English

Mihailović: Everyone can save up a little

Božo Mihailović

It would be great if we could find a way to reduce the budget for 2020 (€2,275 billion) by up to 5%. I think there’s enough room for that and I think it’s not too late, said Mr Božo Mihailović, professor in the Faculty of Economics and president of the Association of Economists of Montenegro.

“Anyone can save a little – in a family, in a company, in a state. That would be enough money to pay interests. Deeper structural analysis would show that budget units really have room for reduction”, pointed out Mr Mihailović.

According to him, salaries in state administration amounting over €500 million are huge.

“For our economy, Montenegro is an expensive country. We have to understand that GDP per capita stands at 47% and we should reduce the number of clerks in the administration. With present indicators, we just can’t handle such an expensive country. We must save and cut administration and consumption of budget units”, said Mr Mihailović.

First and foremost, circumstances under which the budget for the next year is adopted, should be carefully considered.

“Montenegro’s economy is dynamic and growing. The projected growth rate is pretty high. 3,4%. However, the budget derives from some wider characteristics, not just economy”, said Mr Mihailović.

He emphasized that there were barriers to easy realization of the budget – highly-constituted consumption of specific budget units, and high deficit of some other units.

The need for high capital budget is still very strong.

“There’s need for smart release of debts – repayment of debts through restructuring under more favorable interest rates for a longer time period”, said Mr Mihailović.

Mr Mihailović stressed that salaries for education and healthcare sector should have been increased earlier.

“That rise is not very important item in the budget. We must not allow our doctors to leave. Education employees should be motivated. Salary of a regular professor is around €700. Salary of  regular professor and a minister or an MP used to be the same. Now, the difference is enormous. We should question the relations in the distribution and normalize them”, said Mr Mihailović.

Once you open one valve, many others open too

“Anyone advocating for the reduction in contributions, excise, taxes should give an answer to the question: How are those funds supposed to be refunded? I think we should rather work gradually, with comprehensive analyses carried out first. We seem to be acting like €1 million is nothing for us. We must realize that €1 is big and makes difference”, says Mr Mihailović.

Amount earmarked for MA is not huge

“Considering the problems MA has, €21 million is not a high figure. The question is what €21 can do? What solution would be a long-term solution? All options should be considered”, Mr Mihailović said.

He says that any solution would be painful for the country.

“MA has played a very important economic and non-economic role. Now it is faced with serious problems, and is unable to address them on its own”, concluded Mr Mihailović.

 

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