whose fiscal capability per inhabitant in the year preceding the year for which the fiscal equalization is effected has been lower than the average fiscal capability per inhabitant for all municipalities. Municipality’s fiscal capability as mentioned in previous paragraph is defined as an aggregate amount of local fiscal revenues (hereinafter referred to as: local revenues) and common revenues from taxes and fees. Fiscal equalization of municipalities is carried out on the basis of following criteria: 1. fiscal capability of the municipality and 2. budgetary needs of the municipality. In fiscal equalization criteria participate in proportion 90% : 10%. By application of the criteria of fiscal capability of the municipalities, fiscal equalization is made in two stages. First stage of fiscal equalization consists of leveling of common revenues of municipalities per inhabitant, as follows: - tax on income of physical persons to the amount of average of revenues collected on that basis per inhabitant for all municipalities, - tax on sale of real estate to the amount of average of revenues collected on that basis per inhabitant for municipalities entitled to use Fund’s resources, - fees for use of natural resources to the amount of average of revenues collected on that basis for municipalities entitled to use Fund’s resources, Second stage of fiscal equalization consists of leveling of standardized local revenues of the municipality per inhabitant with the averagely collected revenues of all municipalities on such basis per inhabitant in the year preceding the year for which equalization is performed, up to the amount of resources remaining after the first stage of equalization. Standardization of local revenues is effected by the Ministry of Finance by application of average tax rates for all municipalities. The municipality with less than 3,000 inhabitants, the amount obtained by application of first and second equalization stages is increased by applying the coefficient 2.00. Fiscal equalization by application of the criterion of budgetary needs is carried out in the following manner: - 30% of the resources is distributed as fixed to the municipalities which have acquired the right to use of the Fund’s resources and - 70% of the resources are distributed on the basis of the area and length of local roads of municipalities which have acquired the right to utilize Fund’s resources in proportion 50% : 50%.
IV Conditional subsidies of the state budget For financing of investment projects of particular interests for the municipality or several municipalities, municipality is entitled to utilize conditional subsidies from the state budget. The right to use conditional subsidies belongs to the municipality which has adopted multiannual
35 V Economic and structural developments and reforms - Additional Questions - investment plan. Following items are particularly subject to defining by multiannual investment plan: capital requirements (list of all needs for achieving optimized level of public services), capital procurements (assets and equipment), priority influences on environment, effects on the budget, sources of financing and justification for each project included in the plan. Multiannual investment plan is adopted for the period of five years. For conditional subsidies, the municipality may be credited with the maximum of 50% of the amount of funds foreseen for realization of investment project. The amount of conditional subsidies is determined depending on the level of revenues collected on the basis of the fee for buildable land development in the municipality per inhabitant in relation to the average of such revenues for all municipalities in the year which precedes the realization of the investment project, as follows: 1. if the revenues of the municipality per inhabitant in comparison to the average of revenues collected by all municipalities are lower than 50%, the municipality shall be entitled to conditional subsidy in the amount of up to 50% of the value of the investment project; 2. if the revenues of the municipality per inhabitant in comparison with average revenues collected by all municipalities amount to 50% - 70%, the municipality shall be entitled to a conditional subsidy in the amount of up to 35% of the investment project value; 3. if the revenues of the municipality per inhabitant in comparison with average of collected revenues of all municipalities amount to 70% - 90%, the municipality is entitled to conditional subsidy in the amount of up to 20% of the value of investment project; 4. if the revenues of the municipality per inhabitant in comparison with the average of revenues collected for all municipalities exceed 90%, the municipality is entitled to conditional subsidy in the amount of up to 10% of the budgeted value of investment project. Government of Montenegro decides on allocation of conditional subsidies, following the proposal of the Ministry of Finance.
10. (Ref. to Q. 10): Please indicate the main objectives, developments and achievements as regards budgetary policy.
Activities concerted towards quality improvement of the public finances in Montenegro primarily through implementation of budget policies during most recent decade may in principle be divided into two complexes. The amendments or supplements of the legislative framework constitute the first segment, while the second segment consists of implementation of various activities directed towards improvement of the quality of work and procedures related to programming and realization of public finances. In the area of legislation relevant for raising of the quality of public finances, the following legislative act deserves particular attention – Amendments of the Law on Budget, whereby the »organic« Law on Budget adopted as early as in year 2001, was supplemented. Mentioned law prohibited spending of any amount of funds as well as their use in the manner other than the one provided by the adopted Annual Budget Law for the respective year, whereas the use of funds in excess of the allowed was sanctioned as a criminal offence. In the year 2007 Amendments of the Law on Budget were passed, the integral part of which became previous Law on Public Debt; it defined the integration and the transformation of the extra-budgetary funds into state funds; detailed procedure was prescribed for adoption of local self-government units budgets as well as for control of spending of the funds at the local level; the implementation of Capital Budget was defined etc. With adoption of the Law on Amendments of the Law on Budget with the part related to debt and cash management, including guarantees and credits, the Law on Borrowing and Public Sector Debt Management ceased to be effective. Main provisions of the new Law related to borrowing and debt and cash management foresee that the Government shall decide on borrowing and issuing guarantees in accordance with the annual laws on budget, and that the decisions on borrowings and guarantees shall be passed in form of the framework decision which shall encompass all borrowings to be realized during the year, as a result of which there shall be no need for individual approval in each specific case of borrowing.
36 V Economic and structural developments and reforms - Additional Questions - The state may borrow up to the designated annual level of borrowing for the purpose of financing of the expenditures of the state budget in accordance with the annual budget law, redemption of the state debt, maintenance of liquidity, protection from risk by entering into swap agreements, and agreements on purchase of derivatives, financing of other needs in line with the law. Debt management strategy defines the general program of borrowing for the period of three years, guidelines for risk assessment for borrowings, guidelines for debt management, cash management, management of guarantees and borrowings as well as other issues of consequence for debt management. Functioning of sustainable health and pension system is ensured through integration of extra- budgetary funds in the system of State Budget – since year 2008, receipts and expenditures of 5 extra-budgetary funds are planned as integral parts of the State Budget. In such a way the transparency of the budget and the control of spending of the budgetary means are ensured as well as, simultaneously, the liquidity. By virtue of the amendments of the Law on Budget the budget calendar was modified, in a way that the time limits for preparation of the budget were changed, the control of the local self- government budget preparation is rendered stricter and the Article of the Law related to cash deficit/surplus calculation methodology was modified in accordance with the GFS M2001 methodology of International Monetary Fund. The preparation of the new Law on Control of State Aid, harmonized with EU regulation is in course. Adoption of mentioned law is expected to take place in first quarter of year 2009. Amendments of the Law on Internal Financial Audit are also adopted, which provide formation of special units of internal audit within relevant ministries. Through planning and execution of annual budget laws of Montenegro, the following budget policies are being implemented: · Implementation of mid-term budget framework The precondition for outlining and implementation of the mid-tem budget framework is the reform of the process of preparation and planning of the budget and introduction of financial limits (ceilings) for budget beneficiaries over multiannual period. Budget appropriations for multiannual period shall be based on the strategic documents of the Government and of the separate relevant Ministries according to the fiscal framework for total public spending. In such manner the “descending” (“from the top down”) method is introduced in the process of budget planning and preparation (as opposed to previous “ascending” method). The implementation presupposes setting the limits for the mid-term period in cumulative amount, according to the economic classification and by budget beneficiaries, while the detailed overview of costs shall be specified by annual budget laws. Key advantage of introduction of mid-term budget framework reflects in the stable and sustainable fiscal policy, increased capacity for future budget effects/results regulation and improving potential of the Government to allocate resources within the complex of the programs and organizational units, in line with its policy and priorities. · Continuation of implementation of the Capital Budget of MN in the period 2010 – 2013
The formation of the database for all projects connected with the budgets is planned. It shall serve to achievement of appropriate fiscal risks analysis, as well as to improve the decision making process in setting priorities. Adoption of the new law on concessions and public-private partnership shall represent the significant regulatory framework for management of one portion of investments.
· Complete implementation of program budget
In the implementation of the program budget in Montenegro it was opted for the program- budget model which reflects the main activity (program) or group of activities (sub-programs), realized by the spending units. Two levels of application of program-budget are introduced, which are represented by programs and by sub-programs. In the program-budget reform the logical program classification is implemented for the entire budget, while the IT system is undergoing preparation for monitoring and execution of the budget according to the program structure.
37 V Economic and structural developments and reforms - Additional Questions - Since the year 2005 the gradual changeover from the linear to program-budget is being implemented. Full implementation of the program budget including indicators and full application of the “descending” method in the process of budget preparation and planning is foreseen within the mid-term. Government of Montenegro adopted the Decision on the manner of drafting and on the content of the program-budget by which it sets out the method of drafting and content of the program-budget to be prepared by spending units, for the purpose of planning of the annual law on budget, as well as the manner of submission of the Report on realization of the program-budget. Program budget of spending units in the annual law on budget of Montenegro contains in its: (a) Normative part - Title of the spending unit, - Title of the program and - Unique identification number (organizational code ) (b) Reasons - Title of the spending units, - Mission statement, - Program title - Unique identification number (organizational code ) - Program description, - Sources of financing. Within the mid-term framework between years 2011-2013 following budget policies shall be implemented: - Creation of more flexible position of the Government in devising of the budgetary spending which shall primarily reflect in reduction of mandatory obligations in respect of discretionary spending; - Strict employment policy directed towards rationalizing of the employees’ number. Total number of employees in the institutions financed from budget is 42.5 thousand including trainees and employees working under contract on services; - Showing the transfers according to the economic classification – promotion of transparency in the control of public resources spending; - Establishing of the basic macroeconomic rules (level of current spending, capital spending, deficit and public debt); - Debt management strategy – in the first place regular servicing of all liabilities, securing of resources for financing of deficit in years 2010 and 2011 and decrease in nominal amount of debt starting from 2011.
11. (Ref. to Q. 11): Please provide more detailed answer on relation and interaction between government levels in budget management.
Montenegro public finances structure consists of: - Budget of the Government of MN - Republic Fund for Pension and Disability Insurance - Republic Fund for Health Insurance - Employment Office of Montenegro - Compensation Fund - Local self-government’s budgets (Historical Capital Cetinje, Administrative capital Podgorica and 19 municipalities ) Organic Law on Budget regulates adoption of budget, records and budget management, preparation and planning of the budget, execution of the budget of Montenegro, budget of municipality, loans and guarantees, internal control, budget accounting, State Treasury, budget operations and internal audit. Annual State Budget law for fiscal year is adopted by the
38 V Economic and structural developments and reforms - Additional Questions - Parliament. Decision on the budget of the municipality for fiscal year is adopted by municipal council (assembly). Ministry of Finance concludes the agreement with the Central Bank of Montenegro for carrying out of the banking operations on behalf of the state. Municipalities and independent regulatory bodies conclude the agreement with Central Bank on carrying out of the banking operations. Records of receipts and expenditures of the municipality budget are carried out in accordance with the provisions of the Organic Law which regulates records keeping of the State budget. Responsible person in the municipality carries out the management of the municipality budget in the manner prescribed by the Organic Law for the State Budget management. Planning of the state budget is based on the economic growth projections, macroeconomic stability, economic policy, laws and other regulations. On the basis of the Government decision on objectives and guidelines for fiscal policy, in the month of May of the current year the Ministry of Finance issues specialist instructions for preparation of the budgets of spending units and budgets of local self governments for the future fiscal year. Specialist instructions contain: essential economic parameters, instructions, guidelines and time limits for preparation of the budget, framework amounts of expenditures for each spending unit and recommendation for framework amount of expenditures of local self-governments, on the basis of which the spending unit and unit of local self-government independently plan their expenditures, as well as the projection of the next year’s capital budget with estimation of spending of current and capital budget for future three years, on the basis of guidelines and objectives of the fiscal policies determined by the Government. In the process of budget planning, the spending unit submits the application to the Ministry of Finance for allocation of budget resources by the end of July of current for the following fiscal year. Based on assessment of receipts and submitted application for allocation of budget resources, the Ministry of Finance by means of the draft law on the state budget, proposes the expenditures for spending units, and, should in such case a deficit occur, establishes sources of funds for financing it. Should in the process of considering on the draft law on the state budget disagreements arise between the Ministry of Finance and responsible persons in the spending units, the Ministry of Finance shall prepare the final draft for consideration in the Government (session). Ministry of Finance prepares the draft law on state budget and submits it to the Government in the month of October. The competent body of the municipality prepares the draft of the decision on the municipality budget and submits it for consideration to the Ministry of Finance, by 15th November. Competent body of the independent regulatory authority adopts the proposal of the financial plan together with the plan of activities for the next year as well as designates the representative of the independent regulatory authority who shall participate in the respective procedure before the Parliament. The financial plan proposal and the act on designation of the representative are submitted by competent body of the independent regulatory authority to the Ministry of Finance by 30th September of current year. The proposal of the state budget law is adopted by the Government and submitted to the Parliament in month of November. Proposal of the decision on budget of the municipality is adopted by the competent municipality body and submitted to the municipality’s council by the end of the month of November. Board of Directors of the state fund adopts the draft of the fund’s budget for next fiscal year and submits it to the Ministry of Finance by the end of the month of August. Prior to adoption of the proposal of the decision on municipality budget, the competent municipality body is obligated to obtain the opinion of the Ministry of Finance to proposed level and structure of spending, salaries policy, capital expenditures and sources of financing, as well as the level of surplus, or deficit. The overviews of planned receipts and expenditures for three subsequent years, including overviews of multiannual commitments, multiannual expenditures and investment programs are submitted for consideration to the Parliament, i.e. municipal council. together with the proposals of the law on state budget and of the decision on municipality budget, Together with the proposal of the law on state budget, the Parliament is presented proposals of the financial plans with plans of activities for the next year of the independent regulatory bodies, for their adoption. Responsible person in the municipality has such authorities in preparing and
39 V Economic and structural developments and reforms - Additional Questions - planning of the municipality budget as those vested in the Minister of Finance in respect of the preparation and planning of the state budget. Local self-government system of Montenegro consists of: - Historical capital Cetinje - Administrative Capital Podgorica - 19 municipalities.
The rights and obligations of local self-government are defined by the provisions of two systemic laws, as follows: - Law on Local Self-government - Law on Financing of Local Self-government Law on Financing of Local Self Government regulates rights and obligations of the local self governments regarding financing. Provisions of this law, amongst other, define sources of financing of the units of local self-government within following sections of the mentioned law: Sources of Means – sources of means of the municipalities are the following: - Own sources - Common revenues - Equalization Fund - State Budget funds The Law on Financing of Local Self government sets out the structure of the distribution of common revenues between the State Budget and the local government. Also, this law determines the conditions for utilizing of the Equalization Fund sources, as well as utilizing of the conditional subsidies from the State budget. By amendments of the “organic” Law on Budget from year 2007, earlier extra-budgetary funds have obtained the status of state funds and became treated as spending units within the Budget of Montenegro, starting from the Law on Budget of Montenegro for the year 2009. In such manner, the transparency of the budget and control of spending of budgetary resources was achieved, together with the liquidity. However, reform and integration of the funds in the budget system has not been fully completed. Namely, the Compensation Fund and Employment Office are fully integrated within the system of the State Treasury, while the remaining three Funds function independently, although their receipts and expenditures are planned as the integral part of the Budget of Montenegro. Full integration of all funds within the system of State Treasury is expected to take place during next year. The commitments of Montenegro towards international organizations, primarily within the context of the EU integration process, require the establishment of new institutions which shall have the status of spending units within the budget of Montenegro. In the circumstances of the economic crisis and necessity of rationalizing of budget expenditures, the utmost account shall be taken of the need to prevent that the establishment of new institutions causes increase of current spending. To that purpose, the premises for accommodation of new institutions shall be provided for within the space being already in use by other public institutions, while the administration of the newly established institutions shall be provided for by re-assigning of the employees from relevant ministries and from other state institutions. The Law on Budget of Montenegro for year 2010 plans the establishment of following institutions: Within the competencies of the Ministry of Economy. - Administration for carbohydrates - Administration for Mining Within the competence of the Ministry of Maritime and Traffic: - Directorate for Railroads - Ports Administration
40 V Economic and structural developments and reforms - Additional Questions - Within the competencies of the Ministry of Labor and Social Welfare: - Labor Fund - Agency for Peaceful Resolution of Labor related Disputes Within the competencies of the Ministry for Protection of Minority and Human Rights: - Center for Development and Preservation of Minorities of Montenegro Within the competencies of the Ministry for Spatial Development and Protection of Environment: - Institute for Protection of Nature Development Fund, which, until year 2008 had the status of extra-budgetary fund, and in the period between 2008 -2009 became the state fund, shall since year 2010 not be included in the plan as the integral part of the budget of Montenegro, but shall be transformed in the Investment Development Fund of Montenegro and become a joint stock company owned by the state of Montenegro. Considering significant changes in Montenegrin economy (in the banking sector, capital market, economic development priorities and needs, overall economic environment, legislative framework) it became necessary to transform the Fund and adjust its objectives to further economic development and economic policy of the Government of Montenegro. Important justification for transformation also ensues from the current status of the Development Fund which is characterized by inconsistency with relevant legal regulation (recommendations of the SAI, need to comply with the provisions of the Law on Business Organizations with regard to form of business organization, incapacity to comply with relevant legislation regulating financial reporting, inadequate organizational structure and similar). Newly established entity shall have following goals which shall represent the grounds for future development of the Fund: 6. Support to realization of the infrastructural and environmental 7. Balancing of regional development 8. Support to the sector of micro, small and medium-sized enterprises 9. Realization of the process of privatization of the capital which still remains in the Fund’s portfolio 10. Realization of to-date’s placements
12. (Ref. to Q. 12): Please provide the following clarifications: What are remaining steps for complete reform and integration of the former extra-budgetary funds into the budget system? Please indicate steps taken so far. Please describe major activities to improve the management of extra-budgetary funds and, in particular, the Health Insurance Fund.
