Flag of Montenegro

Montenegro country brief

General

Montenegro is a country of 620,029 people (2011 census) 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 on 1 September 2006. Non-resident accreditation to Montenegro is held by the Australian Ambassador in Belgrade, Serbia. Australia’s 2011 Census recorded 1,553 people of Montenegrin ancestry living in Australia.

In 2011-12 the value of Australia’s exports to Montenegro was A$471,000. These comprised primarily Australian beef and other meats. In the same period, the value of imports from Montenegro was about A$864,000, consisting mainly of computers, mechanical handling equipment and parts and electric power machinery and parts.

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 Milo Djukanović’s coalition government was returned to office with a clear majority. Following Prime Minister Djukanović’s resignation in 2010, Igor Luksić was installed as Prime Minister on 29 December 2010. Djukanović remained in Parliament and retained the chairmanship of the DPS. He returned at the head of the DPS in elections held on 14 October 2012, and was appointed Prime Minister.

Montenegro’ most recent presidential elections, held on 7 April 2013, produced a tight result. Incumbent president Filip Vujanović (DPS) won another, second term with a slim (51,21) per cent of the vote, while his opponent Miodrag Lekić, an opposition candidate from Democratic Front, won 48,79 per cent of votes. International observers judged that the election was run professionally and efficiently. 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.

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.

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.

Foreign policy

Montenegro has eagerly pursued recognition and involvement within the international community. In the period since independence, Montenegro has joined the OSCE (June 2006), the United Nations (June 2006), NATO’s Partnership for Peace program (December 2006) and the International Monetary Fund and the World Bank (January 2007). Montenegro became a member of Central European Free Trade Agreement (CEFTA) in May 2007 and signed NATO Membership Action Plan (MAP) in December 2009. The country became a member of World Trade Organization on 29 April 2012.

Accession to the European Union is the country’s primary foreign policy objective. Montenegro’s formal application to the EU was lodged on 15 December 2008. An EU visa-free regime was granted in December 2009. EU candidate country status was granted on 9 November 2010. Formal accession negotiations between Montenegro and the EU began on 29 June 2012. The first accession Chapter 25 on science and research was provisionally closed on 18 December 2012, while the Chapter 26 on education and culture was closed on 15 April 2013.

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 Milosević 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 development has been gradual. The effects of the global financial crisis caused a sharp contraction of 5.7 per cent in 2009, with main industries aluminium and banking significantly affected. After recovering to 2.5 per cent in 2010 and 2011, real GDP contracted again in 2012 to a negligible 0.5 per cent. Tourism continues to be a significant and resilient part of the Montenegrin economy and has enjoyed a considerable amount of foreign direct investment (FDI). The economy’s lack of diversity has been highlighted by its reliance on a few key sectors such as electricity generation, metals and tourism.

Montenegro’s unemployment rate remains problematic, officially listed at approximately 13.24 per cent in 2012 by Montenegrin authorities. However, there are concerns in the Montenegrin press and international financial organisations that unemployment is grossly underreported, and that the real rate could be as much as twice this figure. This is exacerbated by Montenegro’s large shadow economy and its hidden unemployment.

Montenegro’s principal export destinations in 2012 were Serbia, Croatia and Italy. The majority of Montenegro’s exports consisted of refined metals and consumer goods, while the most important imports were machinery and equipment, mineral products, food, beverages and tobacco. Principal import source countries were Serbia, Germany and Italy.

Montenegro’s foreign trade deficit continues to be a problem. In 2012 Montenegro ran a current account deficit of 20 per cent of GDP, although this has improved significantly since 2008. In a mid-to-long term perspective, sustaining an economic recovery will depend on the new Government’s ability to facilitate economic restructuring and industrial diversification, to develop its tourism potential and to invest tourism revenues into knowledge-intensive economic sectors such as the emerging energy sector (base metals and off-shore oil and gas). In the long term, the economy is expected to slowly recover on the back of regional progress on the road to EU integration.

Although not part of the Eurozone, Montenegro uses the euro as legal tender.

Last updated June 2013