Mugoša: The Montenegrin economy desperately needs a serious development strategy

The Montenegrin economy desperately needs a serious development strategy that will clearly define the necessary structural reforms over the next ten years that will contribute to its diversification, improving its liquidity, competitiveness and productivity, said Boris Mugoša, president of the Social Democratic Party of Montenegro and representative of the European Union.

"I have been pointing out for years that the illiquidity of business entities is one of the most serious challenges of our economy. Compared to the end of 2020, there are over 2,2 thousand more blocked companies and entrepreneurs, and the amount of blocked debt has doubled. Also, smaller companies, which are the basis of the economy because they make up 93 percent of the total number of companies and employ around 39 percent of the workforce, have been operating at losses for the last six years, while their capital is today a quarter (25 percent) smaller than in 2019," Mugoša said.

He said that he has been proposing concrete measures to improve the liquidity of business entities for a long time.

"In addition to favorable credit support, it is necessary to continuously work on reducing (para)fiscality; then switch to a model of paying value added tax (VAT) based on the invoice collected, not issued (we proposed this concept but it did not have support in Parliament); apply the institute of multilateral compensation, i.e. offsetting liabilities and receivables between multiple business entities; apply antitrust policies better and more consistently; control the deadlines for settling financial obligations in order to eliminate the practice of 'free credit' of certain business actors from suppliers and support business entities that are on the verge of closure due to problems with the collection of receivables resulting from the method of forcing unreasonably long payment deadlines," said Mugoša.

He also reminds that the government twice this year did not accept the proposal of the SD parliamentary group to increase the amount in the budget for improving the competitiveness of our economy by two million euros, which, "unfortunately, is decreasing year after year in percentage terms in the budget compared to current revenues (from nearly six million a few years ago to less than four million euros)."

"For the aforementioned amount of two million euros, we proposed to reduce the budget item intended for consulting services, which is planned from 34 million euros in 2024 to as much as 46 million in the 2025 budget," said the SD MP.