Montenegro’s small wood producers need secure raw-material supplies and access to modernisation grants to make higher wages sustainable, Mladen Šćekić, president of the Berane Wood Processors Association, said. In an example he gave, a 1,250-euro net minimum wage for seven jobs would raise a small manufacturer’s monthly net wage bill by about 44.4%.
The association represents wood processors in Berane. Šćekić was responding to Economic Development Minister Niko Đeljošaj and economic analyst Predrag Zečević in a debate over the sustainability of the Euro model. His argument was that higher pay must be accompanied by conditions that allow small manufacturers to increase productivity, rather than depend solely on employers absorbing additional costs.
Đeljošaj, a member of the government that sets economic policy, said he would allocate about 45,000 euros more from his company’s profit to employees, calling it an “investment in people”. Zečević argued that employers should share part of their profits and wealth with workers. In response, Šćekić distinguished highly profitable companies, where profit-sharing could be justified, from smaller employers facing different costs.
Costs for small manufacturers
The manufacturer in Šćekić’s example has seven employees and a current monthly net wage bill of 6,060 euros. Paying a net minimum of 1,250 euros for each of those jobs would take the bill to 8,750 euros a month, an increase of about 44.4%. Without a corresponding rise in productivity and appropriate support, higher costs could seriously threaten small producers’ operations, he warned.
“Not all employers are large companies making millions in profits,” Šćekić said. He contrasted telecommunications and internet-services businesses with manufacturers that must secure raw materials, finance inventories, pay for energy, transport and maintenance, buy machinery, produce goods and then find buyers. The experience of a successful service company should not be treated as equivalent to the day-to-day pressures on a small producer, in his view.
Some wood processors lack a continuous supply of domestic raw materials despite Montenegro’s forest resources. According to Šćekić, some producers of finished goods buy wood inputs from elsewhere in the region and even from China. He argued that stable operating conditions were a prerequisite for discussing competitiveness and European-level wages.
Access to state support
During the previous two years, the Ministry of Economic Development directed key modernisation programmes mainly towards the food and metal industries, according to Šćekić. Wood processors did not have equal opportunities to access those programmes, he said. He called on the state to make grants available to the industry for modern machinery, CNC technology, automation, digitalisation and energy efficiency.
Small producers cannot be expected to raise productivity while lacking access to substantial modernisation support, he argued. Using money intended for new machinery to cover current operating costs would also make future improvements in competitiveness harder to achieve. Wood processors are not opposed to pay increases, but want them matched by better production conditions, more reliable raw-material supply and more concrete state support.
Šćekić called for economic policy that enables manufacturing firms to grow, invest and raise employee pay, rather than relying only on expectations placed on employers. “If we want European wages, we must also create European conditions for production,” he said.
