Investment challanges of Montenegro First Plenary Session Investment Policy and Infrastructure Projects Investment challanges of Montenegro Budva, Montenegro, April 14 th 2008 Vujica Lazovic, PhD Deputy Prime Minister for Economic Policy Government of Montenegro 5 th VIENNA ECONOMIC FORUM

»I believe that each mean which foster communication has strong effects in sense that people can learn from each other and achieve freedom they are aiming« Bill Gates Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challlanges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008 Welcome to Montenegro to Vienna Economic Forum!

Montenegro is a success story. The following data confirm this: ◦ Real GDP growth over 7% ◦ Unemployment rate about 11% ◦ Inflation close to euro-zone level ◦ Foreign public debt 21% of GDP ◦ FDI 1600€ per capita ◦ Credit rating BB+ ◦ Stabilization and Association Agreement. Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Success starts with vision, ideas, ability to realize them, political wisdom which Montenegro recognized through: ◦ Stimulating investment environment ◦ Strong will to regain independence ◦ Membership in EU Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

We realized on time that natural beauty of our country is not enough. To construct competitive and stimulating institutional framework is real challenge. Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Process has started by reforms: ◦ euro as official currency ◦ stimulating tax policy ◦ liberalized prices ◦ free flow of capital ◦ privatization of 85% state property ◦ activating of capital market ◦ privatized banking sector ◦ reformed education system, social insurance and labor market Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Time is element which is reality nevertheless success or failure! Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Development brings new challenges and responsibilities:COMPETITIVENESSINFRASTRUCTURE STRUCTURAL UNEMPLOYMENT REGIONAL DEVELOPMENT Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Challenge 1: Competitiveness Institutional framework – prior comparative advantage Further decrease of tax rates Eliminating the business barriers Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Challenge 2: Infrastructure Tourism and development in general impose new infrastructural solutions Own energy sources Highways Regional water supply pipeline Treatment of solid waste and waste water Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Challenge 3: Structural unemployment »Generation« confronting of global trends to old system of education Human resources are the most important value of Montenegro Reforms aiming at increase of education system and labor market flexibility Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

Challenge 4: Regional development Undeveloped North vs. developed South Young people and investors will be motivated to become actors of Northern Montenegro development by…...Eligible investment conditions Construction of infrastructure Opening of university units which will decrease the differences Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

OURAPPROACH?

Use own potential and think within global processes as a necessity in development process.

»People always overestimate changes which will takes place in the next two years and underestimate those to happen in ten years. Therefore, let do not allow to be silenced in inaction«, Bill Gates Montenegro has started new cycle of activities by new investments in high-end tourism through valorization of attractive tourism locations Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

I am convinced that, upon realization of these projects, Montenegro will have the highest economy growth rate in the region! Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008

I wish you pleasant stay in Montenegro! Vujica Lazović PhD, Deputy Prime Minister for Economic Policy, Government of Montenegro Investment Challenges of Montenegro - 5 th Vienna Economic Forum, Budva, 14 th April 2008