Since 1st January 2010 all state funds are included in the system of State Treasury; this means that the resources for operation of the funds are planned within the annual Law on Budget, and that final accounts are presented within the Final Accounts of the State Budget. By including of the state funds in the system of Treasury, the competence of adoption of financial acts was transferred from the competent bodies of the funds to the Parliament of Montenegro, whereby much higher degree of transparency in respect of the information related to revenues realized and resources spent by structure and by purpose is achieved on the side of the funds. - By including of the state funds in the Treasury system all revenues of the Republic are integrated in one point, which significantly contributes to: - More efficient cash management and improvement of liquidity of both State Budget and extra-budgetary funds; - Higher accuracy and efficiency of the consolidated reporting through more efficient processes of public revenues collection and payment of the liabilities of the state. By including the state funds in the Treasury system lawful appropriation of the revenues is ensured, that is, all revenues of the funds shall be used for financing of their activities, since the revenues of the funds shall have the treatment of special purpose revenues and shall serve
41 V Economic and structural developments and reforms - Additional Questions - exclusively for financing of the expenditures of the funds, while the lacking resources shall be provided from the general revenues of the State Budget.
13. (Ref. to Q. 13): Which are the authorities of the different government levels to generate revenues?
According to the “organic” Law on Budget, in line with international GFS 2001 classification, receipts of the budget cover revenues listed in the table below:
Economic classification D E S C R I P T I O N
7 RECEIPTS
71 Current Revenues
711 Taxes
7111 Tax on income of physical persons
7112 Tax on profit of legal persons
7113 Tax on property
7114 Value added tax
7115 Excise tax
7116 Tax on international trade and transactions
7118 Other republic taxes
712 Contributions
7121 Contributions for pension and disability insurance
7122 Contributions for health insurance
7123 Contributions for insurance against unemployment
713 Stamp duties
7131 Administrative stamp duties
7132 Judicial stamp duties
7133 Residence stamp duties
7136 Other stamp duties
714 Fees
7141 Fees for use of goods of public interest
7142 Fees for use of natural resources
7143 Ecology fees
7144 Fees for organizing of games of chance
7148 Road fees
7149 Other fees
715 Other revenues
7151 Revenues from capital
42 V Economic and structural developments and reforms - Additional Questions -
7152 Monetary penalties and confiscation of property gain
7153 Revenues realized by authorities in exercising of their activity
7155 Other revenues
72 Receipts from sale of property
721 Receipts from sale of non-financial assets
7211 Receipts from sale of real estate
722 Receipts from sale of financial assets
73 Receipts from repayment of credits
731 Receipts from repayment of credits
7311 Receipts from repayment of credits granted to other levels of government
74 Donations and transfers
741 Donations and transfers
7411 Current donations
75 Borrowings and credits
751 Borrowings and credits
7511 Borrowings and credits from domestic sources
7512 Borrowings and credits from foreign sources
The introduction of each of listed revenues, rates and amounts as well as the collecting authority are defined by special laws. Following the proposal of the Ministry of Finance or other relevant Ministry, the Government proposes the amendments of existing legislation or introduction of the new legislative acts which relate to generation of budget revenues, and submits such proposals to the Parliament of Montenegro for adoption. The Law on Financing of the Local Self Government defines rights and obligations of the local self- government in respect of financing. Provisions of this law, amongst other, define sources of financing of the units of local self-government within the following sections of the mentioned Law: Sources of revenues – sources of revenues of the municipalities are the following: - Own sources - Common revenues - Equalization Fund - Funds from the State Budget Own sources of the unit of local self-government, according to the provisions of the Law are the following: 1. municipal taxes, in accordance with this law; 2. tax on games of chance and entertainment games, in accordance with special law; 3. fee for use of municipal roads, in accordance with the special law; 4. residence stamp duty in accordance with special law; 5. local administrative stamp duties, in accordance with special law; 6. local communal stamp duties, in accordance with special law; 7. fees for use of buildable land and fees for development of buildable land, in accordance with special law; 8. fee for protection and promotion of environment, in accordance with special law; 9. revenues from property owned by municipality and revenues from property rights; 10. revenues from enterprises and other legal persons owned by the municipality; or in which the municipality holds stake or equity;
43 V Economic and structural developments and reforms - Additional Questions - 11. monetary penalties imposed in the procedure on misdemeanors as well as property gain confiscated in such procedure; 12. revenues from concession fees for carrying out of the communal activities and revenues from other activities subject to concession which the municipality might conclude, in accordance with the law; 13. revenues generated from exercising of their activities by municipal bodies, services and organizations; 14. revenues from interest rates on funds held in deposits; 15. revenues from self-contributions introduced for the territory of respective municipality; 16. revenues based on donations and subsidies and 17. other revenues as set out by the law. Common revenues of the units of local self-government, according to the provisions of the Law, are the following: 1) revenues from tax on income of physical persons 2) revenues from tax on sale of real estate, 3) revenues from concession and other fees for use of natural resources awarded by the State. Financial equalization, that is, leveling of the financing of municipalities is carried out through the Equalization fund. Resources of the Fund are provided from following revenues: - tax on income of physical persons in the amount of 11% of totally collected revenues on that basis; - tax on sale of real estate in the amount of 20% of revenues totally collected on this basis. Conditional subsidies of the state budget – For financing of investment projects which are of particular interest for one or several municipalities, the Municipality is entitled to use of conditional subsidies from the State Budget. Right to use of conditional subsidies belongs to the municipality which adopted multiannual investment plan. Each unit of local self-government, within its own competencies, may decide on introduction or suspending of specific forms of financing as defined by the Law on Financing of the Local Self- Government. In the same manner, it may, in accordance with special laws, decide on ranges of rates or level of amounts for specific sources of financing. However, units of local self-government do not have competence to introduce new or amend the existing legislation, where the only competent body is the Parliament of Montenegro.
44 V Economic and structural developments and reforms - Additional Questions - 14. (Ref. to Q. 15): Please provide quantitative indicators for share of administered/regulated prices and describe the strategy for completing price liberalisation, in particular in the energy sector.
Indicator of share in the spending of the household Table: share of consumption of electric power, coal and pharmaceutical products in total spending of the household
Share in total spending Share in total spending COICOP Title Year 2007 Year 2008
04.5.1 Electric power 3.47% 3.38%
04.5.4.2 Coal 0.09% 0.17%
06.1.1 Pharmaceutical products 1.43% 1.19%
Source: Monstat, Survey on household consumption Strategies of liberalization of prices in mentioned sectors, that is, further plans of regulating of prices in the Montenegrin market are as follows: Energy Sector According to the provisions of the existing Energy Law, Energy Regulatory Agency approves or determines: - prices of electricity, - prices for services of transmission and distribution networks for electricity, - price of electricity for losses in transmission and distribution network, - price of auxiliary services on transmission and distribution network and - price of services of supply of electricity. Draft of the new Energy Law provides that: (1) Agency shall approve prices: 1. of using of the transmission/transportation and distribution system, in particular for electricity and gas; 2. for storage of gas; 3. for auxiliary and systemic services and balancing; 4. and costs of connecting to the transmission/transportation and distribution system of electricity and gas. (2) Agency shall approve: 1. regulated tariffs for supplying electricity or gas to the tariff customers and tariffs for supplies to qualified customers by public supplier, which may be offered by other suppliers to qualified customers; 2. tariffs applicable by the supplier in last resort 3. tariffs for use of plants for LPG (TPG) and CPG (TNG); 4. fee for removal of jamming at identified entry or exit points of the gas transportation system, which is portion of the price (tariff) for transportation and transit of gas; 5. fee for the activities of market operator. Except for the above said, within the period of one year from the date of entry into force of this law, Agency shall determine the price of coal used for production of electricity.
Health Care area „Transparency within the context of forming of the prices and compensations for medical products a) Legislation applicable in the area of pricing of medical products
45 V Economic and structural developments and reforms - Additional Questions - 1. Law on medications (OG RMN 80/04 and OG MN 18/08) which sets out competencies in pricing of medications: Government of Montenegro determines the criteria for formation of maximum prices of medications, as well as the maximum prices of such medications. Ministry in charge of health care proposes the criteria for formation of maximum prices of medications and maximum prices of medications in cooperation with the Ministry in charge of economy. Ministry in charge of market related issues carries out the inspection supervision over prices of medications in circulation. Government of Montenegro adopted the Decree on criteria for formation of maximum prices of medications (OG RMN 50/2007) – Attachment 7 b) It is planned to amend the Decree in order to change the competence; Agency for medications shall be competent for approving the prices of medications according to the criteria defined by the Decree. Amendments of the Decree are expected by the end of March 2010. Government of Montenegro has decided to implement the model of referential prices, as one of the models of the prices control in the medications market, which is also applied in countries of the European Union.
15. (Ref. to Q. 16): Please explain why Employment Office data do not match with MONSTAT data. Please provide additional information on the following questions: Which have been the main sectors of job creation? How do you assess the relationship between economic growth and employment? Which are precisely the main steps taken/to be taken to improve the unemployment situation and/or the mismatch between labour supply and demand?
The competences of the Employment Agency and the MONSTAT, when it comes to data on the labour market are determined by law. In this regard, MONSTAT monitors and provides fact- oriented material for a more complete monitoring of the labour market in a broader sense (population, labour force, employment, unemployment, wages, etc.), which mostly obtains through a survey, while the Employment Agency keeps records on the registered unemployment. In the analysis of the labour market, the data of both institutions are used. It should be noted that in the framework of overall labour market reforms, the records for specific fields are upgraded and modernized, according to IT developments, new methodological requirements and international standards that allow more complete analysis and comparability. Thus, in the framework of the project Labour market reform and workforce development in Montenegro, a special attention was paid to the segment of the labour market records, primarily through the work on the methodological upgrading of the Labour Force Survey (LFS), as a basis for more complete monitoring of the situation in this field, and as a result in 2008 a new LFS was adopted, which has been conducted continuously, quarterly. Therefore, it is relatively short, one-year period of the implementation of a new Survey which basically represents a period of working out and finalizing the methods of its implementation and processing of the obtained data. During this period, certain elements of the Survey are especially reviewed, which includes: · selection of the sample in circumstances of present economic and structural changes, · interviewers trained to conduct the new Survey, · openness and willingness of respondents to realistically present their work - legal and material status, · determining the status, employed-unemployed in cases of: paid-unpaid work, work in agriculture, working time during the reference period, and so on.
46 V Economic and structural developments and reforms - Additional Questions - In addition, regarding the fact that the new Survey has been conducted just one year, an analysis of some labour market elements on the basis of this Survey cannot be conducted back for a period longer than one year due to methodological changes and therefore incomparability of the new with earlier surveys. When it comes to records of the registered unemployment, it can be said that the developed information system of the Employment Agency provides up-to-date, complete and accurate records on such persons. For this reason, in analyzing the labour market, when it comes to unemployment, the data from these records are often used. Due to methodological changes, and other specified circumstances, when it comes to unemployment there are some differences in data registered by MONSTAT and those of the Employment Agency. The labour market, for a relatively long period of time, is characterized by evident high demand of workforce. Thus, in 2004 the employers opened 30,778 job vacancies, while in 2008 there were 64,886 job vacancies. In comparison to previous years, in 2009 due to the impact of the global economic crisis the work force demand significantly decreased. 47,551 jobs were opened, which is by 26.72% less than in 2008. Observed by the type of job, 25.467 or 53.55% were the newly created jobs, and 22.084 or 46.45% were vacancies. Of the total number of advertised vacancies in 2008, 52.59% refers to the newly created, and 47.41% to the vacant jobs. Advertised vacancies Newly created jobs– vacancies - in 2006, 2007, 2008 and 2009 -
Advertised vacant Year Newly created jobs % Vacant jobs % positions
No. 1 2 3 4 5 6
1 2006. 48 913 26 197 53.56 22 716 46.44
2 2007. 63 977 33 412 52.23 30 565 47.77
3 2008. 64 885 34 125 52.59 30 760 47.41
4 2009 47 551 25 467 53.55 22 084 46.45
From the table above it can be concluded that the percentage participation of the newly created jobs in the total number of advertised vacancies, in the past four years, keeps approximately the same level.
47 V Economic and structural developments and reforms - Additional Questions - The following table provides an overview of the advertised vacancies by activities: Advertised vacancies by activities - in 2006, 2007, 2008 and 2009-
2006 2007 2008 2009 Field of activity No. Vac. % Vac. % Vac. % Vac. %
1 2 3 4 5 6 7 8 9
A. Agriculture, hunting and 1 592 1.21 500 0.78 698 1.08 1 418 2.98 forestry
2 B.Fishery 92 0.19 158 0.25 121 0.19 140 0.29
C. Electricity, Gas and 3 Water Production and 550 1.12 1 028 1.61 789 1.22 254 0.53 Supply
4 D.Construction industry 2 718 5.56 3 763 5.88 3 816 5.88 9 146 19.23
E. Wholesale and retail trade; repair of motor 5 vehicles, motorcycles and 13 119 26.82 19 597 30.63 19 598 30.20 9 459 19.89 personal and household goods
6 F.Manufacturing 4 736 9.68 6 331 9.90 6 142 9.47 3 422 7.20
7 G. Financial Intermediation 713 1.46 1 117 1.75 1 443 2.22 420 0.88
H. Activities related to real 8 estate, renting and 2 136 4.37 4 175 6.53 3 787 5.84 4 129 8.68 business
I. Public administration and 9 defense; Mandatory State 1 813 3.71 2 329 3.64 2 820 4.35 1 655 3.48 Social Insurance
10 J.Education 2 742 5.61 2 582 4.04 3 317 5.11 2 769 5.82
K. Health care and social 11 2 374 4.85 2 225 3.48 2 237 3.45 959 2.02 service
L. Other community, 12 social and personal 3 380 6.91 3 763 5.88 4 430 6.83 2 127 4.47 service activities
M. Private households 13 41 0.08 28 0.04 15 0.02 31 0.07 with employed persons
N. Exterritorial 14 0 0.00 13 0.02 5 0.01 7 0.01 organizations and bodies
O. Extracting ore and 15 1 281 2.62 949 1.48 1 143 1.76 427 0.90 stone
P. Transport, Storage and 16 2 662 5.44 4 413 6.90 4 449 6.86 2 366 4.98 Communications
17 R. Hotels and restaurants 9 964 20.37 11 006 17.20 10 076 15.53 8 822 18.55
MONTENEGRO IN 18 48 913 100 63 977 100 64 886 100 47 551 100 TOTAL=
48 V Economic and structural developments and reforms - Additional Questions - From the given review it can be concluded that the highest percentage of advertised vacancies refers to wholesale and retail trade, repair of motor vehicles and personal and household goods (from 20 to 30%), hotels and restaurants (from 15.5 to 20.4%), manufacturing industry (from 7.2 to 9.9%), other community, social and service activities (from 4,47-6,9%), construction (from 5,5- 19%), etc. In 2009, the wholesale and retail trade in the total advertised vacancies participated with 19.8%, hotels and restaurants with 18.5%, manufacturing with 7.1%, other community and service activities generated 4.4%, and the construction industry with 19, 2 %. The structure of the advertised newly created jobs given by activities outlines which sectors have created new jobs: · In 2009, the employers advertised a total number of 25.467 available newly created positions. Out of this number, 16.905 or 66.3% refers to services, while 5733 to wholesale and retail jobs or 33.9%, 4770 r.m. or 28.2% refers to hotels and restaurants, 2634 rm or 15.5% refers to activities related to real estate. To other services refers 3768 of the newly created jobs or 22.4%. · Uoblasti građevinarstva oglašeno je 6.674 novootvorena radna mjesta ili 26,2% od ukupnog broja novootvorenih radnih mjesta.In the field of construction industry, it was advertised 6674 newly created positions, or 26.2% of the total number of new jobs. · In the manufacturing sector, there were 1701 newly created jobs or 6.6% of the total number of newly created jobs.
The stabilization of macro-economic climate in the past few years, after many years of stagnation resulted in much more favourable trends in the field of employment. This is acknowledged through correlation between the generated GDP growth as the most integral indicator of favourable economic trends and the increase in the number of employees in the period in 2004 - 2008. GDP and Employment Treneg for 2004 – 20083
Stopa rasta društvenog bruto proizvoda Stopa rasta zaposlenosti
12
10
8
6
4
2
0 2004. g 2005. g 2006. g 2007.g 2008.g
Due to a set of already mentioned adverse circumstances, the employment in Montenegro, in the period 1990-2003 was in the phase of stagnation, that is, the number of the employed was decreasing, while later on certain dynamics in the employment growth was established, so that, according to MONSTAT in the mid-2007, in Montenegro there were 158.164 of employees, which means that the level of employment was the same as it was in 1990 (Table 2).
