English

Golubović: We must strengthen national production

Vlastimir Golubović

In the circumstances of natural disasters and pandemics, countries where structure of GDP is concentrated on smaller number of sectors is more vulnerable. Montenegro is an example of such country. In Montenegro, share of tourism, construction, commerce and transport in the GDP structure is very high. Therefore, we are now tasked with protecting our country from the negative impacts and creating space for achievement of favorable results in less vulnerable sectors, says in the interview for Pobjeda Mr Vlastimir Golubović, president of the Chamber of Commerce of Montenegro.

POBJEDA: What direction should restructuring of the economy go to?

Mr Golubović: Restructuring of the economy requires further affirmation of natural resources through production of agricultural products and food, construction materials , wood processing and use of rich energy potential. I emphasize the importance of the construction of accumulation hydro energy plants, production of which will be managed depending on the market demands. Montenegro is among rare countries which have chance to optimize electricity production through combination of the resources I mentioned.

That gives us reason to believe that Montenegro will soon become exported of electricity.

POBJEDA: Unfortunately, we can easily be left without significant part of revenues generated in tourism, due to the coronavirus crisis. How risks would it be if we still relied on the tourism revenues?

Mr Golubović: Efforts put in diversification of the offer end extension of season are very important for generating employment, increasing living standard and balancing regional development. We are now tasked with protecting the country from the negative impacts of this crisis and creating space for achievement of positive results in those sectors which are less vulnerable.

POBJEDA: Has the pandemic shown how important it is to develop national production and manufacturing industry?

Mr Golubović: Our country has significant potential for further development of agricultural and food production sector. The country has increased agrarian budget and introduced a set of incentive measures, creating favorable environment for investing in this area.

In the forthcoming four-year period, the Government will earmark around €250 million for investment in agriculture sector. Analyzing data, we come to a conclusion that one third of food can’t be produced here because we don’t have land capacities or favorable climate conditions.

However, the fact is that we import many products for which we have comparative advantage for production and that directly threatens national production. Therefore, there’s real possibility to invest on national capacities which will enable safer supply. I urge all citizens to give priority to purchase of national products.

POBJEDA: What is the most important economic lesson the pandemic taught us?

Mr Golubović: World economy has turned out to be non-resistant to crises that are not directly linked to it. Such phenomena, pandemics and natural disasters, emphasize the need for strengthening national production, food primarily, in order to supply the market safely.

In real economy negative impact of this situation can already be felt through reduction in tourism demand and economic activity in a majority of connected industries. Time will show what impact this crisis will have on GDP trends, purchase power etc.

POBJEDA: In your opinion, how real is the fear of entering recession?

Mr Golubović: At the moment, it is not certain how long the epidemic will take. And economy depends on that.

Slowdown of economic activities is evident and it will result in reduction of the growth rate. If we managed to deal with the crisis in reasonable time, economic activities would start to recover. In that case, consequences would be easier to handle.

Tourism revenues in the second part of the year wouldn’t be able to reach the level form the previous year.

Other sectors, like commerce, construction, agriculture and so on would suffer less damage and would recover fast. On the contrary, every prolongation of the epidemic would have very serious consequences.

Montenegro is devoting efforts in mitigating consequences. Chamber of Commerce constantly communicates with decision-makers. We are trying to come to optimal solutions. However, suppression of the virus is priority.

 

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