Privatization


Until several years ago, Montenegro was the country whose economy was based on the public (socially-owned) property. Since such a concept of ownership has proved to be inefficient, the process of privatization of economy was initiated. Despite the very difficult and in many instances specific conditions in which the process was taking place, the results gained fully justify the efforts. The necessary legislation was adopted and The Privatization Council founded as the Government's body responsible for managing the process of privatization. The intention is to carry out the process in two ways:

1. The sale of shares to strategic investors- Selling shares by means of international tenders is one of the strategic moves to accelerate the entire process of privatization. It is planned to offer the shares of some thirty Montenegrin companies for sale through the international tendering procedure.

2. Mass voucherisation (MVP) as a privatization model, which, besides accelerating the process of privatizing economy, stimulates the development of the capital market and financial institutions. The Act Of Modifications Of And Supplements To The Act Of Privatization Of Economy provides that all the citizens of age of the Republic of Montenegro be entitled to vouchers. For the MVP process, around 2.3 billion DEM was apportioned from the Development Fund and from the shares of the state capital.

Potentials by sector

1. Industry

Over the last 50 years, industry has been the chief carrier of the economic development of Montenegro. In that period, the growth of the power industry, metallurgy (steel and aluminum), and transport infrastructure were making the basis for the overall development. The industrial facilities had been sized to the needs of the previous Yugoslavia so that 90% of the produce of Montenegro was marketed outside the Republic.

Thus, Montenegro presently has at its disposal the facilities for producing 400,000 tons of crude steel; 1,000,000 tons of bauxite; 280,000 tones of alumna; 100,000 tons of aluminum; 75,000 tons of sea salt; 2,700,000 tons of coal; while the power plants (hydro-electric power plants of Perucica and Piva, and the thermoelectric power plant of Pljevlja) produce around 3 bn KWh per year.

Such a basic economic structure is supplemented with a variety of industries - metal-processing, engineering, wood-processing, textile, chemical, leather and footwear, ready-made clothes, household appliances, construction and forestry machines - as well as with significant capacities of the building trade.

Moreover, there are considerable capacities of industrial processing and finishing of agricultural products: abattoirs; fish-processing plants; flour mills with grain silos; dairies; bakeries; breweries and juice factories; fruit processing factories; grape processing plants and wine cellars; medicinal herbs processing plants; tobacco/cigarettes industry; confectioners, etc.

Due to isolation of FRY and the war waged in its neighborhood, the state in this sector of economy is poorer than before, but with adequate investments and modernization of the production programs the outputs can within a relatively short period of time again become competitive in the world market.

2. Agriculture

Agricultural lands and water resources are well preserved from the industrial pollution and thus provide for the production of healthy (organic) foods, particularly meat (poultry, lamb, goat, veal/beef); then milk and dairy produce; honey; fish; vegetables (tomato, pepper, cucumber, and other); fruits (plum, apple, grapes, citrus fruits, olive); high quality wines (Vranac, Krstac, and others); as well as naturally pure potable water of superior quality (tested to the highest world's standards). Growing on the Montenegrin soil are some specific herbs such as "forest fruits" (blueberries, edible mushrooms) and wild medicinal herbs, especially sage (Salvia officinalis), whose exceptional properties are known throughout the world.

Forests and woodlands cover the area of 720,000 ha, thus making 54% of the total surface area of the Republic; of these, the major part (572,000 ha) is in the north-east.

3. Maritime economy and transport

Montenegro has a fleet of more than 40 ships, with the total carrying capacity of 1,000,000 tons.  The Port of Bar, at the entrance to the Adriatic, is equipped for handling the cargo of around 5 million tons annually. In the immediate hinterland of the Port is the Free Trade Zone, offering broad possibilities for the development of manufacturing and service activities and for the construction of warehouses, from which the goods can be easily transported by sea or by Bar-Belgrade railroad and further to the Central Europe. The road network of Montenegro is 5,227 km, of which 1,729 km are modern arterial and regional roads while the rest are local. The total length of the normal-gauge railroads is 250 km, electrified on their most part. The railway junction in Podgorica connects the inland with the Adriatic sea via (the Port of) Bar, whereas the railroad Podgorica-Bozaj connects Montenegro with the neighboring Albania.

Montenegro has two airports, in Podgorica and Tivat.

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