Its major environmental issues include pollution of coastal waters from sewage outlets, especially in tourist-related areas such as Kotor.
It is susceptible to destructive earthquakes.
The use of the name Montenegro began in the 15th century when the Crnojevic dynasty began to rule the Serbian principality of Zeta. Over subsequent centuries Montenegro was able to maintain its independence from the Ottoman Empire.
From the 16th to 19th centuries, Montenegro became a theocracy ruled by a series of bishop princes. In 1852, it was transformed into a secular principality.
After World War I, Montenegro was absorbed by the Kingdom of Serbs, Croats, and Slovenes, which became the Kingdom of Yugoslavia in 1929.
At the conclusion of World War II, it became a constituent republic of the Socialist Federal Republic of Yugoslavia. When the latter dissolved in 1992, Montenegro federated with Serbia, first as the Federal Republic of Yugoslavia and, after 2003, in a looser union of Serbia and Montenegro.
In May 2006, Montenegro invoked its right under the Constitutional Charter of Serbia and Montenegro to hold a referendum on independence from the state union. The vote for severing ties with Serbia exceeded 55% - the threshold set by the EU - allowing Montenegro to formally declare its independence on 3 June 2006.
Location: Southeastern Europe, between the Adriatic Sea and Serbia
Geographic Coordinates: 42 30 N, 19 18 E
Area: 13,812 sq km (land: 13,452 sq km; water: 360 sq km)
Coastline: 293.5 km
territorial sea: 12 nm
continental shelf: defined by treaty
Natural Hazards: destructive earthquakes
Terrain: highly indented coastline with narrow coastal plain backed by rugged high limestone mountains and plateaus. The highest point is Bobotov Kuk (2,522 m).
Climate: Mediterranean climate, hot dry summers and autumns and relatively cold winters with heavy snowfalls inland
Ecology and Biodiversity
Balkan mixed forests reach into small parts of northern and eastern Montenegro.
The interior of the country lies within the Dinaric Mountains mixed forests ecoregion (2) which encompasses the northwest-southeast Balkan mountain ranges, from the eastern Alps to the northern Albania massifs.
The coastal part of the country lies within the Illyrian deciduous forests ecoregion (3) which extends all along the coastal ranges of the Eastern Adriatic coast, from the eastern Alps to the northern Ionian coast between Albania and Greece.
Map source: World Wildlife Fund
People and Society
Population: 657,394 (July 2012 est.)
Ethnic Groups: Montenegrin 43%, Serbian 32%, Bosniak 8%, Albanian 5%, other (Muslims, Croats, Roma (Gypsy)) 12% (2003 census)
0-14 years: 15.5% (male 50,060/female 52,823)
15-64 years: 71% (male 244,057/female 225,620)
65 years and over: 13.5% (male 35,551/female 53,696) (2011 est.)
Population Growth Rate: -0.633% (2012 est.)
Birthrate: 10.89 births/1,000 population (2012 est.)
Death Rate: 9.03 deaths/1,000 population (July 2012 est.)
Languages: Serbian 63.6%, Montenegrin (official) 22%, Bosnian 5.5%, Albanian 5.3%, unspecified 3.7% (2003 census)
Literacy (age 15 and over can read and write):
Urbanization: 61% of total population (2010) growing at an annual rate of change of 0.1% (2010-15 est.)
The origins of the Montenegrin state can be traced to the emergence of Duklja, a vassal state of Byzantium, in the 9th century. In 1042, King Vojislav won a decisive battle against Byzantium, and Duklja became independent. About 120 years later, Duklja (by then known as Zeta) was conquered by Raska (Serbia). The use of the name Montenegro began in the 15th century when the Crnojevi dynasty began to rule the principality of Zeta. Over the subsequent centuries, Montenegro, while a part of the Ottoman Empire, maintained a level of autonomy. From the 16th to 19th centuries Montenegro was a theocracy ruled by a series of bishop princes, who were at first selected by popular assembly but later through heredity. In 1852, it was transformed into a secular principality when Danilo Petrovic Njegos set aside the ecclesiastical title and assumed the title of prince. Montenegro was recognized as an independent, sovereign principality by the great powers of Europe assembled at the Congress of Berlin in July 1878.
During World War I, Montenegro fought on the side of the Allies but was defeated and occupied by Austria. Upon Austrian occupation, King Nikola I and his government went into exile. In late 1918, an Assembly met in Podgorica, and under the eyes of the Serbian army, deposed King Nikola and declared unification with Serbia. The government of Montenegro in exile denounced the Assembly's action, to no avail. From 1919 to 1941, Montenegro was part of what became known as the Kingdom of Yugoslavia despite armed resistance in the early 1920s to rule from Belgrade.
