MONTENEGRO DEMOCRACY INDEX 2009
MONTENEGRO DEMOCRACY INDEX 2009

Author(s): Miloš Bešić
Subject(s): Politics, Economy, Civil Society, Governance, Government/Political systems, Transformation Period (1990 - 2010)
Published by: CEDEM Centar za Demokratiju i Ljudska Prava
Keywords: Montenegro; economic crisis; budget deficit; political continuity; EU integration
Summary/Abstract: A period we realized this INDEX in, was characterized first of all by economic crisis of Montenegrin society. During realization of the previous INDEX, the crisis also knocked at the door of Montenegrin society and influenced crucial economic indices. This time, the crisis moved into companies and homes of Montenegrin citizens, and it has certainly caused troubles to the Montenegrin government as well, which by a method of ‘extinguishing fire’ is trying to solve newly created problems. There are four key problems the Government is facing, in the economic sense. First, it is a budget deficit, since budget receipts are not in the slightest in accordance with what has been planned. A problem like this is especially emphasized in a small system as Montenegro is, simply because importance and ‘price’ of government apparatus and all institutions financed from the budget is significantly bigger in comparison to bigger social systems. The second problem is a lack of investments of all forms, especially direct foreign investments, which were counted on as important driving force of economic development. In this way, a lack of money inflow, which was one of crucial driving forces in the previous period, seriously shook set economic goals. The third problem certainly is a lack of banks’ credit potential, which cannot follow the firms and their ambitious projects. Consequently, it has led to making money itself more expensive and endangered profitability of the projects the private sector counted on. The fourth, and in this macroeconomic point of view the last, a chronic problem of high foreign trade deficit is still present, and it is a much bigger problem now in the light of the fact that the present deficit is disproportional at the expense of capital expenditures.

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