Montenegro’s key international commitments, in this area, include the following:

• Fully-fledged membership in the World Trade Organisation (WTO), as one of the most importaint foreign policy priorities of the state economic development (the Protocol on Accession of Montenegro to the Marrakesh Agreement, establishing the WTO, 2012). Thus, Montenegro acceded to the multilateral trade system, in the area of liberalisation of trade in goods, services, customs, intellectual property and other WTO areas. Free trade agreements (FTA), aimed at creating an environment, conducive to investments and competitiveness of the economy, are of importance to the State.

• Central European Free Trade Agreement (CEFTA)– harmonised economic development among the signatories can be achieved through the membership (Moldova & Western Balkans countries (WB6): AL, BIH, MKD, MNE, SER, KS*).  Priorities of cooperation: trade in goods and services, commerce development, investments, employment, increase in productivity, financial stability. Montenegro fully implements CEFTA Agreement (2007).  A duty-free regime applies to all industrial products, originating from the signatory countries.  A free trade is implemented in agricultural products with Serbia, BIH, North Macedonia and Kosovo*, while the economic cooperation between Montenegro, Albania and Moldova is implemented through the agreed trade liberalisation. As foreseen in the Agreement, Croatia withdrew from CEFTA, following its accession to the EU, in 2013. [link: PKCG]

*UNSCR 1244/1999

• Fully-fledged membership in United Nations Industrial Development Organisation (UNIDO). UNIDOpolicies are focused at: circular economy[1], industry, industrial parks, sustainable energy, employment of youth and entrepreneurship, gender equality. The objective is to achieve: common prosperity of all countries included in UNIDO, better economic competitiveness, preserved environment, enhanced knowledge and institutions, services, better standards for the next generations.

• Fully-fledgedmembership in North Atlantic Treaty Organisation (NATO), since 5^th June, 2017. This membership assumes, not only securing the joint defence system of the State, under collective umbrella, but also a better standardisation of goods and services, secure investments and regional cooperation, in acc. with the Treaty obligations towards the members of the Alliance.
• Stabilisation and Association Agreement between European Commission and their Member States and Montenegro (SAA), entered into force on the 1^st May, 2010.  SAA agreement aims to promote the modernisation and restructuring of industry. Preconditions: respect of democracy & rule of law, private capital, regional cooperation, free trade and political & economic stability (Art. 94). Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Montenegro, of the other part, 2010/224, has been changed with the Consolidated text, Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Montenegro, of the other part, 2015.
• Common EU trade policy– one of foreign affairs pillars of EU (Treaty of EU, Art. 206, 207). The aim of Montenegro is to further harmonize with common rules of the Customs Union, as well as with the customs’ duties and trade affairs with 27 Member States of EU.

• Energy Union – Montenegro is party to the Treaty. One of the most importaint assignments is to create a stable regulatory and market framework, capable of attracting investment in gas networks, power generation, transmission and distribution networks, so that all Parties have access to the stable and continuous energy supply, that is essential for economic development and social stability. (Energy Treaty, 2005, Art.2, a). Community fosters the use of renewable energy, in line with the acquis communautaire, incl. CENELEC standards.

INDUSTRIAL POLICY UNDER the GOALS of SUSTAINABLE DEVELOPMENT of the UNITED NATIONS – UN SDGs 2030

–  Industry policy activities, stemming from the document “Industrial Policy of Montenegro until 2023, do not have an equal scope of industrial sectors, deriving from the Montenegrian Law on classification of business activities (Official Gazzette “SLCG” 18/11, dated 2011). Activities are adjusted with the needs of the modern digital and green economy, following the priorities of the goals of the UN and the priority policies of EU.

Montenegro strives to contribute to the achievement of the goals of the UN 2030 Agenda, as one of the UN member states. Objectives of the Agenda of UN represent the wide scope of activities of sustainable and inclusive industrial development. SDGs:

• SDG 2 – Zero hunger – to increase food production (micro & small enterprises) and revenues by 100%, sustainable food production;
• SDG 6 – Clean water and sanitation –ensure access to water and sanitation (water and waste water management)
• SDG 7 – Affordable and clean energy –share of renewable energy in final consumption; GHG emissions; energy import/export; double increase of energy efficiency
• SDG 8 – Decent work and economic growth –clusters and MSMEs in industries boosting employment; diversification and economic development
• SDG 9 – Industry, Innovation and Infrastructure (major goal)– development of industry, technology, infrastructure, sustainable economy; diverzification, inclusion and innovation; access to finance
• SDG 11 – Sustainable cities and communities –waste management in urban areas
• SDG 12 – Responsible consumption and production –action plans of sustainable production and consumption; ecological footprint; domestic material consumption (DMC); sustainable use of domestic resources; recycling rate; support for scientific and technological capacities of sustainable production until 2030; circular economy
• SDG 13 – Climate action –share of renewable energy in final consumption; CO₂ emissions on a yearly basis; decarbonisation
• SDG 17 – Partnership for the goals – investments in science and innovations through the global mechanism of sustainable technologies, universal trade system under the World Trade Organisation (WTO), coherence of policies of sustainable development.

