Montenegro Energy and Security

By | June 1, 2022

Economy and energy

Already at the time of the Federal Republic of Yugoslavia, Montenegro had pursued an economic and monetary policy independent from the Serbian one with the adoption of a different currency: between 1992 and 2002 the region used the German mark and since 2002 has adopted unilaterally the euro, a currency that is still legal tender in the country.

In the last decade, the country’s GDP has grown dramatically, as has per capita wealth which has gone from $ 1300 in 2000 to $ 12,412 today. A growth held back by the external effects on the country of the global economic crisis of 2008-09. Montenegro’s tourism potential remains very high. The main obstacle to full development is the latent regional instability and infrastructural deficiencies. Despite this, tourist flows have experienced a volume in constant growth, so much so that the sector represents about 4% of the GDP. In the same period, foreign direct investments also grew sharply, especially in the real estate sector.

According to indexdotcom, the economic system presents quite serious problems. Unemployment, for example, affects more than a third of the active population. At the same time, the trade balance deficit reaches more than 17% of the national GDP, although a high share of incoming investments contributes to finance a large part of this deficit. There remains the problem of severe corruption, also linked to the widespread presence of criminal organizations.

Despite the problems, the Montenegrin economy is particularly dynamic and in the past decade has experienced growth rates of over 5%. After the crisis of 2009 (-5.9%), Montenegro managed to start a good recovery in the following two years, to then settle back on contained growth. Although the forecasts for the next few years remain positive, the recovery will remain constrained by some external factors: firstly, the persistence of the recession in the euro area and, secondly, the heavy national public debt (equal to 58.8% of GDP), fueled by the financial collapse of the Kap, the main national aluminum industry at the center of a legal dispute between some of the most important holding companies Central and Eastern European mines. From an energy point of view, the internal market is small and underdeveloped. Coal dominates among the items of consumption. In the past, Montenegro was characterized by high energy intensity, i.e. high consumption in relation to GDP, mainly due to the activities of the highly developed aluminum industry. The momentum of the tourism sector has partially reduced the energy intensity of the GDP, however above the OECD average.

Defense and security

When the union of Serbia and Montenegro was dissolved in 2006, part of the joint army was assigned to the Montenegrin armed forces, limited by President Filip Vujanović to just 3,000 soldiers. Part of the army was devoted to the creation of a border police which is concentrated along the Serbian and Albanian borders. The objective of the Montenegrin security forces is to participate in international peacekeeping operations, even though Pogdorica had never taken part in them until 2009, merely sending civilian personnel or making part of their own resources available. Since 2010, Montenegro has participated in the NATO ISAF mission with a contingent of 27 soldiers.

Foreign policy has been oriented in a pro-Atlantic sense with the conclusion of some agreements with the USA on security, use of infrastructures and vigilance against the proliferation of weapons of mass destruction. International cooperation is particularly relevant in the defense sector, since, since independence, the country would not have been able to afford the expenses necessary to ensure the functioning of the army.

Lexicon of the 21st Century

Montenégro. – In June 2006 the independence of Montenegro put an end to the State Union of Serbia and Montenegro: the Montenegrin population called to pronounce themselves in the referendum of May 21, 2006, with 55% of the votes in favor, declared themselves for the independence that it was officially sanctioned on June 3. At the end of the same month, Montenegro obtained wide international recognition and became a member of the United Nations (June 28). The first legislative elections, in September, registered the success of the Coalition for a European Montenegro (41 seats) dominated by the Democratic Party of Socialists (DPS), originally a Montenegrin branch of the Yugoslav Communists. A new grouping of pro-Serbian parties, the Serbian List, won 12 seats, while just 11 seats were assigned to a coalition that included the People’s Socialist Party among the others. In October 2007, after the ratification and promulgation of the new Constitution, an indispensable prerequisite for negotiations with the European Union, Montenegro signed the Stabilization and Association Agreement, the first important step in favoring the integration process of Montenegro in the EU. In April 2008 the incumbent president Filip Vujanović, elected when Montenegro was still united with Serbia, was reconfirmed as president, winning 51.8% of the votes, significantly distancing the candidate of the Serbian list, A. Mandić (19.5 %). Milo Djukanović was appointed prime minister, leader of the DPS, who has been at the top of Montenegrin political life for over two decades; resigned in December 2010.

Montenegro Energy