3 Data obtained by the Statistical Office of Montenegro -MONSTAT
49 V Economic and structural developments and reforms - Additional Questions - In the total number of employees, for the observed period, there was a significant increase in participation of women, regarding the fact that in 1990 it was 39.3%, while in 2007 it was 46.8%, which is in correlation with, in the same period, recorded decline in the participation of women in the total employment from 56.8% to 45.3%. Employment trends for 1990 – 2008 - ( Tab. 2)
No. of employees Share of women in the total number of No. Year employees in Total Women %
1 2 3 4 5
1 1990 159 384 62 673 39.3
2 1991 142 856 55 983 39.2
3 1992 133 587 53 046 39.7
4 1993 130 948 52 338 39.9
5 1994 128 797 51 083 39.7
6 1995 125 399 49 492 39.4
7 1996 125 194 49 356 39.4
8 1997 121 278 49 035 40.4
9 1998 118 273 48 252 41.3
10 1999 115 328 48 180 41.8
11 2000 113 784 48 725 42.8
12 2001 114 440 48 335 42.2
13 2002 113 827 48 604 42.7
14 2003 111 968 61 206 42.9
15 2004 143 479 61 553 42.8
16 2005 144 340 62 066 43.0
17 2006 150 800 64 596 43.1
18 2007 158 164 73 998 46.8
19 2008 166 221 73 469 44.2
Present deficits and a surplus in the labour force supply and demand, particularly emphasised in certain occupations, impose the need for the implementation of a series of programs in order to harmonize these relations, that is, adjust the labour force supply to its demand. In this regard it should be particularly noted the importance of education and training programs (courses and trainings, additional trainings, retraining, or specialization - from the fields of metal processing, handicrafts, agriculture, computer science, foreign languages, hospitality-tourism, shipping, etc.), which are implemented in accordance with the needs- requirements of employers or the interest shown by the unemployed.
50 V Economic and structural developments and reforms - Additional Questions - With the assistance of the Employment Agency in the past few years, on the average about 60 types of such programs have been carried out annually for a known employer or the labour market, which included 4500-5000 or about 15% of the unemployed. The implementation of other programs of the active employment policy contributed significantly to establishing of more favourable relations on the labour market Therefore: · implementation of the public works program, on average covers about 1500 unemployed persons per year; · program of co-financing the employment of trainees includes 1100-1200 persons; · through the support of the Employment Agency 6000-7000 persons per year find an employment on a seasonal basis; · program of micro and small entrepreneurs promotion, the so-called - Self- Employment Program, ensured co-financing of 9873 programs since 1999, and through their implementation enabled the employment for 15 928 persons; · Program Employment for You, which was implemented in 13 less developed municipalities as of 1st of September 2008, included about 3550 of unemployed persons. The Centres for information and professional counselling (Podgorica, Bar, Herceg Novi) are established as a part of the Employment Agency. The services of these Centres are aimed at providing information on career planning, the education possibilities in Montenegro, opportunities for retraining, additional trainings, courses and specializations, labour market and the employment opportunities. The ten-year review of unemployment trends suggests that despite crucial impact of transitional changes on structural discrepancies between the labour force supply and demand, regional differences in the unemployment rate and the emphasized process of migration from the underdeveloped towards developed areas, the unemployment is significantly reduced (Table-1). The number of unemployed persons at the end of December 2009 makes only one-third of the unemployed from the end of the base year 2000, and a more pronounced decrease in the number of unemployed persons started as of 2003. Also, it is important to note that, starting with 2005 the share of unemployed women in comparison to the male population was lower and that such trend continued until the end of 2009. Unemployment in the period 2000- 2009 (Situation on 31 December)T-1
Unemployment No. Year Total: Index Women % Index rate
1 2 3 4 5 6 7 8
1 2000. 73 673 100 44 513 60.9 100.0 27.88
2 2001. 74 829 101.57 45 408 60.6 102.0 28.32
3 2002. 74 254 100.79 45 108 60.7 101.4 28.10
4 2003. 70 559 95.77 40 102 56.8 90.1 26.70
5 2004. 59 383 80.60 31 142 52.4 69.9 22.47
6 2005. 49 319 66.94 23 536 47.7 52.8 18.66
7 2006. 39 421 53.51 17 995 45.6 40.4 14.91
8 2007. 32 059 43.52 14 278 44.5 32.1 12.12
9 2008. 28 704 38.96 12 897 44.9 28.9 10.80
10 2009. 30 169 40.95 13 704 45.4 30.7 11.42
51 V Economic and structural developments and reforms - Additional Questions - The reducing trend of unemployment was crucially affected by the process of continuous enhancement of the system infrastructure and the economic ambient in general, together with the efforts to maintain positive effects of the established political and macro-economic stability and even more pronounced orientation towards the development projects, which were accelerating economic growth. The Government of Montenegro significantly contributed to these developments through the program, institutional and financial support to employment, that is, consistent, coordinated by sectors and integrated approach to the employment policy, especially as of 2002. The process of achieving greater economic freedom and the system openness, liberalization of economic movements and market mechanisms functioning is intensified. The development of entrepreneurship and entrepreneurial initiatives has had a strong system support through the program of entrepreneurship promotion. By reducing the tax burden on earnings, the entrepreneurial activity of employers and the new employment were encouraged, without endangering optimal inflow of budget revenues. The privatization plans were implemented with a pretty good interest on tenders, implying that the process of ownership transformation has entered its final phase. In the real sector, the growth has been achieved in the construction, transport, tourism, trade sectors. In the framework of sector policies, the development priority of agriculture and tourism was implemented. Evidentan je bio vrlo dinamičan rast prihoda od poreza u fiskalnoj sferi i vrlo dobar trend u finansijskom sektoru sa porastom prometa na finansijskom tržištu.AA very dynamic growth of tax revenues in the fiscal sphere and a very good trend in the financial sector with an increase in turnover on the financial market was also evident. The process of preparing the new system, organizational and methodological solutions, which are expected to ensure compatibility and comparability of statistical evidences with the international standards, is initiated. Simultaneously, the labour market reform is conducted and greater labour market flexibility was supported by means of enhancing labour legislation and the strategic employment policy framework, while the intensive development and the implementation of programs, measures and activities of labour market institutions contributed to an active employment policy framework.
52 V Economic and structural developments and reforms - Additional Questions - 16. (Ref to Q. 17): Please provide the following additional information: i. An overview of the privatisation process since year 2000;
An overview of the generated sale of shares and assets during the privatization process in the period as of 2000 is given in the following tables. TENDER SALES
Date of signing the No. Company name Buyer Agreement
2001
Rudnik mrkog uglja-Berane 1. 22.04.2001 Gradex HPB Ltd, Slovakia (Coal Mines - Berane)
HTP ”Budvanska rivijera’ -Hotel 2. 28.07.2001 HIT, Slovenia “MAESTRAL”
3. “Slide Bearings Industry” Kotor 20.12.2001 DAIDO Metal Company, Japan
2002
Sibinergoresurs, 4. HTP ”Budvanska rivijera”-Hotel “AS” 24.05.2002 Moscow
“Strip cold-rolling mills” 5. - TECHNOSTEEL G.m.b.H., Switzerland HK Ironworks Nikšić
HTP ”Budvanska rivijera” Hotel Moskovskaja Trastovaja Grupa 6. 8.10.2002. “4 JUL”Petrovac Moscow, Russia
AD“Jugopetrol“- 7. 10.10.2002 HELLENIC PETRLEUM, Greece Kotor
IRVA a.d. 8. HTP” MIMOZA”-Tivat 17.10.2002 Belgrade
2003
Nova Ljubljanska 9. “Montenegrobanka” AD Podgorica 9.05.2003. Banka,Slovenia
HTP “Budvanska rivijera” -Hotel Unis Tours 10. 9.06.2003. “MONTENEGRO A” Banja Luka
HTP “Budvanska rivijera” -Hotel Pemi Bau 11. 9.06.2003. “RIVIJERA” –Petrovac Berlin
HTP ”Budvanska rivijera’ Hotel Imobilia 12. 9.06.2003 “BELLEVUE” Budva
53 V Economic and structural developments and reforms - Additional Questions -
Date of signing the No. Company name Buyer Agreement
HTP ”Budvanska rivijera” Hotel Maestraltours 13. 7.08.2003 “MEDITERAN” Budva Budva
HTP ”Budvanska rivijera” Hotel 14. 8.07.2003 Hotel Apartmans Brunsweek “MONTENEGRO”
2004
Podgorica Aluminium Plant - - 15. Šišković Ltd,Danilovgrad „Lime factory Spuž«
HTP"Budvanska rivijera"- - - 16. Hotels Group Montenegro Stars Hotel “Splendid”
HTP"Boka"- - - Hunguest Hotels, 17. Hotel “Topla” Hungary
HTP"Boka"- - - Hunguest Hotels, 18. Hotel “Centar” Hungary
HTP"Boka"- - - 19. JT Investment Limited,Israel Hotel “Rivijera”
HTP”Miločer”- - - Springer&Sohns, 20. Hotel “Panorama” Austria
UTIP”Crna Gora”- - - 21. Burić Žarko Hotel “Podgorica”
HTP”Budvanska rivijera” –Hotel - - 22. Bepler&Jacobson ”Avala”
AD “Livnica” Niksic - - 23. Gatti S.p.A. Italia (Foundry - Nikšić)
2005
„Telekom Crne Gore“ AD Podgorica - - Matav RT 24. (Telecom of Montenegro) Hungary
- - 25. AD “Centrojadran, Bar Fadis Ltd, Bar & YU Lovćen Ltd.., Bar
- - Société Générale, Paris, 26. „Podgorička banka“ a.d., Podgorica France
- - 27. «Aluminium Plant» Podgorica Salamon ent., Moscow; Russia
- - 28. „Bauxite Mines“ AD Nikšić Salamon ent., Moscow; Russia
54 V Economic and structural developments and reforms - Additional Questions -
Date of signing the No. Company name Buyer Agreement
HTP „Korali „Bar Consortium:
36,93 % of the share capital with the - - Atlasmont, 29. capital increase PIF Trend,
NFD Holding,
2006
Consortium:
„Atlasmont Banka“ Podgorica 30. „Pljevaljska banka“ AD Pljevlja - - PIF „Atlasmont“Podgorica
„Fininvest“ Ltd, Podgorica
„Montenegro modern shoes“ AD 31. - - Mileta Brajković Cetinje
Consortium: HTP “Budvanska rivijera“AD - - - 32. - Pletzer Leasing Austria Hotel „Vile Oliva“ - Montemlin Šajo, Montenegro
33. „Jadran“ AD Perast - - Imobilia Ltd. Budva
34. UTIP „Crna Gora“AD Podgorica - - Normal Tours Ltd. Podgorica
MN Specialty Steels 35. „Ironworks „ AD Nikšić - - Great Britain
36. „Crnagoraput“ AD Podgorica - - Strabag AG Austria
2007
37. HTP“Boka“ AD Herceg Novi - - „Vektra Montenegro„ Ltd. – Podgorica
Igalo Rest, Recreation and Health Consortium: 38. - - Centre „Igalo“ AD Igalo PIF „ HLT“ and HTP „Primorje“ –Tivat
39. AD “Radvent” Nikšić - - „MN Specialty Steels“ Ltd. –Great Britain
40. MMK “Standard” AD Nikšić - - „Comp Comerc“ Ltd. – Nikšić
41. Mill “Muharem Asović” AD – Nikšić - - „Agroglobe“ Ltd. –Novi Sad
"4. novembar" Metal Parts Factory AD - - 42. Mojkovac „BT International „ Ltd. –Bern-Switzerland
55 V Economic and structural developments and reforms - Additional Questions -
Date of signing the No. Company name Buyer Agreement
"4. Novembar" (Earmarked product - - 43. factory AD Mojkovac) „BT International „ Ltd. –Bern Switzerland
2008
City small bakery and a medical clinic - - 45. ''LD GRUP'' - Nikšić – Nikšić
46. ''Kuside-1'' Nikšić - - MI ''Goranović'' - Nikšić
47. ''Kuside-2'' Nikšić - - MI ''Goranović'' - Nikšić
AD “Polimka“ Berane -64,1624% of 48. - - „KIPS“„ Ltd. – Podgorica the share capital
2009
„EPCG“ AD Nikšić-
49. (Electric Power Industry of 3.09.2009 A2A S.p.A.- Italia Montenegro) 18.3% of the share capital
Lovcen osiguranje AD, Podgorica- 50. (Lovćen Insurance) - 41, 1402% of the 18.12.2009 Triglav DD. Slovenia share capital
AD „Marina “ Bar-54,3464% of total Konsortium: AS Latvijas Krajbanka and SIA 51. 29.12.2009 capital Multikapitals , Latvia
The long-term lease of land on the 52. peninsula Luštica-Municipality of Orascom Tivat
90% of the share capital of the 53. company “Luštica Development "ad Orascom Podgorica
Long-term lease of land on the North star LLC Podgorica and Equest Capital 54. peninsula Luštica-Municipality of Limited Jersey Herceg Novi
AUCTION SALE
No. Business premises Date Buyer
2000
56 V Economic and structural developments and reforms - Additional Questions -
No. Business premises Date Buyer
AD”Verušanka” Podgorica 1. 09.06.2000. - / Business administration -Podgorica/
AD”Knjigopromet” Bijelo polje 2. 09.06.2000. - / Warehouse Building Supplies /
AD “Tehnomarketi” 3. 05.07.2000. - /Commercial space »Mimoza«/
DD “Gross market”Podgorica 4. 28.07.2000. - /business premises-Nikšić/
AD “Drvoimpex-mobile” 5. 28.07.2000. - / business premises -Ulcinj/
AD “Adriatic Shipyard” 6. Bijela 04.10.2000 /location »kuća Krstića« /
HTP “Ulcinjska rivijera” 7. 04.10.2000 /restaurant »Tri ribara«/ (The Three fishermen)
HTP ”Budvanska rivijera” 8. /Restaurant”Sunce”/ 04.10.2000
HTP ”Ulcinjska rivijera”
9. /Restaurant “Tri ribara”/ (The Three fishermen) 04.10.2000
DD “Gross market”Podgorica 10. 04.10.2000. - /commercial space-Podgorica/
AD”Montenegropromet” Budva 11. 01.11.2000. - /Department Store of Bar/
AD”VUP” Danilovgrad 12. 06.12.2000. - /fcommercial space – Grain elevator/
AD”Eko mlijeko” Bijelo Polje 13. - - /41,35% of the share capital
2001
57 V Economic and structural developments and reforms - Additional Questions -
No. Business premises Date Buyer
Rent-a-vile-Herceg Novi 14. 15.01.2001. Komnen Stanišić (Property of the Government of Montenegro)
“Drvoimpex-Totoši” Ulcinj 15. 24.01.2001. Filip Markolović /60,65% of capital /
“Mašinopromet-Commerce” Omnioil LTD.. 16. 24.01.2001. /50,99% of capital/ Podgorica
DD”Južni jadran” Herceg Novi “Carine” Ltd.. 17. 24.01.2001. /26,29% of the capital/ Podgorica
AD “Drvoimpex-prehrana” Podgorica Prelja Noca 18. 14.02.2001. /commercial space-Totoši/ Škrelja
AD “Agroprodukt” Nikšić 19. 14.02.2001. Timislav Lalićević / business premises in Nikšić/
AD”Napredak” Kotor 20. 14.02.2001. Snežana Kovinić /Supermarket located in Tivat/
TP “Izbor” DD Bar 21. 30.03.2001. Veljko Jakovljević / Supermarket located in Sutomore/
AD”Napredak”Kotor 22. 30.03.2001. Dragan Dudić /Building of an old printing shop-Kotor/
AD “Zetatrans” Podgorica 23. 13.06.2001. - /facility-lokal 1/
TP “Izbor” DD Bar “IN nekretnine” 24. 20.06.2001. /Ground floor of the Department Store in Virpazar/ Podgorica
AD”Duklja-bakery” Niko Ivanović and Mirjana 25. 01.08.2001. /Located in Podgorica/ Paunović
AD”Montex”-Nikšić Internorma 26. 01.08.2001. /business premises in Podgorica/ Podgorica
AD”Jasikovac” Berane 27. 01.08.2001. Tihomir Lazić /Store /
