Montenegro

Ministry of Finance of Montenegro, the Royal Netherlands Embassy and UNDP signed an Agreement of Cooperation

Podgorica, 16 March 2009

The Project ‘Strengthening capacities of the Ministry of Finance to efficiently plan, analyse and manage the public finances in support to country’s aspirations for sustainable development and EU integration’ is a joint initiative of the Government of Netherlands, UNDP Montenegro and the Ministry of Finance, and it will be financed by the Government of Netherlands with 750,000 Euros for the next two years.

 

 

The Government of the Netherlands and the UNDP will invest efforts to assist the Ministry in creation and implementation of:

1. common policy platform for efficient functioning of appropriate coordination mechanism in economic and fiscal programme,
2. budget planning,
3. projection of public finance indicators, and
4. insurance and tax policy in accordance with the EU standards.

The Project is designed as a capacity building initiative that combines

1. trainings on new policies,
2. drafting of manuals and legal documents,
3. development and implementation of financial monitoring, and
4. reporting framework that is harmonized with acquis communautaire.

“The project aims to strengthen the Government’s capacities for planning, analysing and managing public finances for the benefit of its citizens, and support to the country’s aspirations for sustainable development and EU integration in this domain is very important. The outcome will include enhanced institutional and administrative capacity for financial analysis, management, policy development, dialogue and fiscal planning,” said H.E. Mr. Igor Lukšić, Deputy Prime Minister and Minister of Finance in the Government of Montenegro. „The project is particularly important for preparation of fiscal programme, enhancing of budgetary capacities and for mid-term budget planning, for the tax and customs systems, as well as for the sector of insurance and its monitoring,“ said Deputy Prime Minister Lukšić, and he stressed that the realization of this project would move the Montenegrin finance system closer to the EU standards.

 

‘The Kingdom of the Netherlands wishes to support the efforts of Montenegro in achieving the EU standards, in order to accomplish its goal –the EU integration,” said H.E. Mr. Ronald J. P. M. van Dartel, Ambassador of the Royal Netherlands Embassy in Belgrade. He said that the project for strengthening the capacities of the Ministry of Finance is one of bilateral projects of Montenegro and the Netherlands worth more than ten million euros in total. „It is in our common interest to use the pre-accession phase efficiently to provide the best results in the transition process. This project came at the right time, when the financial crisis is heavily affecting every country. Governments need to make the right move in crisis situations, and cooperation and a good advice can help the Montenegrin Government and the Ministry of Finance, which plays a key role,“ Ambassador van Dartel said. He also reiteated that the pre-accession period of Montenegro can be used for successful finalisation of the transition process and implementation of the reforms in quality manner.

“UNDP is looking forward to the realization of this two-year project, which will complement the Ministry’s efforts in the finance system reforms and, although one successful year with continued economic growth is behind us, the global economic crisis brings new challenges to the whole world, and to a certain extent some of its implications will be felt in Montenegro, too.  The ongoing reforms in the area of public finance management will be challenged with capability of the Country to adjust to the essential complexity and necessary cross-cutting nature of the policy-making process in the public finance management, having also in mind the new phase of EU integration process. Therefore, we hope that the Project will be of a help to the Ministry of Finance to further strengthen the country’s financial system as essential for development goals such as sustainable economic growth and reduction of poverty,” said Mr. Alexander Avanesov, UNDP Resident Representative/UN Resident Coordinator in Montenegro.

 

 
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The Project of Strengthening capacities of the Ministry of Finance complements the ongoing efforts of the Ministry of Finance to reform and strengthen the public finance sector. It is expected to contribute to modernising the financial system and its harmonization with the EU standards, thus better serving development goals such as sustainable economic growth and poverty reduction. The project’s support will be focused but not limited to: 1) Economic and Fiscal Program; 2) Budget; 3) Tax and Custom; 4) Public Finance indicators; 5) Insurance.

The project will have a three-pronged approach:

1. Training of key personnel of the Ministry of Finance and other relevant institutions in technical areas, such as projection of macroeconomic indicators, mid-term budget planning, tax and custom regulations, financial reporting and public policy initiatives.
2. Development of legal and administrative framework in accordance with the EU requirements, and in particular with acquis communautaire to ensure more integrated and long-term cohesiveness of EU integration process.
3. Improvement of institutional mechanisms to ensure more systematic information flow, public consultation, regular monitoring and review of financial policies and coordination with other agencies, at national and local levels.