Country profile - Societal developments (Montenegro)

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SOER Country profile from Montenegro
Published: 26 Nov 2010 Modified: 21 Mar 2015

EU accession/enlargement

Montenegro is a potential candidate for membership of the EU. The European perspective was reaffirmed by the Council in June 2006 after recognition of the country's independence by EU Member States. On 15 October 2007, Montenegro signed the Stabilisation and Association Agreement (SAA) and an Interim Agreement on trade and trade-related issues. A European partnership with Montenegro was adopted by the Council on 22 January 2007 and the Montenegrin government adopted a National Action Plan (NPI) on 17 May 2007. Montenegro submitted its application for EU membership on 15 December 2008. Montenegro has received candidate status on 9. November 2010.

Progress in Environmental Management in Montenegro

In 1991, Montenegro’s National Assembly declared the country to be an ecological State, committed to protecting the environment to the highest level. Since 1991, the Ministry of Spatial Planning and Environment has prepared, and the Montenegro Parliament adopted, a series of environmental laws, regulations and ordinances.

In 2000, Montenegro published its first national State of the Environment Report. It outlines the state of the environment in general terms, as specific data were not available due to poor and unorganised monitoring systems. In 2001, the government adopted the Development Directions for Montenegro, which provided a long-term strategic direction, including environmental, economic and social orientation. Between 2000 and 2006, the government adopted the main legal framework that included environmental protection, strategic environmental impact assessments, impact assessment and waste management laws. In 2006, the government completed a final draft of the National Sustainable Strategy that was based on the concept of sustainable development, identification of environmental problems, natural resource management, and economic and social development.

From 2006 until today the following laws have been adopted in the field of environment:

·        Law on Environment (Official Gazette of Montenegro, no. 48/08)

·        Law on air quality (Official Gazette of RM, br.48/07)

·        Law on the ratification of the Kyoto Protocol to the UN Framework Convention on Climate Change (Official Gazette of RM, no. 17/07)

·        Environmental Protection Act (Official Gazette of Montenegro, no. 51/08, 21/09)

·        Law on chemicals (Official Gazette of Montenegro, No. 11/07)

·        Law on genetically modified organisms (Official Gazette of Montenegro, br.22/08)

·        Law on Sea (Official Gazette of Montenegro, no. 17/07, 06/08).


With the Environmental Law (Official Gazette of Montenegro, No. 48/08) and the Decree on Amendments to the Regulation on organisation and working methods of public administration (Official Gazette of Montenegro no. 68/08) of 16 November 2008, the Agency for Environmental Protection was established. The Agency formally and legally began to function on 1 March 2009 when regulations on the internal organisation and systematisation of Agency for Environmental Protection were enforced.

Internal organisational units are:

·        Sector for monitoring, analysis and reporting;

·        Sector for the issue of permits;

·        Sector for communication and information system management;

·        Department of environmental inspection;

·        Service for legal and financial affairs.

Transformation from centrally planned economy to market economy

The Montenegrin economy weakened in the 1990s because of economic sanctions, wars in the region and the unstable political environment. This resulted in hyperinflation, high unemployment and low income for citizens. Additional problems for economic development arose from differences in economic, political and social spheres between Serbia and Montenegro, which remained until Montenegro became an independent state. As a result of these complex factors, GDP reached its lowest level for the period 1991-2007 in 1993 when it was only $ 1 706 per person – including frozen prices from 1994 and the informal economy.

The economy of Montenegro has made progress since 2006. In terms of current prices, GDP in 2007 reached $ 5,355 per person, or $ 9,934 per person based on purchasing power parity (PPP) which is 2.2 times more than in 2000. GDP growth has resulted mainly from a large increase in foreign direct investment (FDI), expansion of the service sector in areas such as tourism and jobs related to tourism, and the real estate sector.

The government has conducted a series of economic reforms, of which the most important were privatisation, the introduction of the euro as the official currency, price liberalisation, tariff reduction, opening the economy and the establishment of control over the budget deficit.

These developments and other effective strategic changes have provided a solid basis for rapid economic progress in the years that followed. More than 80 % of state-owned enterprises have been privatised, which led to the development of stock markets. The influx of FDI in 2007 amounted to €1 007.7 million, while the outflow amounted to €482.2 million. A series of laws and regulations have been adopted which promoted a competitive business environment.


Globalisation, urbanisation, production and consumption

Macroeconomic stability is as significant for Montenegro as economic policies that enable the use of the global market as an opportunity for development. Due to this, Montenegro is increasingly open for foreign investment and is among the first in Europe in terms of foreign investment per person.

Cities and other urban settlements are the centres and carriers of economic and social development, as, to a lesser extent, are some rural, tourist and areas of special natural importance. As a consequence of the migration process, demographic pressure is high particularly in the cities and the largest urban settlements. Every year sees a reduction in the population density of settlements outside the cities and in rural areas.

Productivity in Montenegro is growing much more slowly than consumption.


Armed conflict / war legacy

During the 1991-1995 Bosnian War and Croatian War, Montenegro participated as part of the Federal Republic of Yugoslavia (FRY) and faced a big challenge. In May 1992, the United Nations imposed an embargo on FRY that affected many aspects of life in the country. The entire Montenegrin industrial production stopped, and the republic's main economic activity became the smuggling of consumer goods – especially those in short supply including petrol and cigarettes, both of which skyrocketed in price. It became a de facto legalised practice and it went on for years.

This had very negative impacts on the environment, especially because of the increased risk of illegal imports of dangerous waste as well as the danger of industrial accidents due to the lack of imported raw materials and spare parts for industrial facilities. Negative effects were also caused by the suspension of international cooperation and the interruption of international financial support for projects in the field of environmental protection. NATO bombing of FRY during 1999 also had a very negative impact on the environment.

 All these issues had long-term negative consequences for the environment and development in general.



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