When Yugoslavia was invaded and partitioned by the Axis powers in April 1941, Montenegro was occupied by Italy and ran under a nominally autonomous administration. While some Montenegrins sided with Italy, motivated by antipathy against past rule from Belgrade, the Partisan Revolt in Montenegro began early, on July 13, 1941, and initially scored impressive successes against the Italian occupiers. Throughout World War II, Montenegro served as an effective base and refuge for Josip Broz Tito's partisans. After the war, Montenegro was granted the status of a republic within the Socialist Federal Republic of Yugoslavia.
The breakup of the Yugoslav federation after 1989 left Montenegro in a precarious position. During 1991 and 1992, Slovenia, Croatia, Bosnia and Herzegovina, and Macedonia all seceded from Yugoslavia. In April 1992, Serbia and Montenegro jointly approved the Constitution of the Federal Republic of Yugoslavia (F.R.Y.), and supported Yugoslav President Slobodan Milosevic’s military campaigns in the early to mid-1990s. Despite Montenegro’s political attachment to Serbia, Montenegro maintained a sense of national identity. The government of Montenegro was critical of Milosevic's 1998-99 campaign in Kosovo, and the ruling coalition parties boycotted the September 2000 federal elections, which led to the eventual removal of Milosevic's regime.
In March 2002, the Belgrade Agreement was signed by the heads of the federal and republican governments, establishing the parameters for a redefinition of Montenegro's relationship with Serbia within a joint state. In February 2003, the F.R.Y. parliament ratified the Constitutional Charter, establishing a new state union and changing the name of the country from Yugoslavia to Serbia and Montenegro. On May 21, 2006, the Republic of Montenegro held a successful referendum on independence and formally declared independence on June 3, 2006.
The first parliamentary elections following Montenegro's declaration of independence were held on September 10, 2006. Both domestic and international observers assessed the elections as being generally in line with international standards. Zeljko Sturanovic of the Democratic Party of Socialists (DPS) was appointed as Prime Minister. The newly elected Montenegrin parliament began work on the country's first post-independence constitution, which was adopted on October 19, 2007. The constitution, among other things, changed the country's official name to "Montenegro."
Prime Minister Sturanovic resigned for health reasons in February 2008 and was succeeded by former Montenegrin President and Prime Minister Milo Djukanovic. Presidential elections were held on April 6, 2008, and incumbent President Vujanovic was elected for a second 5-year term with 52% of the vote. Domestic and international observers assessed this election as being generally in line with international standards. On June 10, 2009, a new parliament re-elected Prime Minister Djukanovic to a sixth term. Prime Minister Djukanovic resigned from office on December 21, 2010, while remaining President of the ruling DPS party. On December 29, 2010, the Montenegrin parliament approved President Vujanovic’s nomination of Igor Luksic as the next Prime Minister. Luksic, also from the DPS, had been serving as Minister of Finance under Prime Minister Djukanovic since 2004. At 34 years of age, he became the youngest head of government in the world.
Despite considerable progress since independence and success in maintaining inter-ethnic harmony, some ethnic tensions remain. The country must also cope with the significant challenges involved in strengthening the rule of law. Numerous international observers, non-governmental organizations (NGOs), think tanks, and media have reported on Montenegro’s significant problems with organized crime and corruption, which are widely believed to be pervasive at all levels of society. In addition to these issues, there is a significant disparity in incomes between the rural, ex-industrial northern regions of Montenegro and the more prosperous central and coastal regions.
Government Type: Republic
The 81-member parliament is Montenegro's lawmaking body. Members are elected in general elections. Following 2009 elections, the governing DPS/SDP/BS/HGI/DUA coalition had 48 seats in parliament, followed by the SNP (16 seats), NOVA (8), PZP (5), FORCA (1), Albanian List coalition (composed of the Democratic Alliance in Montenegro and the Albanian Alternative) (1), and the Albanian Coalition-Perspektiva (composed of Party of Democratic Unity of Albanians and a group of citizens represented by Amir Hollaj) (1).
Capital: Podgorica - 144,000 (2009)
Administrative divisions: 21 municipalities (opstine, singular - opstina); Andrijevica, Bar, Berane, Bijelo Polje, Budva, Cetinje, Danilovgrad, Herceg Novi, Kolasin, Kotor, Mojkovac, Niksic, Plav, Pljevlja, Pluzine, Podgorica, Rozaje, Savnik, Tivat, Ulcinj, Zabljak
Independence Date: 3 June 2006 (from Serbia and Montenegro)
Legal System: civil law. Montenegro has not submitted an International Court of Justice (ICJ) jurisdiction declaration; but accepts International criminal court (ICCt) jurisdiction.
International Environmental Agreements
Montenegro is party to international agreements on: Air Pollution, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, and Ship Pollution.
