Montenegro Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Trade relations with the EU and the Czech Republic

Montenegro mainly exports aluminum, electricity, and meat products to the EU. Mainly cars, medicines, meat, PHM are imported to Montenegro from EU countries. Luxembourg and Slovenia are the main EU export partners of Montenegro, while the most important EU import partners are Germany and Greece. The main articles imported from the Czech Republic to Montenegro include cars, fuels, oils, boilers, electricity. appliances and beer.

FTAs and treaties

Montenegro signed the Stabilization and Association Agreement (SAA) on October 15, 2007. Montenegro signed the CEFTA (Central European Free Trade Agreement) in July 2007. The EFTA states signed Free Trade Agreements with Montenegro in Geneva on November 14, 2011. List of valid international agreements with the Czech Republic in their current form is also available on the website of the Ministry of Foreign Affairs.

Developmental cooperation

From the point of view of Czech development aid, Montenegro is not one of the priority countries. Nevertheless, in 2020, a small local project was implemented with the Mountain Service of Montenegro, the purchase of two special transport stretchers. In this year, an agreement was signed on MLP financing to strengthen the capacities of the Center for Women’s Rights, and with NVO Don Bosko, funding was secured for the construction of a playground and programs for children and youth.

Prospective fields of study (MOP)

Mining, mining and oil industry

At the end of 2021, the Ministry of Capital Investments denied the information that diesel was found in Černohorské Vody and that the explorations that started in 2019 will continue. This is an assumption of 51 billion m³ of gas and 438 million barrels of diesel. The company Luka Bar AD (port of Bar) could play a major role in the storage of approx. 20,000 m3 of liquid gas.

Energy industry

The previous government announced that it was withdrawing from building small hydropower plants. He wants to make more efforts in the field of possibilities for the construction of wind and solar power plants. Looking forward, Montenegro would like to become an exporter of electricity. For this purpose, a submarine cable connecting Montenegro with Italy was laid.

ICT

The impact of the coronavirus crisis confirmed Montenegro’s strong dependence on tourism. The previous government began to make increased efforts in the field of supporting the development of modern technologies and increased digitalization of society.

Water management and waste industry

There are currently 10 wastewater treatment plants operating in Montenegro, with 3 more planned in the north. By 2035, Montenegro plans to invest more than EUR billion in environmental protection. Montenegro has significant reserves of quality water, but imports a large amount of bottled water from Serbia and Italy.

Rail and rail transport

The railway infrastructure is outdated, as is the railway rolling stock. Černá Hora plans to buy three train sets for intercity transport. In addition to the delivery of new cars, opportunities for Czech companies can also be seen in the repair and revitalization of used locomotives and wagons.

Business relations

Trade relations with the EU

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 992.56 1,232.48 1,254.31 929.4 1,143.57
Imports into the EU (million EUR) 128.6 179.7 160.0 137.70 136.10
Balance with the EU (million EUR) -962.58 -1,052.90 -1,094.26 -791.5 -1,007.65

Source: Monstat

To the EU, Montenegro mainly exports aluminum, electricity, wood industry products, and meat products. Mainly cars, medicines, meat, diesel as PHM are imported to Montenegro from EU countries. Luxembourg and Slovenia are the main EU export partners of Montenegro, while the most important EU import partners are Germany and Greece.

Trade relations with the Czech Republic

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.30 0.34 0.41 0.23 0.32
Imports to the Czech Republic (billion CZK) 0.04 0.17 0.19 0.11 0.11
Balance with the Czech Republic (billion CZK) -0.26 -0.15 -0.21 -0.12 -0.20

Source: businesscarriers.com

The main articles imported from the Czech Republic to Montenegro include cars, fuels, oils, boilers, electricity. appliances and beer. It is mostly a re-export from Montenegro to the Czech Republic.

Trade relations with countries outside the EU

Comment on the numbers in the table, the reasons for the positive or negative balance, comparison with the EU and what causes the differences.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 1,211.6 1,321.09 1,346.07 1,175.75 1,360.60
Imports to countries outside the EU (million EUR) 242.40 220.53 255.42 228.42 300.94
Balance with non-EU countries (million EUR) -969.36 -1,100.57 -1,090.64 -947.33 -1,059.65

Source: Monstat

Foreign direct investment

The total inflow of foreign direct investment (FDI) at the end of last year amounted to 898.4 million euros, with 34million euros leaving the country at the same time, according to preliminary data from the Central Bank of Montenegro (CBCG). The net inflow of foreign direct investment reached 552 million euros, which is 18.1 percent more than in the same period of 2020. “The total inflow of foreign direct investment increased by 3percent compared to the comparable period, which is a result of the growth of equity investments,” reports the CBCG.

A total of €1,759,000 of FDI went from the Czech Republic to Montenegro. The structure cannot be determined, the Central Bank of Montenegro does not publish this data.

FTAs and treaties

Treaties with the EU

Montenegro signed the Stabilization and Association Agreement (SAA) on October 15, 2007. The SAA supports economic and trade relations. Montenegro signed CEFTA (Central European Free Trade Agreement) in July 2007. CEFTA thus serves as preparation for full membership in the EU. The EFTA States signed Free Trade Agreements with Montenegro in Geneva on 14 November 2011. The agreement entered into force on 1 September 2012.

Contracts with the Czech Republic

In the bilateral contractual area, Montenegro signed up to all obligations arising from international agreements signed by the state of Serbia and Montenegro and its legal predecessors. In May 2018, the succession negotiations between the Czech Republic and Montenegro were successfully completed after several years.

The current list of valid international agreements with the Czech Republic is also available on the website of the Ministry of Foreign Affairs.

