The business environment in Montenegro is moderately unfavorable, according to Filip Lazović, Deputy Secretary General of the Employers’ Union (UPCG). He emphasized that while some improvements are evident, long-standing issues persist, and there is a lack of will to address them decisively.
Lazović highlighted the major problems, particularly the informal economy, which remains significant despite efforts to address it through tax reforms. He acknowledged positive steps, such as reforms in labor costs, but noted that the informal sector continues to be a major issue.
Another challenge is the inefficiency of public administration, which he described as large but ineffective. He pointed out that the regulatory framework in Montenegro is unpredictable, citing frequent changes in the VAT law, which creates uncertainty for businesses.
Lazović also discussed the labor shortage, which has become a growing problem, particularly in sectors like tourism. He stressed that to address this, Montenegro must enhance its appeal as part of the European labor market, as workers are increasingly looking for opportunities abroad.
The high number of public sector employees, compared to the private sector, also poses a problem, with Lazović describing it as a “Montenegrin paradox.” He argued that the public sector should be more efficient and focused on progress, rather than employing individuals who may not contribute meaningfully to the economy.
Additionally, Lazović addressed the impact of inflation, particularly its effects on business costs, including fuel prices, which have led to higher product and service prices.
Regarding government measures to control margins and boycott certain retailers, Lazović opposed such interventions, arguing that the state should not interfere too heavily in market forces, especially without adequate analysis.
He concluded by noting that Montenegro, despite its small size, has significant potential, particularly in tourism, energy, and agriculture, and should focus on producing high-quality, expensive goods and services to drive future economic growth.
