According to last year’s report of the World Bank, WB, Montenegro is one among four economies worst hit by the coronavirus pandemic. The other three countries hardest hit by Covid-19 are the Seychelles, the Maldives and the Cape Verde Islands.
The economic analyst, Mr Predrag Drecun, finds these assessments simple and logical, as the Montenegrin economic system is not resilient to big global cracks in the economy.
“An extremely and structurally unfavorable import-dependent economy, very high elasticity of the economy in relation to one economic branch, growth of foreign trade deficit, and, it will turn out, poor response to global challenges, have affected the fall in GDP to be almost 20 percent. It often happens in life that your biggest weaknesses come to a light when something happens to you suddenly,”Mr Drecun told CdM.
According to him, if Montenegro continues to fight against consequences instead of removing the causes, it will keep its position as the worst hit economy.
“Because tourism industry has been hit hard by the pandemic globally, and we depend on tourism with over 30% of direct and indirect impacts on the GDP,” he explains.
The economic analyst, Mr Vasilije Kostić, claims that Montenegro is justifiably among the worst coronavirus-hit economies, but can no compare with them when it comes to other social, economic, cultural and historical criteria and measures.
“This fact can be a significant benefit to us, despite the fact that we realized what we have been pointing out for years – that the Montenegrin economy must not be so dependent on one branch and that it should be diversified – in the worst possible way,” Mr Kostić indicates in a statement for CdM.
Growth
The WB report published on January 6 also points out that the Montenegrin economy will grow by 6.1% this year, which is the highest of all countries in the region. That growth next year should amount to 3.9%. Mr Kostić comments on such forecasts as seemingly dynamic and successful.
Mr Drecun, on the other hand, thinks they may be misleading. In his opinion, Montenegro possesses capacities to overcome structural issues quickly.
“These potentials cannot be used by the existing concept of economy, nor by the existing level of political articulation in our society. We must turn to the real sector, i.e. agriculture, energy, infrastructure, and after that – tourism.”
Recovery
The WB expects the investment in Montenegro will increase. They also warn that massive changes must be made.
“Good investments are now of paramount importance. Our response to the pandemic will shape a common future in the years to come. We need to lay the foundations for a fair and sustainable global economy,” the WB suggests.
