In the economy, the new government will have to pick up where the old one left off. In strategic, long-term sense, I don’t see there will be any significant changes. And it won’t be good if there are any, said Professor Vasilije Kostić, from the Faculty of Management and economic analyst.
Answering the question what the new government should focus on in the economy, he said that there couldn’t be any significant changes.
“If we take into consideration the principle that decision making process in economic policy should be focused on development of its “anti-fragility”, or in other words, development of long-term sustainability of the system with the improvement of its ability to adapt to the circumstances – then the new government shall continue where the previous one left off. In strategic, long-term sense, I don’t see any significant changes. In operational, short-term, there could be some changes, but eventually they will come down to the same thing”, Professor Kostić explains.
What does it precisely mean? Mr Kostić reminds of all the liabilities, objectives…
“Montenegro’s strategic, long-term, economic objectives can be presented like this: European living standard, dynamic competitive export-oriented economy with low unemployment rate, country with strong social function, more developed healthcare and education system. Mid-term, short-term, operational and other objectives include the following: consolidation of public finances, reduction of debt, reduction of fiscal deficit, increase in export, pensions and social benefits, reducing unemployment, development of production of domestic food and other”, Mr Kostić explains.
He reminds that MNE has taken some international obligations regarding publicly defined policies. That’s another reason to claim that there cannot be any significant changes.
“For that reason I think there’s not much room for “innovations” when it comes to defining economic policy. That means that the future government will work on the same: achievement of the defined goals. Why would you change something that has been adequately established?”, Mr Kostić says.
He thinks that the new government will do what it has to do.
“The new government will not even have the specific model of creation bur rather of development of the organization of economic activity in the circumstances of coronavirus. Program of strategic development of the previous government will be helpful”, he said.
What should be the first actions of the new government? Stable and dynamic economic activities, Mr Kostić answes.
“The first economic task of the new government will be to provide stable and dynamic performance of economic activities and preserve employment. That’s not easy at all, not even in regular circumstances”, Mr Kostić explains.
In addition, it is necessary to service financial liabilities on the grounds of loans.
“Which is going to be another challenge, as COVID-19 situation is plunging revenues and increasing expenses”, Mr Kostić warns.
Commenting on the statements that we might come into the situation of the lack of money, Mr Kostić says it is a real danger. However, he doesn’t think we could go bankrupt.
“Bankruptcy is the term which is often misused for political ends and is subjectively perceived. If bankruptcy is synonym for demise, then I don’t believe in such scenario. There are international institutions and various aid and support mechanisms. But the danger of the lack of money is real, taking all circumstances into account”, Mr Kostić says.
However, we should bear in mind that the structure of international financial system has been significantly changed in the favor of countries that apply for funds.
“And that gives a dose of certainty in overcoming challenges of that kind”, Mr Kostić says.
Mr Kostić also thinks that our system has been reinforced though shocks.
“When the system is exposed to stress, it becomes stronger and brings new value from the situation, it becomes able to adapt to new circumstances and, generally, makes progress. Without mutations, there cannot be adaptations or evolution”, Mr Kostić said.
