Inclusive institutions are a pillar of long-term economic development because they create an environment in which entrepreneurs can operate freely, develop their ideas and contribute to society, without fear of political influence or unequal rules, said the President of Montenegro, Jakov Milatović.
At the opening of the World Congress of Entrepreneurs in Podgorica, he said that the state should create a favorable environment for economic development, adding that entrepreneurs are not only drivers of economic development, but the foundation of every advanced society.
"Your energy, innovation and business success cannot develop in a vacuum. Your success depends on how willing the decision-makers are to provide an environment in which you can freely act, create and grow," said Milatović.
As he emphasized, a successful economic environment requires stable, functional and inclusive institutions that will provide support, enable the realization of entrepreneurial ideas and ensure that effort is paid fairly.
"It is our duty to build these institutions, to strengthen them and make them independent, because only such institutions can build the future we all strive for," Milatović announced.
He indicated that the Nobel Prize for Economics was awarded to three outstanding researchers - Daron Acemoglu, Simon Johnson and James Robinson, whose work, as he stated, points to the key role of inclusive institutions in the development of society and economy.
"These laureates have shown us once again that the success of society does not depend only on the abilities of individuals, but on how the institutions that support these individuals are set up and organized," said Milatović.
As he added, inclusive institutions are the basis of long-term economic development.
"They create an environment in which entrepreneurs can operate freely, develop their ideas and contribute to society, without fear of political influence or unequal rules," said Milatović.
According to him, when institutions become politicized, exploitative, when a small number of people in power control resources, the whole society sinks into stagnation.
"Such societies can achieve short-term benefits for the elite, but in the long-term, the majority of citizens remain deprived of opportunities for development and progress," said Milatović.
He pointed out that it is the duty of decision-makers to ensure the existence of strong, independent and inclusive institutions that will provide support to the economy and citizens.
"Without these foundations, economic progress becomes impossible, and society remains in a state of stagnation," said Milatović.
As he pointed out, in this context, the process of joining the European Union (EU) for Montenegro is not only a political goal or a formal obligation, but an opportunity to strengthen institutions, improve the legislative framework and create a business environment that is stable, transparent and inclusive.
Milatović said that in order to achieve Montenegro's membership in the EU by 2028, Montenegro must redouble its reform efforts.
"By the end of 2026, we must complete all obligations from the European agenda. I believe that we will all agree that the essence of those obligations, as well as our economic management, is contained in strengthening the rule of law," said Miltović.
According to him, there is no entrepreneurship, stability, prosperity or economic development without the rule of law.
Milatović said that, on the way to approach high European standards and full membership in the EU, regional cooperation is essential and that Montenegro already participates in over 40 regional initiatives.
"The common regional market represents an ambitious, but also by far the most elaborate regional undertaking, which includes almost all key policy areas - from digital transition, trade and investment, to innovation, entrepreneurship and green transition," Milatović said.
That project, he said, has the potential to further accelerate and improve economic cooperation in the region, as well as to become a strong catalyst for the growth and strengthening of regional trade.
He emphasized the strategic importance of joining Montenegro to the Single Payment Area in Euro from January 1 of the following year.
"As the first country from the Western Balkans to join this system, Montenegro has achieved a key step towards deepening institutional and market synergy with the single European market," said Milatović.
He said that Montenegro is at a turning point.
"We are entering the most important period of our social development. We must implement essential reforms that will shape our political and economic future," said Milatović, adding that the country is also facing challenges.
He pointed to the adoption of the law through emergency procedures, without adequate public discussion, which, he said, left out the participation of business associations in the creation of a business environment.
"This trend must be stopped immediately. Adopting a law without a thorough analysis and consultation with the relevant actors endangers the progress of our country," said Milatović.
He said that he is aware of the challenges facing Montenegro in certain sectors of the economy.
"The energy sector is recording a decrease in profitability despite the increase in the number of employees," said Milatović, adding that this clearly indicates the need for urgent improvement of efficiency and sustainability through corporate governance instruments.
"As a country with one of the largest shares of state-owned enterprises in the economy, but also with unique potential in the energy sector, its efficient management is not only necessary - it is imperative for future economic development," said Milatović.
As he pointed out, this is crucial for the transition to green energy sources.
"Tourism, as an important branch of the economy, is facing a drop in profitability. If we do not act immediately, we risk losing our position on the international tourism market," warned Milatović.
According to him, attention must be directed towards improving competitiveness and quality of services, because this is the only way to "keep Montenegro as a desirable destination in the eyes of the world".
"We must not use the comparative advantage of this sector in our economy to extract additional money through tax increases, thereby reducing its competitiveness," said Milatović.
He also pointed out that the production sector is facing serious challenges, including a constant decline in the coverage of imports by exports.
"This trend must be reversed through strategic interventions. In contrast, we are witnessing an increase in excise duties on wine producers, which puts small producers in an unenviable position, as well as our biggest business brand - "Plantaže", said Milatović.
He assessed that it is not wise to put additional burdens on producers, whose pillars are already faltering under the accumulated burden of decades of wrong economic development.
"Let's do everything to help our economy, and if we don't know how - then let's not repay them," said Milatović, reminding that the Montenegrin economy is facing a labor shortage, low productivity and an inefficient public sector.
"Instead of the state apparatus being a support and support, the economy has become a hostage to delayed reforms of public administration. It is necessary without delay to provide favorable financing lines to our micro and small economy, to finally put the credit-guarantee fund into operation and provide support for them to take competitive loans and start the investment cycle," emphasized Milatović.
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