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Montenegro

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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $
         
GNI per capita
 US $ 106
Ranking is given out of 208 nations - (data from the World Bank)


Update No: 126 - (26/11/07)

The newest of the new
Montenegro became the latest country to emerge last year when its people voted just enough, 55% in May, to obtain independence. Any rerun would see this victory repeated with a landslide, so popular has the independent reality been. 

Montenegro separated from its former federal partner, Serbia, in June 2006 after a referendum on independence. It was an independent state until 1918 when its leaders opted to join the newly-formed Kingdom of Serbs, Croats and Slovenes that later became Yugoslavia. Montenegro was the smallest among the six republics in federal Yugoslavia and it was the only republic to stay in a federation with Serbia after 1992. 

Montenegro is poised to do really well. It is a jewel of a new country on the Adriatic. It has everything a nature-lover could want and is a tourist paradise close to the heart of Europe.

Its property market is the most expansive on the continent. It can expect a continuing flood of rich entrants, boosting prices. In particular it has attracted Russians some of whom have purchased the choicest developments. 

But its own people have problems all the same. Not everything is paradise for them.

The EU beckons
This became clear in the EU report on Macedonia for this year. The Commission expects Montenegro to produce significant results in relation to improving administrative capacity and tackling corruption.

As the newest state in the region, Montenegro is praised for making good progress in establishing the necessary legal framework and institutions following its declaration of independence in June 2006. "The parliament and government adapted to the requirements of independence. They continued improving their efficiency", the report says.

Nevertheless, the Commission considers that the capacity of parliament needs to be improved. The report recognizes the government's attempts at reorganization as strengthening the new institutions, with a focus on defence reform, foreign affairs as well as and justice and home affairs.
"However, the government's efficiency, in particular as regards implementation of legislation, needs to be further enhanced", report notes.

The underhand underside
As elsewhere in the region, corruption in Montenegro remains widespread and represents a serious problem. "The founding of political parties and election campaigns lacks transparency", the report notes.

Significant risk of corruption has been noted also in areas of construction and land use planning, privatisation, concessions and public procurement.

Public administration in Montenegro is considered as weak and inefficient. The Commission requires further efforts in ensuring the impartiality of public administration and the strengthening of its capacity, including the training of personnel.

Podgorica has achieved some progress in administrative and legal reform, but the report underlines that there are still some obstacles in the completion of this process because of a lack of consensus on issues relevant for the constitution, in particular language and religion. "Results have been limited so far as Montenegro has not yet established a sustained track record on reforms", the report says.

Lack of progress is noted also in the areas of border policing, asylum, and migration, and the Commission recommends further efforts to deal with these.

Another serious problem pinpointed in Montenegro is money laundering. "Police capacities are limited and there is not yet a proper monitoring of financial transactions beyond the banking system, especially in relation to real estate and foreign investment", the report says. "Some progress can be reported in the fight against drug smuggling, but it remains a serious problem", it adds.

Regarding human rights and the protection of minorities, Podgorica has made progress in establishing a necessary framework following independence. However, it adds: "The creation of a solid basis for minority rights protection requires the inclusion of appropriate provisions in the constitution."

Turning to the position of civil society, the report says it "remains fragile and tensions between government bodies and non-governmental organizations persist". 

The report says Montenegro has maintained a satisfactory level of cooperation with The Hague Tribunal, and it acknowledges that Podgorica has continued taking up international obligations since independence.

The economy has been growing fast and macroeconomic stability has been improved. "Risks subsist in particular from large current account deficit".

However, poor administrative capacity has been affecting the economy. "Though structural reforms were pursued, weak institutional capacities and deficiencies in the rule of law continue to hamper the proper functioning of the market economy", the report concludes. 

Montenegro adopts first constitution after independence
The parliament of Montenegro adopted on October 19 with the two-thirds majority the country's first constitution since it regained its independence last year, said reports from the Montenegrin capital Podgorica. In the 81-seat parliament, the new constitution was supported by 55 MPs, while 21 voted against and the rest abstained. The parliament also adopted a law on implementing the constitution. The new constitution, which was backed by the ruling coalition headed by Prime Minister Zeljko Sturanovic and a part of the opposition, is the second in Montenegro's history as an independent and sovereign state, after the one adopted in 1905 under the reign of King Nikola Petrovic. Following months of deliberations in the parliament, the ruling coalition managed to secure the two-thirds majority required for the adoption of the constitution to avoid a referendum. Montenegro has a population of some 650,000, of whom 43 percent are Montenegrins, 32 percent Serbs, 12 percent Bosniak Muslims, 5 percent Albanians and 1 percent Croats. 

According to the constitution, the official language of Montenegro will be Montenegrin, which is a dialect of Serbian. The pro-Belgrade Serb parties insisted that Serbian should be Montenegro's official language, and objected to the adoption of the red flag with the Montenegrin royal eagle, instead of the red, white and blue standard that is similar to the Serbian flag. The new constitution was one of the crucial missing elements for Montenegro's progress toward membership of the European Union, with which the republic signed a stabilization and association agreement.

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