Press release from 30th Cabinet session: ADMAS project, budget amendments, higher education

Podgorica, Montenegro (15 June 2017) – At today's session, the Montenegrin Cabinet discussed the implementation of the ADMAS project, which is being implemented under the Agreement between the Abu Dhabi Fund for Development (ADFD) and the Government of Montenegro in the amount of 50 million USD with a view to  providing more favourable access to loan arrangements for businesses in agriculture and related sectors, thus enhancing their participation in the market and raising business standards. To date, 23.2 million USD has been invested, 3 million USD has been reserved, while additional 23.8 million USD remains available. In order to include a wider range of potential users into the implementation of the ADMAS project, the Cabinet decided to reduce the minimum amount of loan support from the current US $ 1.000.000,00 to 200.000,00 USD.

The Government approved the Draft Law Amending the Law on Budget of Montenegro for 2017, which provides for an increase in direct revenues by EUR 8 million based on the collection of a certain part of the VAT and the increased collection of residual tax debt (tax, contributions for pension and health), in line with the Law on Rescheduling of Tax Claims. Revenues will grow further in line with the macroeconomic projections and current and planned fiscal policy measures contained in the Draft Fiscal Strategy of Montenegro 2017-2020. The total planned budget expenditures, compared to the original plan, increased by EUR 8 million for the purposes of financing unforeseen expenditure and enforcement of conclusions of the Government. This has increased expenditures of the current budget, whereas expenditures of state funds, financing transactions and capital budget remained unchanged.

It was especially emphasised that the amendments will not cause the change in the budget deficit in relation to the one planned by the Budget Law of Montenegro for 2017.

The Government approved the Draft Law Amending the Law on Higher Education. It was stressed that the proposed amendments aim to improve the quality of education, access to higher education for all on equal terms, the increase in student mobility and the harmonisation of the education system with the needs of the labour market. The most important change, inter alia, is the introduction of a new 3 + 2 + 3 model of study, as the dominant model in the European area of higher education, free primary and master studies at the University of Montenegro, mandatory practical training, as well as the establishment of the Quality Assurance Agency for Higher Education, as a professional body that will carry out the process of evaluating the quality of study programmes in the institutions.

The Prime Minister underscored that the passing of the law and other laws in the field of education make a serious step forward in terms of creating conditions for all the policies that are necessary for the society progress.

In order to implement the fiscal consolidation measures related to the reduction of salaries for the A, B and C group of jobs, the Government passed the Draft Law Amending the Law on Public Sector Pay. Reducing earnings by 6% for those categories of employees in the public sector will achieved budget savings of EUR 1.7 million annually. The law enforcement will commence on 1 July 2017.

Today's session also passed the Information on the implementation of the project of construction of the Krnovo wind farm. Bearing in mind that the adverse weather conditions have prevented the Krnovo wind farm from being connected to the electricity grid within the deadline, the Cabinet decided to extend the deadline for putting the wind farm into operation for additional six months.

The Cabinet also discussed the results of negotiations with the International Bank for Reconstruction and Development (IBRD) for the "Reform of the Tax Administration" project. The Cabinet approved the Loan Agreement between Montenegro and the International Bank for Reconstruction and Development for the project totalling EUR 14 million, and the funds are intended for: organisational restructuring, building capacity management and information technology that will improve the performance of the tax administration system.

Montenegrin Cabinet also discussed the implementation of the Programme of increasing regional and local competitiveness through compliance with the requirements of international business standards for the period 2014-2016. It was noted that the programme is being successfully implemented and that many business entities have shown interest in it. Programme refers to financial support for entrepreneurs, small and medium-sized enterprises, especially in the less developed areas in order to increase competitiveness, primarily through compliance with international standards for products. The total of EUR 70.000 has been envisaged in 2017 for this type of support.

PUBLIC RELATIONS SERVICE OF THE GOVERNMENT OF MONTENEGRO