Montenegro’s ambition to join the European Union by 2028 is increasingly credible. The country has made significant progress in aligning its legal and institutional frameworks with EU standards, opening and advancing negotiation chapters across a wide range of policy areas.
Yet beneath this progress lies a more fundamental question: can Montenegro achieve economic convergence without a strong industrial base?
The challenge is not unique to Montenegro, but it is particularly acute in its case.
The structure of the economy is heavily skewed toward services, which account for more than 75% of GDP. Tourism, real estate, and related activities dominate, while industrial production remains limited.
This composition has supported growth, but it raises questions about long-term convergence.
Historically, countries that have successfully caught up with EU income levels have done so through a combination of industrialization, export growth, and productivity gains. Manufacturing and tradable sectors play a central role in this process, providing the scale and efficiency needed to drive income convergence.
Montenegro’s current model does not fully align with this pattern.
The country’s main sources of growth—tourism and real estate—are not easily scalable in the same way as industrial production. They are also subject to diminishing returns, as capacity constraints and environmental limits become more binding.
This creates a structural gap between Montenegro and more industrialized EU economies.
EU accession provides both an opportunity and a test.
On the one hand, integration into the single market offers access to a large and dynamic economic space. It facilitates trade, investment, and the movement of capital and labor. EU funding supports infrastructure development and institutional reform, creating the conditions for growth.
On the other hand, accession exposes Montenegro to competition from more productive economies. Without a strong industrial base, the country risks remaining at the lower end of the value chain.
The role of infrastructure is critical in this context. Projects such as the airport concession, road upgrades, and energy investments are essential for improving connectivity and supporting economic activity. However, infrastructure alone is not sufficient.
The development of productive sectors requires a broader set of policies, including education, innovation, and regulatory support.
Energy is one area where Montenegro has potential. The country’s renewable resources, particularly in hydropower and wind, could support export-oriented growth, especially in the context of Europe’s energy transition.
Logistics and transport also offer opportunities. Montenegro’s geographic position along the Adriatic coast provides access to regional and European markets, particularly if supported by improved infrastructure and integration into EU transport networks.
However, these opportunities must be actively developed.
The banking sector has a role to play in this process. By expanding lending to productive sectors, banks can support the development of new industries. However, this requires both demand from viable projects and a risk environment that supports such investment.
EU funding mechanisms provide additional support. Through IPA III and other programs, Montenegro can access resources for infrastructure, innovation, and capacity building. These funds are not transformative on their own, but they can catalyze broader investment.
The central issue is one of strategic direction.
Montenegro has successfully built a service-based economy that attracts capital and supports growth. The next phase requires building a productive base that can sustain convergence.
This is not a question of replacing tourism, but of complementing it.
Without such a shift, Montenegro’s path to the EU will be one of institutional convergence without full economic convergence. The country will integrate into the European framework, but the gap in productivity and income levels may persist.
The window for change is still open. But it is narrowing as accession approaches.
