Montenegro has been grappling with significant economic challenges for decades, including excessive dependence on the public sector and mass tourism. While many young people secure jobs in the public sector through political connections, the real economy increasingly relies on foreign labor. This trend poses long-term risks to the country’s economic stability, warns Isak Adizes, a leading management expert and consultant to governments and corporations worldwide.
Predictions realized
Twenty years ago, Adizes proposed an alternative development path for Montenegro, suggesting the country could become a center for financial services and high-tech industries, rather than relying on seasonal tourism and low-wage jobs. He warned that a lack of skilled labor would become a serious problem, and unless the economy shifted toward knowledge-based sectors, the country would be forced to import workers from abroad. Today, those warnings have become a reality, with mass tourism, uncontrolled urbanization, and a bureaucratic economy creating numerous challenges for Montenegro.
Labor force issues
Adizes predicted that Montenegro, being a small country with limited labor resources, would face serious challenges, particularly if it relied heavily on tourism, an industry requiring large numbers of workers. He foresaw the country being forced to import labor from neighboring countries like Serbia, Bosnia, and Albania, or even further afield. Adizes also warned that relying on foreign labor could create socio-economic problems, as the status and integration of these workers could affect local communities.
Missed opportunities for strategic development
Adizes pointed out that Montenegro missed the chance to position itself strategically in industries such as finance or high-tech. Instead, the country continued to focus on tourism and low-wage jobs, without building a solid foundation for innovation, education, or digital skills. He cited Singapore as an example of a small country that successfully became a global center for finance, technology, and education through significant investments in education, digitalization, and foreign investment.
Tourism strategy
Adizes also criticized the country’s tourism strategy. While mass tourism continues to grow, he argued it is not sustainable and does not provide significant income or improve the standard of living for locals. He warned that Montenegro should have focused on developing high-quality, luxury tourism, attracting fewer but wealthier tourists. Instead, uncontrolled development and mass tourism have led to significant infrastructure challenges and environmental degradation.
The current crisis
Adizes warned that the uncontrolled urbanization seen in Montenegro is reminiscent of the situation in Acapulco, Mexico, where unchecked development led to a collapse in tourism and quality of life. He cautioned that if Montenegro does not reconsider its approach to tourism and development, it could lose its greatest assets—its natural beauty and exclusive tourism potential.
The way forward
While Adizes acknowledged that it is now difficult to reverse the situation, he stressed the importance of careful planning for sustainable development, focusing on high-tech industries, digitalization, and education. He urged the government to move away from mass tourism and low-wage labor models and focus on innovation and creating a knowledge-based economy. However, he expressed doubt about whether the situation can be rectified given the decisions already made and the ongoing consequences of those choices.
