Competitiveness in South East Europe 2021
A Policy Outlook
The future sustainable economic development and well-being of citizens in South East Europe depend on greater economic competitiveness. Reinforcing the region’s economic potential in a post-COVID-19 context requires a holistic, inclusive and growth‑oriented approach to policy making. Against the backdrop of enhanced European Union (EU) accession prospects and a drive towards deeper regional integration, the governments of the six Western Balkan (WB6) economies have demonstrated a renewed commitment to enacting policy reforms.
The third edition of Competitiveness in South East Europe: A Policy Outlook comprehensively assesses policy reforms in the WB6 economies across 16 policy dimensions crucial to their competitiveness. It leverages a highly participatory assessment process, which brought together the views of OECD experts, WB6 policy makers and local non-governmental stakeholders to create a balanced and realistic depiction of their performance. The report seeks to provide WB6 policy makers with a multi-dimensional benchmarking tool, enabling them to compare performance against regional peers as well as OECD good practices, and to design future policies based on rich evidence and actionable policy recommendations.
Economy-specific profiles complement the regional assessment for the first time in this edition of Competitiveness in South East Europe: A Policy Outlook, and provide each WB6 economy with an in-depth analysis of their competitive potential as well as policy recommendations tailored to their specific challenges to inform their structural economic reforms and sustainable development agenda.
Montenegro profile
Montenegro is a small service-based economy with a large tourism sector. In 2019, services accounted for 58.7% of gross domestic product (GDP) and 73% of employment in Montenegro, with the highest contributions coming from wholesale and retail trade, accommodation related to the large tourism sector, real estate, and transportation and storage. Over the past decade, the services sector’s GDP contribution has expanded considerably at the expense of both industry and agriculture. The GDP share of industry, including construction, declined from 22.3% in 2001 to 16.1% in 2019, while its contribution to employment declined from 25% to 19.1%. Currently manufacturing accounts for just 4% of GDP and 6.4% of employment. Meanwhile, the contribution of agriculture, forestry and fishing to GDP has nearly halved since 2001, from 10.8% to 6.4%. Today this sector accounts for just 7.8% of employment, the smallest contribution in the Western Balkan (WB) region (World Bank, 2020[1]).
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