Dirk Niebel, German Minister of Economic Cooperation and Development

Fruitful Development Cooperation

The ties between Montenegro and Germany are reflected in many different areas, this includes very fruitful development cooperation

Dirk Niebel, German Minister of Economic Cooperation and Development

During the fourteen years that Germany and Montenegro have been working together on development issues many joint successes have been achieved, and the portfolio of ongoing projects continues to be impressive. Germany is still Montenegro’s second biggest donor, coming after the EU but before the US and Turkey.

PARTNERS

Successful cooperation always needs a reliable and committed partner – and Montenegro has shown itself to be a fitting partner right from the start

EU

Through our early involvement in Montenegro right from the start, we have shown that we want Montenegro to be part of the European family

ENVIRONMENT

The more stable the overall environment is, the more attractive the location becomes for foreign companies – including German ones

Mr. Niebel, you will be coming on an official visit to Montenegro in August. What are the priorities of your visit’s agenda?

– The agenda for my visit to Montenegro is, on the one hand, to find out how the current projects are progressing, and, on the other, I am also keen to learn more about the progress that has been made with regard to the process of moving closer to the EU.

In the last ten years, Germany has invested over €250 million in Montenegro through various channels. Are you satisfied with the efficiency of these investments?

– For our side – by which I mean, development cooperation – I can answer that question with a clear “yes”. I think that it has obviously paid off that we Germans led the way in 1999 – immediately after Yugoslavia broke apart – and got involved in building up the country, particularly its infrastructure. Just think, for example, of how the water supply and sanitation system has been rebuilt all along the Adriatic coast or how the hydropower stations at Piva and Perucia have been restored to working order. Together these two plants provide for about three quarters of Montenegro’s energy needs.

However, successful cooperation always needs a reliable and committed partner – and Montenegro has shown itself to be a fitting partner right from the start. It also helped that both Montenegro’s politics and its economy are clearly pro-European – that has made a lot of things easier.

Dirk Niebel, German Minister of Economic Cooperation and DevelopmentI think that, through our cooperation, we have been able to make a not insignificant contribution towards stabilising both Montenegro and the region as a whole. That in turn has been the basis for Montenegro’s success in moving closer to the EU. And Germany has also benefited from this cooperation – it has opened and is still opening doors for many German businesses. And although Montenegro still has a good way to go, I think the country can be very proud of what has been achieved so far!

Until about 2016 we will continue to be actively engaged in projects in Montenegro. Our ongoing and planned projects add up to a total of over €300 million

Following Croatia joining the EU, Montenegro is now the number one candidate among West Balkan countries in terms of opening of the accession negotiations. From your perspective, what are the priorities that Montenegro needs to adhere to in order to expedite its accession to the EU?

– Here we are talking about precisely that part of the journey which still lies ahead for Montenegro: It is not just by chance that the priorities of the accession negotiations are basic rights and justice, and fighting organised crime and corruption. In our view Montenegro’s flanks are still open in that regard and there is still a great deal of work to be done.

However, if Montenegro is serious about wanting to become a member of the EU, then it will have to meet EU-defined standards with regard to the rule of law, establish stable democratic and free-market structures, observe wide-ranging human rights and minority rights, and bring its legislation and government administration into line with EU standards. I see huge challenges still ahead that Montenegro needs to be aware of. Nevertheless, we will do everything we can to help Montenegro realise its ambitions to become an EU member and I am convinced that Montenegro will address these problems with the same determination that we have come to know from our past years of cooperation.

In the last two years, Germany and Montenegro have noticeably increased their contacts. What have been the results of the contacts between the two countries so far?

– One result, if you take me personally, is that, although this is admittedly my first time in Montenegro, I am on my third visit to this region since taking office as development minister. The whole south-eastern region of Europe is very important to us.

We are convinced that we must do everything we can to promote the integration of this region – so that, in the best case scenario, instead of just being next to one another, the individual countries will start working with one another. That is the best strategy for reconciliation and lasting peace – and I am sure that the countries of south-eastern Europe share that same interest.

For Montenegro in particular, we want, for the future, to stop being development cooperation partners. That is not meant in a negative way, quite the opposite! Montenegro has made good progress, so that we have decided to withdraw to an extensive degree, but not yet completely. Until about 2016 we will continue to be actively engaged in projects in Montenegro. Our ongoing and planned projects add up to a total of over €300 million.

And it will still be possible for us to offer Montenegro support beyond 2016, on a case-by-case basis, within the framework of regional programmes. We have already done that in the case of regional projects in the field of energy efficiency and water supply. We are not planning to just drop everything, we will continue to be present in Montenegro.

Thanks to its location on the Adriatic and its largely unspoilt countryside, Montenegro therefore has excellent potential for developing tourism as the mainstay of its economy. I could imagine that, sooner or later, many more German tourists will discover your beautiful country for themselves

How has Germany helped, and will help, Montenegro on its way to the EU membership?

– I think that, through our early involvement in Montenegro right from the start, we have shown that we want Montenegro to be part of the European family. That has been a reciprocal process: Montenegro also indicated its intentions early on, embarking on a course that led towards the EU – and we have supported that course, not only politically.

