Prof. Gordana DJUROVIC, PhD*
MONTENEGRO is located in South-Eastern Europe with 623,000 inhabitants which live on 13,912 km2. Diversity of geological base, landscape, climate and soil, as well as the very position of Montenegro on the Balkan Peninsula and Adriatic Sea created conditions for formation of biological diversity with very high values, that puts Montenegro among biological ”hot-spots” of European and world’s biodiversity. The economy of Montenegro is mostly service-based (64% of GDP and 80% of employment) and is in late transition to a market economy. Estimated GDP for 2015 is 3.595 mil € with real growth rate of 3.2%. GDP/pc is 5,784 €. Measuring GDP/pc in PPS, Montenegro is 41% of the EU average in 2015. Montenegrin strategic foreign policy priorities are EU and NATO membership (negotiation talk with the EU started on June 2012 and NATO Accession Protocol signed on 19 May 2016).
UN 2030 AGENDA AND RESPONSE OF MONTENEGRO
The Government of Montenegro adopted the first National Strategy for Sustainable Development (NSSD) in April 2007, together with a corresponding Action Plan for the period of 2007-2012. Since then, the Government adopted five annual progress reports on the NSSD implementation. It was a step towards making an effort to materialize and make concrete the constitutional commitment of Montenegro to be an ecological state. In the period of its drafting, it relied on the guidelines and goals set in national strategic documents of that time, as well as on the Mediterranean Strategy of Sustainable Development (MSSD) and obligations arising from Agenda 21, Johannesburg Plan for Implementation, Millennium Declaration and relevant conclusions and recommendations of the UN Commission for Sustainable Development (CSD). Since its adoption, the Action Plan of NSSD with a number of goals, measures and related indicators was revised in the evaluation process. It was done in accordance with findings of the annual progress reports on NSSD`s implementation and progress that was achieved in implementation of other relevant programmes and strategic documents in the meantime. The progress reports were subject of consideration by the National Council for Sustainable Development with the aim to provide recommendations based on which Government of Montenegro continued to guide the implementation phase of NSSD. The results of NSSD implementation were reported to UN CSD with the aim to inform not only on the progress but also to adjust a national process to relevant recommendations of CSD.
Being aware of the complexity of the challenges the UN 2030 Agenda on Sustainable Development put in front of national authorities, the most valuable example of good practice which Montenegro may share is the experience that was gained in creating the methodological concept and establishing the related process for preparation of new NSSD until 2030 which put transposition of SDGs and indicators for sustainable development in the centre of such created national response.
The Fourth Progress Report on implementation of 2007 NSSD which was published in parallel with the finalization of participation of Montenegro in the Rio+20 conference, and the Fifth Progress Report on implementation of 2007 NSSD which was published in 2013 guided planning process of reviewing NSSD. The monitoring and evaluation results indicated that the respectable progress has been achieved – environmental pillar score 47%, social development score 65% and economic development pillar score 49%, respectively in average about 53% of 236 planned measures from the 2007 NSSD Action plan was realized by 2013. Bearing that implementation score in mind and since time-frame for implementation of the Action Plan of 2007 NSSD has expired in 2012 and since many changes have taken place in Montenegrin society in the meantime, particularly in terms of reforms related to the process of accession of Montenegro to EU, and also given that new global sustainable development road map has been created by adopting document The Future We Want at Rio+20, there was decision to launch revision of the NSSD in July 2013, one year after Rio+20 Conference.