AD “Eko-lina” Bijelo Polje 28. 01.08.2001. Miodrag Petrić /Supermarket «Uzor«/
HTP “Boka” Herceg Novi 29. 01.08.2001. Nada Živanović /Catering facility «Konoba»/
58 V Economic and structural developments and reforms - Additional Questions -
No. Business premises Date Buyer
Korporacija “Jakić” AD Pljevlja Primat Ltd.. 30. 09.08.2001. /land in Podgorica/ Podgorica
AD “Vunko” Bijelo Polje 31. 09.08.2001. Miodrag Madžgalj /location – premises of the »Workers' House”/
AD “Gorica” Podgorica “Euromix Consulting” 32. 09.08.2001. /land/ Podgorica
AD “Štampa” Podgorica 33. 10.10.2001. Snješana Damjanović /commercial space in Podgorica/
AD”Mill- MuharemAsović” “Tilija” 34. 10.10.2001. /Storage space in Pljevlja/ Pljevlja
“Korporacija-Jakić” 35. Pljevlja 10.10.2001. - /business premises in Novi Sad/
HTP ”Budvanska rivijera” 36. 10.10.2001. /Caffe Bar “Castello” Petrovac/ Moskovstvaja Trasovaja Grupa,Russia
TP”Izbor” DD Bar 37. 28.11.2001. Muhamed Čantić /Supermarket located in Pečurice/
“Industrijaimpex” Podgorica 38. 28.11.2001. Milan Jovetić / business premises in Cetinje/
“Industrijaimpex” Podgorica 39. 28.11.2001. “Ekos banka “ AD, Podgorica / business premises in Belgrade/
2002
HTP ”Boka” Herceg Novi 40. 18.01.2002. Borisav Đikanović /Café bar “Hercegovina”- Lepetani/
AD”Eko-flora” 41. 18.01.2002. Denis Kanalić Bijelo Polje / purchasing station /
AD”Zetatrans” 42. 18.01.2002. Stanka Stanković /Facility in Podgorica -location 1/
“Koni-konfekcija”-Nikšić “Pjastera” 43. 11.02.2002. /land/ Nikšić
AD”Zetatrans” 44. 21.02.2002. Rajko Janković /business premises in Podgorica/
59 V Economic and structural developments and reforms - Additional Questions -
No. Business premises Date Buyer
AD”Zeatatrans” 45. 21.02.2002. Petar Vukčević / business premises in Podgorica /
HTP ”Budvanska rivijera” 25.03.2002 MTG,Budva 46. / business premises in Petrovac/
“Korporacija-Jakić” Pljevlja 47. 18.04.2002. Ivona Leškov /business premises in Novi Sad/
“Koni-konekcija”Nikšić 48. 16.05.2002. “Plus commerce”-Nikšić /land/
“Koni-konekcija”Nikšić 49. 16.05.2002. Veselin Kankaraš / land /
HTP ”Boka” 16.05.2002 Davor Marić 50. /Restaurant “Stoli”/
AD “Gorica”-Podgorica 51. 17.06.2002. “Bast-plastik”-Nikšić / land /
AD “Gorica”-Podgorica “Euromix-consulting” 52. 17.06.2002. / land / Podgorica
HTP ”Budvanska rivijera” 17.10.2002 Gluščević Igor 53. / The entertainment terrace -NT Slovenska plaža/
2003
AD “Zetatrans” Podgorica “Uniprom” LTD. 54. 04.03.2003. /part of the company's property/ Nikšić
HTP ”Boka” Meso promet, 24.04.2003 55. /Pizzeria “Zdravljak”/ Bijelo Polje
HTP ”Boka” 24.04.2003 Radojica Tadić, Nikšić 56. /Bar “Beograd”/
HTP ”Boka” 24.04.2003 Djapić Vladimir,Bijela 57. Coffee bar “Igalo”
HTP ”Boka” 24.04.2003 Mateja Kežman 58. /location “Carinarnica”/
HTP ”Boka” 59. 24.04.2003 Mateja Kežman /commercial space and land “Orjen”/
60 V Economic and structural developments and reforms - Additional Questions -
No. Business premises Date Buyer
HTP ”Boka” 24.04.2003 Dragica Smiljanić 60. /Catering facility ”Kuća Konjevića”/
AD “Gross-market” Podgorica AD “Meso-promet” 61. 18.09.2003. /Commercial space/ Bijelo Polje
HTP ”Boka” 62. /Imanje Sekulović-Meljine/ 16.12.2003 Bast LTD.,Nikšić
AD “Automont” Podgorica AD “Duklja Zora”and 63. 24.04.2003 / part of the company's property / PZU drugstore “Lijek”
2004
64. AD “Živinoprodukt” Spuž - selling majority stake - - "Agro biznis sistem" Ltd. Nikšić
65. Part of the property of AD ”Lovćen” - - "Era" Ltd. Podgorica
66. AD ”Drvoimpex” Niš- selling minority stake - - Jovan Radulović from Kruševac
2005
67. Part of the property of “Adriatic shipyard” AD Bijela - - P.S. “Lady M” Ltd. Nikšić
Part of the property of HTP “Boka” Božidar Maljković 68. - - Herceg Novi from Belgrade
69. Part of the property of “Radoje Dakić” AD - - “Delta M CG” Ltd. Podgorica
70. Part of the property of “Radoje Dakić” AD - - “Delta M CG” Ltd. Podgorica
71. Part of the property of “Jadran” AD Perast - - Boris Barović from Kotor
2006
Part of the property of HTP»Budvanska Rivijera« AD 73. - - Fin Invest Ltd. - Podgorica Budva -Restaurant »Golubinj«
Part of the property of HTP»Budvanska Rivijera« AD 74. - - Nikola Rajković from Portorože Budva- Restaurant »Sutjeska«
61 V Economic and structural developments and reforms - Additional Questions -
No. Business premises Date Buyer
Part of the property of HTP»Budvanska Rivijera« AD 75. - - »Šajo« Ltd. - Podgorica Budva- Restaurant »Brežine«
Part of the property of HTP»Budvanska Rivijera« AD 76. - - »Rakovac Komerc« Ltd. - Budva Budva- Restaurant »Pizzeria«
Part of the property of HTP»Budvanska Rivijera« AD SMS Invest Ltd. British Virgin 77. - - Budva- Restaurant »Tavern« Islands
Part of the property of HTP»Budvanska Rivijera« AD General-Commerc Ltd. 78. - - Budva - Restaurant »Nerin« Podgorica
64. Part of the property of ad Agrotransport Podgorica - - Zetagradnja Ltd. Podgorica
Part of the property of the Republic Fund PIO – Beppler Invest,ems Limited from 65. - - Hotel PIO Limassola,Cyprus
Share of the Employment Agency in LLC„Urban 66. - - YU Lovćen Ltd. Bar Planning and Design“ Bar
2007
Part of the property of » Institute of Black Metallurgy« 67. - - K.D. „Dis“ - Nikšić ad - Nikšić
Part of the property of Electric industry “Obod”« ad 68. - - „GP Cetinje“ Ltd. – Cetinje - Cetinje
Part of the property of Forest service company 69. - - Directorate of Forests - Pljevlja »Pljevlja« – Pljevlja
2008
Electric industry “Obod”AD - Cetinje- selling part of 70 - - Pejaković Vojislav the property –business premises –area 67 m2
71 "Sekas" Ltd.. - Podgorica - - "Sagam" Ltd. - Podgorica
72 "Jekon" DD – Bijelo Polje - - "Mesopromet" Ltd. – Bijelo Polje
"Adriatic shipyard" AD – Office space area of 150 "B Navi Montenegro" LTD. - 73 - - m2 Herceg Novi
" Adriatic Shipyard " AD – Office space area of 73 "GPS Navimport" Ltd. - Herceg 74 - - m2 Novi
62 V Economic and structural developments and reforms - Additional Questions -
No. Business premises Date Buyer
75 " Adriatic Shipyard " AD – Land area 640 m 2 - - Slobodan Popović
76 " Adriatic Shipyard " AD – Land area 333 m2 - - Dragan Đurković
77 " Adriatic Shipyard " AD – Land area 2648 m2 - - Slobodan Popović
2009
„Budvanska rivijera“ AD Budva - the total land area 78 - - Adriatic Fair AD Budva of 1152 m2
79 „Budvanska rivijera“ AD Budva- Land area 238m2 - - „Jugopetrol“ AD Kotor
„Budvanska rivijera“ AD Budva- land with a facility 80 - - „General-commerce“ Podgorica of the total area of 355 m2
„Budvanska rivijera“ AD Budva –the property with 81 - - Željko Mitrović land KO Sveti Stefan
STOCK EXCHANGE SALE
§ 2002 Overview of privatization through stock sales of shares of the Employment Agency in 2002
No. Company name No. of shares
1. AD”Agropolimlje- slaughterhouse”-Berane 1 111
2. AD”Drvoipex-nutrition”-Podgorica 318
3. AD”Agropolimlje-fish pond”-Berane 4 485
4. AD”Štampa”-Podgorica 2 223
5. AD”C-Vračar”-Herceg Novi 11 310
6. AD “Roplet “-Rožaje 6 744
7. AD”SI Promet”-Podgorica 667 800
TOTAL
63 V Economic and structural developments and reforms - Additional Questions -
Overview of privatization through stock sales of shares of the Development Fund in 2002
No. Company name No. of shares
1. AD”Klanica”-Berane (slaughterhouse) 72
2. AD”Ribnjak”-Berane (fish pond) 164
3. AD”Marko Radović”-Podgorica 94 497
4. AD”Štampa”,Podgorica 13 336
5. AD “C-Vračar”-Herceg Novi 443
6. AD”Vatrostalna”-Podgorica 11 850
7. AD”Roplet”-Rožaje 300
TOTAL
Revenues from privatization through the stock exchange sale of shares of the Pension Fund in 2002
No. Company name Revenue (EUR)
AD”Ribnjak”-Berane (fish pond) 1. 85 781.50 2. AD “C-Vračar”-Herceg Novi 242 552.20
3. AD “Klanica”-Berane (slaughterhouse) 14 237.30
4. AD”Štampa”-Podgorica 67 739.91
5. AD”Roplet”-Rožaje 32 606.70
TOTAL: 442 917.61
§ 2003 Overview of privatization through stock sales of shares of the Development Fund in 2003
No. Company name Quantity
1 Eko meso - Bijelo Polje 43 355
2 Jasikovac -Berane 532
3 Centrokoža produkt - Podgorica 510
4 Servis import - Podgorica 12 168
5 Duklja eksprex restaurant - Podgorica 1 060
6 SI Promet - Podgorica 77 100
7 Pekara – Berane (Bakery –Berane) 285
64 V Economic and structural developments and reforms - Additional Questions -
8 Drvoimpex-foreign trade Podg. 241
9 Utility program - Berane 546
10 Drvoimpex Bams - Podgorica 62
11 Drvoimpex Mibex - Podgorica 1
12 Drvoimpex Mervel - Podgorica 52
13 Drvoimpex Standard - Podgorica 64
14 Hotel Tara - Pljevlja 303
15 Hotel Pljevlja - Pljevlja 244
16 Retail trade - Berane 1 116
17 Agriculture and forestry - Berane 367
18 Dairy - Podgorica 1 143
19 Dairy - Berane 1 056
20 Obnova premis - Herceg Novi 2 527
21 Drvoimpex - Spoljopred Podgorica 28
22 Drvoipmex - Mobile Podgorica 102
23 Elmos - Budva 133
24 Drvoimpex Aorta - Podgorica 90
25 Drvoimpex Finkom - Podgorica 53
26 Drvoimpex - GM - Podgorica 79
27 Drvoimpex Prehrana - Podgorica 13
28 Roplet - Rožaje 25 539
29 Duklja Ribnica - Podgorica 2 183
30 Duklja Zora - Podgorica 230
31 Hotel Mojkovac - Mojkovac 589
32 Trgotekstil - Nikšić 997
65 V Economic and structural developments and reforms - Additional Questions -
33 UTP Sinjavina - Mojkovac 1
34 Forest Institute- Podgorica 90
35 Retail trade - Nikšić 871
36 Gornji Ibar - Podgorica 104
37 PKB"Herceg Novi" 5 745
38 Gradnja - Bijelo Polje 51
39 Autoboka - Kotor 1 390
40 Bokakomerc - Radanovići 11 881
41 Drvoimpex-Čeluge Bar 52
42 Wholesale trade - Berane 567
43 Mješovito - Herceg Novi 13 127
44 Andrija Paltašić - Kotor 718
45 Stadion - Berane 84
46 Knjigopromet - Bijelo Polje 456
47 Drvoimpex - Podgorica 287
48 Kotor - projekt Kotor 2
49 Božur Veleexport - Podgorica 78
50 Mašinopromet - car sales 381
51 Trebjesa a.d. Nikšić 652
52 Otrantkomerc a.d. Ulcinj 6 663
53 Magistrala - Mojkovac 95
54 Volumentrade - Podgorica 609
55 Bajo Pivljanin-Agriculture Plužine 1 001
56 Crna Gora Inžinjering - Nikšić 170
66 V Economic and structural developments and reforms - Additional Questions -
57 UTP"Piva" Plužine 997
58 Bajo Pivljanin-Trade Plužine 32
59 Primorje - Ulcinj 310
60 Napredak - Pljevlja 1 229
61 Mladost - Bijelo Polje 3 189
62 Agroprodukt - Nikšić 2 226
63 Pako - Andrijevica 64 230
64 Ibarpromet a.d. Novi Sad 1 635
65 Centrokoža trade - Podgorica 67
66 Trgocentar - Nikšić 12 758
67 Drvoimpex Merx - Nikšić 279
68 Dalmacija - cement Podgorica 52 057
69 Proljeće komerc - Pljevlja 6 301
70 Mesopromet - Podgorica 20 651
Mechanization and engineering program - 71 9 978 Nikšić
72 Servisimport SI - Podgorica 141 227
73 Zeta film - Budva 1 193
74 Ribnjak (fish pond)- Nikšić 1
75 Radni Invest - Bijelo Polje 294
76 Radnik Komerc - Bijelo Polje 61
77 Radnik beton - Podgorica 125
78 Gumig - Berane 36
79 Sanitas - Cetinje 775
80 Budva construction agency 50
67 V Economic and structural developments and reforms - Additional Questions -
81 Higijena - Podgorica 815
82 Koka produkt - Podgorica 99
83 Južni jadran - Herceg Novi 2 186
84 Bar construction agency 3 946
TOTAL
Overview of privatization through stock sales of shares of the Employment Agency in 2003
No. Company name No. of shares
1. “Eko meso”AD Bijelo Polje 7 226
2. ”Trgocentar”AD Niksic 2 829
3 ”Drvoimpex –foreign trade”AD Podgorica 2 774
4. “Centrokoza produkt”AD Podgorica 1 992
5. “Centrokoza trade”AD Podgorica 1 314
6. “Drvoimpex bams”AD Podgorica 740
7. “Drvoimpex mibex trade”AD Podgorica 123
8. “Drvoimpex merx”AD Podgorica 47
9. “Magistrale”AD Podgorica 1 176
10. “Proljece komerc”AD Pljevlja 4 875
11. “Drvoimpex mervel”Podgorica 565
12. AD Company for construction supervision and 1 030 laboratory inspection Podgorica
13. “Volumentrade”AD Podgorica 98
14. Hotel”Tara”AD Pljevlja 3 440
15. Hotel”Pljevlja”AD Pljevlja 7 344
16. “Drvoimpex-standard”AD Podgorica 1815
17. “Drvoimpex-spoljopred”AD Podgorica 700
18 ”Drvoimpex-mobile”AD Podgorica 1 518
19. “Zitoprodukt”AD Pljevlja 8928
20 ”Drvoimpex aorta”AD Podgorica 861
68 V Economic and structural developments and reforms - Additional Questions -
21. “Drvoimpex finkom”AD Podgorica 360
22. “Drvoimpex GM”AD Podgorica 888
23. “Duklja ribnica”AD Podgorica 20 538
24. “ Mechanization and engineering program”AD 52 598 Niksic
25. “Bajo Pivljanin”AD Pluzine 17 925
26. “Trgotekstil”AD Niksic 10 644
27. “Sinjajevima”AD Mojkovac 248
28. “Duklja zora”AD Podgorica 2 960
29. Hotel”Mojkovac”AD Mojkovac 8 772
30. “Servisimport Si”AD Podgorica 104 720
31. “Crna Gora inzinjering”AD Niksic 985
32. “Agropolimlje utility service”AD Berane 3 384
33. “Forest Institute”AD Podgorica 3 256
34. “Retail trade”AD Niksic 9 101
35. “Zetafilm”AD Budva 22 599
36. “Montenegroexpres”AD Budva 521 400
37. “PKB Herceg Novi”AD Herceg Novi 47 961
38. “Piva”UTP AD Pluzine 6 876
39. “Ribnjak”AD Niksic (fish pond) 1 144
40. “Bajo Pivljanin trade”AD Pluzine 325
41. “Gradnja”AD Bijelo Polje (construction) 5 001
42. GP”Primorje”AD Ulcinj 1 832
43. Department store”Niksicanka”AD Niksic 38 027
44. “Bokakomerc”AD Radanovici 4 559
45. “Drvoimpex- Celuge”AD Bar 495
46. “Radnik Invest”AD Bijelo Polje 2 594
47. “Radnik komerc”AD Bijelo Polje 486
48. “Radnik beton”AD Podgorica 3 233
49. “Andrija Paltasic”AD Kotor 9 816
69 V Economic and structural developments and reforms - Additional Questions -
50. “Stadion”AD Berane 1 388
51. “Agropolimlje Pekara”AD Berane 13 902
52. “Jasikovac”AD Berane 55 033
53. “Agropolimlje retail trade”AD Berane 23 630
54. “Mjesovito”AD Herceg Novi 304 421
55. Bakary”Vojo Mijuskovic”AD Niksic 3 160
56. “Gumig”AD Berane 620
57. HTP”Berane”AD Berane 16 070
58. “Mladost”AD Bijelo Polje 3 071
59. “Agropolimlje Mljekara”AD Berane 8 820
60. “Duklja Pekara”AD Podgorica 15 994
61. “Duklja exprex restaurant”AD Podgorica 7 290
62. “Napredak”AD Niksic 55 463
63. “Knjigopromet”AD Bijelo Polje 5 499
64. “Tehnomarkets”AD Podgorica 18 345
65. “Marko Radovic”AD 196 100
66. “Drvoimpex”AD Podgorica 8 453
67. “Kotor projekat” AD Podgorica 269
68. “Mesopromet”AD Podgorica 3 442
69. “Pako”AD Andrijevica 21 942
TOTAL
Revenues from privatization through the stock exchange sale of shares of the Pension Fund in 2003
No. Company name No. of shares
1 AD Servisimport SI Podgorica 313 670
2 AD Centrokoža trade Podgorica 3 942
3 AD Drvoimpex foreign trade Podgorica 8 248
70 V Economic and structural developments and reforms - Additional Questions -
4 AD Drvoimpex Bams Podgorica 2 185
5 AD Centrokoža produkt Podgorica 5 976
6 AD Drvoimpex Merx Nikšić 139
7 AD Drvoimpex Mibex Podgorica 370
AD Company for construction supervision 8 85 and laboratory inspection Podgorica
9 AD Motorway Mojkovac 3 528
10 AD Proljeće komerc Pljevlja 14 630
11* AD Drvoimpex Mervel,Podgorica 1 695
12* AD Trgocentar Nikšić 8 483
13* AD Volumentrade Podgorica 292
14* AD Hotel Tara Pljevlja 10 325
15* AD Hotel Pljevlja, Pljevlja 22 032
16 AD Drvoimpex Spoljopred Podgorica 2 12
AD Drvoimpex mobile Podgorica 17* 4 557
18* AD Drvoimpex aorta Podgorica 2 590
19* AD Drvoimpex Fincom Podgorica 1 080
20* AD Drvoimpex GM Podgorica 2 673