• to the UN Report about the Sustainable Development Goals for 2021, Montenegro is advancing moderatelly, under the SDG 9. Chosen indicators belong to the services and not to the classic activities (education, science and research, transport, information-communication technologies). There is a need to maximally adjust the industry sector to the modern, ecologic and socially responsible principles of business. Indicators in the area of water supply, electric energy, access to clean fuels, acceptable level of CO2 emmissions. (SDGs: 6, 7, 9, 12, 13) are positivelly/successfully graded.
• NATIONAL STRATEGY FOR SUSTAINABLE DEVELOPMENT OF MOTENEGRO UNTIL 2030 (NSSD) –

Strategy promotes the principles of sustainable production and consumption and sustainable use of resources, including electric power generation and supply, as well as materials for industrial purposes. Montenegro will gradually adopt and apply EU policy on products. The Strategy envisaged optimisation of technological processes towards reducing waste generation, more efficient use of inputs and less by-products, less energy and water use, and lower GHG emissions. The economy is not diversified enough. Additional rural development is needed and the new implementation of new and efficient technologies (green and blue economy). It is concluded that “economic activities are not adjusted enough with the goals of sustainable development (forestry, hunting, energy, industry, exploitation of mineral resources, maritime economy, transport, spatial planning, construction, tourism), as well as the relatively high level of domestic material consumption – DMC and the low level of Resources Productivity – RP”. Under the environmental protection and waste management, focus is on the necessary implementation of the Best Avaialble Technicques – BAT and the mitigation of the industrial hazards. It is necessary to realise the Programme of harmonisation of economy areas with the Law on the integrated restriction and control of pollution of the environment (Integrated certificates issued to the Steel-plant in Nikšić, Coal-power Plant in Pljevlja, etc.). Strategy will provide the funds, necessary for the reconstruction of the industrial plants.

Mid-term Working Programme of the Government of Montenegro 2022-2024 is in line with the goals of NSSD.

Global indicators of sustainability of the national development: index of human development, ecologic footprint, DMC, RP, public space utilisation.

Economic development indicators: GDP growth rate, % of employment, sustainable consumption and production.

[1] The current process of plastic production and discard doesn’t meet the criteria of the circular economy. The aim is to protect the environment and lay the foundations for a new economy, where the design and production are in accordance with the needs of reuse, recycling and development of sustainable materials. By gradually reducing production and usage of light plastic bags and disposable plastic products, in the next three years, Montenegro will create good preconditions to join the standards of EU countries (SDG 12). (Source: ERP 2022-2024)

Industry policy and production within the strategic framework of Montenegro

By adopting the Industrial Policy of Montenegro 2019-2023, Montenegro has renewd its industrial frameowrk of activities and achieved a visible progress in the field. All activities are absorbed regarding the fulfillment of the only one closing benchmark left, taking into consideration the obligation to continuoulsy monitor and report about the implementation of this document, which is considered as the most importaint strategic document for the policy[1]. The document entails the development of the competitiveness, with focus on industy (extraction of ores and stones, processing industry, suppling through the electric energy, water, waste water management, process of waste disposal.

[1] Source: Office for EI.

