Green Entrepreneurship Development in Montenegro
2.2 The competitiveness of the Montenegrin economy Business environment in Montenegro is significantly improved with the adoption of new legislation harmonized with EU regulations and with the implementation of institutional reforms in the fiscal system and financial sector. However, entrepreneurs are still faced with the difficult business environment, which is mostly due to the complicated regulatory framework, which affects adversely the level of entrepreneurial activity. Economy of South-East Europe in recent years suffered the impact of the global economic crisis. Beyond the crisis, long-term competitiveness and prosperity of the region, according to estimates of the Organization for Economic Cooperation and Development (Organisation for Economic Co-operation and Development – OECD), will largely depend on the level of FDI. OECD first announced the Investment Reform Index in 200611, which refers to the countries of South-East Europe. Since the publication of the publication in 2006 of the first Investment Reform Index, there has been progress in reforming policies and institutions which shape the environment for investment. Investment Reform Index 2010 shows further reforms in various areas of fundamental importance. The main conclusions and recommendations of the Investment Reform Index in 2010 are12: •
Investment policy and promotion – The economies in South-East Europe have progressively reducing restrictions on national treatment in relation to the period when the first Investment Reform Index 2006 was published. Today, the only other restrictions are in certain areas such as weapons production and processing.
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Human capital development – Government of South Eastern Europe countries must tackle the issue of skills development as the period of policy development for human resources is long and the a global increase in demand for skills must prevail.
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Trade policy and facilities – Since the Investment Reform Index 2006, all SEE countries have strengthened ties with multinational trading system within the regional trade. Montenegro is member of the WTO, CEFTA and EFTA.
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Access to finance – Limited access to finance is a major problem of entrepreneurs in South-East Europe. This problem is emphasized by the global financial crisis.
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Regulatory reforms and parliamentary processes – Most of the economies of South-East Europe have made progress in establishing an institutional and legal framework for regulatory reform as well as in implementing reforms.
11
Investment Reform Index is a project supported by the RCC and the OECD, which prescribed the methodology for assessment of progress in the reform of the Western Balkan countries in the field of investment policy and promotion, tax policy, customs policy, SME development, the fight against corruption and organized crime, politics competition, tourism, regulatory reform (RIA), and human resource management. Based on the methodology for assessment, progress index is calculated that a country achieves a previous year. 12 Source: Investment Reform Index 2010, Organisation for Economic Co-operation and Development
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