Overview of basic agreements in the economic field:

Payment agreement between the government of Czechoslovakia and the Union Executive Council of the Assembly of the Socialist Federal Republic of Yugoslavia (Belgrade, 8 February 1991);

Agreement between the government of the Czech Republic and the federal government of the Federal Republic of Yugoslavia on mutual support and protection of investments (Belgrade, 13 October 1997, No. 23/2001 Coll.),

The agreement on its amendment entered into force on 05/04/2011;

Agreement between the government of the Czech Republic and the federal government of the Federal Republic of Yugoslavia on mutual assistance in customs matters (Belgrade, 9 September 1998, No. 99/2001 Coll.);

Agreement between the Government of the Czech Republic and the Council of Ministers of Serbia and Montenegro on the prevention of double taxation in the field of income and property taxes (Prague, 11 November 2004, No. 88/2005);

The agreement between the government of the Czech Republic and the government of Montenegro on economic and industrial cooperation (Cetinje, 27/2011) entered into force on 22/09/2011 – on the basis of the agreement, the Interparliamentary Mixed Commission for Economic Cooperation between the Czech Republic and the Czech Republic was established;

In March 2005, an Agreement on Cooperation was signed between the Chambers of Commerce of the Czech Republic and Montenegro, and in 2008, an Agreement on Cooperation was signed between the Union of Industry and Transport of the Czech Republic and the Union of Employers of Montenegro.

Developmental cooperation

Montenegro is a recipient of development aid from some states.

From the point of view of Czech development aid, Montenegro is not one of the priority countries, although some small development projects are still implemented here.

For the time being, the largest development aid project was provided by the Czech Republic in the years 2004–2009 (a total of €980,000) as a contribution to the rehabilitation project of the lead-zinc ore dump in Mojkovec. Remediation was carried out by the Czech company VODNÍ ZDROJE as Praha. In 2018, a small local project to support the integration of the disabled and members of minority groups into society through cultural events and art circles was implemented in Montenegro by the Culture and Information Center “Budo Tomović” in Podgorica. In 2019, a small transformational project aimed at educating journalism students and young journalists in the field of working with information in electronic media was implemented. In 2020, a small local project was implemented with the Mountain Service of Montenegro, as part of which two special transport stretchers were purchased for Montenegrin mountain rescuers.

Prospective fields of study (MOP)

Perspective field 1

Mining, mining and oil industry

At the end of 2021, the Ministry of Capital Investment denied the information that diesel had been found in the Montenegrin waters and that the exploration started in 2019 would continue. This was an assumption of 51 billion m³ of gas and 438 million barrels of diesel (These estimates are based on 3D images carried out as part of a joint project of the Italian-Russian consortium ENI-Novatek and the Greek Energean). The company Luka Bar AD (port of Bar) could play a major role in the storage of approx. 20,000 m3 of liquefied gas.

Mining from the Maoče mine is being considered again in connection with which the construction of the Bijelo Polje – Maoče railway line is also closely linked. The Maoče mine was considered earlier, but due to the increase in land prices and the need to ensure transport, this project was postponed.

Perspective field 2

Energy industry

The previous government announced shortly after its appointment that it was withdrawing from the construction of small hydropower plants. However, he wants to make more efforts in the area of ​​researching the possibilities of building wind and solar power plants. The most important source of electricity is still the 1st block of the thermal power plant Pljevlja. Looking forward, Montenegro would like to become an exporter of electricity. For this purpose, a submarine cable connecting Montenegro with Italy was laid. The start of work on the gasification of the country will depend on the implementation of the construction of the Adriatic-Ionian gas pipeline, or on the results of the seabed survey.

Perspective field 3

ICT

Montenegro’s strong dependence on tourism has led government officials to decide that the economy must be diversified. The impact of the coronavirus crisis confirmed the correctness of this decision. The previous government began to make increased efforts in the field of supporting the development of modern technologies and increased digitalization of society. At the end of 2019, a tender was announced for the construction of a new National Science and Technology Park in Podgorica. Montenegro is open to cooperation both within the Western Balkans region and with the countries of the European Union. There is thus potential for the application of Czech companies as well.

Perspective field 4

Water management and waste industry

There are currently 10 wastewater treatment plants operating in Montenegro, and 3 more are planned in the north, Bijelo Polje, Kolašin and Rožaje. By 2035, Montenegro plans to invest more than EUR billion in environmental protection. The financial resources of the state and municipalities are very limited. Montenegro has significant reserves of quality water, but it cannot use it effectively on its own and imports a large amount of bottled water from Serbia or Italy. Problems with the treatment and regulation of waste and sewage water persist in a number of places in Montenegro. A number of municipalities (regions) will be forced to prepare plans for the construction of wastewater treatment plants, water networks, waste incinerators and landfills. A separate chapter is the revitalization and removal of numerous wild landfills or the reclamation of the tailings pond near the aluminum production plant (KAP) in Podgorica.

Perspective field 5

Rail and rail transport

The railway infrastructure is outdated. The exception is the Podgorica-Nikšić railway line, which was completely revitalized in the past by the Czech company AŽD. The entire railway network of Montenegro will have to replace the existing sleepers with concrete sleepers. The railway rolling stock is also obsolete. Černá Hora plans to buy three train sets for intercity transport. The value of the contract is EUR 15 million, while the financing is to be provided by the EBRD and the government is to provide a state guarantee for the loan. In addition to the delivery of new cars, opportunities for Czech companies can also be seen in the repair and revitalization of used locomotives and wagons. In the national medium-term plan, one of the priorities in the field of transport for the next three years is the project of reconstruction of the railway infrastructure and the connection of the port of Luka Bar with the border with Serbia.

Montenegro Trade