Bleak times for Montenegro's economoy
With rising costs, stagnating wages and a slowdown in foreign investment, Montenegro's economic situation is steadily deteriorating.
By Nedjeljko Rudovic for Southeast European Times in Podgorica – 07/06/10
A construction site stands idle in Budva. [Getty Images]
Doctors and teachers now receive about 400 euros per month. Police officers and soldiers get about 300 euros. Meanwhile, the cost of living is up: rent for a small apartment in Podgorica is about 200 euros a month -- making it difficult for many to make ends meet.
In addition, some workers have not received salaries for months.
Economic experts say that one of the main problems is that the economy hasn't developed its manufacturing and export-oriented enterprises. Additionally, huge public spending -- a result of the bulky administrative apparatus -- remains a problem.
"Micro, small and medium enterprises in the areas of organic food production, processing of wood, stone, water production, forest and sea products and the service sector should be kept under special attention. Special treatment in the near future needs to [include] the tourism sector, with marine business for multiplicative effects in the long run," Investment and Development Fund Chairman Dragan Lajovic says.
The fund was established by the government last year to spur economic development.
Foreign investment has also dwindled. From 2006 to 2008, there was a huge demand from people in Russia and Great Britain for property on the Montenegrin coast -- but no more. Last year, several seaside projects had to be halted midway due to lack of funding.
"Exit from the crisis includes … a package, which should be based on opening the economy to foreign investment, thus making positive multiplicative effects," Lajovic said, including job creation.
He warns that foreign capital requires fertile soil, and Montenegro is not the only destination that is suitable.
One problem, however, is that banks in the country significantly curbed lending last year.
"There are currently only 59 companies that Montenegrin banks will provide credit support to, which is a devastating fact," Central Bank Chief Economist Zorica Kalezic told SETimes.
Montenegro's Central Register showed that there were 51,505 companies in the country at the end of April.
Since banks will not give loans, employers warn that they will have to lay off workers.
23 Mar 2011 / 16:34
Corruption Indictment Filed Against Budva Officials
Montenegrin prosecutors have filed an indictment against a number of high-ranking officials from the city of Budva for allegedly embezzling several million euros.
Montenegro's State Prosecutor's Office filed an indictment on Tuesday against the mayor and deputy mayor of the Municipality of Budva, Rajko Kuljaca and Dragan Marovic, and nine other people on suspicion of abuse of position and embezzlement in the "Zavala" case.
The suspects are accused of abusing their official positions to allow Zavala Invest, a company part-owned by Russian tycoon Sergey Polanski, to illegally construct about 40 villas at Budva’s nearby Zavala Cape, Montenegro’s top summer resort.
In addition to Kuljaca and Marovic, the indictment was filed against members of the Democratic Party of Socialists (DPS) Djordjije Pinjatic, Dragan Zinic, Slobodan Djurovic, Stevan Vucetic, Sreten Tomovica, Novak Stanojevic, Marko Kalostra, Dragan Sekulic, Miodrag Minic, and Russian national Natalia Panini, former director of "Zavala Invest", the Prosecutor's Office said in a statement.
Dragan Marovic is the brother and closest associate of one the country’s most powerful politicians, Svetozar Marovic, while Djordjije Pinjatic, a DPS deputy, is also one of Svetozar Marovic’s close associates.
The prosecution asked the court to extend the custody of the defendants, who were arrested in December, noting that their release could "undermine confidence" in the ability of the prosecutor and the courts to prosecute and judge the case, and pointing to the gravity of the charges.
Police arrested the officials in the resort of Budva on December 24, days after the resignation as prime minister of Milo Djukanovic, head of the ruling Democratic Party of Socialists, DPS.