Montenegro Country Brief
General
Montenegro is a country of 678,177 people (July 2008 estimate) in the western Balkans occupying 13,812 km2 - approximately six times the area of the Australian Capital Territory. It has a coast on the Adriatic Sea and shares borders with Croatia, Bosnia and Herzegovina, Serbia, Kosovo and Albania. Montenegro’s capital is Podgorica.
Bilateral Relations
Australia recognised the Republic of Montenegro as an independent state on 27 June 2006. Diplomatic relations between Australia and Montenegro were established shortly thereafter, on 1 September 2006. Non-resident accreditation to Montenegro is held by the Australian Ambassador in Belgrade. The 2006 Census recorded 1,171 people of Montenegrin origin living in Australia.
In 2008, the value of Australia’s merchandise exports to Montenegro was about AUD 6.1 million, consisting primarily of books, paintings, vehicles and spare parts for vehicles, and textile products. In the same period, the value of imports from Montenegro was about AUD 1.1 million, consisting mainly of furniture, books and paintings
Economic and Political Snapshot
Political Overview
The Montenegrin Parliament is an 81 seat unicameral body. Deputies serve a four-year term. The Parliament passes all laws in Montenegro, appoints the Prime Minister (on nomination by the President), appoints ministers (on nomination by the Prime Minister), appoints justices of the courts and ratifies international treaties.
Montenegro held its first parliamentary elections as an independent country in September 2006, when the ruling Democratic Party of Socialists (DPS) and the Social Democratic Party (SDP) retained the slim overall majority. Montenegro went to the polls again on 29 March 2009, when Prime Minister Djukanovic’s coalition government was returned to office with a clear majority. According to the report of the Organisation for Security and Cooperation in Europe (OSCE) Office for Democratic Institutions and Human Rights (ODIHR), the 2009 parliamentary elections met ‘almost all’ OSCE and Council of Europe commitments. The new Montenegrin Parliament verified the mandates of new Members of the Parliament during its first session on 23 April. Ranko Krivokapic (SDP) was re-elected Speaker of the Parliament on 6 May 2009.
The President of Montenegro is directly elected for a five-year term. No person may serve more than two terms as President. The President is responsible for promulgating laws enacted by Parliament, nominating the Prime Minister and justices of the Constitutional Court for approval by parliament, representing Montenegro internationally and calling parliamentary elections. The day to day conduct of government is led by the Prime Minister and portfolio Ministers.
Montenegro’s Presidential elections in December 2002 and February 2003 were declared invalid because voter turnout fell short of the required 50 per cent. Former parliamentary speaker Filip Vujanovic (DPS) was elected President in May 2003 after the minimum voter turnout requirement was abolished. He was reelected in the presidential elections held in April 2008.
The former state union of Serbia and Montenegro
The origins of the former state union of Serbia and Montenegro lie in the formal dissolution of the Federal Republic of Yugoslavia (FRY) on 4 February 2003. At this time, the Federal Parliament adopted a new Constitutional Charter and proclaimed the establishment of the state of ‘Serbia and Montenegro’. Under the terms of the 2003 Belgrade Agreement, both Serbia and Montenegro had the right to hold a referendum regarding their membership of the state union. Montenegro held such a referendum on 21 May 2006.
Montenegrin Independence
Prior to the May 2006 referendum, the Montenegrin Parliament adopted the European Union recommendation that at least 50 per cent of registered voters must take part and that 55 per cent of the turnout must vote for independence for it to be deemed successful. Official results released on 23 May 2006 showed that 86.49 per cent of voters participated - the highest since the country's first democratic elections in 1990. Of those, 55.5 per cent voted for independence, just above the 55 per cent mandate required. The conduct of the referendum was deemed free and fair by international observers.
The Montenegrin Parliament adopted a declaration of independence on 3 June 2006, commencing the process for official dissolution of the state union of Serbia and Montenegro. On 5 June 2006 the Serbian Parliament voted to declare the Serbian Republic’s independence, and assumed the powers and obligations as successor of the former state union of Serbia and Montenegro. Australia officially recognised the independent state of the Republic of Montenegro on 27 June 2006, and acknowledges the Republic of Serbia as the continuing entity of the former state union.
Montenegro has eagerly pursued recognition and involvement within the international community. In the relatively short period since independence, Montenegro has joined the OSCE (June 2006), the United Nations (June 2006), NATO’s Partnership for Peace program (December 2006), the International Monetary Fund and the World Bank (January 2007).
Montenegro’s formal application to the European Union was lodged on 15 December 2008. On 23 April 2009, the European Union Council of Ministers invited the European Commission to submit its Opinion regarding Montenegro’s application for membership of the European Union. It is expected that the European Commission will provide its Opinion in the course of 2010.
Economic Overview
Montenegro has been making a gradual transformation into a market economy since 1990. However, it is recovering from a low base following significant mismanagement of the Yugoslav economy by the Milosevic regime. International sanctions introduced in May 1992 against the regime also exacerbated economic problems. A portion of the country's industrial and economic infrastructure was also damaged or destroyed during NATO military action in 1999.
In recent years, the pace of economic reform has been slow and the rate of economic recovery has been gradual. Montenegro’s GDP growth in 2008 was estimated at 7.5 per cent. Growth to varying degrees has occurred in all sectors of the economy: industrial production, tourism, forestry, construction and transportation. Industrial growth has been low due to supply problems in the energy sector. Tourism continues to be a significant and rapidly growing part of the Montenegrin economy and has enjoyed a considerable amount of foreign direct investment (FDI).
Despite steady economic growth, Montenegro’s unemployment rate remains problematic. Unemployment rates in 2007 were approximately 14.7 per cent, with seven per cent of the population living below the poverty line. Montenegro also suffers from a large shadow economy and significant hidden unemployment.
Montenegro’s largest trading partner is Serbia. The majority of Montenegro’s exports consist of raw materials and semi-finished products, including aluminium, steel, alcohol beverages, tobacco, and processed lumber, while the most important imports were machinery and motor vehicles. Montenegro’s foreign trade deficit continues to be a problem, as the volume of imports has been more than twice the volume of exports for several years in a row. In the first ten months of 2008, the Montenegrin foreign trade deficit was 18 percent higher than in the same period in 2007 and amounted €1.7 billion. This is expected to worsen in the coming year when the full impact of the global financial crisis is expected to be felt. Montenegro’s debt at the end of 2008 stood at €8.95 billion, or 26.8 per cent of GDP. Internal debt stood at €413.0 million or 12.4 percent of the GDP, and foreign debt stood at €481.7 million or 14.4 per cent of the GDP. Montenegro uses the Euro as legal tender, but is not part of the Eurozone.
Last updated: 15/06/2009