21* AD Drvoimpex Preh Podgorica 958
71 V Economic and structural developments and reforms - Additional Questions -
22* AD Drvoimpex Standard, Podgorica 5 450
23* AD Trgotekstil Nikšić 31 920
24* AD Bajo Pivljanin polj Plužine 53 800
25* UTP Sinjavina Mojkovac 732
26* AD Duklja – zora Podgorica 8 888
Hotel Mojkovac Mojkovac 27* 26 367
28* AD Duklja Ribnica Podgorica 61 593
Mechanization and engineering program AD 29* 157 794 Nikšić
30* AD Montenegro engineering Nikšić 2 954
31* AD Forest Institute Podgorica 9 752
32* AD Retail trade Nikšić 27 322
33* Agropolimlje Utility service ad 10 143
34* AD Zeta film 67 797
35* AD Montenegro Express Budva 1 565 560
36* AD Ribnjak Nikšić (fish pond) 3 432
37* AD Bajo Pivljanin trade Plužine 974
38* AD Gradnja Bijelo Polje (construction) 15 006
39* PKB Herceg Novi AD, H Novi 143 883
40* GP Primorje Ulcinj 5 495
41* AD Bokakomerc Tivat 13 697
72 V Economic and structural developments and reforms - Additional Questions -
42* AD Radnik invest, Bijelo Polje 7 786
43* AD Radnik komerc, B Polje 1 458
44 AD Drvoimpex Čeluge, Bar 1 474
45* AD Radnik beton Bijelo Polje 9 690
46* AD Stadion Berane 4 162
47 AD Mladost Bijelo Polje 9 213
48* AD retail trade Berane 70 873
49 AD Mješovito Herceg Novi 913 276
50* AD Andrija Paltašić Kotor 29 440
51* AD Pekara Vojo Mijušković Nikšić 6 004
52* AD Dairy Berane 26 474
53* AD Tehnomarket Podgorica 55 050
54* AD Gumig Berane 1 859
55* AD Napredak Nikšić 165 643
56* Knjigopromet Bijelo Polje 16 488
57* AD Sanitas Cetinje 1 118
58* AD Drvoimpex Podgorica 25 346
59* AD Pako Andrijevica 65 790
TOTAL
73 V Economic and structural developments and reforms - Additional Questions -
§ 2004
Overview of privatization of enterprises through the stock exchange sale of shares of the Development Fund in 2004
No. Company name No. of shares
1 C - promet - Cetinje * 578
2 Izgradnja - Berane * (civil engineering) 206
3 Jugoprevoz - Berane * 1 451
4 Farma Moravac - Bijelo Polje * (farm) 1 308
5 Sokara - Nikšić * 23
6 Štamparsko knjižarsko preduzeće* (printing – 66 publishing company)
7 Lenka - Bijelo Polje * 1 028
8 Montenegropromet - Budva * 18 332
9 Tehnomarket - Podgorica * 1 164
10 Eko-lina Bijelo Polje * 8 344
11 Industrija impex-import Podgorica * 834
12 Kristal - Rožaje * 25
13 Termoplast - Gusinje * 118
14 Poliex - Berane * 319
15 Duklja pekara - Podgorica * (bakery) 31
16 Famod montebus - Rožaje * 70
17 1 Maj - Andrijevica ** 6 433
18 Autoremont - Kotor 63 657
19 Brskovo - Bijelo Polje 2 318
20 Mesopromet - Nikšić * 205
21 Monter - Pljevlja * 27
22 Moračatrans - Podgorica * 282
23 RK Nikšićanka - Nikšić * 4 206 (Department store –Nikšić) 24 Pekara - Nikšić * (Bakery –Nikšić) 85
25 Factory of light and protective clothing * 1 052
26 19 Decembar - Podgorica * 473
27 Bratstvo i jedinstvo - Ulcinj * 265
74 V Economic and structural developments and reforms - Additional Questions -
28 TP Centar Ražnatović - Podgorica * 806
29 Građevinsko Crna Gora - Nikšić * 544
30 Novogradnja - Budva * 482
31 Trgovina CG - Rožaje * (Trade-Rožaje) 25
32 Turist biro - Nikšić * (Tourist bureau) 18
33 Gradina kvarta - Bijelo Polje * 66
34 Obod Genex - Cetinje * 305
Obod Štamparija - Cetinje * (Obod Printing 35 3 703 house)
36 Papir - Podgorica ** 4 014
37 HTP"Onogošt" Nikšić 307 030
38 Fenix - Pljevlja 4 510
39 Napredak - Kotor 15 837 681
40 VUP - Danilovgrad * 147
41 Radnik Arming - Bijelo Polje * 8
42 Wholesale - Nikšić * 87
43 Radnik servis - Bijelo Polje * 37
44 Mill- Muharem Asović - Nikšić * 1 457
45 Turjak - Rožaje * 397
46 Factory of concrete elements Zaton* 131
47 Servistrans - Rožaje * 1 975
48 Velimport - Podgorica * 142
49 Jadran prevoz - Ulcinj * 216 (Adriatic transport Ulcinj) 50 Polipak - Bijelo Polje * 258
51 Put - Bar * 131
52 Social standards and catering * 518
53 Servis import SI - Podgorica * 584
54 Daido metal - Kotor * 70
55 Dinamiktrade -Podgorica * 105
56 Orjen produkt - Herceg Novi 1 311
57 Ugostiteljstvo - Berane ** 300 (Hospitality Industry -berane) 58 Boksiti - Cetinje ** 1 851
75 V Economic and structural developments and reforms - Additional Questions -
59 Krušik 4 Novembar - Mojkovac * 297
60 Goricapromet - Podgorica ** 1 238
61 Duklja - Podgorica 1 117
62 Zetatrans - Podgorica 333 174
TOTAL
Overview of privatization of enterprises through the stock sale of the Employment Agency in 2004
No. Company name No. of shares
1 "Trgocet" Cetinje 4 215
2 "Ciglana Rudeš" Berane 33 478 (Brick Plant Berane) 3 "Napredak" Kotor 5 797 500
4 "Mesopromet" Nikšić 2 398
5 "Orijenprodukt" Herceg Novi 218
6 "Velimport" Podgorica 976
7 "Kristal" Rožaje 36 060
8 "Budva Construction Agency" Budva 1 414
9 "Vup" Danilovgrad 2 812
10 Građevinsko"Crna Gora" Nikšić 4 498
11 "19. decembar" Podgorica 4 956
12 "Agropolimlje hladnjača" Berane 787 (cold storage plant) 13 "Termoplast" Gusinje 6 516
14 "Eko mlijeko" 1 711 B. Polje 15 Štamparija "Obod" Cetinje 42 875 Printing House Obod 16 "C - Promet" Cetinje 4 179
17 " Obnova premis" 1 750 H. Novi 18 " Zetatrans" 246 591 Podgorica 19 "Albatros" Ulcinj 42 814
20 " Wholesale" Berane 5 460
21 " Jadran riba"Kotor 258
22 "Lenka" Bijelo Polje 5 628
23 "Račica" Tivat 4 590
76 V Economic and structural developments and reforms - Additional Questions -
24 "Industrijaimport-industrijaimpex" Podgorica 11 886
25 " Montex" Nikšić 5 977
26 "Obod Genex" Cetinje 6 707
27 "Duklja" a.d. Podgorica 211
TOTAL
Overview of the privatization of enterprises through the stock exchange sale of shares of the Fund PIO in 2004
No. Company name No. of shares
1 AD Trgocet Cetinje 10 423
2 AD Kotor projekt, Kotor 809
AD Ciglana Rudeš, Berane 3 591 (Brick Plant Berane)
4 AD Napredak Kotor 17 392 600
5 AD Mesopromet Nikšić 7 194
6 AD Montenegropromet Budva 401 996
AD Zavod za izgradnju Budve 7 4 228 Budva Construction Agency
8 AD VUP Danilovgrad 8 435
9 AD Građevinsko Crna Gora 13 495
10 AD 19 Decembar Podgorica 14 868
AD Duklja pekara Podgorica 11 47 982 Duklja Bakery
12 AD Duklja eksprex restaurant Podgorica 21 875
13 AD Eko mlijeko Bijelo Polje 5 133
14 AD C promet Cetinje 12 536
15 Obnova Premis Herceg Novi 5 264
16 Orijenprodukt Herceg Novi 655
17 AD Zetatrans Podgorica 521 101
77 V Economic and structural developments and reforms - Additional Questions -
18 AD Albatros Ulcinj 128 428
19 UTP Piva AD Pluzine 20 619
Štamparija Obod Cetinje 20 128 597 Printing House
21 Kokaprodukt ad Podgorica 3 684
Fabrika elektroda AD Plužine 22 44 542 (Welding Electrodes Factory)
23 AD Monter Pljevlja 6 964
24 INIS Marko Radović 588 250
AD Pomorski saobraćaj Kamenari 25 6 281 Maritime transport
26 Ad Jadran riba Kotor 772
27 AD Lenka Bijelo Polje 16 885
AD Industrijaimpex industrija import 28 35 630 Podgorica
2 500 AD Mesopromet klanica Podgorica 29 2 500 (Slaughterhouse) 2 500 2 826 30 AD Montex Nikšić 1 202
31 AD Wholesale Berane 16 390
32 AD Obod genex Cetinje 20 140
33 AD Duklja Podgorica 636
34 TUP Brskovo Bijelo Polje 187 818
TOTAL
§
78 V Economic and structural developments and reforms - Additional Questions -
§ 2005
Overview of privatization of enterprises through the stock sale of the Development Fund in 2005
No. Company name No. of shares
1. HTP Primorje - Tivat 10 269
2. Imako - Bijelo Polje 1 333
3 Forest Institute - Podgorica 4 368
4. Račica - Tivat 139
5. Bjelasica Rada - Bijelo Polje 1 258
6. Intours - Podgorica 252
7. Kodre - Ulcinj 619
8. Servisimport SI - Podgorica 2 726
Impregnacija drveta 9. 8 719 (Wood impregnation)
10. Eko - flora - Bijelo Polje 626
11. Vunko - Bijelo Polje 96
12. Dalmacija cement montenegro - Pg 60 040
13. Izbor - Bar 23 574 000
14. Fjord - Kotor 3 904
15. Jadran riba - Kotor (JARB) 1 545
16. Jadran riba - Kotor (JARI) 744
Zaštita – Podgorica 17. 239 (Protection –Podgorica)
Autosaobraćaj - Herceg Novi 18 824 (Traffic infrastructure)
19. "Nik pek" Nikšić 10 193
79 V Economic and structural developments and reforms - Additional Questions -
20 HTP Primorje - Tivat 10 269
TOTAL
Overview of privatization of enterprises through the stock sale of the Employment Agency in 2005
No. Company name
1 Solana "Bajo sekulić" AD Ulcinj (Salt Company – Ulcinj) 2 "Bjelasica rada" AD Bijelo Polje
3 "Cetinjeturist" AD Cetinje
4 "Eko - flora"
5 "Fjord" Ad Kotor
6 "Farma moravac"
7 "Gorica promet"
8 "Impregnacija drveta" AD Kolasin (Wood impregnation) 9 "Izbor" AD BAr
10 "Merkur intours"
11 "Montenegropromet"
12 "Radnik zaton"
13 "Servistrans"
14 "Solar 80 elastik"
15 HTP"Onogošt" Ad Niksić
16 HTP "Primorje" AD Tivat
17 "Titex" AD Podgorica
18 "Turjak"
19 "Wholesale"
20 "Zaštita" sup (Protection) TOTAL
80 V Economic and structural developments and reforms - Additional Questions -
Overview of privatization of enterprises through the stock exchange sale of shares of the Fund PIO in 2005
No. Company name No.of shares
AD Farma Moravac Bijelo Polje 1 70 302 (Farm –Mojkovac)
2 AD Eko-flora Bijelo Polje 86 046
3 HTP Primorje Tivat 578 223
4 HTP Onogošt Nikšić 865 146
5 HTP Turjak Rožaje 27 438
6 AD Izbor Bar 117 936 000
7 HTP Fjord Kotor 130 650
8 AD Cetinjeturist Cetinje 392 744
9 AD Servistrans Rožaje 63 040
10 AD Zaštita Podgorica(Protection) 312
11 AD Drvoimpex Beograd 2 082
12 AD Jasikovac Beamax Berane 165 110
13 AD Bjelasica rada Bijelo Polje 97 157
14 AD Solar-elastik Podgorica 8 862
15 AD Goricapromet Podgorica 620
16 AD Kristal Rožaje 5 026
AD Impregnacija drveta Kolašin 17 4 360 (Wood impregnation)
18 AD Žitoprodukt Pljevlja 26 775
19 AD Mercur Intours Podgorica 18 142
TOTAL
§
81 V Economic and structural developments and reforms - Additional Questions -
§ 2006 Overview of companies through the stock exchange sale by the Development Fund in 2006
No. Company name No. of shares
1. AD"Plavsko jezero" Plav (Z) 11 584
2. AD"Servis-agro" Podgorica 2 534
3 HTP"Albatros" Ulcinj 12 734
4. AD"Zetatrans" Podgorica 14 722
I-AD"Napredak" Pljevlja 4 395 5. II- AD „Napredak” Pljevlja 1.368
6. AD"Bisernice" Rožaje 6 037
7. HTP"Mimoza" Tivat 20 451
8. AD “Lovćeninvest” 3 987
9. AD “Nibus” Nikšić 6 446
10. AD”Rivijera”Kotor 36 850
11. AD”Vinopromet” 30 400
12. AD ”Sinjavina” Šavnik 4 455 660
13. AD “Zimasport” 5 805
14. „Nikšićka banka“ AD Nikšić 1 953
15. „AtlasMont banka“ AD Podgroica 1 084
TOTAL
82 V Economic and structural developments and reforms - Additional Questions -
Overview of privatization of enterprises through the stock sale of the Employment Agency in 2006
No. Company name
1 “Primorka” AD Bar
2 “Plavsko jezero” AD
3 „Podgorička banka“ Ad Podgorica
4 “Bisernica” AD Bijelo Polje
5 “Moračatrans” AD
6 “Elastik plastika” AD Podgorica
7 “Nibus” AD Niksic
8 “Rivijera” AD
9 “Vinopromet” AD Herceg Novi
10 “Vunko” AD BijeloPolje
11 “Sinjavina” AD Kolasin
12 “Zimosport” AD Zabljak
13 „Nikšićka banka“ AD
14 “Imako” AD Bijelo Polje
15 “Radnik Arming” AD Bijelo Polje
16 “Radnik Servis” AD Bijelo Polje
TOTAL
Overview of privatization of enterprises through the stock exchange sale of shares of the Pension Fund in 2006
No. Company name No.of shares
1 AD Velepromet Podgorica 176 097
2 AD Wholesale Nišić 18 228
3 AD Plavsko jezero Plav 189 652
4 AD Radnik Zaton 15 931
5 AD Bisernica Rožaje 3 018
6 AD Moračatrans Podgorica 4 410
7 AD Elastik plastika Podgorica 30 769
83 V Economic and structural developments and reforms - Additional Questions -
8 AD Lovćen invest « Pdg 1 523
AD « Hladnjača « Berane 9 2 362 (Cold storage plant –Berane)
10 AD « Termoplast « Gusinje 19 545
11 AD Nibus Nikšić 8 383
12 AD Rivijera Kotor 18 425
13 AD Vinopromet Herceg Novi 15 200
AD Pekara Berane 14 41 692 (Bakery Berane)
15 AD Sinjavina Šavnik 2 227 830
16 AD Zimosport Žabljak 3 486
17 AD Imako Bijelo Polje 177 681
18 AD Arming Bijelo Polje 1 486
19 Ad Radnik servis B. Polje 2 393
TOTAL
§ 2007
Overview of privatization of enterprises through the stock exchange sale of shares of the Development Fund in 2006
No. Company name No. of shares
1. "Hipotekarna banka" AD Podgorica 21
2. "RZUP" Podgorica 1 653 154
3 AD "Grosmarket" Podgorica 8 753
AD Solana "Bajo Sekulić" 4. 164 058 (Salt Company - Ulcinj)
AD "Prehrana" Pljevlja 5. 158 176 (Nutrition)
6. AD "Uzor" Rožaje 1 841
84 V Economic and structural developments and reforms - Additional Questions -
AD "Prekookeanska plovidba" Bar 7. 83 025 (Transatlantic sail –Bar)
8. AD "Ultep" Ulcinj 2 737
9. AD "Božur Veleexport" 2 496
10. ŠP "Šavnik" AD Šavnik 79 324
11. "Lovćen invest" AD Podgorica 609
TOTAL
Overview of privatization of enterprises through the stock exchange sale of shares of the Employment Agency in 2007
No. Company name No.of shares
1 "Social standards and catering".AD 5 583
2 AD "Grosmarket" Podgorica 1 459
3 "Agriculture and forestry" AD 2 499
4 "Koka produkt" AD 556
AD "Prehrana" Pljevlja 5 29 583 (Nutrition –Pljevlja)
"Prekookeanska plovidba" AD 6 21 827 (Transantlantic sail)
7 "Uzor" AD Rožaje 307
8 AD „Koni konfekcija“- Nikšić 7 597
9 "Jugooceanija" AD 59 226
10 "Preduzeće za izgradnju Podgorica" AD 11,86 Podgorica Construction Agency 11 AD "Ultep" Ulcinj 818
12 ŠP "Šavnik" AD Šavnik 13 220
13 "Ugostiteljstvo" AD 50 Hospitality Industry TOTAL
85 V Economic and structural developments and reforms - Additional Questions -
Overview of privatization of enterprises through the stock exchange sale of shares of the Pension Fund in 2007
No. Company name No.of shares
1 AD „ Social standards and catering“ - Nikšić 16 747
2 AD „Agriculture and forestry“ - Berane 7 495
3 AD „Grosmarket“- Podgorica 4 376
AD „Prehrana“ – Pljevlja 4 88 748 (Nutrition – Pljevlja)
5 AD “Uzor“ - Rozaje 921
AD „Prekookeanska plovidba“- Bar 6 65 481 (Transatlantic sail)
AD RK „Nikšićanka“- Nikšić 7 114 092 Department Strore –„Nikšićanka“
8 AD „Vunko“ - Bijelo Polje 213 041
9 AD „Koni konfekcija“- Nikšić 22 790
AD „Fabrika stočne hrane“ Spuž 10 11 997 (Fodder company - Spuž)
„Preduzece za izgradnju Podgorice“ 11 3 560 Podgorica construction Agency)
12 AD “Ultep“ - Ulcinj 2 453
AD „Šumarsko preduzeće“ -Savnik 13 39 662 (Forest company)
AD „Ugostiteljstvo „ – Berane 14 150 (Catering –Berane)
15 AD „Trgokoop“ - Podgorica 28
TOTAL
86 V Economic and structural developments and reforms - Additional Questions -
§ 2008
Overview of privatization of enterprises through the stock exchange sale of shares of the Development Fund in 2008
No. Company name No. of shares
Kooperacija AD Podgorica 1. 6 915 (Cooperation –AD Podgorica)
2. Ritamtrade AD Podgorica 245
3 SI Promet - L AD Podgorica 1 301 738
TOTAL
Overview of privatization of enterprises through the stock exchange sale of shares of the Employment Agency in 2008
No. Company name
"Kooperacija" Podgorica 1 (Cooperation –AD Podgorica)
2 Hipotekarna banka, Podgorica
3 "Velepromet", Podgorica
TOTAL
Overview of privatization of enterprises through the stock exchange sale of shares of the Pension Fund in 2008
No. Company name No. of shares
AD Koperacija Podgorica 1 3 461 (Cooperation –AD Podgorica)
2 Hipotekarna banka, Podgorica 10
3 AD Novi Prvoborac, Herceg Novi 24 927
TOTAL --
§ 2009
There was no stock exchange sale recorded in 2009.
