Nina Drakić, president of the Montenegrin Chamber of Commerce: It's time to turn European integration into concrete economic benefits for the economy

Therefore, the topics we want to talk about are different. At the first conferences, the issues of macroeconomic stability, development, investments, privatization and building basic infrastructure dominated. Today we are talking about European integration as a development opportunity, a single regional market, digital and green transformation, industrial competitiveness, sustainable financing, energy transition, circular economy, innovations and new business models. Already in 2017, the central theme of the Conference was "Challenges on the way to the European Union", while in recent years the focus has been on regional economic integration, the Berlin process and the joint development potential of the Western Balkans.

But I think that the biggest change is that the position of the Montenegrin economy in relation to the European area has changed. Today, we are no longer just talking about how to adapt to changes coming from outside, but how to be an active participant in them. Montenegrin companies are increasingly thinking about how to use European funds, how to introduce new technologies, reduce costs and emissions, find new partners and markets, and thus become competitive in the single European market.

At the same time we have to be realistic. The Montenegrin economy is still small and very open, heavily reliant on tourism, investments and external financing, which makes it vulnerable to external shocks. If I had to single out one of the biggest changes in the past 15 years, I would say that it is the transition from the question of "how to develop the economy" to the question of "how to prepare the Montenegrin economy for the future and for membership in the European Union." That`s a big difference. We became aware that it is no longer enough to just grow - but that growth should be smarter, more sustainable and more competitive.

However, regulatory compliance does not in itself mean the readiness of the economy. The real question is whether our companies are ready to operate in an environment where quality standards, digitization, productivity, green transition, innovation and the ability to rapidly adapt will be key to survival and growth.

This is where I see the biggest task for the coming period. We must help Montenegrin companies, especially small and medium-sized enterprises, not to welcome membership only as an administrative event, but as a business opportunity for which they have been prepared. They need information, advisory support, access to funding, technologies, knowledge and European partners. This is exactly where the Chamber of Commerce sees its role - to be a bridge between European policies and the specific needs of companies. We additionally confirm this with the implementation of the initiative B4EU Montenegro - Business Ready for EU Membership, which includes the preparation of the Montenegrin economy for membership in the European Union. The goal of the Chamber as an umbrella business association is to shift the focus from the question of how ready Montenegro is for membership to the question of how ready our economy is to take advantage of membership.

Regional trade and administrative barriers further increase business costs. Detentions at borders, non-harmonized procedures and insufficiently developed transport and logistics infrastructure especially affect small and medium-sized enterprises. A current example is the application of the Schengen rule of 90/180 days to professional drivers from countries in the region. The EES did not introduce this restriction, but by digitally recording entries and exits, it allows for its more systematic application. This can reduce the availability of drivers in international transport, cause congestion and increase the cost of shipping goods between the Western Balkans and the European Union. That is why it is necessary to find a legally sustainable and regionally harmonized solution that will not jeopardize the integrity of the Schengen rules, but will respect the specifics of international road transport.

When I say "reforms of institutions", I mean something very specific. Twenty years of development of the Montenegrin economy has shown that long-term success depends much less on individual legal solutions, and much more on the quality and consistency of the institutions that implement them: on the predictability of regulations, the efficiency of administration and what we might call institutional memory. Therefore, in the next two to three years, I expect a measurable improvement in the work of institutions: shorter duration of court proceedings, faster issuance of construction permits, consistent application of regulations. Another priority concerns people. The share of the working-age population in Montenegro is decreasing, and the lack of qualified staff is already limiting productivity growth and the ability of the economy to attract investments that such staff are looking for. Demographic policy must become an integral part of the economic strategy, and not just a social issue, through the activation of the domestic labor force that is not on the labor market, a controlled policy of hiring foreigners in deficit sectors and an educational system that really follows the needs of the economy. Without progress on these two plans, neither European support nor the best-designed measures will give full effect in practice.

The first move must be the creation of a stable and predictable business environment. The economy must know the rules of the game in advance, administrative procedures must be simpler, and institutions more efficient. The second move refers to a much stronger channeling of public and private investment towards projects that create production, export and new knowledge, not just short-term consumption. The third move implies systemic support for sectors in which Montenegro has a real chance to be competitive: energy, ICT, logistics, food industry and other production based on domestic resources. It is these areas that the Analysis recognizes as important drivers of the development of greater added value.

- I would like to point out that the Analysis does not set a fixed numerical goal for the year 2035, but rather shows a clear path of convergence that should be continued and accelerated. What the Analysis shows is that from 36% of the EU average in terms of purchasing power parity in 2006, we have reached 54% in 2025, which confirms that convergence is possible, but also that its current pace is not sufficient if we want to substantially reduce the development gap with the European Union in the next decade. Therefore, the real question is whether we are ready to speed up the pace of convergence. The analysis links this task to productivity growth, sectors with higher added value, a stronger export base, higher quality institutions and more efficient use of human capital.

The biggest challenge is the structure of the economy. The share of industry in the GDP decreased from almost 15% in 2006 to around 8.3% in 2024, while agriculture and other manufacturing activities lost part of their relative importance. At the same time, services became more dominant, which contributed to the growth, but also increased the dependence on tourism, domestic consumption and external movements.

That`s why I believe that the goal is not to return to the economic structure of twenty or thirty years ago, nor re-industrialization in the classic sense. We need modern production, more technologically intensive, more energy efficient, better connected to services and capable of being included in European value chains. The same applies to agriculture: its future is not in mass production, where we can hardly compete with large producers, but in quality, processing, branding, organic production and a stronger link with tourism. The analysis sees room for reducing import dependence precisely in connecting domestic agriculture and tourist consumption.

The structure of foreign direct investments (FDI) is a particularly important issue. Montenegro did manage to attract a large amount of capital, but after the pandemic, a significant part of the investment was re-directed towards real estate, which in some years made up half of the total FDI inflow. Such investments are important, but they do not provide the same long-term effects as investments in production, technology and export capacities. That is why the next phase must be focused not only on how many investments we attract, but also what kind of investments we attract, how many new knowledge, quality jobs, exports and connections with domestic companies they create.