The assessment of public investment management (PIMA) identified that the institutional framework in Montenegro, which governs that area, is relatively stronger than in developing countries with low incomes and economies with expanding markets.
Montenegrin competent authorities decided to implement PIMA, which would help identify opportunities for strengthening good infrastructure management in Montenegro, which could lead to greater efficiency in consumption, which means achieving more for every investment. euro.
"The PIMA assessment, which was completed in July last year, identified that the institutional framework governing the management of public investments is relatively stronger than in low-income developing countries and economies with expanding markets," the text published on the website states. of the Ministry of Finance, which is a translation of the report of the International Monetary Fund (IMF).
As it is added, laws on budget and fiscal responsibility, public procurement and public-private partnership (PPP) were adopted in order to support competitiveness, transparency and sustainability of public finances.
"Guidelines and by-laws were adopted to ensure that public investment projects are better prepared and comparable across sectors. However, there is a lot of room for improvement in project planning and assessment, especially in better identification of fiscal risks associated with projects," the statement added.
The text adds that strengthening the framework for managing public investments in Montenegro is of key importance in order to ensure that capital investments provide the highest return to the country within sustainable fiscal prospects.
"However, it seems that the effectiveness of the Montenegrin framework is lower in many areas, which indicates that the good practices provided for in the existing regulations are not fully followed, thereby undermining the impact of public investments," the text adds.
An example of such practice is the repeated violation of target values and fiscal rules, which indicates that they are not given guidance to ensure that large investment projects are in line with fiscal sustainability.
A complex strategic planning framework, weak project evaluation practices, and a limited review process reduce the capacity to select those initiatives that will have the greatest impact on growth.
"The competent authorities of Montenegro have confirmed their interest in continuing the reforms to improve the management of infrastructure projects. This decision is very timely, considering that key investment projects are on the horizon, including the next phase of the Bar-Boljare project. But there is limited fiscal space for their implementation. Therefore, the speed with which the deficiencies identified through PIMA will be resolved and the efficiency with which the framework will be implemented will determine how effective public investments will be in support of economic recovery in the coming period," the text states.
The PIMA evaluation was done within the framework of the Reform of Revenue Management and Public Finance Management program in Southeast Europe, which includes six beneficiaries from the Balkans and is financially supported by the European Union (EU) and the Swiss State Secretariat for Economic Affairs.
Detailed findings can be found in a document published on the IMF website https://infrastructuregovern.imf.org/, together with a brief description of public investments in the country and a proposed action plan to strengthen good infrastructure management.
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