The President of Montenegro, Jakov Milatović, emphasized that reforms in the judiciary and public administration should not only be technical but also essential and resistant to any political and party influence.

During the opening of the International Conference on Economics and Business (MICEB 2025) in Budva, he noted that Montenegro, as a small and open economy, cannot afford to rely on depleting resources for long-term growth, stressing that the gold mine must be institutionally trustworthy.

“Global trends indicate we’re increasingly living in a more predictable world. Geopolitical tensions, supply chain disruptions, energy crises, trade wars, and the fragmentation of the global market are shaping our current reality. The European Union, which we aspire to join, is redefining its development priorities. Concurrently, there is a growing recognition of the necessity for fairer, more inclusive, and resilient economic models,” Milatović stated.

He noted that sustainability is no longer a mere addition.

“Sustainability forms the foundation of any serious development plan. Montenegro, being in the process of EU integration, faces the challenges of a dual transition—economic and democratic,” Milatović emphasized, expressing his pleasure at hosting one of the world’s leading economists, James Robinson, the 2024 Nobel Prize winner in Economics, at the conference.

Inspired by Robinson’s research, Milatović expressed his desire to discuss the most vital capital a country possesses: its institutions.

“Not merely bureaucracy, but rather the fundamental rules that govern modern society, which should be equitable for all,” he highlighted.

Milatović structured his address around three key messages he believes are critical for advancing Montenegrin society.

“The first message is that institutions are more than mere resources; it is not wealth that builds robust institutions, but strong institutions that generate wealth. The works of Robinson, Semoglu, and Johnson demonstrate that natural resources, geography, and historical reputation do not necessarily ensure a country’s prosperity. Therefore, Montenegro, as a small and open economy, cannot risk its long-term growth on depleting resources. Our ‘gold mine’ must lie in institutional reliability—having a judiciary that ensures investment security, a state administration that upholds the law, and market conditions that provide equality for everyone. Investors are drawn to environments where contracts are honored, not necessarily to the cheapest land. Entrepreneurs will not risk their capital in settings where opportunities depend on proximity to the ruling party or elite, rather than the quality of their ideas. This underscores that high institutional quality is a prerequisite for any serious economic vision and development strategy,” assessed Milatović.

Establish equal conditions for all market participants

For his second message, Milatović asserted that economic development without institutional reform is merely an illusion.

“We can construct roads, but without strong institutions, our progress will be limited. Our nation has encountered numerous challenges over the past thirty years, including the transition from a planned to a market economy, large and often opaque privatizations, growth reliant solely on tourism and borrowing, dependence on foreign investments without adequate legal safeguards, and brain drain. Although there were instances of short-term economic growth, this was unsustainable in the long run. The ineffectiveness of our institutional system discourages competition, favors the privileged, and drives the educated youth abroad, resulting in adverse selection domestically. The privatizations during our transition phase, instead of cultivating a vibrant middle class, intensified clientelistic networks and increased economic inequality. Regrettably, we seem to have learned little from such examples. Without resetting our society and enhancing our system to create equitable conditions for all market participants, we will continue to lose capital, talent, and opportunities for innovation. This is not merely a European demand; it is a fundamental requirement for a healthy and sustainable economy,” stated Milatović.

He identified his third message as the critical moment being now.

“The change cannot wait for tomorrow. Institutions do not transform on their own; we must change them or risk being shaped by them,” Milatović concluded.

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