If we can’t manufacture cars, we can generate electricity
With the existing economy structure, it is difficult to expect significantly higher coverage of imports by exports, says the economic analyst Predrag Drecun. He claims that some of the imports could be substituted by higher production of food and electricity. The Ministry of Economy believes that this should be done by developing economic patriotism and exporting services.
“If we close the energy and food balance, we would have a long-term sustainable economy, since conceptualized as it is, it depends on foreign investments, tourist season and remittances from abroad,” Drecun told Pobjeda.
The total foreign trade of goods amounted to €2.67bn last year, ie 12% more than in 2016. Import coverage by export was 16.1%, ie it was slightly increased. Montenegrin exports were €371m worth.
Montenegro still primarily exported aluminium (€72m), then iron and steel (€17.9m) and recently bauxite (€66.7m).
When it comes to import, however, the most of it is related to machines and vehicles (€552m). Out of the sum, €163m was spent on cars. Food is the second most imported good (€425). Montenegro spent €103m on meat, €67m on fruit and vegetables and €58m on grains and €52 on milk and eggs, although Montenegro has a relatively significant domestic production of eggs as well as dairy products.
Import of fuel cost €172m, medicines €76m, beverages €64m and phones €73m.
Drecun says that the country has to borrow every year because it does not have a good structure of the economy. He says he understands that we cannot develop the production of vehicles and machines, but we can try manufacturing furniture and some less complicated products.
The Ministry of Economy believes that the solution is in the liberalisation of trade in services.
“The volume of services grows and most importantly, in this area, we are constantly making a surplus. According to the Central Bank data, a high inflow from services exports amounting to 31.7% of GDP was achieved in 2016, which is 3.6 times more than the export of goods,” the ministry says.