Agricultural products: tobacco, potatoes, citrus fruits, olives, grapes; sheep
Irrigated Land: 22 sq km (2008)
Natural Resources: bauxite, hydroelectricity
arable land: 13.7%
permanent crops: 1%
Montenegro has natural resources, primarily bauxite, adequate water supplies, and a climate conducive to agriculture and tourism. Prior to World War II, Montenegro’s economy was principally agrarian. The establishment of the bauxite-alumina-aluminum industry after the war provided Montenegro with a core strategic industry while the existence of a unified Yugoslavia offered guaranteed markets and a wide pool of suppliers. In the 1960s, tourism began its initial growth, largely attracting visitors from Eastern Europe and Yugoslavia. War and sanctions in the early 1990s hit Montenegro hard, plunging many citizens below the poverty line, and significant recovery began only after the end of the Kosovo crisis in 1999. The adoption of the deutschmark (DM) in November 1999 largely disconnected Montenegro's economy from Serbia and from the extreme currency fluctuations experienced by the Serbian dinar. On March 31, 2002, Montenegro replaced the DM with the Euro (€), though it is not officially part of the European economic and monetary union (Eurozone).
The recent global financial crisis had a significant negative impact on the economy, largely due to the ongoing credit crunch, a decline in the real estate sector, and a fall in aluminum exports. In March 2009, Moody’s Investors Service downgraded Montenegro’s government bond rating from Ba2 to Ba3 and assigned a negative outlook to the rating. On March 31, 2010, Standard & Poor's Ratings Services lowered Montenegro’s long-term sovereign credit rating from 'BB+' to 'BB', while also affirming the short-term sovereign credit rating at 'B'. Reflecting a stabilizing financial climate, however, on March 30, 2011, Moody’s upgraded its outlook on Montenegro’s government bonds from negative to stable, though the Ba3 rating remained unchanged. Ba3 and BB rated securities are considered “non-investment grade, speculative” bonds.
In September 2010, Montenegro issued its first Eurobond, financing €200 million ($255 million) over a term of 10 years at a rate of 7.85%. As of July 2011, Montenegro was in talks with the World Bank to secure an $85 million development policy loan to support its underfunded government budget. It was expected that the World Bank would stipulate a strengthening of the supervisory role of Montenegro’s central bank, a move needed in order to improve the confidence of commercial lenders and enhance the availability of traditional financing mechanisms.
During the last few years, Montenegro has created a largely business-friendly investment climate. The country established the lowest corporate tax rate in the region (9%). More than 90% of capital value in Montenegrin companies had been privatized by July 2010, although there have been some setbacks to the privatization agenda. In October 2010, the government regained part ownership in a previously privatized aluminum company (the Podgorica Aluminum Plant, KAP) that had been plagued by strikes and lawsuits since its privatization. Under the agreement, the government received a 29.4% stake in the company and a 31% stake in the associated bauxite mine, as well as seats on the boards of both companies. KAP, the country’s biggest single contributor to GDP, continues to struggle in the face of high resource and labor costs. The government has also attempted to privatize the state-owned airline, Montenegro Airlines, but received no bids for the portion of the company that was made available in 2010.
The banking sector, telecommunications, and oil import and distribution in Montenegro are 100% privately owned. The most significant business climate improvement that Montenegro has made is in the area of tax policy. Montenegro introduced value added tax (VAT) in April 2003, and established tax rates of 17% and 7% (for tourism and staple food items) as of January 2006. The lower VAT rate for tourism is to encourage growth in this strategic industry. Montenegro also decreased the personal income tax (PIT) and implemented a 9% flat rate in January 2010. These changes have helped Montenegro rank 56th out of 183 economies in the World Bank’s “Ease of Doing Business” report.
In the years since independence, there has been rapid growth in tourism and tourism investments, particularly along the Adriatic coast. The independent World Travel and Tourism Council has repeatedly ranked Montenegro as one of the top-growing tourism destinations in the world, with growth estimated at 11.9% annually through 2021. After a real estate boom in 2006 and 2007 during which foreign speculators purchased much Montenegrin property along the coastline, the Montenegrin real estate sector cooled. Foreign investment in the country has slowed recently, in part as a result of the global economic crisis. According to estimates of the Montenegrin Investment Promotion Agency, foreign direct investment in 2011 was €534 million ($701 million), 23% lower than 2010. Foreign direct investment per capita is €860 ($1,129), the highest rate among countries in the region. Compared to many of its neighbors, Montenegro has a high per capita GDP (about $10,100), though unemployment remains a problem (19.7%, according to the Statistical Office of Montenegro).
The dissolution of the state union of Serbia and Montenegro in 2006 led to Montenegro’s independent membership in several international financial institutions, such as the European Bank for Reconstruction and Development (EBRD) and Central European Free Trade Agreement (CEFTA), of which it was Chair-in-Office in 2009. In January 2007, Montenegro joined the World Bank and International Monetary Fund (IMF). Montenegro was confirmed as a member of the World Trade Organization on December 17, 2011.
GDP: (Purchasing Power Parity): $6.957 billion (2011 est.)
GDP: (Official Exchange Rate): $4.2 billion (2011 est.)
GDP- per capita (PPP): $11,200 (2011 est.)
Industries: steelmaking, aluminum, agricultural processing, consumer goods, tourism
Currency: Euros (EUR)