Montenegro is advancing its goal of European Union membership by 2028, transitioning from a diplomatic focus to an emphasis on economic execution. This shift underscores the necessity for the country to transform legal alignment and institutional reforms into a robust private sector. Branko Mitrović, president of the Foreign Investors Council, asserts that EU accession will initiate a new phase of competitive demands for capital, productivity, and investor confidence.
The current economic situation reveals that Montenegro’s gross domestic product per capita stands at approximately 54% of the EU average. This statistic highlights that mere accession will not suffice for convergence; rather, the nation must enhance its productive activities, expand its corporate base, and eradicate administrative hurdles that hinder investment decisions and project execution.
Mitrović emphasizes the need for Montenegro to nearly double its economic output to approach the EU average. Achieving this goal requires not just increased consumption or seasonal tourism revenue but also the establishment of a business environment conducive to high-value services, infrastructure development, energy investments, export-oriented enterprises, digital advancements, and industrial upgrades.
This discourse emerges at a critical juncture as Montenegro seeks to position itself as a leader in the EU enlargement process. The “28 by 2028” initiative has become integral to the country’s international narrative. Although recent advancements in closing accession chapters have bolstered this momentum, the economic disparity becomes more apparent as Montenegro progresses toward membership. While legal chapters can be navigated swiftly by smaller economies, bridging the economic gap with the EU average necessitates sustained capital formation and productivity improvements over time.
The Foreign Investors Council plays a significant role in this discussion due to its members’ substantial contributions to Montenegro’s economy. International companies account for approximately 21% of national GDP and employ nearly 6,000 individuals. Their insights regarding administrative challenges and regulatory consistency are crucial for shaping Montenegro’s growth trajectory.
As of 2024, Montenegro’s official GDP is projected at €7.645 billion, with a real growth rate of 3.2%. While this marks a commendable recovery post-pandemic, it falls short of what is needed to close the gap with the EU within the anticipated timeline. The International Monetary Fund forecasts growth in the low 3% range in the medium term, necessitating careful management of inflation and fiscal pressures. Mitrović’s comments reflect a broader concern that current growth rates lack structural strength for rapid convergence.
Investors have identified familiar barriers to business across the Western Balkans: slow permitting processes, inconsistent rule enforcement, arbitrary administrative discretion, delays in public procedures, weak inter-institutional coordination, and inadequate digitalization of public services. These issues are particularly critical in Montenegro due to its small domestic market; any delays or uncertainties can significantly impact project viability.
The focus must not only be on attracting new foreign investments but also on retaining and expanding existing ones. Current international firms represent a valuable source of potential investment due to their familiarity with the local market and established teams capable of scaling operations if conditions improve. Therefore, reforms should be evaluated based on their effectiveness in expediting permits, resolving disputes timely, enhancing infrastructure connectivity, hiring skilled labor, and enabling confident capital planning.
While EU membership may provide an expanded institutional framework, it cannot replace the need for effective implementation. Investors will continue to assess Montenegro based on risk factors and operational capabilities. The country’s small size offers potential advantages if it can streamline administrative processes; otherwise, it risks losing investors to larger neighboring markets or EU member states with more reliable implementation practices.
A pivotal economic transition is required from a consumption-driven model reliant on tourism towards a more diversified investment landscape. Although tourism and real estate will remain vital sectors, future growth must incorporate energy infrastructure enhancements, logistics improvements, airport modernization projects, digital service expansions, green transition initiatives, industrial support services, and higher-value business platforms aligned with EU markets. These sectors demand long-term investments that hinge on institutional trust.
The elimination of barriers is thus not merely a technical challenge but a strategy for convergence. Improvements in permitting speed, public administration efficiency, dispute resolution mechanisms, and regulatory consistency would directly influence Montenegro’s capital costs. Investors across various sectors factor uncertainty into their pricing models; each unresolved administrative issue acts as an impediment to growth.
Montenegro’s path toward EU integration has already generated political visibility; however, transforming this visibility into actionable reforms remains a significant challenge. The country must demonstrate that it operates like an aspiring EU member state through transparent public processes, predictable taxation regimes, professional regulatory practices, digitalization of public services, and efficient decision-making by institutions.
Mitrović’s remarks should be interpreted as an agenda for growth rather than mere criticism. To align more closely with EU standards, Montenegro must integrate improvements in its business environment into its accession strategy. The forthcoming phase will rely not only on negotiations in Brussels but also on effective governance at municipal offices and ministries that influence capital inflows and operational dynamics.
While EU membership may represent a long-awaited opportunity for Montenegro, achieving tangible economic progress will depend on leveraging the pre-accession period to simplify investment processes while fostering credibility among potential investors. The figure representing 54% of the EU average serves as both a developmental gap and a benchmark indicating the extent of reforms still necessary.
