Although Montenegro is one of the smallest of the Balkan states, with a population of just over 600,000, we are ambitious. Since regaining our independence in 2006, through a referendum held according to the highest European standards, we have made far-reaching economic and political reform our foremost goal.
On the economic front, we have made substantial advances. From being the least developed Yugoslav republic, we have tripled our GDP per capita over the past ten years to over $7,000.
Such progress has made Montenegro today’s leader in terms of per capita income growth among the six western Balkan countries: Albania, Bosnia and Herzegovina, Serbia, Kosovo, Macedonia and Montenegro.
We have achieved this by liberalising business regulation, focusing on an attractive foreign direct investment policy and pro-actively engaging investors. We have introduced on-line company registration, simplified customs regulations, streamlined bankruptcy legislation and instituted a number of safeguards for foreign investors based on a new Foreign Investment Law.
As a result, FDI in Montenegro has grown – from €52m in 2004 to €330m in 2013 – with investment chiefly from EU-member countries, Switzerland and the Russian Federation.
This means foreign direct investment as a percentage of GDP is among the highest of all European countries, averaging 20 per cent over the past six years.
Montenegrins take great pride in the adoption of business-related legislation drawn up to EU standards that has brought these results.
We have initiated a number of large-scale projects which are set to underpin our medium-term growth. These include the undersea Italy-Montenegro power link – an €800m project by Italian-based Terna to be completed by 2017 – and the expansion of the Pljevlja coal-fired power plant, valued at €350m, which will increase Montenegro’s installed generating capacity by 30 per cent.
Other developments include the Adriatic Ionian Natural Gas Pipeline, offshore oil and gas exploration concessions, and the Bar-Belgrade highway and Bar-Budapest railway, both significant upgrades to transport links between Montenegro and the European Union.
In the tourism sector, a number of international investors are making landmark investments. These include the resort developments of Lustica Bay, where Orascom, the Egyptian telecom and construction conglomerate, will invest €1.1b by 2018; Porto Montenegro, where a Peter Munk-led consortium has already invested over €280m; and Aman St Stefan Resort, where Singapore-based Aman Resorts has a €55m expansion phase underway, on top of an original €60m investment.
Together with the planned €500m One & Only resort project by SOCAR, the Azeri oil and gas company, and a €350m hotel development by Diar of Qatar, this means a total tourism sector investment of some €2.4bn – equal to over two thirds of our total current annual economic output.
This is not just political rhetoric. In the past year, we have advanced 6 places – to 44th position globally – in the World Bank’s Ease of Doing Business rankings. Points of most notable progress include property registration (an improvement of 16 places) and construction permitting (a leap of 68 places), while maintaining our lead as third globally in ease of getting credit.
We know it is possible to achieve economic growth without democratic progress. The government of Montenegro is, however, deeply committed to the European path, believing that democratic development should never be second to economic advancement.
To further advance democratic development, we are intent on improving the rule of law. I and the Montenegro government fully recognise that only by improving and maintaining the rule of law can we maintain trust and ensure long-term economic development.
For the sake of both the democratisation of our society and the legal security of investors, it is paramount for our courts to work faster and deliver more consistent rulings, together with proper enforcement.
In its 2010 report, the Council of Europe’s Group of States against Corruption (Greco) noted that the most serious challenge for Montenegro was the effective application of legislation.
We took note. Our efforts on increasing the consistency of legislation enforcement and improving coordination of anti-corruption activities has resulted in the latest Greco report writing that Montenegro has made “credible efforts to meet the recommendations”. Greco thus “commended Montenegro for substantial reforms”.
Our next priority will be increasing the transparency of the judiciary by focusing on awareness-raising campaigns on issues such as reporting corruption and the protection of whistle-blowers.
Another priority is to ensure the freedom of the media and we will continue our efforts to guarantee that media organisations are unobstructed in their work, in cooperation with the Organization for Security and Co-operation in Europe.
In this regard, we have recently passed legislation decriminalising defamation, an important step in improving media freedom. The courts will soon pass judgement on several cases of intimidation or violence against journalists.
Having said this, it is at the same time important that – through improved self-regulation – safeguards are put in place against the abuse of media by private interests. The government believes media organisations themselves must work to improve and maintain full professional standards.
I have here outlined our priorities for sustainable progress in Montenegro. However, it is not just up to us. The quality of infrastructure in Montenegro, as well as neighbouring non-EU countries, presents an economic and political challenge. Johannes Hahn, the EU enlargement commissioner-designate, is right to note that the western Balkan states must be better connected to each other. Equally important, our infrastructure connections with the rest of Europe need upgrading.
Underdeveloped transport and trade links hamper regional economic cooperation and, consequently, raise security issues. Constructing cross-border transport routes – most notably the Adriatic-Ionian highway to connect, Italy (Trieste) to Greece (Kamalata) through Slovenia, Croatia, BiH, Montenegro and Albania – requires investment sums beyond any of our countries’ individual capacities. This is why the initiative for the infrastructural development of the Balkans, strongly endorsed by Chancellor Merkel at our August meeting in Berlin, is a crucial step in furthering our region’s political and economic integration.
We believe that the economic and democratic progress that accompanies Euro-Atlantic integration is the only guarantee for our sustainable, long-term development. At the recent summit in Cardiff, we received confirmation of Nato’s readiness to invite Montenegro as a member by the end of next year – a vitally important example of the recognition of our continued reform efforts.
While my government will continue its unwavering commitment to economic and democratic reforms in the context of the EU accession process, it is equally important that the EU remains committed to prospective members like Montenegro.
When presenting the new progress report last week, the EU’s enlargement commissioner, Štefan Füle, stated: “In many respects, Montenegro has been leading the way in the region… One year on, there are already positive results to be proud of.”
Montenegro is the most advanced EU membership candidate in terms of open chapters. To continue this constructive relationship, we ask the EU to reciprocate our commitment to a shared future.
Milo Đukanović is the president of the Government of Montenegro.
This article originally appeared on Financial Times: http://blogs.ft.com/beyond-brics/2014/10/10/guest-post-montenegro-is-proving-its-commitment-to-euro-atlantic-values/?Authorised=false
Source: Government of Montenegro