Tamás Kamarási, MFIC President, (CEO Of Crnogorska Komercijalna Banka (CKB))

The possibilities and resources at Montenegro’s disposal are unquestionable, but they are not enough in and of themselves. There are many countries today that want to attract foreign investors and that invest plenty to ensure they provide the best possible conditions for those wanting to invest. Montenegro must start competing better and more decisively in this extremely demanding and important “contest”

Tamás Kamarási is the new president of the Montenegrin Foreign Investors Council and CEO of Crnogorska Komercijalna Banka (CKB). These functions prompted us to begin this interview by asking him how he assesses Montenegro’s current investment capacities and how they can be improved in the future.

How attractive is Montenegro as a destination for investment today?

– I believe in the investment potential of Montenegro. My view is confirmed by the fact that we have successful projects that are backed by foreign companies that have recognised the opportunities offered by this country. Their operations today are high quality, sustainable and displaying a high level of resistance against various negative influences. We also shouldn’t overlook the positive impact of those projects on the living and working conditions of the wider social community in the areas where they are present.

Thus, there are extremely positive examples on the one hand, but there are also those that perhaps haven’t delivered the kind of result we expected. The possibilities and resources at Montenegro’s disposal are unquestionable, but they are not enough in and of themselves. There are many countries today that want to attract foreign investors and that invest plenty to ensure they provide the best possible conditions for those wanting to invest. Montenegro must start competing better and more decisively in this extremely demanding and important “contest”.

I would stress that Montenegro’s future as an investment destination will be determined to a great extent by the readiness of the competent institutions to create a clear strategy for attracting investors. This strategy must focus on sustainable development and strengthening competitiveness, which are also strategic directions for the economy’s future development. The implementing of such a strategy should be completely free of any occasional political or other influences – it must represent a roadmap to the sincere determination for us to bring and retain dependable investors who will turn the opportunities we are discussing into successful projects.

You’ve said that the Government of Montenegro must work to devise new policies for attracting foreign investors. What are those policies and are there good practice examples?

– Harmonising with the EU acquis and achieving a stable environment for the operations of various businesses certainly remains among the priorities. One of the future policies must be directed towards more effectively solving the territorial imbalance problem in the context of the representation of foreign investments on the territory of Montenegro. I think this issue is generally important to the entire society, and not only to foreign or local investors. I will repeat the fact that we have successful projects that have raised the quality of life in some parts of the country, and I see no reason why this principle wouldn’t be applicable at the level of the entire country. I’m certain that we can achieve significant progress and lay the foundations of uniform development through the establishment of special funds or the creation of a fiscal policy that would provide investors with certain tax breaks.

One of the future policies must be directed towards more effectively solving the territorial imbalance problem in the context of the representation of foreign investments on the territory of Montenegro… I’m certain that we can achieve significant progress and lay the foundations of uniform development through the establishment of special funds or the creation of a fiscal policy that would provide investors with certain tax breaks

I also hope that appropriate attention will be paid to developing and better utilising human capital in the period ahead. A key role in this process could be played by formally recognising the knowhow and technologies that are brought by foreign investors and that form the basis of any progress for which we strive. Here, again, we reach the importance of the aforementioned strategy, which can help us recognise and implement the quality practices of other countries that have successfully solved some of the challenges I’ve mentioned.

What gives you hope in 2023, which is already looking likely to be just as tough as last year?

– At the Foreign Investors Council, we rely in particular on the assessments of international financial institutions.

Their forecasts don’t anticipate Montenegro entering recession, while GDP should remain in the positive zone, despite the announced reduced percentage of growth. I also wouldn’t overlook the fact that Montenegro is independent of global energy supply flows, which could create some new opportunities that can ultimately have a positive effect on the balance of payments internationally.

Nor should we ignore the fact that over recent years we’ve been living in, or feeling the consequences of, all the challenges we’ve faced – from the public health crisis to the situation prompted by the war in Ukraine. This has additionally motivated all those who have sustainable business models to create plans that will help them achieve positive business results, and our members are certainly also amongst them. Most of them have created mechanisms that can be activated quickly in the case of unexpected pressures. So, I view the unfolding 2023 with a dose of moderate optimism, and I think we are sufficiently empowered to find a way to create opportunities from situations that we generally don’t perceive as being positive and motivating.

