Montenegro and the Birth of the First Mediterranean Tiger

Maja Drakic, Kyle McKenzie and I have just published “Montenegro: The Challenges of a Newborn State” in the Mercatus Policy Series. This is the second Country Brief published by the Mercatus Center.

Montenegro is one of the most interesting countries in the world at the moment. It is a very exciting place, full of promises, and it’s fast changing. After its independence in May 2006, the country is now at a crossroads. It could show the world that good policy and good politics can cohabit together by continuing to reform its institutional environment to become a successful economy. It could also stifle the reform process that was started in the late 1990s and let internal quarrels dominate the political scene.

But Montenegro is full of young people who are motivated to move on, put communism behind them, and start businesses and all sorts of ventures. Our co-author, Maja Drakic, is one of these young, super talented, and energetic people. She is a gifted economist who is willing to put her life on the line to get things going, and she understands deeply what needs to be done in her country to help it succeed. It was such a great opportunity to work with her.

Montenegro can learn from other countries’ experiences. Estonia shows that following liberal reforms can have a significant positive impact on economic growth; and the New Zealand case provides an instructive example of governmental discipline for a small and transitioning country.

Also, whether Montenegro chooses to join the EU will be crucial for its future and the future of the Balkan region. While the EU can be an attractive option, it is not clear to us that it is the best route to follow. In any case, keep your eyes open on little Montenegro, as we may see in the next decade the rise of the first Mediterranean tiger.

Comments

[Nick]

Frederic, This is a really interesting brief. It is good to see the liberal reform agenda that Montenegro has been following. The benefits of EU membership(such as opening a large trade zone) and drawbacks (accepting political union)are clearly a key challenge for emerging transitional European economies. It will be interesting to see what path Montenegro takes and how it continues to develop.
Nick