87 V Economic and structural developments and reforms - Additional Questions -
ii. Size, employment and activity of privatised enterprises, and government future plans for privatisation;
According to estimates, the joint stock companies in Montenegro in the observed period 2002- 2007, showed defensive restructuring, with a reduction in employment for approximately 25% (Source: Analysis of the effects of privatization in Montenegro, the Faculty of Economics of Podgorica, Faculty of Economics of Belgrade and the Faculty of Economics of Ljubljana). In the same period, companies organized as a limited liability company showed relatively better results in the restructuring of employment, and recorded an increase in the number of employees. The review of the number of employees in the period 2002-2007, according to estimates (Source: Analysis of the effects of privatization in Montenegro, the Faculty of Economics of Podgorica, Faculty of Economics of Belgrade and the Faculty of Economics of Ljubljana) is given in the following table:
Year Group Number Median T test Sig.
AD 47 563.65
2002 DOO 30 41.23 3 537 0,000a
Average 77 360.11
AD 50 502.72
2003 DOO 31 46.87 3 363 0,000a
Average 81 328.25
AD 49 462.11
2004 DOO 33 58.67 3 260 0,000a
Average 82 300.74
AD 54 445.70
2005 DOO 38 80.39 3 307 0,000a
Average 92 294.81
AD 56 457.03
2006 DOO 42 99.30 3 243 0,000a
Average 98 303.72
AD 58 417.82
2007 DOO 44 108 3 117 0,000a
Average 102 284.17
AD 316 471.81
2002-2007 DOO 219 76.08 8 213 0,000a
Average 515 309.82
88 V Economic and structural developments and reforms - Additional Questions - Source: Analysis of the effects of privatization in Montenegro, Faculty of Economics in Podgorica, Faculty of Economics in Belgrade, Faculty of Economics in Ljubljana. Note: (a) represents the statistical significance of coefficients at the 1% risk level. After the implementation of privatization, the company management is mainly improved and characterized by better business results, productivity increase, and the introduction of measures of rationalization, including the domain of the employment policy and resolution of the status of redundant employees. The scope of the economic activity in the privatized enterprises is predominantly determined by market conditions, while particularly in companies of strategic importance for the economy the balance sum hasn’t been significantly changed. The main objectives of the privatization in 2010 include a continuation of growing trends in terms of efficiency and effectiveness of operations of business organization in Montenegro, encouraging foreign investments and entrepreneurship in all areas, increasing employment and improving living standards. The effects of privatization of the reminder of the state-owned property should contribute to achieving better economic effects in the economy and strengthening the competitiveness of the country. Based on the mild recovery of the world economy, the expectations are that the privatization projects that experienced failure during 2009 will be successfully implemented in 2010. According to the Privatization Plan for 20104, the following specific activities related to privatization are planned: Through a public international tender, in 2010 the procedure of selection of investors for the valorisation of the tourist sites will be implemented (Ada Bojana, Velika plaža, Njivice, Utjeha, Buljarica and Jaz) as well as continued the activities on valorisation of military-tourist complexes Mediteran, Zabljak, Bigovo - Trašte, Kotor and Valdanos - Ulcinj. The activities related to realization of open tenders for the privatization of companies Montepranzo-Bokaprodukt AD Tivat, AD Montecargo Podgorica and AD Container terminal and general cargo Bar will be continued. On the basis of decisions passed by the Privatization Council, the preparation of tenders for the following companies will be continued: in the field of transport: Montenegro airlines AD Podgorica, Railway infrastructure of Montenegro AD Podgorica, Barska plovidba Bar, in the field of manufacturing: Adriatic Shipyard AD Bijela, Zora AD Berane, Duvanski kombinat (Tobacco plant) AD Podgorica, Institute of ferrous metallurgy AD Niksic; in the field of tourism: Institute Dr. Simo Milosevic AD Igalo, HTP Budvanska rivijera AD Budva, HTP Ulcinjska rivijera AD Ulcinj; in the field of energy: DOO Montenegro bonus Cetinje, Electric Power Industry of Montenegro AD Niksic - small hydro power plants and in the field of newspaper and publishing activities: Pobjeda AD Podgorica. The privatization process will be also initiated in the company the Montenegro Post DOO Podgorica. The privatization in 2010 will be predominantly focused on projects in the sector of tourism and transport. These projects in the country where one of the most important ports for the region is located and with a tourism as the priority development branch can even further increase the interest of investors.
4 The Privatization Plan for 2010, adopted by the Government of Montenegro, defines concrete activities and privatization methods planned respectively per each company
89 V Economic and structural developments and reforms - Additional Questions -
iii. What is the current status and portfolio of the agency in charge of privatisation? What are the prospects for further divestment and termination of activities of the same agency? What is volume and efficient of use of privatisation revenues. Please substantiate the answer with concrete data and indicators.
The Law on the Agency of Montenegro for Economic Restructuring and Foreign Investments (Official Gazette of Serbia and Montenegro 25/90 and 7/91), which was passed at the end of July 1990, regulated establishing of the Agency of Montenegro for Economic Restructuring and Foreign Investments as a specialized organization of the Republic, with a legal personality, rights, obligations and responsibilities closer defined in this law. The strategic goals of the Agency, in compliance with the aforementioned Law and the Ownership Transformation Law, were referring to the procedures of the ownership transformation management of companies and other entities with social capital and their transformation into companies with known owners of the total capital in the private, combined, state and corporate ownership. All companies in Montenegro, except for utilities, water management, housing, greens, and alike are restructured. The ownership structure in relation to earlier social ownership was established. Of the total capital in the economy which was transformed (EUR 4.423.984.048, Source: Development Fund and the Agency of Montenegro for Economic Restructuring and Foreign Investments), 21% was transferred to the Development Fund, 11% to the Fund for Pension and Disability Insurance of Montenegro, about 3.79 % to the Employment Agency of Montenegro, 40% to the state, 15.80% to workers, banks participated with 1.01 and the other shareholders with 6.53%. Transitional - temporary owners are the state, the Development Fund, Pension and Disability Fund and the Employment Agency, who have an obligation to sell their shares in compliance with the Privatization Law. The Privatization Law (Official Gazette of the Republic of Montenegro 23/96, 6 / 99, 59/00 and 42/04), stipulates for the Government of Montenegro to establish the Privatization Council in charge of management, control and implementation of privatization. The privatization, in terms of this Law, implies the change of ownership over the transformed company social capital and the capital transferred to the transitional - temporary owners, in accordance with annual privatization plans, which are adopted by the Government at a proposal of the Privatization Council. The tasks of the Agency in accordance with the Privatization Law and the Decision on the scope and composition of the Privatization Council had professional, consultancy, administrative and technical character. Therefore, the role and the authorizations of the Agency were very limited in the process of privatization. The activities on the ownership and management transformation of companies, as stipulated by the aforementioned laws, are mainly completed, while part of the activities of the Agency (carrying out professional, consulting services for the needs of the authority in charge of the implementation of privatization), in compliance with the new work organization of the state administration, were transferred to other bodies and institutions, thus meeting the conditions for the abolition of this agency. In compliance with the Law on abolishment of the Law on the Agency of Montenegro for Economic Restructuring and Foreign Investments (Official Gazette of Montenegro, No. 83/09), which entered into force on 27 December 2009, this Agency ceased to exist and work. The funds generated from the sale of the state capital, are used by the Government, in compliance with the Privatization Law, for financing the infrastructure and other programs of interest for the state and programs of restructuring. Other competent authorities that carry out the privatization of the capital, in compliance with the Privatization Law: Development Fund of Montenegro, Fund for Pension and Disability Insurance of Montenegro and the Employment Agency of Montenegro
90 V Economic and structural developments and reforms - Additional Questions - (funds) were deciding upon the way of use of the funds generated from the sale of the capital in compliance with the business policy and strategy. In the period 2002-2009, the Fund for Pension and Disability generated EUR 70,704,391.90 in total from privatization. The larger amount of funds generated from the privatization, the Fund for Pension and Disability Insurance transformed into time deposits with commercial banks in Montenegro in order to maintain the current liquidity of the Fund and ensure timely payment of pensions, while the reminder of assets is used for settling current obligations on the grounds of the pension and disability insurance rights. The Employment Agency, pursuant to Article 45 of the Ownership Transformation Law, assets generated from privatization used for creating new jobs. So the funds are predominantly focused on financing the program of the active employment policy, namely: implementation of programs, as follows: (preparation for employment, retraining courses, additional trainings, specialization, etc, co-financing of public works, co-financing of seasonal employment (in tourism, construction sector, hospitality industry, agriculture etc.), co-financing the salaries for trainees, funding self- employment, co-financing of education and training, co-financing the adjustment of space and technical equipment for the purpose of employment of disabled persons and other measures, in compliance with the laws of the Agency. In the period 2002 - 2009, the Agency generated from privatization a total of EUR 23,575,982.01, of which EUR 8,016,198.85 were used for financing the self-employment loans, while EUR 15,559,783.16 were spent for financing of other programs within the active employment policy measures. The assets generated from privatization, the Development Fund used for financing the investment projects of small and medium-sized enterprises. Since its foundation, including 2009, the Development Fund financed the total of 778 projects in the sector of small and medium-sized enterprises. The participation of the Fund in the lending programs amounted to EUR 53.43 million, where the implementation of these projects has created conditions for the additional employment of approximately 10,142 employees. The number of loans extended to individuals amounted to 131, while the remainder of 647 projects refers to credit support directed towards the sector of small and medium-sized enterprises. During the period 2006-2009, the Managing Board of the Development Fund of Montenegro adopted the Decisions on the provision of credit support for the total of 318 projects in the SMEs sector. Of this number, 304 projects were successfully implemented in the sector of small and medium-sized enterprises, while the implementation of the remainder of 14 projects failed as a result of cancelling by investors or a bank. The participation of the Fund in the implementation of these loans amounted to 31.60 million. The realization of loans approved in this manner, according to estimates, created conditions for the opening of 1386 additional jobs. Of the total number of approved loans in the previous period, 74, 01 % was implemented in less developed municipalities in Montenegro, which represents 72, 72% of the total value of realized loans. Therefore, it can be concluded that the regional component in the very process of credit support by the Fund was the most represented. The majority of implemented projects are from the fields of manufacturing activities (21.4%), services (19.09%), tourism and hospitality industry (17.15%) and food industry (16.50%). In addition to credit line aimed at the SMEs sector, the Fund's investment activity was focused on the provision of credit funds to finance the infrastructure and environmental projects of municipalities, public companies and privately owned companies. The credit line was implemented in two ways, namely: through and with guarantees of commercial banks and the purchase of the issued bonds. Through and with guarantees of banks, the total of 15 projects were financed, with the participation of the Fund in the amount of € 6.53 million, while 11.4 million Euros was allocated in that period for funding of 18 projects implemented by local governments through the purchase of the issued bonds. During the said period, the Fund took part even in financing of projects of strategic importance. One of such projects in which financing the Fund participated is the
91 V Economic and structural developments and reforms - Additional Questions - construction of the Regional water supply system for the coastal part of the country, for which the allocated assets amounted to 5.4 million Euros. Thus, the invested assets of the Development Fund shall be treated as equity in the public utility Coast of Montenegro Regional Montenegrin Water Supply System, with the share in the equity of 21.10%. In the same period, in order to improve the general condition of the road network and prepare of the upcoming tourist season, the Fund has provided funds in the amount of EUR 1.2 million, as well as the assets worth EUR 5 million for the rehabilitation of the road network Mateševo-Podgorica-Kolašin.
17. (Ref to Q. 20): Please provide the following additional information: i. Aggregated balance sheet of state-owned enterprises are missing. Please provide the value for 2008 (and 2009 if available);
According to estimates, the aggregate balance sheet value of companies with majority state ownership amounts to 1.6 billion Euros.
ii. How many state-owned, or formerly state-owned, enterprises have been restructured so far?
Pursuant to the Ownership Transformation Law, in the process of ownership transformation of companies and other entities with a social capital and their transformation into companies under known owners with the total capital in the private, combined, state and corporate ownership, a total of 416 companies were transformed in Montenegro. All companies in Montenegro, except for public companies in the sectors of utilities, water management, housing, greens, and alike have been restructured. The ownership structure in relation to earlier social ownership was established. Of the total capital in the economy which was transformed (EUR 4.423.984.048, Source: Development Fund and the Agency of Montenegro for Economic Restructuring and Foreign Investments), 21% was transferred to the Development Fund, 11% to the Fund for Pension and Disability Insurance of Montenegro, about 3.79 % to the Employment Agency of Montenegro, 40% to the state, 15.80% to workers, banks participated with 1.01 and the other shareholders with 6.53%.
iii. How many enterprises are currently being restructured or envisaged to be restructured?
The procedure of the company restructuring, in terms of creating conditions for the more successful privatization, and whose tenders are in progress in companies AD Port of Bar and Railways of Montenegro are completed, while the activities on the realization of the restructuring program in the company Montenegro Post DOO Podgorica are launched and still in progress.
92 V Economic and structural developments and reforms - Additional Questions -
18. (Ref to Q. 21): Please provide also the overview of procedures for bankruptcy.
Overview of the bankruptcy procedures5 held before the Commercial Court in Podgorica for 2006, 2007, 2008 and 2009: In 2006, 315 bankruptcy cases and 10 liquidations at the creditor's request were finalized. In 2007, the bankruptcy procedure of 359 companies was concluded, 10 liquidations also at the creditor's request were conducted. In 2008, the bankruptcy procedures against 347 companies were completed and 4060 judicial liquidations, of which: 3 at creditor's request, and 4057 ex-officio at the proposal of the Registrar of the Commercial Court Central Registry because of a failure to extend the duration of judicial liquidation pursuant to Article 86 item 11 of the Law on Business Organizations (Official Gazette 6 / 2002) and failure of business organizations to comply with Law in terms of Article 96 item 6 and 7 of the same Law. In 2009, on the grounds of the bankruptcy procedure, 342 business entities were closed, including 4271 at the proposal of the Registrar on the same legal basis. The bankruptcy procedure in 2006 lasted up to three months in 42 cases, over six months in 187 and over nine months in 86 cases. In 2007, bankruptcy procedure lasted up to three months in 24 cases, in 205 up to six months and over nine months in 130 cases. In 2008, bankruptcy procedure was completed within three months in 35 cases, up to six months in 184 cases and over nine months in 128 cases. In 2009, the duration of the bankruptcy proceedings was significantly reduced, so that within three months the proceedings were ended in 294 cases, up to six months in 38 cases and over nine months in 10 cases. All judicial liquidations were completed within three months.
