In the last ten years 4.3 billion dollars left Motenegro without a trace

In the last ten years 4.3 billion dollars left Motenegro without a trace


By Adnan Prekic – Podgorica

During the period from 2002 to 2011, Montenegro lost almost 4.3 billion dollars or 3.24 billion euros from its revenues without a trace, which is more than the entire annual gross domestic product of the country. This information was published in the U.S. financial agency “Global Financial Integrity.” Most of the money, in this analysis, nearly two billion euros, left the country in 2004 and 2005, when Montenegro implemented some of its largest privatizations.

According to the analysis of the U.S. agency, there are two main ways in which the money are taken out of the country. Those are gaps in the balance of payments and intentional errors in external trade. On the example of Montenegro, Global Financial Integrity states that most of the money was taken away in 2004, 980 million and the following year 925 million dollars. The amount of money that was taken away in those two years makes up 44 percent of the total amount for the entire ten-year period. In 2006, when Montenegro regained its independence after a referendum, 436 million dollars where illegally taken from the state, while in 2007, which was marked by strong credit growth and a boom in the real estate market and capital, this amount increased to 743 million.

Daily newspaper “Vijesti” for Podgorica reminds thats just in 2005 the two largest privatizations occured. That year were privatized some of the the largest companies: aluminum Combine and  Montenegro Telecom. These two privatizations brought to the sate about 200 million euros.

After a few years, in 2008 the situation stabilized. From that year a steady decline is recorded and in 2011, 222 million dollars were said to have been “lost”. Taxation of this money could be an important component of the Government’s efforts of reducing the budget deficit. Montenegro for several years has minus in the state budget, which is why the Ministry of Finance has introduced rigorous measures for tax collection. The consolidation of public finances was one of the most important task of the government of Montenegro in 2013. They increased tax control, VAT increased from 17% to 19%, and spending was reduced in the public sector. All this contributed to the fact that Montenegro increased its budget revenue by nearly 10% for 2013.

The fiscal discipline will continue in 2014. In addition to expanding the tax base in certain occupations, the focus of the financial policy of the government in 2014 will be the stricter control of employment, as well as the elimination of the black market. Results of the analysis carried out by the Faculty of Economics, shows that 14% of the employees in Montenegro work illegally, while employers pay 16% taxes and the minimum wage of 193 euros. This causes the total deficit of 90 million or 6.8% of the projected budget for 2014. If one begins from the fact that Montenegro has an average of 170,000 employees then one would come up with figures that 24,000 of them work illegally, while employers pay the minimum wage for 27,000 employees.

According to Global Financial Integrity, in the last 10 years on average from Montenegro left around 430 million dollars per year. From neighboring countries the most money was illegally extracted from Serbia, an average of five billion dollars per year.