“You cannot really start with the legal industry before you understand the political moment in the country” says Vladimir Radonjic, the Managing Partner of Radonjic / Associates in Montenegro, when asked for the Buzz in his country. “Politics has been the main subject of conversation in the country for the last 12 months.”
According to Radonjic, the country was “caught in the crossfire between the US and Russia,” due to the Montenegrin NATO accession process. In fact, “we have been talking only about the NATO accession since the election last October — it was the major political subject in the country. This kind of political issue affects all other matters in the country of course, and the country’s economy before anything else.” Still, Radonjic reports, “the waters may be calming down now” as a result of the country’s accession to NATO on June 5, 2017. “We are now newest fully-fledged NATO member country, and this topic may be put ad acta now,” he says, using a Latin phrase meaning "to close the matter on a topic." As a result, he says, “I would say 2017 may be a year of expectations. After a year of political turmoil – discussion on whether we should be joining the NATO or not – everything can finally focus on the economy.”
That’s not a simple topic, of course, as Radonjic admits that Montenegro’s economy “is not really in such good shape.” Still, he says, the new government headed by the new Prime Minister seems to be looking for new solutions for these economic deficiencies.” Radonjic is encouraged. “They seem to be doing well, so far, and we are experiencing some good signs.” He points out that “we used to be the regional leader in FDI for a couple years, and although for the last few we’ve seen a decline, now there are some impulses and signs of recovery.” Radonjic reports seeing a pick-up in interest from international investors looking into Montenegro as a potentially good jurisdiction to be based in, and also as a potential hub for regional or even global activities, “particularly for the banking and financial industry, software and other services companies." He believes that Montenegro can compete with the economies of a similar size that are doing well in such industries. “Montenegro can do as good as Malta,” he says.
Still, Radonjic says, although, “I am seeing openness of the government to explore these new opportunities, and I am confident this will lead to new growth, the increase of public debt remains a hot topic, and especially the period from 2018 to 2020 will be challenging for the Montenegrin government because repayment of existing loans and governmental bonds will come due.” He says that he and his colleagues in the legal industry are hoping the government will be able to cope with such difficulties and keep their eyes on the opportunities that do exist and move the country’s economy forward.
In terms of sources of activity in the economy, Radonjic points to “three main sectors: infrastructure, energy and real estate.” Major projects initiated in each of these fields during previous years are progressing well.
In real estate, Radonjic pointed to three main projects: Lustica Bay, Porto Montenegro, and Portonovi. He says, “tourism figures are increasing, and Montenegro as a destination is becoming more popular. And this of course affects the real estate sector.”
Indeed, on a related matter, the main infrastructure project continues to be the construction of the planned highway from Podgorica to Belgrade. The construction of the first part is accelerating – Radonjic says “they’re now working at full speed after a year and half of delays” – and he says the country “is now in negotiations with the Chinese contractor handling the construction to begin working on the second phase, so we hope this may happen in the near future too.” According to Radonjic, “that’s the most important infrastructure project in the country.”
Finally, Radonjic says, “on energy the key topic is still the EPCG – the State-owned electricity production company that was privatized few years ago by Italy’s A2A S.p.A., and after a lot of back and forth between the government and the Italians, the local media are now reporting that the Italians might be activating their exit strategy by selling their share back to the Government or to other interested investors.” In addition, he reports, “the government exploring the possibilities with potential investors – Chinese companies, among others – for hydro power plants on Moraca river, so that’s also something that may be contribute to the growth of the local economy.”