On May 21, 2006, the Republic of Montenegro held a successful referendum on independence and on June 3, the Parliament of Montenegro declared the independence of Montenegro, formally confirming the result of the referendum on independence. Serbia did not obstruct the ruling, confirming its own independence and declaring the Union of Serbia and Montenegro ended, shortly thereafter.
Economy of Montenegro
The republic of Montenegro severed its economy from federal control and from Serbia during the Milosevic era and maintained its own central bank, used the euro instead of the Yugoslav dinar as official currency, collected customs tariffs, and managed its own budget. The dissolution of the loose political union between Serbia and Montenegro in 2006 led to separate membership in several international financial institutions, such as the European Bank for Reconstruction and Development. On 18 January 2007, Montenegro joined the World Bank and IMF. Montenegro is pursuing its own membership in the World Trade Organization as well as negotiating a Stabilization and Association agreement with the European Union in anticipation of eventual membership. Severe unemployment remains a key political and economic problem for this entire region. Montenegro has privatized its large aluminum complex - the dominant industry - as well as most of its financial sector, and has begun to attract foreign direct investment in the tourism sector.
Foreign investment
During the last few years, Montenegro has created a business-friendly investment climate. The Euro replaced the DM on March 31, 2002. The country established the lowest corporate tax rate in the region (9%) and in 2006, inflation was 2.5%. According to the cost of the living index, the inflation rate in the first half of 2007 was only 1.1%. Around 85% of capital value in Montenegrin companies had been privatized by December 2006. The banking sector, telecommunications, oil import and distribution in Montenegro are 100% privately owned. Capital structure analyses show that the state still has shares in 65 companies, and in 53.8% of those the state has more than 50% ownership.
Net foreign direct investment (FDI) in 2006 reached €537.2million, which was six times higher than in 2004, and investments per capita are €869 - one of the highest in Europe. In the first half of 2007 there was a 78% increase in direct foreign investments in Montenegro. According to preliminary data from the Montenegrin central bank, the amount of foreign investments from January to July 2007 was €487.5 million.
Agriculture
Almost 14% of the total Montenegro land area is used for agricultural purposes. The specific terrain configuration and vicinity of the coast causes various climate types and make establishing a wide range of agricultural production possible. The main products are: grains, tobacco, potatoes, citrus fruits, olives, grapes. Sheepherding and commercial fishing are also very common.
Industry
Montenegro has privatized its large aluminum complex - the dominant industry. Other main industries in Montenegro are: steelmaking, agricultural processing, consumer goods and tourism. Tourism and tourism investments, particularly along the Adriatic coast, are booming. The independent World Travel and Tourism Council repeatedly has ranked Montenegro as the top-growing tourism destination in the world, with growth estimated at 10% annually through until 2016.
Infrastructure and Communication
As Montenegro is a very small country the railway network is very poor, only 250 km. Roads in Montenegro are far below European standards. The road network totals 5,277 km, of which only 1,729km paved. Montenegro has 2 international airports in Podgorica and Tivat.
In 2005 there were 177,663 main telephone lines in use, however mobile phones are much more popular - over 660,000 users in March 2007. The most modern way of communication - the internet - had 266,000 users in 2006.
GENERAL DATA
Area: 13,812 sq km
Population: 684,736
Capital city: Podgorica
Language: Serbian
Ethnic groups: Montenegrins 43.2%, Serbian 32%, Bosniaks 7.8%, Albanians 5%, Muslims 4%, Croats 1.1%, others 6.9%
Land boundaries: Albania, Bosnia and Herzegovina, Serbia
MACRO DATA
GDP (real growth): 6.5%*
GDP (PPP): € 2.71 billion*
GDP per capita: € 3957.72*
Inflation: 2.7%* (Jan-Aug 2007 y-o-y)
Unemployment:14.34%** (April 2007)
Export: € 489.24 million f.o.b.
Import: € 1,392.77 billion f.o.b.
* 2006 est. source: CIA
USEFUL DATA
Currency: Euro
Time zone: GMT +1
Calling code: +382
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