Economy of Montenegro

By | April 29, 2022

According to cheeroutdoor, Serbia and Montenegro is a moderately developed industrial-agrarian state with a predominance of private property. Industry and construction give St. 2/5 of social production, agriculture – 1/4. The share of the service sector is growing. In 2001, 42% of GDP was produced in the private sector, 30% in mixed enterprises, and 28% in state and public enterprises. More than 90% of GDP is created in Serbia, less than 10% in Montenegro (hereinafter, since 1999, data on Kosovo and Metohija are not included due to their absence).

In the 1990s the economy of Serbia and Montenegro fell into decay due to the destruction of the single market of the former SFRY, military conflicts in the Balkans, international sanctions and NATO bombing. GDP in 1990-2001 decreased from 28.4 billion to 10.1 billion dollars (606.7 billion din), and per capita – from 2.7 thousand to 1.2 thousand dollars.

Industry was in a particularly difficult situation. In 2002, the volume of production in it was 45% of the level of 1990, incl. in extractive industries – 57%, in manufacturing – 38%. In the metalworking industry, the production of machinery and equipment, clothing and footwear, output decreased by 82-85%. In most industries (except energy), production capacities are loaded by no more than 1/3.

Agriculture was also badly affected. In 1990-2002, the area of ​​cultivated land decreased by almost 10%, the number of cattle by 35%, pigs by 17%, sheep by 44%, poultry by 35%. Reduced production of most types of products.

Living standards in the 1990s declined sharply, the bulk of the population was on the verge of survival.

Change in con. 2000 political regime and the normalization of relations with the world did not improve the situation in the economy. The average annual GDP growth rate was 4% in 2001–02. Industrial production did not increase in 2001, in 2002 the increase was less than 2%. The dynamics of production in agriculture is unstable. The volume of transportation, communication services, construction work has decreased. Significantly increased only the volume of retail trade.

Restoration and modernization of production are going slowly. Capital investment in fixed assets in 2001 amounted to 65.8 billion din. (11% of GDP). The number of employed at enterprises is decreasing (2.2 million in 2002), while the number of unemployed is growing (923,000). Unemployment 25%. St. 1/4 of the unemployed are qualified personnel.

Achievements include financial stabilization and growth in household incomes. Inflation dropped from 86% in 2000 to 14% in 2002. In December 2002, the average real wage was US$142 at the official exchange rate, and the average old-age pension was US$135, slightly more than the cost of the minimum consumer basket. The population has significant foreign exchange savings (46.7 billion din. in terms of official rates), the bulk of which is frozen. Savings in national currency – 3.6 billion din.

The standard of living remains low, more than 50% of the population’s expenditures go to food.

Power industry (16%), mechanical engineering (15%), food (14%) and chemical industry (11%) are leading in terms of the share in industrial production, followed by knitwear, textile and clothing industries (6%), non-ferrous metallurgy (4%). ), production of building materials (4%). A prominent place is also occupied by the extraction and processing of non-metals, the furniture, rubber, pulp and paper, leather and footwear, and printing industries.

The energy industry is based mainly on the use of local lignite reserves, near the extraction sites of which large thermal power plants have been built in Serbia (Kolubara, Kostolac, the third in Kosovo and Metohija). 1/3 of electricity is produced at hydroelectric power stations (the largest is Dzherdap on the Danube). Vojvodina produces oil and small amounts of natural gas. The oil refining industry is represented by plants in Pancevo and Novi Sad.

In 2002, 33.5 million tons of coal (mainly lignites), 682 thousand tons of oil, 107 million m3 of natural gas were mined, and approx. 44 billion kWh of electricity. A significant amount of energy and electricity is imported. 755 thousand tons of gasoline, 728 thousand tons of diesel fuel, 848 thousand tons of fuel oil, 38 thousand tons of oils and lubricants were produced from oil refinery products.

In ferrous metallurgy, the main object in Serbia is a large plant in the city of Smederevo, in Montenegro – a plant in the city of Niksic (mainly rolled steel). In 2002, 495 thousand tons of pig iron, 596 thousand tons of steel were smelted, 671 thousand tons of rolled products, 30 thousand tons of pipes, 166 thousand tons of cold-rolled sheet steel were produced.

Non-ferrous metallurgy stands out in scale. In Serbia, significant copper ore mining (Bor, Maidanpek deposits) and copper smelting (Bor) are carried out, rolling (Sevojno, Nis), cable-rolling (Svetozarevo) and cable (Zaecar, Novi Sad) are developed. ) production. The main capacities of the lead-zinc industry are concentrated in Kosovo and Metohija; there are also mines in Montenegro, an electrolytic zinc plant in Serbia (the town of Šabac). Precious and rare metals are also extracted from copper and lead-zinc ores. Bauxites are mined in Montenegro and an aluminum plant has been built in Podgorica.

In 2002, 104 thousand tons of aluminum, 36 thousand tons of electrolytic copper, 1.5 thousand tons of zinc, 170 tons of refined lead, 6.8 tons of refined silver were smelted, 38 thousand tons of copper and 17 thousand tons of rolled aluminum were produced (excluding Kosovo and Metohija). A significant part of non-ferrous metallurgy products, as well as finished products from it, is exported.

The chemical industry has developed in Serbia mainly on the basis of by-products of non-ferrous metallurgy, as well as oil and gas raw materials. In 2002, 74 thousand tons of sulfuric acid, 133 thousand tons of nitric acid, 18 thousand tons of phosphoric acid, 437 thousand tons of nitrogen fertilizers, and 188 thousand tons of plastics were produced. The production of artificial and synthetic fibers is significant.

Diversified mechanical engineering is developed: in Serbia and Montenegro – the electrical and electronic industry; in Serbia – the production of agricultural machinery, mining equipment, automobiles (passenger cars – in the city of Kragujevac, trucks – in the city of Priboy). A shipyard was built in Kotor (Montenegro).

In 2002, 15 thousand automobile engines, 595 trucks and 11 thousand cars, 24.7 thousand motorcycles, 3 thousand tractors, 65 freight cars, 1.7 million transformers, 4.6 thousand televisions, 18, 4 thousand tons of cable products, 11.6 thousand tons of batteries, 10.1 thousand refrigerators, 4 thousand washing machines.

The production of building materials is based mainly on local mineral raw materials. There are 3 large cement factories in Serbia (in Beocin, Kosjeric and Novi Popovac) and several brick factories. Deposits of technical and architectural stone are being successfully developed.

The food industry, textile, leather and shoe production are developed mainly in Vojvodina, as well as in large cities. There are well-known tobacco factories in Nis and Vranje.

Agriculture has favorable natural and climatic conditions for development. In the 1990s the volume of production in it managed to be kept at a level that allows almost completely satisfying domestic needs for agricultural products and partially exporting it.

The industry has a predominantly grain and livestock direction. The area of cultivated land is 4,445 thousand hectares, of which 3,791 thousand hectares are in the private sector. The main agricultural regions are in Serbia – the Middle Danube Lowland and the Morava Valley, which are almost completely plowed. Wheat, corn, rye, sugar beets, hemp, sunflowers, potatoes, plums, and grapes are grown. Cattle, pigs, sheep, poultry are bred. In Montenegro, the main branch of agriculture is mountain pasture animal husbandry (sheep, unproductive cattle). Processed approx. 6% of the land is grown mainly plums, figs, pomegranates, almonds, citrus fruits, as well as olives and grapes.

In 2002, 2.2 million tons of wheat were harvested (with a yield of 32 q/ha), 5.5 million tons of corn, 992 thousand tons of potatoes, 2.2 thousand tons of sugar beet, and approx. 0.5 million tons of meat, 1.8 billion liters of milk, 1.4 billion pieces. eggs, 6.2 thousand tons of fish were caught.

Railways play a major role in transportation. Their total length is 4.1 thousand km, incl. electrified – 1.4 thousand km. A network of highways is developed – the total length is 45 thousand km, incl. modern highways – 28 thousand km. River navigation is carried out along the Danube, Sava, Tisza and canals (limited due to the effects of NATO bombing). River ports – Belgrade, Novi Sad and Smederevo, sea – Bar and Kotor. The main airports are in Belgrade and Podgorica. The length of the pipelines 1.5 thousand km (2001).

Tourism is developed in the seaside resorts of Montenegro and in the areas of thermal springs in Serbia. In 2002, tourist sites received St. 3 million people, incl. 661 thousand foreigners.

After the change of the political regime in 2000, the main efforts of the government were aimed at normalizing the country’s international situation. All sanctions have been lifted from it, membership in the UN and international economic organizations has been restored. In September 2002, the Serbian government formed the European Integration Council to prepare for EU accession.

Trade and economic relations with Western countries and the former republics of the SFRY have been restored. During 2001-02, a significant part of the external debt, which had increased during the sanctions due to accrued interest, was written off or restructured. At the 1st donor conference in Brussels in 2001, it was decided to allocate 1.3 billion dollars to the country in the form of non-repayable aid and soft loans.

There is no common economic policy in Serbia and Montenegro, as there is no single economic system. Serbia uses the national currency, Montenegro switched to the German mark in 2000, and since 2002 to the euro, has its own central bank, tax, customs and budget systems.

The People’s Bank of Yugoslavia (from February 2003 – Serbia) has been pursuing a tight monetary policy since 2001, which the IMF supports with stand-by loans. In con. In 2002, the refinancing rate was 9.5%, the volume of reserve money was 34 billion din, and the money supply in circulation was 94.6 billion din. The foreign exchange reserves of the NBS have grown significantly ($2.3 billion), and their volume is sufficient to maintain financial stability. The dinar is pegged to the euro, and its exchange rate is almost stable (at the end of 2002 – 61.52 din. for 1 euro). External debt of Serbia and Montenegro in December 2002 – 8.6 billion US dollars.

In 2002, the share of budget expenditures in the federation in the produced GDP was 7%, Serbia 26%. The federal budget is balanced, Serbia’s budget deficit in 2001 did not exceed 3%. Balance of all public finances, constituting approx. 50% of GDP, has a significant deficit.

Economy of Montenegro