Finance Minister Žugić in Washington: Montenegro’s economic policy largely coincides with World Bank's priorities

Washington, D.C, the USA (20 April 2015) -- Montenegrin delegation, headed by Finance Minister Radoje Žugić and Governor of the Central Bank Miloica Dakić, participated in Washington in the 2015 Spring Meetings of the World Bank Group and the International Monetary Fund.

At the meeting with Montenegro’s Finance Minister, World Bank’s Vice President Laura Tuck praised the progress achieved by the Ministry of Finance in managing public finance, as well as the achieved level of fiscal consolidation. Minister Žugić informed Vice President Tuck about planned incentives in the sector of tourism and measures targeted at the development of northern part of the country, which should release Montenegro’s investment potential and result in higher and sustainable growth rates in the future.

The two officials agreed that Montenegro and the World Bank have developed successful cooperation and they discussed chances for even better collaboration through the adoption of the new strategy by the end of the year. Namely, the development of the Systematic Diagnostic of Montenegro has been underway, the analytical framework that preceeds the Strategy of the World Bank, aimed at determining Montenegro’s growth quality and sustainability, as well as the level and distribution of poverty.

It was agreed that Montenegro’s economic policy largely coincides with the priorities preliminarily established by the World Bank through the Systematic Country Diagnostic. To address the uneven regional development, the World Bank has been asked to investigate the possibility of providing funds for refinancing the local communities’ debt, which would create a higher quality framework for future efficient management and improvement of financial management capacity of local communities. In order to provide further budgetary consolidation, a systemic project in the health sector was also discussed, with particular emphasis on efficiency and sustainability of funding of medicines by health insurance funds, as well as quality and efficiency of hospital management, etc. The project would, along with the project related to increasing tax administration efficiency, mark a significant step towards further quality consolidation of the budget.

Ongoing projects and potential new investments of credible investors in the fields of transport, tourism and energy were on the agenda of the Montenegrin delegation's meeting with representatives of the International Financial Corporation (IFC) in Washington. High tourism and its huge impact on local employment and development of local self-government will be at the IFC’s focus when searching for investors during the drafting of the new Strategy. The meeting also discussed the possibility to support micro and small businesses and systemic approach to microcredit institutions, through the analysis of corporate governance and their potential funding opportunities. Finally, the meeting addressed the provision of expert assistance to commercial banks in order to develop their skills in the management of NPAs.

Montenegro’s delegation and representatives of the Multilateral Investment Guarantee Agency (MIGA) discussed the possibility of obtaining financial support for development projects in small and medium-sized businesses, especially in the northern part of Montenegro, as well as the possibility of obtaining a guarantee to cover non-commercial risk for certain infrastructure projects.

The World Bank’s representatives voiced willingness to assist Montenegro in the implementation of development projects, including the drafting of a new framework strategy for the World Bank's engagement in Montenegro.