WASHINGTON, June 16, 2016 — The World Bank Group’s Board of Executive Directors today endorsed a new Country Partnership Framework (CPF) for 2016-2020 to support Montenegro on a path toward more sustainable and inclusive growth. The new framework will selectively support Montenegro’s development agenda, with a particular focus on creating employment and economic opportunities, and restoring fiscal balance in order to accelerate long-run inclusive growth.
Montenegro faces the significant challenge of creating good jobs for its people. Solving this problem requires actions to strengthen the supply of labor as well as increase demand for labor from potential employers. Young job seekers need to be equipped with relevant skills, while less-skilled and more vulnerable segments of the population need access to opportunities and jobs.
“Creating better economic opportunities for the people of Montenegro is at the heart of our new strategy,” said Tatiana Proskuryakova, World Bank Country Manager. “We will continue strengthening the education and training system so as to better align it with the needs of the evolving labor market, while at the same time investing in creating job opportunities in sectors such as tourism and agriculture.”
All arms of the World Bank Group will join together to support public sector reform and private sector investments to stimulate faster and more inclusive growth. The International Financial Corporation (IFC) and the Multilateral Investment Guarantee Association (MIGA) will assess private sector opportunities.
"IFC will continue supporting the private sector through investments and advisory work to encourage economic growth and job creation in Montenegro,” said Thomas Lubeck, IFC Regional Manager for the Western Balkans. "IFC will be engaged in efforts to attract private sector participation in infrastructure, renewable energy and tourism related sector projects and help to improve access to finance through banks and microfinance institutions and resolution of non-performing loans.”
Today, Montenegro’s growing fiscal deficits and public debt levels are making it more difficult to finance long-term private sector development at a pace needed for Montenegro to become a prosperous high-income country and move forward in its accession to the European Union.
“Restoring macroeconomic and fiscal sustainability and strengthening the financial sector will be critical to stimulate private investment and accelerate private sector growth and job creation in the long run,” said Ellen Goldstein, World Bank Regional Director for the Western Balkans. “It is also an opportunity to improve the quality of public spending for more inclusive social and employment services for poor and vulnerable populations, so that all Montenegrin citizens benefit from future development.”
The World Bank Group’s Country Partnership Framework benefited from extensive consultations with stakeholders at various levels of government, private sector, academia, civil society, and international development partners. Stakeholders agreed on the need to strengthen macro-fiscal resilience as a foundation for future growth, and to shift to a growth model driven by the private sector as a vehicle for inclusive job creation in all regions of the country.
The new framework suggests between US$250 and US$300 million in indicative lending for Montenegro over the CPF period from the World Bank, tailored to the pace of economic reforms. The World Bank has an on-going portfolio of four operations for a total amount of US$120 million. Support to the private sector from the International Finance Corporation may be in the range of US$40 to US$60 million, depending on market conditions. IFC currently has three on-going projects for a total outstanding portfolio of US$29 million.
For more information on the World Bank’s work in Montenegro, please visit: https://www.worldbank.org/en/country/montenegro
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