19. (Ref to Q. 22): Please provide 2009 report on state aid (when available). How have subsidies and public guarantees developed over time? According to what economic criteria is state aid granted? Is there a medium-term target on scaling public guarantees down?
The Annual report on the state aid control for 2009 is in the phase of drafting. The Commission for the State aid Control pursuant to Article 10, paragraph 3 of the Law on State Aid Control (Official Gazette of Montenegro, No. 74/09), is obligated to submit the Annual Report on the assigned state aid to the Government and Parliament of Montenegro not later than June 30 of the current year for the year before. The allocation of the state aid shall be conducted in compliance with the by-laws: Decree on the manner and procedure of applying for and the contents of the necessary documentation for the previous and subsequent control of state support and assistance (Official Gazette of Montenegro, No. 13/08) and Decree on detailed criteria, purpose and conditions of granting of state support and assistance (Official Gazette of Montenegro, No. 13/08).
5 Source: Commercial Court of Montenegro
93 V Economic and structural developments and reforms - Additional Questions - The Decree on methodology and contents of forms for submission of applications and the state aid control and the Decree on the detailed criteria, conditions and manner of granting state aid are in the procedure for adoption. The government guarantees are issued for credit arrangements between the international financial institutions and companies that were in majority state ownership. These arrangements were referred to significant infrastructure projects, which are aimed at improving economic development. Consequently, the guarantees were issued for the modernization of road, rail and air infrastructure, as well as the development of communal infrastructure. Over time, the policy of the Government of Montenegro defined, when it’s possible, or there is an approval of international financial institutions, issuing of the government guarantees, instead of direct indebtedness of the state. The aforementioned policy is implemented in those situations where there is a realistic image that the companies to which the guarantees are issued are able to independently service their liabilities arising from the credit arrangements. Also, during 2009, because of the world economic crisis, certain guarantees were issued also to commercial companies that are of particular importance for the economy. So, the guarantees were issued to the Aluminium Plant Podgorica, Ironworks Niksic, Bauxite Mines, Montenegroairlines, Crnogorska plovidba, Pobjeda AD Podgorica. At the same time, in 2009 the guarantees were issued for loan arrangements between the international financial institutions and the Montenegrin commercial banks to finance projects of small and medium-sized enterprises. Regarding the policy on the gradual reduction of state guarantees, currently withdrawn foreign guarantees make 142 million Euros, or 4.7% of GDP, that is, 12.5% of foreign debt, which does not represent a significant burden for the state. Domestic guarantees are withdrawn in the amount of 7.97 million Euros, or 0.265% of GDP, or 1.81% of domestic debt. The policy of the Government of Montenegro – Ministry of Finance will imply that the amount of issued guarantees does not exceed the amount of 15% of GDP. Table 1. Issued foreign guarantees
Signed Withdrawn until Creditor Loan Borrower Year of signing amount 31/12/2009
Project for European EIB Monteput 2004 24 000 000 24 000 000.00 Roads
EPCG Reconstruction of power EIB Electric Power 2002 11 000 000 7 917 281.01 system Industry of Montenegro
EIB Modernization of airports PC Airports of ME 2004 12 000 000 11 000 000.00
Small and medium EIB enterprises through Commercial banks 2009 91 000 000 18 600 000.00 commercial banks
EBRD Modernization of airports PC Airports of ME 2003 11 000 000 10 235 127.00
Regional Water Supply PC Regional Water EBRD Project - southern arm of 2007 8 000 000 8.000.000.00 Supply System phase I
Regional Water Supply PC Regional Water EBRD Project - southern arm 2008 7 000 000 6.136.959.71 Supply System phase II
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Project of reconstruction of EBRD railway infrastructure - PC Railways of ME 2009 4 000 000 40.000.00 Phase III
Project of emergency Railway EBRD restoration of railway infrastructure AD 2009 15 000 000 0.0 infrastructure II Podgorica
KfW Perucica EPCG 2003 3 580 000 3.055.065.34
KfW Piva EPCG 2007 16 000 000 1.247.439.34
KfW Substations at Ribarevine EPCG 2007 5 400 000 0.0
Replacement of filters in TE Pljevlja and expansion KfW EPCG 2008 15 000 000 4.906.798.75 of substations Podgorica- Ribarevine
KfW Opportunity bank Opportunity bank 2009 15 000 000 15.000.000.00
KfW NLB Montengrobanka NLB 2009 16 000 000 5.000.000.00
OTP KAP KAP 2009 49 680 000 26.813.633.00
TOTAL Withdrawn until 31.12.2009 141 952 304.15
Table 2. Issued national guarantees
Creditor Borrower Amount
NLB Montenegrobanka Bauxite Mines A.D. Nikšić 5 000 000.00
Podgorička banka Pobjeda A.D. Podgorica 2 970 000.00
2 700 000.00 (funds still have not Hipotekarna banka Montenegro Airlines withdrawn)
1 800 000.00 (funds still have not NLB Montenegrobanka Montenegro Airlines withdrawn)
TOTAL WITHDRAWN UNTIL 31.12.2009 7 970 000.00
20. (Ref to Q. 25): Please provide additional information on how has the size of enterprises developed and the number of companies grouped by size.
According to the Central Registry of the Commercial Court of Montenegro, in the period 2005 – 2009, the number of registered business organizations increased from 29.000 to 42,018, which is an increase of 13,018 or 44.89%.
Registered business organizations 2005 2006 2007 2008 2009
TOTAL 29 000 33 377 36 753 40 369 42 018
Source: CRPS
95 V Economic and structural developments and reforms - Additional Questions - If we observe the growth of registered companies in comparison to the previous year, from the table above is clear that in 2006 the number of registered companies increased by 4377, in 2007 it increased by 3376, in 2008 by 3616 and in 2009 by 1649. This difference mainly consists of newly established small enterprises. Regarding the fact that out of the total number of registered companies, we cannot single out companies by size, we will use data on the number of active MSMEs6 from the Tax Administration database. According to data obtained from the Tax Administration, the number of active MSMEs in Montenegro at the end 2009 amounted to 15,229. If we compare this number with the number of active MSMEs in Montenegro at the end of 2005, when it was 10,276, it can be concluded that this number significantly increased by 48.20% or 4953. The number of micro, small and medium-sized enterprises in the period from 2005 to 2009 was constantly growing, so that the number of micro enterprises from 7047 increased to 11.883, which makes an increase of 4.836 or 68.62%. The number of small enterprises increased from 1.092 to 1.497 that is by 405 (37.09%), while the number of medium-sized enterprises from 355 increased to 426, which makes an increase by 71 or 20%. The number of entrepreneurs was reduced from 1.782 in 2005 to 1.423 in 2009, which makes the reduction by 359 or - 20.15%. This may also mean that a number of entrepreneurs decided to pre-register the company and turn it into micro enterprise. Tabular overview of the number of MSMEs in Montenegro in the period 2005-2009
Medium Year Entrepreneurs Micro enterprises Small Businesses TOTAL companies
2005 1 782 7 047 1 092 355 10 276
2006 1 808 8 172 1 184 358 11 522
2007 1 723 9 845 1 306 395 13 269
2008 1 609 11 852 1 472 424 15 357
2009 1 423 11 883 1 497 426 15 229
Source: Tax Administration
21. (Ref to Q. 26): Please better focus the answer and provide additional details on R&D expenditure.
The following table provides the gross domestic expenditure for research and technological development (RTD) in millions of Euros and expressed as a percentage of gross domestic product (GDP):
Year 2002 2003 2004 2005 2006 2007 2008
Gross domestic 1.80 1.24 2.98 2.94 0.87 3.77 n/a expenditure on RTD
GDP 1 360.10 1 510.10 1 669.80 1 815.00 2 148.90 2 807.90 3 085.00
% GDP 0.13% 0.08% 0.18% 0.16% 0.04% 0.13% n/a
6 Active MSMEs enterprises are those that are regular tax payers
96 V Economic and structural developments and reforms - Additional Questions - The following table provides the gross expenditure from the budget of Montenegro for research and technological development (RTD) in millions of Euros and expressed as a percentage of GDP:
Year 2002 2003 2004 2005 2006 2007 2008
Gross state expenditure on RTD 0.59 0.57 0.56 1.19 1.11 1.48 2.38
% BDP 0.044% 0.038% 0.034% 0.066% 0.052% 0.053% 0.071%
Table: Overview of allocation of funds of the Ministry of Education and Science for the period 2005-2008
NI projects (including Year Total in € NI additional trainings International cooperation equipment)
2005 0.72 mil € 47.00% 46.40% 6.60%
2006 0.6 mil € 57.16% 27.67% 15.17%
2007 0.88 mil € 57.78% 22.00% 20.22%
2008 1.67 mil € 69.14% 17.25% 13.61%
The following table provides the higher education gross expenditures for research and technological development (RTD) in millions of Euros and expressed as a percentage of GDP:
Year 2002 2003 2004 2005 2006 2007 2008
Gross costs of higher education 0.46 0.36 1.63 2.66 0.54 3.36 n/a
% BDP 0.03% 0.02% 0.10% 0.15% 0.03% 0.12% n/a
22. (Ref to Q. 27): Please provide focussed information on the main obstacles for doing business.
The Government of Montenegro as one of its long-term strategic priorities sets out to improve the business environment, through the elimination of existing barriers to business and the reform of regulatory framework that will prevent creation of new barriers. The Government of Montenegro is cooperating intensively with the World Bank and International Finance Corporation on the implementation of this objective. One of these forms of cooperation is reflected in the implementation of the Action Plan to reform the Ease of Doing Business. The Action Plan was prepared by representatives of the IFC in November 2009 and the Government of Montenegro adopted it in December 2009. At the same time, the Action Plan is implemented within the Regulatory Reform Project and improvement of the business environment, which is implemented and co-financed by the Government of Montenegro and the International Finance Corporation. The Action Plan is based on the already identified barriers in ten areas, which companies have been facing during their existence and foundation, that is, recommendations for their elimination and improvement of conditions and regulations in these areas. The Action Plan is enclosed as attachment to this question.
97 V Economic and structural developments and reforms - Additional Questions -
Doing Business Action Plan Montenegro, November 2009
Ordinal Topic Planned activities Responsible persons Time frame no Construction Short-term activities permits 1. Implement the Law on Spatial Planning and Construction (2008). Decision-making level IV quarter 2009 and beyond Branislav Gregović, Rank: 160/183 Organization of round tables with the topic »Practical experiences in implementation of the new Law« is Maja Velimirović Petrović planned. Several thematic round tables will provide the opportunity to discuss this topic with local self- governments, and with other subjects, primarily investors and business organizations from this area. Operational level Number of procedures: 19 UNDP will provide full financial and logistic support to the Ministry. Danilo Gvozdenović, Days: 230 Rajka Radulović, Cost: 1.086% Lidija Medigović GNI per capita 2. Development of programs for posting planning documents on the Internet. Decision-making level January 2010 Branislav Gregović, The implementation of the information system is progressing as planned, and it is realistic to expect the first results at the end of January. Operational level Budislava Kuč, The tasks are carried out in cooperation with the World Bank (under LAMP). Željko Božović, Nikola Petrović
3. Establishing of Permanent Operational Team Responsible person: For establishing of the Permanent Operational Danilo Gvozdenović Team 15 November 2009 In accordance with the conclusions made at the V session of the Council, for the purpose of permanent analysing and improving indicators of ''building permit issuance'', the Ministry of Spatial Planning and Environment will establish a Permanent Operational Team.
98 V Economic and structural developments and reforms - Additional Questions -
4. Analysis of regulations Responsible person: January – February 2010 Danilo Gvozdenović The Ministry of Spatial Planning and Environment is to prepare a comprehensive analysis of regulations that are relevant to the indicator »Issuance of construction permits«, with proposal conclusions and submit it to the Council.
Mid-term to long-term activities (over one year) 5. Posting planning documents on the Internet. Decision-making level 2014 Branislav Gregović, A part of planning documents that has been already adopted in digital format will be entered immediately upon the completion of the implementation phase of IS. Operational level Budislava Kuč, The process of developing, entering and processing of plans for entire Montenegro requires a longer period of time (to 5 years). This time period is required because all new planning documents (national and Željko Božović, local) need to be produced in accordance with the provisions of the new law (to be harmonized with the Nikola Petrović law) and then in digital format to be posted on the Internet.
The tasks are carried out in cooperation with the World Bank (under LAMP).
Topic Ordinal Planned activities Responsible persons Time frame no
Starting a Short-term activities (one year) business 1. Make the requirement related to the company seal optional when registering a business organization (1 Decision-making level End 2010 day and EUR 30-40); Dragan Kujović Overall ranking: 85/183 It is necessary to analyse the current legal solutions within the national legislation, for the purpose of carrying out this activity in a short period of time, and consider the consequences of abolishing the seal at Operational level Number of the occasion of registering of business activities of business organizations from the aspect of various Maja Jokanović procedures: 12 institutions involved in the registration process in general. Goran Nikolić Days: 13 If assessed as acceptable, this solution would be taken into account in the drafting of the new Law on Business Organizations, by the end 2010. Establish an operational team Cost: 2,6% GNI with representatives from per capita institutions involved in the An inter-sectoral Work Team needs to be established for this activity in order to produce the required registration process: Ministry of analysis with prior approval of the Council for Elimination of Business Barriers. Finance with Tax Administration; Statistical Office, Commercial Court, Central Bank, Secretariat for Legislation
99 V Economic and structural developments and reforms - Additional Questions -
2. Produce and post a standard model of the company founding acts (Standard Registration Form) on the Responsible entity: Commercial 1 January 2010 website of the Central Register, Court-Commercial Court Central Register and Ministry for Information Society Note: The above time frame In cooperation with the Ministry for Information Society, a tender has been announced which subject is has been identified by the the development of the information system of the Central Register of Business Entities under the signed Public Procurement Commercial Court in Podgorica. The new solution needs to facilitate any data defined by the Law on Decision-making level: Contract between the MIS Business Organizations and other supporting legal acts to be entered in the Register, in the form that and the first ranked enables detailed analysis of all data, researches in respect of any required criteria and producing of Tenderer. If obligations reports for various purposes. Commercial Court-Commercial under the contract fail to be Court Central Register fulfilled the time frame will be redefined. The objectives that the required information system is to meet are as follows: possibility to collect data on several locations through a range of standard forms; single entering of data at registration; migration of Operational level: the current data into the new system; collecting and processing of a large number of data, i.e. documents; great reliability of registered data; possibility to issue various certificates and documents within a short period of time; accessibility and publicity of information from the data base through various searches accessible to Internet users; possibility of connecting with IT systems of other users (Government, state Commercial Court-Commercial authorities and institutions and the like); software support to archiving of documents and documentation Court Central Register i Ministry management (documentation scanning). for Information Society
The previous activity will enable the implementation of the proposed recommendation by DB, i.e. posting the basic documents – standard form of the Memorandum of Association and Articles of Association on the website of the Central Register.
3. Amend the Law on Business Organizations (Article 86) to eliminate the obligation of annual extension of Entity responsible for this Passing of the new Law on registration. Adjustments in the company records should be made on regular basis as defined in Article activity: in the short-term - Business Organizations (IV 70 of the same Law. The registration should be valid throughout the life of the company until it has been Ministry of Finance with Tax quarter 2010) liquidated voluntarily or by the court decision. In addition, the company may be erased from the register Administration after a specific period of inactivity. Such inactivity may be established if the company fails to submit annual financial statements as defined in Article 71 of the above mentioned law. (No direct effect on DB, although this reform would release the register of this time consuming task and facilitate its focusing on Decision-making level: new registrations.) Ministry of Finance
The elimination of the obligation for annual extension of registration will be possible under the new legal solution, i.e. after the adoption of the new Law on Business Organizations. An interim step that would Operational level: facilitate the long-term elimination of this procedure is the consideration of the possibility for the Tax Administration to provide information to the Commercial Court about the companies that submitted the Ministry of Finance with Tax financial statements so the Commercial Court would have the records of active business entities. Administration and Commercial Court
Entity responsible for this activity in the long-term: Ministry of
100 V Economic and structural developments and reforms - Additional Questions -
Economy
Decision-making level: Ministry of Economy
Operational level: Ministry of Economy with institutions to be involved in the drafting of the new Law on Business Organizations
4. Integration of submission of registration information in a single interface, if one agency could accept the Responsible entity: Ministry of applications from entrepreneurs rather than eight agencies as is the current practice (Register of Economy and Ministry of Business Entities, Statistical Office, Municipality, Pension Fund, Employment Office, Health Fund, tax Finance 1 January 2011 authorities and Chamber of Commerce). Note: The time frame is given indicatively (is Decision-making level: conditioned by the In order to implement this, it is necessary to consider the possibility for IT networking of all entities implementation of a range involved in the registration process which requires a series of preconditions that will be possible to be met Ministry of Economy of activities that are also in the period exceeding one year. In the short-term it is possible to establish an inter-sectoral Work Team included in the action plan) to analyse and make suitable recommendations. Operational level: Ministry of Economy, Ministry of Finance, Commercial Court- Commercial Court Central Register, Statistical Office, Municipality, Pension Fund, Employment Office, Health Fund, Tax Administration
5. Complete the integration of registration with the Tax Administration, Pension Fund, Employment Office Decision-making level: End 2010 and Health Fund. Single registration form should be submitted to one agency only – Tax Administration, which is to maintain a single data base with defined user access by other agencies. Biljana Šćekić
Legal preconditions have been created, i.e. the implementation has been facilitated for the Law on Unified Operational level: Registration and Reporting System for Calculation and Collection of Taxes and Contributions (OGMN Tanja Bošković 29/05) and application of the model for unified collection of taxes and contributions, which full implementation is anticipated from 1 January 2010, in order to contribute to simplification of registration and collection of taxes and contributions, i.e. implementation of the integration of registration process with the Tax Administration, Pension Fund, Employment Office and Health Fund.
