Montenegro country brief

Montenegro is a Southern European 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.

A European Union (EU) candidate country, Montenegro applied for EU membership in 2008 and opened accession negotiations on 29 June 2012. In 1999, Montenegro unilaterally adopted the Euro.

Montenegro is in the process of joining the North Atlantic Treaty Organization (NATO), having signed the Accession Protocol on 19 May 2016.

Bilateral relations

Australia recognised 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. The Montenegrin Embassy to the United Arab Emirates holds non-resident accreditation to Australia. The first non-resident Montenegrin Ambassador to Australia presented his credentials in December 2015.

Australia’s 2011 census recorded 1,179 Montenegro-born people living in Australia, with 1,553 claiming Montenegrin ancestry.

In 2014-15, Australia’s bilateral merchandise trade with Montenegro was worth $268,000. Worn clothing and rags, and perfumery and cosmetics, are Australia’s major exports to Montenegro. Alcoholic beverages, and paper and paperboard, are Montenegro’s major exports to Australia. Over the same period, Australia and Montenegro traded services for $6m.

Political overview

Montenegro is a parliamentary republic. It declared independence on 3 June 2006, following the referendum on 21 May 2006 on dissolving the former state union of Serbia and Montenegro.

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 most recent presidential elections, held on 7 April 2013, produced a tight result. Incumbent President Filip Vujanović of the Democratic Party of Socialists (DPS) was returned to office with a slim majority (51.21 per cent of the votes). Miodrag Lekić, the candidate from the Democratic Front, won 48.79 per cent of votes. The next presidential election is due in 2018.

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) and ministers (on nomination by the Prime Minister), , appoints justices of the courts and ratifies international treaties. Following the October 2012 parliamentary election, on 4 December 2012, the Montenegrin Parliament elected DPS leader Milo Djukanovic to the position of Prime Minister for his sixth term since 1991. Mr Djukanovic survived a vote of confidence in February 2016. The next round of parliamentary elections is due in October 2016.

Foreign policy

The pursuit of its European and Euro-Atlantic aspirations is Montenegro’s key foreign policy priority. In parallel, Montenegro has worked to promote regional cooperation and enhance its participation in international organisations. Montenegro has joined the OSCE (June 2006), the United Nations (June 2006) the International Monetary Fund and the World Bank (January 2007), and the World Trade Organization (April 2012).

Since independence, Montenegro has participated in a number of international peace operations under UN, EU and NATO auspices, including the International Security Assistance Force (ISAF) in Afghanistan, the European Union Naval Force off the coast of Somalia (Operation Atalanta) and the UN Mission in Liberia (UNMIL). As of May 2016, Montenegro contributes 17 soldiers to the NATO-led Resolute Support mission (RSM) in Afghanistan.

Economic overview

Since 1990, Montenegro has made a gradual transformation into a market economy Growth recovered in 2013 from the double-dip recession of 2009 and 2012. After a mild slowdown in 2014, the economy rebounded in 2015 and growth could reach 3.5 per cent in 2016 supported by government spending, the construction of the Bar-Boljare highway and a resilient tourism sector. However, there remain some risks notably, to public finances (public debt is around 66 per cent of GDP – it has more than doubled since 2006 – and is expected to reach 80 per cent of GDP over the next three years), banks’ profitability and non-performing loans, external conditions, low labour productivity and unemployment (which increased to 18.4 per cent in February 2016). Increasing pressure on public finances could force the government to implement tighter fiscal policy over the mid to long term which will come at the expense of overall growth.

Economically, Montenegro’s integration with Europe is increasing. In 2014, the European Union was Montenegro’s biggest trading partner (46 per cent of Montenegro’s exports went to the EU and 35 per cent of Montenegro’s imports came from the EU). In services and foreign investment, Russia remained Montenegro’s single most important partner, accounting for 30 per cent of tourism stays and 25 per cent of foreign direct investment (FDI) inflows—mostly real estate.

Last Updated: 27 June 2016