• Platform of the Economic Recovery 2022-2026 – overall planning and analytic document, with the aim of economy recovery from the pandemics Covid-19, for the next 4 years: economy market; social and demographic trends and movements, human resources; infrastructure; macro-economic stability & public finance; innovation, digitalization & green economy; good governance, coordination & monitoring of the strategic documents (41 indicator). In the period from 2006-2019, emplyment decreased in all industry sectors (except in water supply management), out of which the most decrease in the processing industry (2 230 workers are left out of work). Processing industry increased minimally, in comparison to other industry sectors, in this period (9%). In 2021, credit support was given to the SMEs in the processing industry. In the energy sector, from 2016-2019, the primary industrial production varied in growth. Under RES (Renewable Energy Soruces), production of the wind power plants in 2019 amounted to almost 20% of total energy produced and it has a tendency of growth in future. Principles of the platform are: green and digital transformation, balanced regional development; economy based on innovations and knowledge. Within the context of regional cooperation and european integration, the opportunities for the development are represented also through the implementation plan of projects, stemming from the Economic Investment Plan for Western Balkans, (worth €500 mil.).
• Economic Reform Programme for Montenegro, 2022-2024 (ERP) – major document of economic policy of the country. The aim management of economic reforms, fulfillment of the Copenhagen Criteria, inclusive growth and strengthening competitiveness. Industrial production recorded annual growth by 4.4 %, in the first eleven months of  2021, taking into consideration greater demand for electricity production (9.5 %) and processing industry (7.1 %). In 2021,  the system for the implementation of policies of innovation and smart specialization (S3) was set up. Programme priorities were determined in the policy of innovations, through the preparation of the Operational Programme for the implementation S3, 2021-2024, and throug the drafting of the Innovation Programme 2021-2024. Financial support is given to SMEs and credit lines were given to the MSMEs, through the activities of the Credit Guarantee Fund (KGF).  Program ERP for 2022 also includes measure of support to investments in the sector of food production, with the aim of strengthening competitiveness in the area of agriculture, industry and services. Procesing industry will grow, indicativelly, at the rate of 5.8%, annually, until the end 2024. Growth is expected in the area of food processing, wood and metal industry and pharmaceutical products produciton. to the Ministry of finance, the real growth rate of industrial production amounted  to 7.4% in 2021, while the estimations are the following: 5.2% (2022), 6.2% (2023) & 5.9% (2024). GDP growth in 2023 will amount to 5.1%. Share of industrial produciton in Gross Added Value (BDV) will amount to 12.3% (2023). Export will intensify in the sectors of electric energy, minerals  and metals. Projects planned, in industry, will amount to, indicativelly, almost €275 mil., out of which WTTP in Podgorica represents 17.7% of total investments, related. Within the sectors D-E, other projects planned are: ecologic reconstruction of thermo power plant in Pljevlja – TEP, Hydro power plants investment in building the infrstructure – HE Komarnica, construction of the damn on the Zeta River, solar/wind power plants construction – SE Briska Gora, VE Brajići and VE Gvozd, energy efficiency in public and private buildings. By implementing these projects, Montenegro will modernise its infrastructure and enhance competitiveness in the industry sectors. These measures planned will give strong impetus to the dynamics of european integration and to the achievement of sustainable development goals.
• Strategy of Smart Specialization 2019-2024 (S3) – new technologies, development of the innovation eco-system, connection between the economy and the science, GII index. The key aim is to increase the level of the competitiveness of Montenegro through innovations and research. Results of the analysis present a strong economic potential of the country: agriculture and food, energy, ICT, processing industry, medicine and the quality of life, construction and tourism. The smallest growth of employees, in 2018, was recorded in the area of water supply, waste water management and process of control of waste disposal (0.9%; CBCG). Share of processing industry in the GDP in Montenegro, in 2017, amounted to 3.8%.
• Mid-term Work Programme of the Government of Montenegro 2022-2024. SPRVCG (& Annual work Programme 2022): priorities are stable finance and sustainable economic growth, incl.: competitiveness, regional connectivity, green economy, smart, sustainable and inclusive growth. Document follows the goals of the Accession Programme of Montenegro to EU, 2022-2023. (PPCG). Programme of the Government also includes UN Sustainable Development Goals  (SDG 9). Projections of the Government of Montenegro, until end 2024: real economy growth rate will amount to 4.5%. Goods export will nominally exceed the levels from 2019. Average number of employed persons will increase by 3,3%, (the current number of emploed persons is 230.000). The balanced regional development will be taken into account, while implementing the employment policy. Priorities of the Government of Montenegro until the end of are green and digital transformation, that would integrate the industry through the sustainable economic development, with the focus on the inclusive policy, innovation and knowledge. Priority areas: energy and transport infrastructure, mineral resources, processing industry, MSMEs and mini-scale industry, entrepreneurship for women, wood-processing, tourism, waste management, food production (promotion of the family agriculture produciton household). Share of the industry sectors in the gross added value – BDV (B-E) will increase by 10% (13.3% in 2020), until the end 2024.  Programme for modernisation of the processing capacities – supply of equipment and the machinery, continuation of the implementation (alternative energy systems for production lines).  Number of micro, small and medium sized companies, currently, amounts to 37 217, while 20% more is expected, until end 2024.
• NATO standards: total no. of assigned company codes – NCAGE to the Montenegrin companies will increase by 2%, annualy, while the total no. of assigned NATO stored numbers will be increased by 5%, on a yearly basis.
• Programme of social and economic support of the Government of Montenegro to the labor force and economy, in the fight against pandemics (2020-2021): financial support is realised (IRFCG) for over 100 000 employed persons in MSMEs, incl. industry companies, as well as assistance for participation in COSME, ERASMUS (young entrepreneurs). This included the most vulnerable industry companies, during 2020 & 2021. The Program entailed the IV^th economic and social measures Package of the Government Support, for 2021, which assisted companies of the processing industry, esp. in agriculture.