Montenegro’s approach, to economic development – centred around tourism, ICT, agriculture, energy and SMEs, and coupled with strategic government measures – promotes long-term stability and growth ~ Nik Gjeloshaj
The prerequisites for Montenegro’s political and economic stability are multidimensional. Politically, the country must have a strong governance framework, a transparent and accountable political system and a commitment to the rule of law. Speaking in this interview, Deputy PM and Economic Development Minister Nik Gjeloshaj outlines the Montenegrin government’s key initiatives.
“Our primary strategic economic goal is to achieve smart, sustainable and inclusive economic growth that improves quality of life for all our citizens. In this regard, economic policies are focused on several key areas: diversifying economic activities and increasing competitiveness, strengthening our economy’s resilience against external shocks, ensuring macroeconomic and fiscal stability and improving the business environment,” says our interlocutor.
These growth prospects are further supported by the country’s commitment to fulfilling the EU accession agenda. As he notes, “for small economies like ours, economic integration within the region and with the EU is crucial to improving living standards. Seamless access to larger markets allows companies across the Western Balkans to achieve the necessary economies of scale to be competitive. By offering an integrated market, Montenegro can attract high-quality foreign direct investments.”
In this regard, explains our interlocutor, Montenegro actively promotes regional cooperation by participating in more than 30 regional initiatives and platforms. “Our role in chairing regional mechanisms contributes to positioning our country and the region’s economies on the European map through the continuous improvement of constructive regional dialogue, the promotion of common values based on European principles and standards, and project-oriented cooperation aimed at comprehensive reform across the Western Balkans.”
He adds that the Montenegrin government is committed to enhancing regional cooperation through the implementation of the Action Plan for the Common Regional Market (CRM), CEFTA 2006 and the new Action Plan for the Common Regional Market for the 2025-2028 period, which defines key regional measures that enable a better business environment in the region and a higher level of competitiveness through digital transformation mechanisms. Montenegro supports enhanced intra-regional trade within the Western Balkans, improved customs cooperation between the Western Balkans and the EU, and the modernisation of border crossings. These instruments are vital to accelerating economic convergence with the EU and nurturing good neighbourly relations in the region.
He notes that green corridors are fully recognised as a means of facilitating transport and trade within the region and between the region and the EU, particularly in terms of customs cooperation, data exchange, risk assessment, the alignment of working hours and the modernisation of infrastructure, equipment and IT systems at border crossings, with the aim of reducing formalities and waiting times for goods to be cleared by customs.
How would you evaluate overall macroeconomic stability and the conditions for foreign investment in Montenegro?
— Montenegro has made significant progress in terms of achieving macroeconomic stability. This is evident in our steady GDP growth, controlled inflation rates and improved standard of living for our citizens. Despite being a small, open and import-dependent economy with limited diversification, we have focused on several key sectors in an effort to drive our economic development.
To foster sustainable domestic production and encourage foreign investments, we have adopted pro-business policies and streamlined regulatory frameworks that create an environment conducive to investment. Our geostrategic location and EU membership candidacy further enhance our attractiveness among foreign investors. Alignment with EU standards is not just an administrative task, but a key factor in attracting foreign investments. Investors seek stability, predictability and a favourable business environment, and Montenegro is continuously harmonising with EU norms as part of the EU integration process.
I would like to highlight that receiving the IBAR is a direct signal that Montenegro has made significant strides in important areas and can continue with the process of aligning with EU laws and standards in preparation for accession by 2028. Receiving the IBAR also paved the way to close other chapters in which Montenegro has met the final benchmarks.
Montenegro’s reforms linked to the EU’s Growth Plan for the Western Balkans aim to accelerate enlargement by improving infrastructure, youth employment and digital public services
In this context, Montenegro is ready to close several negotiation chapters by the end of the year. The chapters that are closest to being closed are Chapter 7 – Intellectual Property Law, Chapter 10 – Information Society and Media, Chapter 20 – Entrepreneurship and Industrial Policy, and Chapter 31 – Foreign, Security and Defence Policy.
Montenegro’s legal framework for investment remains clear, comprehensive and conducive to both foreign and domestic business operations. We have consolidated our investment promotion agency structure and strategy over recent years, exemplified by the Montenegro Investment Agency (MIA), a government-funded, autonomous public agency. The MIA is tasked with promoting and facilitating investment, realising public-private partnership projects, promoting innovation and providing investors with comprehensive information on business registration.
In 2022, in cooperation with the World Bank Group, the Montenegrin Ministry of Economic Development developed a comprehensive Investment Incentives Inventory to help catalogue and navigate the various incentives on offer. This has been instrumental in supporting digital transformation and attracting investments in innovative solutions that enhance production processes and living conditions.
What do you consider as the key drivers of the country’s economic development, and what crucial measures has the government taken to ensure the smooth functioning of the economy?
— Montenegro’s economic development is driven primarily by its strong tourism sector, which contributes significantly to the country’s GDP by attracting investments in the hospitality sector. The government has recognised the importance of sustainable tourism and has implemented tailored subsidies, educational workshops, certification programmes and international networking to promote sustainable destination management.
In addition to tourism, the ICT sector stands out as a key driver thanks to its remarkable resilience and rapid growth. The government’s focus on building a digital, smart and green economy is evident through continuous support programmes that encourage competitive business solutions and export diversification.
The agricultural sector also plays a vital role, with the government having significantly increased subsidies and budget allocations to integrate agriculture with tourism and support the manufacturing industry and crafts. This integration helps improve the overall competitiveness of the economy.
Energy sector initiatives are another crucial component, where efforts are being exerted to increase green production capacities, improve energy efficiency and enhance infrastructural connectivity with neighbouring countries. These measures are intended to create more sustainable and interconnected energy infrastructure.
Our efforts have been focused on reducing trade barriers, improving market access and aligning our trade policies with EU standards. The government has also been proactive in supporting entrepreneurship and SMEs, recognising their importance to boosting the national economy’s competitiveness.
Through programmes designed to stimulate new business ventures and strengthen existing ones, there is a focus on fostering economic activity and enhancing the competitiveness of domestic products and services. The Ministry of Economic Development has been instrumental in creating and implementing these support programmes, which include financial and non-financial assistance aimed at fostering innovation and competitiveness on the domestic market and internationally.
In the industrial sector, we have implemented policies to increase competitiveness and innovation. By harmonising our industrial standards with those of the EU, we are working to ensure that Montenegrin products meet standards of quality, fostering greater regional economic integration. In this regard, the Government of Montenegro has adopted its Industrial Policy for the 2024-28 period as a comprehensive strategic document aimed at further enhancing and strengthening the competitiveness of industry.
The new Industrial Policy is focused on digital transformation and improving the innovative performance of companies, as well as their transition to green and sustainable business practices. This will improve the competitiveness of Montenegrin industry, enabling faster integration with the European single market.
Financial and technical support is provided for sustainable investments linked to productivity, innovation, decarbonisation and gender equality, with institutions like the Innovation Fund and Investment Development Fund of Montenegro offering investors favourable credit lines.
| BREAKTHROUGH After receiving the IBAR, Montenegro is most likely to close several negotiation chapters by year’s end, including chapters 7, 10, 20 and 31 | PRO-BUSINESS We have adopted pro-business policies and streamlined regulations to foster sustainable domestic production and attract foreign investment | BALANCE Despite progress, Montenegro’s coastal regions continue to outpace its northern regions in terms of growth, with ongoing efforts required to balance development |
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