Our cooperation has helped to stabilise Montenegro and advance the country’s development. The goal is now within reach: a good year ago the European Union began accession negotiations with Montenegro. However, our basic way of doing things is also that we do not break off projects in the middle – all our committed projects will be carried out properly right to the end as agreed. That is another aspect of a partnership based on trust, such as we have with Montenegro.

Which economy segments have the biggest potential for more trading between the two countries?

– You don’t need to be an economist or an analyst, all you need is two good eyes to see what potential and what riches your country has to offer. Some of the region’s finest sandy beaches are in Montenegro, with the bathing season lasting from May to November and with spectacular nature parks offering diverse opportunities for sports and nature tourism. Thanks to its location on the Adriatic and its largely unspoilt countryside, Montenegro therefore has excellent potential for developing tourism as the mainstay of its economy.

I could imagine that, sooner or later, many more German tourists will discover your beautiful country for themselves. However, I do see areas where some catching-up is needed: if this potential is to be fully harnessed, further improvements will need to be made in the infrastructure, especially in coastal areas, to bring it up to international standards. An uninterrupted electricity supply and modern water and sanitation systems are certainly a must. It is also true for other areas of the economy that, the more stable the overall environment is, the more attractive the location becomes for foreign companies – including German ones!

Several dozen German companies have been operating in Montenegro with Montenegro expecting FDIs to be made in the production sector. Do you think that that is a realistic expectation considering the Montenegrin economic potential that is on offer to direct investors, and do you think that Montenegro is ‘visible’ enough to the German economy and German businesses?

– I am pleased to have a group of business people with me as part of the delegation on my visit. You can believe me when I say that my fellow travelers have a genuine interest in Montenegro. However, your question does of course touch on an aspect that we do need to address: we need to make Montenegro and the region as a whole with all its possibilities more well known.

Montenegro is an interesting location for international businesses by reason of its position on some important transit routes. The representatives of companies and business associations accompanying me on my visit will certainly use this opportunity to make valuable contacts and to network. I will also be meeting with the young graduates from the Scholarship Programme of German Industry, which my Ministry supports. They are all multipliers and will gradually help enhance the links between our two countries so that, in addition to the political relationships, economic and also personal relationships are built up. I also know that Montenegrins are very interested in Germany, both the country and its people. I would be pleased and supportive if, in return, the people in Germany were to develop an even greater interest in Montenegro.

I would like to repeat that, without improvements in the infrastructure, it will be hard to attract more tourists

Montenegro is certainly one of the most attractive tourist destinations in the region, with a huge untapped tourist potential. To what extent is Germany going to support this important economic segment in Montenegro?

– Within the framework of our cooperation we have already made a start in many areas – for example, our experts have provided tailored advice to support the development of “hike and bike” tourist activities in the mountains. We were also involved in the further development of the government’s tourism master plan, which is a kind of blueprint for the whole tourism industry.

During my visit I will also be going to Lake Skadar. Here we have begun a transboundary project to protect the biodiversity of a unique natural landscape on the border between the two neighbouring countries. This project is not only creating jobs – it is also developing the hinterland for tourism, far away from the areas typically visited by people interested in beach and bathing holidays. With regard to the coastal region, I would like to repeat that, without improvements in the infrastructure, it will be hard to attract more tourists.

During your earlier visits to the West Balkans, you have underlined regional stability on many occasions as being important for economic growth in this region. What is your view of today’s business climate for investors willing to invest in Montenegro and the region?

– I think that Montenegro – like its neighbours – is a very suitable location for major trading chains or suppliers of car parts, for example. The economic environment and the geographic location are good. Montenegro is one of the countries in the region that is on the right track. Particularly when it comes to stability, the country has made great progress. That is also reflected in the World Bank’s Doing Business Report: here Montenegro has moved up 6 places compared with the previous year from 57th to 51st place out of a total of 185 countries.

Montenegro is an interesting location for international businesses by reason of its position on some important transit routes. The representatives of companies and business associations accompanying me on my visit will certainly use this opportunity to make valuable contacts and to network.

Which economic segments do you think have a potential for cooperation between the West Balkan countries on projects that could involve German investors too?

– All in all – as we have talked about already – tourism is a sector with great potential. Sustainable, gentle tourism in particular is an area that is gaining in popularity, in Germany and elsewhere. I see good opportunities here for cooperation, including cooperation with German businesses and investors.

I could imagine that the tourist sector can offer opportunities – particularly in Montenegro – to spur urgently needed structural change. Montenegro is not the only country facing such challenges. Many parts of Germany have either already made the difficult and painful journey away from heavy industry towards a more service-based economy, or they are in the middle of this transition. Sharing and exchanging experience in this area could certainly prove fruitful. All in all, I am convinced that it will be small and medium-sized enterprises in particular that have the greatest influence on the job situation and on further economic development both in Montenegro and throughout the whole region. I think Montenegro would be well advised to continue on this path. I am eager to see what other impressions I will have to take home with me from my visit to Montenegro.