We’ve seen very often in the recent past that small economies like Montenegro’s have been hit hard by turmoil on global markets and have recorded both strong falls and rises in GDP. Despite expectations that the war in Ukraine would threaten tourism, that wasn’t the case. Do you expect Montenegro to continue prospering from the influx of digital nomads and investors from both Russia and Ukraine?

– The turmoil that was felt due to the situation on global markets was primarily a result of the insufficient diversification of the Montenegrin economy. It is evident that the situation in Ukraine and other circumstances have prompted certain numbers of people to continue their lives and businesses in our country. I see an opportunity in this to further diversify the domestic economy and reduce the existing focus on a small number of branches.

I hope there will be understanding to turn that which is partly a consequence of the current situation into a lasting standard and that the trend of attracting foreign investors and digital nomads will continue after the end of the current political and security crisis in Europe, which I’m sure we all wish for sincerely.

Montenegro, like many other countries, has also been hit by inflation. To what extent did it impact macroeconomic stability and the predictability of doing business?

– Montenegro is an import-oriented country, so the inflationary pressures we feel are partly a consequence of that fact and the fiscal measures that are being implemented in the public finance system. However, I would like to emphasise the significant shifts that are evident in the quality of available data, which also influences the timely updating of the forecasts provided by domestic and international institutions.

For this edition of the White Book, we’ve tried to review in particular the process of adopting and implementing laws, public administration efficiency, the digital transformation of public services, the grey economy, taxation and fiscal levies at the local level

I see a chance in this for us to more quickly adapt to the influences to which we may be exposed in domestic and global frameworks. Significant space is provided for us to create mechanisms that will offer us more effective management and planning, which is an extremely important prerequisite for achieving business goals.

The banking system remained stable in the previous period, while the percentage of non-performing loans didn’t increase significantly in 2022. Is there still enough work with quality clients for banks?

– The situation in the banking sector confirms that there are certainly enough high-quality business opportunities. I would like to use this opportunity to note that there are encouraging indicators of increased financial discipline, but I hope to see even more decisive steps from the competent institutions in terms of combating the grey economy. Along with strengthening the trend of increased financial discipline and combating the grey economy more effectively, we will provide additional strength for the banking sector to be an even greater driver and supporter of development projects, strengthening the economy and creating attractive new business opportunities.

How much has Montenegro advanced in the meantime when it comes to eGovernment and digitalisation, in general and in the banking sector specifically?

– Unfortunately, despite certain developed and available solutions, we have been stuck in a deadlock for quite some time when it comes to digitalisation and eGovernment. If you look at the banking and commercial sector, you’ll see that clients have various digital services at their disposal. The number of active users of this type of service is growing on a daily basis, which is why many companies are basing their operations specifically on making significant advancements and investments in this type of offer.

Clients are turning to digital products because of the speed, savings in terms of time and the numerous benefits they thus receive. With this in mind, it is completely reasonable for citizens to expect to be able to perform a significant part of their obligations and jobs related to the local or state administration system online. I hope to see more tangible developments in the time ahead, which would certainly contribute to Montenegro being better perceived as an investment destination.

You will publish the next edition of the MFIC White Book soon. Will it retain its existing structure or will you introduce some new features?

– The structure of the White Book will remain largely unchanged, especially in the part covering the assessments of economic sectors, first and foremost telecommunications/ICT, banking/finance, tourism, manufacturing/energy, trade/retail and transport/logistics, in order for us to be able to follow the twelve-year trend and indicate improvement or deterioration, depending on the assessments of member companies operating in their respective sectors.

This edition of the White Book will also contain assessments that relate to categories that are individually important, namely the labour market and employment, real estate development, taxation, corporate governance and the rule of law. These are also the areas that have been subjected to assessment for the last 12 years consecutively. In the part that includes additional assessments of individual categories, these are six categories that were introduced in 2016 and relate to regulations governing public-pivate partnerships, public procurement, the digitalisation of public services, the grey market and inspections, human capital and personal data protection regulations.

We will also retain the evaluation of Montenegro’s regulatory environment, with the defining of recommendations on how to improve it in various departments. For this edition of the White Book, we’ve tried to review in particular the process of adopting and implementing laws, public administration efficiency, the digital transformation of public services, the grey economy, taxation and fiscal levies at the local level.