Emerging Markets / July 21, 2017

Economics and Agribusiness in Montenegro

Montenegro is a small country located in the Balkans in southeastern Europe along the Adriatic Sea. A part of Yugoslavia throughout most of the twentieth century, Montenegro existed in a federal union with Serbia from 1992 until 2006. Since achieving its national independence in 2006, the country has strengthened its democratic institutions and, in 2017, became the newest member of the North Atlantic Treaty Organization (NATO). Currently, Montenegro has a total territory of almost 14.000 square kilometers, which is somewhat smaller than Connecticut. The country’s landscape is mostly rugged and mountainous both inland and along the more than 290 kilometers of coastline. Montenegro has a total population of approximately 650.000 citizens, 64% of which live in an urban setting, notably the capital city of Podgorica with close to 165.000 inhabitants. The national annual gross domestic product (GDP) is US$10 billion (PPP) and the country has experienced positive economic growth upwards of 1.5% in recent years. The Montenegrin economy is divided into 9% agriculture, 21% manufacturing, and 70% services. Similarly, it is estimated that the agricultural industry employs 5% of the national labor force, while manufacturing employs 18% and services employ another 77%. Meanwhile, the agriculture industry utilizes 39% of the national territory, while another 40% is forested.

In terms of natural resources, Montenegro has bauxite and hydroelectricity. Within manufacturing, the national industry is focused on steel and aluminum making as well as agricultural processing. Likewise, an important sector of the national economy is driven by the tourism industry. Simultaneously, the country’s agricultural industry has as main products tobacco, potatoes, olives, grapes, citrus fruits, and sheep. In terms of trade, during 2015, Montenegro imported US$2.3 billion worth of goods and exported US$432 million, resulting in a negative trade balance of US$1.85 billion. Furthermore, Montenegro’s main export, representing 27% or US$119 million of the country’s total, consisted of metals, namely raw aluminum and iron bars. On the other hand, the country’s main import, representing 16% or US$373 million of all international purchases, were machines, such as broadcasting equipment, computers, and telephones. Lastly, Montenegro’s main trading partners are fellow European countries, namely Bosnia and Herzegovina, Italy, Serbia, and Croatia, as well as China.

Economics and Agribusiness in Montenegro

In recent years, the average per capita protein intake of animal origin amongst the Montenegrin population has been of 58 grams daily. Meanwhile, cereals, roots, and tubers supply 35% of the average food energy intake in the country. Simultaneously, land distribution and output in Montenegro have evolved throughout the last decade. Back in 2006, permanent pastures and meadows in the country covered 325.000 hectares, while arable land covered little over 174.000 hectares and permanent crops accounted for 16.000 hectares. More recently, by 2014, permanent pastures and meadows had decreased to 217.000 hectares, while arable land represented less than 9.000 hectares and permanent crops covered 5.000 hectares. Similarly, in 2006, the cereals market in Montenegro utilized 4.830 hectares of land and yielded 14.350 metric tons annually. Finally, in 2014, the country devoted little over 2.200 hectares of land to cereals production and yielded some 7.615 metric tons.

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