Although Montenegro did not join the World Bank Group (WBG) until 2007, a program of lending and analytical work began soon after the State Union of Serbia and Montenegro joined the WBG in 2001. The Bank’s engagement during the pre-independence period was focused on supporting Montenegro’s efforts to build a market economy and re-establish growth after a period of regional conflict and intense instability, through Analytical and Advisory services (AAA) and new investments - especially in energy and water.
In mid-2007, the WBG and the government of Montenegro developed the country’s first post-independence Country Partnership Strategy (CPS) covering FY07–FY10. In January 2011, the Board approved a $216 million CPS for FY11–14. This current CPS is client-driven, and reflects Montenegro’s status as an upper-middle-income client with well-defined development priorities. This CPS focuses on two strategic priorities:
i) strengthening institutions and competitiveness in line with EU accession requirements
ii) improving environmental management, including reducing the costs of environmental problems
During the period of this CPS, many accomplishments have been made. The country’s business investment climate has been greatly enhanced - with the average time to issue a construction permit decreasing from six months to two months and average registration diminishing from 25 days to 9. With Bank support, Montenegro completed its first agricultural census in 40 years, underpinning further development of the national rural development program. Grants were given to 650 farmers, 60% of whom live in the poorer, northern region of the country, received grants that help them enhance their agricultural production. 14 public sector buildings were retrofitted to improve their energy efficiency, resulting so far in a 50-60% reduction of energy consumption, related operating costs, and improved working and service conditions in public facilities in the education and healthcare sectors.
Analytical and advisory services further contributed to program implementation and policy dialogue. The Country Economic Memorandum outlined possible development strategies as the country embarked on the next stage of the EU integration process. The Labor Market Incentives TA is helping the authorities to identify the main constraints to jobs creation and employment growth and developing policies to remove constraints. The Public Expenditure and Institutional Review provided policy recommendations to underpin a strategy to contain public expenditure growth and increase the “value for money” in public administration. As a complement, the Public Expenditure and Financial Accountability Assessment provided an evaluation of Montenegro’s PFM systems and helped identify reform priorities to further strengthen financial management as a part of the pre-accession process. The Bank’s Vienna-based Financial Sector Advisory Centre (FinSAC) continues to support the banking sector by strengthening the Central Bank’s steering powers and capabilities to assist with commercial banks’ NPL portfolio resolution strategies. Cutting across sectors, the Gender Assessment provided an overview of gender issues in Montenegro.
Overall, over the last 10 years the World Bank has helped improve people's lives in Montenegro by financing 12 projects in the total amount of about $277.86 million.
Additionally, the International Finance Corporation (IFC) has worked with Montenegro since 2007. The IFC’s current portfolio in Montenegro stands at $43.1 million and focuses on increasing access to finance by supporting the development of local financial institutions, particularly ones that lend to small and medium enterprises (SMEs). The IFC’s advisory services in Montenegro aim to improve the investment climate and the performance of private sector companies, and to attract private sector participation in the development of infrastructure projects.