101 V Economic and structural developments and reforms - Additional Questions -
6. In parallel with this, it is necessary to merge the registration with the Central Register of Commercial The activity has already been Court and registration with the Chamber of Commerce. An entrepreneur would submit an application only eliminated, i.e. it is a formally to the Central Register. It is not to be required to submit a separate application to the Chamber of non-existent step and it was Commerce. Instead, the Chamber would have access to the commercial register and would accept new pointed out in producing of the members based on information from the commercial register. Doing Business report that elimination of this procedure should be taken into account This is a formally non-existent activity, i.e. a step, and it was pointed out in producing of the Doing since at the moment of Business report that elimination of this procedure should be taken into account since at the moment of registration with the Central registration with the Central Register of Commercial Court an enterprise automatically becomes a Register of Commercial Court an member of the Chamber of Commerce. enterprise automatically becomes a member of the Chamber of Commerce.
Mid-term to long-term activities (over one year) 1 June 2010 7. Establish a single web-portal for registration of companies to serve as a »one counter« where an Responsible entity: Ministry of entrepreneur may complete all registration procedures. (while entrepreneurs would still have the option to Finance use applications in paper if they want to)
Decision-making level: For implementation of the proposed activity it is necessary to engage an expert from IT department to provide software support to this activity. Ministry of Finance
Operational level: Ministry of Finance with other institutions 8. Do analysis of the possibility to merge the advance payments of profit tax and VAT at least for limited Responsible entity in the short 30 June 2010 liability companies and joint stock companies. term: Ministry of Finance with Tax Administration
Competence of the Ministry of Finance, i.e. Tax Administration. Decision-making level: Ministry of Finance
Operational level: Ministry of Finance with Tax Administration
9. Do analysis of the possibility to merge the registration with the Statistical Office and Tax Administration by Responsible entity in the short February 2010 introducing a single form, authorizing one agency to accept applications and merging the registration data term: Ministry of Finance with bases of these two agencies into one data base. Tax Administration
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Competence of the Ministry of Finance, i.e. Tax Administration and Statistical Office. Decision-making level: Ministry of Finance
Operational level: Ministry of Finance with Tax Administration and Statistical Office 10. Amendments to the Law on general administrative procedure, where a shorter period would be Responsible entity: Minister of June 2010 determined for acting and decision-making of state authorities. Interior Affairs and Public Administration –Department for public administration and Department for local self- government
103 V Economic and structural developments and reforms - Additional Questions -
Topic Ordinal no Planned activities Responsible persons Time frame
Closing a 1. Procedures for insolvency are globally satisfying and Montenegro is well ranked; Decision-making level IV quarter 2009 business 2. Parties to the cases related to insolvency have benefits from all the reforms mentioned in the section of Dragan Kujović this Plan related to enforcement of contracts; Overall ranking: Operational level 44/183 3. Additional professional improvement and training of bankruptcy judges and interim administrators would also be beneficial. Lidija Radović
Time (in years) 2,0 Based on the Action Plan for elimination of business barriers to entrepreneurship development, a Working Group has been established to work on drafting of the new Law on Insolvency of Business Organizations. The drafting of the Law on Insolvency of Business Organizations is envisaged in the Cost (% Work Program of the Government for IV quarter 2009 and it is under the responsibility of the Ministry of ownership) 8 Economy. In addition to the representatives of the Ministry of Economy, the drafting of the mentioned law is to involve the representatives of the Ministry of Spatial Planning and Environment, Commercial Court and Supreme Court. The Law on Insolvency of business organizations has already significantly Return rate advanced, and the Working Group has produced a working text that will be forwarded in the form of a (cents of a dollar) draft version to relevant experts and interested parties to provide suggestions next week. 43,7
Appreciating the significance of the offered assistance and recommendations by the DB Reform Unit, the Working Group for developing the new Law on Insolvency of Business Organizations will make the mentioned law available to the DB Reform Unit.
Topic Ordinal no Planned activities Responsible persons Time frame
Enforcing Improve the functioning of commercial justice by: Contracts Short-term activities (one year) 1. Detailed presentation (mapping) court processes in order to identify the main obstacles to expeditious trial Decision-making level Item 1 – ongoing Overall ranking: of commercial cases and enforcement of settlement of claims (ongoing); 133/183 Branka Lakočević, 2. Based on this mapping determine whether there is a need to amend civil procedures and enforcement Item 5 – continuous proceedings to eliminate risks of delays; Srđan Spajić activity
Procedures 3. Continue developing computer-based system of judicial statistics in order to systematize court (number) 49 management by better adapting to changes in caseload and staffing levels;
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4. Bringing utility bills cases out of the courts; Operational level Deadline for adoption of the Law on Enforcement Duration (Days) Marina Miranović Proceedings: 545 Amendments to the enforcement proceedings are currently ongoing, while the introduction of private 1st Quarter of 2010 enforcement officers will enable a more efficient enforcement of court rulings, as well as reduction of burden on courts operation. Cost (% claim) 25.7 5. Develop an incentives structure for judges and staff based on an analysis of judicial statistics; Deadline for other activities: 6. Analyze alternatives to standard postal service to improve service of process; November 2010 7. Improve the capacity of auxiliary judicial professions to facilitate enforcement, attendance of the parties.
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Ordinal Topic Planned activities Responsible persons Time frame no Getting Credit In the short-term, the Credit Bureau should:
1. Distribute both positive and negative data on borrowers Responsible persons in the To be defined by the new Overall ranking: CBM: Law on Banks until the end of 2009 43/183 Zdenka Rakočević, The Regulatory Credit Registry of the Central Bank of Montenegro (CBM) collects all information on the borrowers that concern the regular servicing of obligations against a bank, history of repayment, the Milena Knežević, amount of monthly installment, grounds of borrowing, total borrowing in the banking system, etc. The Legal Rights: Veselin Vuković, 9/10 Central Bank has entered into a Contract on Business Cooperation with all commercial banks and microcredit financial institutions (MFI) operating in Montenegro, which defines exchange of data from the Srđan Šuković, Credit Registry database. The banks are thus distributed with both positive and negative information (delay in repayment, total borrowings in the system, etc). Mijomir Ćirović Credit Information: 2/6
2. Keep information on arrears of more than 20 days (currently only arrears of more than 60 days are Public Registry recorded in the system) Coverage: 27.6% of adults The database of the Credit Registry records all information on arrears in repayment starting from one-day delay and more. Furthermore, the report generated by banks and MFIs from the database states in the Public Bureau column “Arrear Days” all arrears by each individual credit, regardless of the number of arrear days in Coverage: 0.0% question. Information that the Credit Registry records only arrears of more than 60 days is the of adults consequence of the application of previous Decision in Minimum Standards of Credit Risk Management of Banks, which defines non performing loans as loans in arrear more than 60 days. In accordance with the provisions of the above-stated Decision, a product of the Credit Registry was created indicating loans in arrears of more than 60 days. However, it is important to mention that arrears of more than 20 days are reported and that such information is distributed to banks in every query for each individual borrower.
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3. Distribute more than 2 years of historical data and do not erase positive and negative information (payments, defaults, arrears) once the loans are repaid
It is important to mention that the database of the Registry keeps all information collected since its establishment, both positive and negative, and even for loans repaid in the meantime. However, the Credit Registry is designed in such manner to present the status of a loan on certain reporting date, which is as a rule the last day in the month for which the report is submitted. A bank may get the information on the borrowings of a client for two years back in such way that a request is made for a report to be generated with the reporting data of two years ago. Furthermore, it is technically possible to create a new product to be made available to banks that would indicate historical data of a loan for a period of two back years.
4. Guarantee by law that borrowers have the right to access their data
The Central Bank has entered into a Contract on Business Cooperation with all users of information from the database of the Credit Registry (banks and MFIs), which regulates in a legal manner such relation and defines the issue of protection of information confidentiality. Congruent to the present legislation, borrowers are not entitled to access their information; however, we are of the opinion that this matter could be resolved by defining appropriate legislation that would enable borrowers to access their personal reports.
In the medium-term, the Credit Bureau should:
5. Collect and distribute data from a broad range of sources: retailers, trade creditors or utility companies (electricity, water, telephone, garbage collection), as well as financial institutions
We are of the opinion that the operation of the Credit Regulatory Registry would be significantly improved if such type of data would be also available. In that respect, we would require technical assistance to upgrade the existing capacity of the Credit Regulatory Registry since presently the technical capacity of the Registry is based only on obtaining information on clients’ borrowings with banks and MFIs. Furthermore, in order to obtain accurate information it is necessary to ensure that it is mandatory for all participants to provide duly the data to the Credit Registry.
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6. Offer credit-scoring services
Given that the functioning of the scoring model connotes that the information on both expenditures and revenues of the client is available, and taking into account the fact that present capacities of the Credit Regulatory Registry are not sufficient to support this type of request, we are of the opinion that we would also require technical assistance to improve the operation of the Credit Registry in this segment. We consider that this recommendation is reasonable since it would certainly contribute to better management of credit risks by banks.
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Ordinal Topic Planned activities Responsible persons Time frame no Protecting 1. Strengthen investor protection by amendment to/ adoption of the new Law on Foreign Investments: Decision-making level 2nd Quarter 2010 Investors Goran Šćepanović Rank: 27/183 Amendments to / preparation of the new text of the Law on Foreign Investments, which additionally regulate the area of foreign investments, aimed at investor protection in Montenegro Operational level Extent of Disclosure Index: Ivana Šaranović 5 2. Strengthen investor protection (e.g. minority shareholders) through amendments to the Law on Business Activities will start in 2010 Organizations in order to:
Extent of Director Liability Index: 8 Additionally define conflict of interest and enable special rules on certain activities;
Ease of Enable immediate disclosure if established that there is a conflict of interest in case of a director; Shareholder Suits Index: 6
Request a consent from shareholders on certain transactions entered into with related parties; Strength of Investor Protection Index: Submit requests for disclosure of personal conflict of interests in company’s reports; 6.3
Request a report from an external auditor before the approval of transactions between related parties;
Enable to a court to annul transactions of related parities if unfair to shareholders.
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Ordinal Topic Planned activities Responsible persons Time frame no Registering Short-term activities (one year) Property 1. Introduce a standard sale-purchase contract for immovable property, contract on gift and contract on Responsible persons from the 15 November 2009 exchange on the website of the Real Estate Administration of Montenegro, in order to facilitate activities in Ministry of Finance: terms of sale-purchase, gifts and exchange. Rank: 131/183 Periša Perović, Milanka Otović, Number of Maja Mitrović procedures: 8 2. Make notarization of the sale-purchase contract optional; Ministry of Finance In End of 2009 cooperation with the Ministry Days: 86 of Justice Presently is not possible to implement activities with regard to the possibility to make notarization of contracts optional. Cost: 3.3% of property value This represents an obligation under law and therefore an initiative to amend the law in that respect needs to be brought up. At the 6th meeting of the Council for Eliminating Business Barriers, the conclusion was that this statutory obligation could not be abolished; however, the Law on Court Fees should be amended in order to establish a fixed amount of fee to be 10 euro.
3. Eliminate the requirement for a tax clearance certificate Periša Perović, 15 November 2009 Milanka Otović, In terms of the third activity dealing with eliminating the requirement for a tax clearance certificate to be Maja Mitrović, submitted at the event of registration in the Immovable Property Cadastre it is important to mention that this obligation does not exist since 2004 when a new Law on Tax on Immovable Property Turnover (Official Mićo Orlandić, Gazette of the Republic of Montenegro, No 65/01 and 69/03) entered into force by which the Law on Šefko Kurpejović Property Tax (Official Gazette of the Republic of Montenegro, No 3/92, 30/93, 3/94, 20/95 and 45/98) was rescinded.
We are of the opinion that, as new thing for this period, the website of the Real Estate Administration of Montenegro should also contain an Instruction or guidance on registration in the Immovable Property Cadastre.
Medium- to long-term activities (more than one year)
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4. Computerize and unify all records at the Real Estate Administration (including both legal ownership records and tax and value records);
Existing Status: Distribution of data and communications are carried out through a computer network created through a connection of LAN networks of regional offices in to a single WAN network at the level of Montenegro by using Mip NET service. It is important to mention that during 2008 hardware infrastructure was procured as follows: - Outdated servers, workstations, monitors, black-white A4 laser printers, A4 scanners, UPSs and other ancillary equipment was replaced and new storage system was procured; - Procurement of multi-functional A3 laser device (printer, copier, scanner), procurement of A3 color laser printers, procurement of multi-functional A0 scanner, procurement of A0 plotter, procurement of digital projectors, procurement of black-white A3 photocopying machines, procurement of A4 laser fax machines; - Procurement of specialized Erdas and Leica photogrammetric work stations with supporting equipment; - GPS/GLONASS smart antenna and supporting equipment for Leica rovers.
Development and implementation of the new software application for processing of unified alphanumerical and graphical data and public display of data for the establishment of the Immovable Property Cadastre. All cadastral municipalities being subject to public display are implemented in the new software.
At the end of April of this year, the Real Estate Administration enabled on its website to all its users to access part of the data on its disposal. All data are for information purposes, and the plan is that through the development of the Geo-Portal a database of geo-spatial data should be organized as its main objective, procedures for electronic exchange of geo-spatial data should be established and grounds created for the implementation of the electronic cadastre.
The World Bank loan project - Land Administration and Management Project (LAMP) became effective on 24 February 2009 and activities in respect of procurement plan have already started.
We are of the opinion that during this period we should improve the Immovable Property Certificate in accordance with legislative arrangements which are currently being amended.
5. Increase resources at the Real Estate Administration
The Government of Montenegro adopted the Rulebook on Internal Organization and Systematization of the Real Estate Administration and by doing so enabled increase of resources of the Real Estate Administration. By adopting this Rulebook, the Government of Montenegro provided support to future objectives and tasks for which the Administration is established.
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Ordinal Topic Planned activities Responsible persons Time frame no Paying Taxed Short-term activities (one year) - take forward the reform of consolidating the number of tax payments, especially focusing on CPT, VAT, 1. Excises; Responsible person for all Deadline for all short- short-term activities: Biljana term activities: end of - examine possibility of quarterly payment of the corporate profit tax, using current year estimated profit Overall ranking: Šćekić June 2010 145/183 as a base; - develop strategy for reducing delays in payment of VAT refunds; - create infrastructure for electronic filing of tax returns; Note: an operational team will Electronic payment of Payments - conduct public information campaigns to increase the use of online filing and payment of taxes; - implement e-payment for VAT/corporate profit tax taxpayers, before e-filing of returns; be created for carrying out tax liabilities is already (number): 89 these activities consisting of possible - use FIN number for VAT. representatives of relevant institutions and private Time (hours): 372 sectors
Medium- to long-term activities (more than one year) Total Tax Rate - develop an efficient and effective tax regime for SMEs by bringing potential taxpayers into the tax net 2. and reducing administrative burden on SMEs; Responsible person for all (% profit): 28.9 medium-term activities: - further streamline tax laws to facilitate business environment; Biljana Šćekić - put in place a true self-assessment system in line with best international practice to improve compliance, reduce administrative burden, and ensure optimal utilization of tax administration resources; - conduct Marginal Effective Tax Rate (METR) analysis to measure true burden of tax regime on investors.
NOTE: Based on the analysis of effects of implementation of tax laws (currently ongoing) new activities will be identified (and existing corrected) to be carried out within short-term or medium- term in order to improve the business environment.
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Ordinal Topic Planned activities Responsible persons Time frame no Trading across Short-term activities (one year) Border 1. Prepare a detailed mapping of procedures for import and export Responsible person for all Deadline for all short- short-term activities: Biljana term activities: 2. Reduce the list of documents required for customs clearance. Re-examine the requirement for terminal Overall ranking: Šćekić handling receipts. 30 October 2010 47/183
3. Improve customs duty and fee payment procedure. Provide customs clearance immediately after traders Note: an operational team will have submitted payment certificates. Documents for be created for carrying out Export: 7 these activities consisting of 4. Continue implementing the automatic payment mechanism. Speed up efforts to communicate the temporary representatives of relevant Time and Cost for payment/authorization number to traders electronically. institutions and business Export: 14 days, 775 US$ 5. Review customs laws/contracts where necessary to implement the above improvements.
Documents for Medium- to long-term activities (more than one year) Import: 7 Time and Cost for 6. An informal risk management system has been introduced in Montenegro since 2006. Analyze the current Import: 14 days, system, align with best practices, and institutionalize it. 890 US$
NOTE: Based on the analysis of effects of implementation of existing arrangements new activities will be identified (and existing corrected) to be carried out within short-term or medium-term in order to improve the business environment.
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Ordinal Topic Planned activities Responsible persons Time frame no Employing 1. Analysis of business barriers arising from the Law on Foreigners, Law on Employment of Foreigners and Implementing Entity: End of January 2010 Workers Law on Administrative Fees Ministry of Finance
Overall ranking: Pursuant to the Conclusion of the Government of Montenegro, No 03-11234 of 5 November 2009, the Ministry of Finance is tasked to establish working group consisting of representative of the Ministry of Participating Institutions: 46/183 Finance, Ministry of Labor and Social Welfare, Ministry of Interior and Public Administration, and Ministry of Labor and Social Employment Office. Welfare, Ministry of Interior and Public Administration and Redundancy Cost Employment Office (weeks of salary): 28
Rigidity of Employment Index (0-100): 13
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