loading...
To top

Publication in the community "Montenegro"

This is an automatic translation.
Click here to read the publication in the original language.

Tourism in Montenegro's Reform Program - 2

In the program of economic reforms of 2015 - 2018. (hereinafter referred to as the Program), which we are closely studying, the funding structure that was laid down in the previous program was revised. Changes were required, including, because of plans for the capital construction of tourist facilities.

Economists and financiers of Montenegro have developed a common sectoral structure for providing / allocating funds. So, Montenegro's loans will mainly be used to build transport infrastructure and develop small and medium-sized businesses. Montenegro will invest its own funds mainly in agriculture and transport infrastructure. Tourism and energy will be financed for the most part from "other sources" - by other sources it is meant mainly private investment. "Mainly" because it's not 100%, but it's close to it.

Montenegro does not have enough funds to implement the program. "Not enough money" is not a value judgment, but a norm. Otherwise, why would investors be needed? And tourists? And tourists-investors?

For reference: the state can attract investment in all industries € 1282,220,000, and the need for financing is € 1831400096, the deficit is € 549180096 during the reform period, every year Montenegro will miss € 137295024. Annually the state can compensate € 1186629925 at the expense of budgetary funds. The rest is third-party investments. Great opportunities for third-party investors.

Tourism, together with the energy industry, refers to industries where there is an acute need for investment ... More precisely, the deficit refers to these sectors mainly. The share of tourism in the total volume of necessary investments of about 25% is the most "energy-intensive" branch.

However, it should be noted that, despite the declared priority of the tourism industry, close attention is paid to agriculture. Perhaps, it is possible that the next reform program is not tourism, but the agrarian sector will be a priority. Further it will be clear why.

The Investment Program does not address in great detail the sources of investment. The changes mentioned above are included in the planning, and not in the details of the methods of financing. The Program expresses confidence only in the fact that it will invest the EU, here no deficit is forecasted.

The EU provides from 35% to 55% of all investments in the country, depending on the industry. The spheres in which the EU is represented are direct investments in the development of competitive (within the EU) enterprises and agriculture. Tourism is left to investors from other countries.

Where are undifferentiated investors with targeted investments especially needed? Montenegro expects investors to expand the tourist season to infinity in time and space. Montenegro wants to leave the "south-summer-sea-beach-crowd-but-inexpensive" coordinate system, make the holiday more elitist, special attention to the northern region of Montenegro, the development of mountain / ski tourism, the construction of new facilities - more expensive, more profitable. And necessarily with the involvement of the local population.

It is worth recalling and emphasizing that the Program for 2015-2018. is a change and addition of the previous program (Program - 2013 - 2016, then supplemented until 2017).

And in that program, a possible recession is predicted - significant! - a tourist flow from Russia and Ukraine due to the crisis in the region and the decline in oil prices. Problems in tourism activity of investors in this industry will be diminished, then hit by trade and transport. This assumption has not been changed, therefore, it remains relevant. As we told in the previous article, since the beginning of 2015 the Russian tourist flow has grown substantially, but the Ukrainian one has already decreased, and it became much more interesting.

In the foreseeable future, we will have a remarkable opportunity to assess the prognostic abilities of Montenegrin economists. In the event that the tourist flow from Russia begins to dry up, the capital construction of tourist facilities will no longer attract investors, and, under the terms of the main program, the state will start investing in agriculture in order to increase self-sufficiency and import substitution. This must be borne in mind.

Evgeny Novozhilov

Sources:

http://www.gov.me/vijesti/146546/Program-ekonomskih-reformi-2015-2017.html#sthash.ZL4o5Weu.dpuf

#EvgenyNovozhilov

This is an automatic translation.
Click here to read the publication in the original language.

This post is available in the following languages: