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Montenegro

[Montenegrin]

Socio-economic profile

Although the country went through a period of hardship in the early 1990’s due to the war and sanctions imposed against the Socialist Federal Republic of Yugoslavia, the economy of Montenegro is growing well. The country adopted the Deutsche Mark and then the Euro, which helped to stabilise the economic system during a time when prices needed to be re fixed and trade opened up.

The first wave of economic crisis had little impact on the country because its construction industry was flourishing. But in 2009 the crisis hit harder: aluminium exports fell and factories had to close, industrial production contracted by about 32% and mining and manufacturing activities slowed down. From 2009 the economy shrunk by 14.2% every year.

When it comes to looking for work, the reduced number of jobs hits women particularly hard with 52.4% of women in work in comparison with 68.4% of men. Maternity leave is generous, one year paid leave is enshrined in the labour laws. But the lack of part-time jobs and child-care facilities make it hard for women to come back into the workforce.

Employers suggest that the high tax burden is one reason for the fact that 30% of the countries GDP is generated by the informal labour market: 55% of self-employed people are engaged in the informal economy, 75% of farmers and 93% of unpaid family workers.

Targeting support to Montenegro

To help countries on their way to joining the EU, a fund called the Instrument for Pre-accession Assistance, or IPA, has been created by the European Union. One of IPA’s key goals is to prepare countries to run the programmes which, when they join the EU, will receive support from funds such as the European Social Fund (ESF).

Ensuring the funds are used correctly

Fighting corruption is a crucial challenge for most of the countries wanting to join the EU, it remains prevalent in many areas and needs to be tackled. Tangible results and credible track-record in the fight against corruption need to be shown and assistance from the European Union will pay particular attention to this aspect.

Tackling unemployment

The percentage of young people looking for work hit 45.5% in 2010 before coming down to 37.1% in 2011. These people often find themselves inactive, pushed into undeclared labour or forced to accept jobs with poor conditions. The north of the country has a higher unemployment rate and the country plans to put in place a regional development strategy to focus efforts on areas that need support.

Getting more qualified people into the labour force

Employers say they are missing candidates that are highly qualified and those that have practical skills, such as foresters, bakers, car mechanics and so on.

The government is focusing on improving the education system and some changes should be in place by 2014. Since 29.6% of Montenegrins over 15 years old only have primary education or lower, these changes are vital.

IPA – support where it is needed

The Instrument for Pre-Accession Assistance (IPA) supports the candidate and potential candidate countriesto develop in a way that tackles social challenges and benefits the entire society.  It is based on the strong sense of solidarity that exists between the EU and the countries at its borders - countries with which the EU shares enduring commercial, historical and cultural ties. IPA is directed towards countries that are on the pathway towards joining the EU.

Between 2007 and 2011, 10% of the overall funding set aside by IPA for Montenegro went to projects aimed at social development. Here was how the funding was used over that time:

  • 2007-2010, support came to €8.63 million

As of 2012 IPA IV (Human resources development) has started to be implemented and an amount of €2 775 000 in 2012 and €2 808 000 in 2013 are to be dedicated to employment and social policies.

Financial Plan

IPA allocation from the European Union, covering projects in all sectors, between 2011 and 2013 came to €166 million. Following the granting of candidate status in 2011, the funds dedicated to Human Resources development (HRD) are clearly earmarked in the EU allocation of funds.

2007

2008

2009

2010

2007

2012

2013

31 400 000

32 600 000

34 500 000

33 521 000

31 400 000

33 035 000

Including €2.775.000 for HRD

34 414 000

Including €2.808.000 for HRD