The baseline assessment, as the starting point, focused on the trends that represent a framework for preparation of the revised NSSD. That document was subject of public consultations with a broad spectrum of relevant stakeholders. On the basis of the given comments and analytical work of the expert team, a broader basis – the Platform for Development of the NSSD 2015-2020, was prepared. It provided the analysis of the existing conditions, as well as directions for completion of the NSSD revision. In parallel, supported by the UNDP Office in Montenegro, in 2015 the team of consultants prepared National Human Development Report 2014 – Towards a resource efficient economy, Fulfilling Montenegro’s promise as an ecological state. Both documents were presented to the expert and interested public. Taking into account opinions and suggestions given during the participatory process, the expert team and the Ministry of Sustainable Development and Tourism embarked on amending the Platform and developing methodological approach for communicating the results of the expert team to the public. Also, additional expert analyses which were not originally planned were conducted and the initially anticipated time-frame set for revision of the NSSD MNE was redefined. However the most relevant reason for modification of original plan for NSSD revision were the results of the Open Working Group on SDGs and related intergovernmental negotiation process under UN auspices on the sustainable development after 2015 and financing for sustainable development. That was followed with the decision of the National Council for Sustainable Development and Climate Change to change original task of revising NSSD 2007 to the task of developing new NSSD after 2015, and after adoption of UN 2030 Agenda on Sustainable Development until 2030 in September 2015 to the new NSSD until 2030. It resulted in a complete change of structure and content of new NSSD as well as the composition of expert team as to respond to requirements of UN 2030 Agenda on Sustainable Development until 2030. Instead of making completion of new NSSD in 2014 the adoption of new strategy was postponed for June 2016.
Additional expert analyses provided specific guidelines for resolving the problems of non-sustainable trends of national development which were identified through baseline assessment and related analysis of problems and causes and DPSIR analysis and for responding to the challenges UN 2030 Agenda on sustainable development introduced into national policy for sustainable development. Such prepared analyses resulted also with development of a set of synthetic indicators of sustainable development which were introduced due to the need to perform complete and comprehensive monitoring of the sustainability of national development. In addition, inputs for new strategy were based on the critical assessment of all relevant national strategic development documents such as actual sectoral strategies (energy, industry, transport, agriculture, etc.), National programme for integration to the EU, Montenegro’s Development Directions 2015-2018, Programme of economic reforms, Agenda for competitiveness 2020, etc. against results of NSSD 2007 implementation and requirements of the UN 2030 Agenda for sustainable development.
Montenegrin Government adopted the Draft of NSSD until 2030 on its session held on 28 December 2015. After three-month public consultations on the Draft of NSSD until 2030, the Government of Montenegro adopted on 7 July 2016 final version of the National Strategy for Sustainable Development of Montenegro until 2030.
NSSD until 2030 is a key national strategy that defines the structure of the system for monitoring the implementation of sustainable development policy of Montenegro in the period until 2030. The backbone of the monitoring and reporting system will be monitoring of progress in implementing the 17 SDGs and accompanying 169 targets defined in the UN Agenda for sustainable development until 2030 and integrated into the strategic goals and measures of NSSD. The NSSD established a platform for translating SDGs and sustainable development indicators into the national context, in order to link them, already in the initial stage and to the extent possible, to the monitoring of progress in the implementation of measures defined in the NSSD Action Plan until 2030.
INCORPORATION OF THE SDGs INTO NATIONAL FRAMEWORK
Guided by national needs that were identified against the analysis of the lacks of national development and needs in responding to the challenges that have been introduced by 2030 UN Agenda on Sustainable Development, the central place in the new NSSD is given to determination of the strategic goals and measures as to define answers on how to achieve sustainable management of four groups of national resources – human capital, social capital and values, natural capital and economic capital, as well as on how to achieve good governance and sustainable financing for sustainable development of Montenegro in period until 2030.
Hence the most complex element of this methodological approach was related to transposition of the requirements of the UN 2030 Agenda for Sustainable Development, with its 17 sustainable development goals (SDGs) and 169 targets, the Addis Ababa Action Agenda with recommendations for financing sustainable development into NSSD`s strategic goals and measures. 167 tasks from 169 tasks grouped in UN 17 SDGs are taken over from and 169 tasks to new NSSD until 2030.
|UN AGENDA 2030: Sustainable Development Goals|
|Goal 1.||End poverty in all its forms everywhere|
|Goal 2.||End hunger, achieve food security and improved nutrition and promote sustainable agriculture|
|Goal 3.||Ensure healthy lives and promote well-being for all at all ages|
|Goal 4.||Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all|
|Goal 5.||Achieve gender equality and empower all women and girls|
|Goal 6.||Ensure availability and sustainable management of water and sanitation for all|
|Goal 7.||Ensure access to affordable, reliable, sustainable and modern energy for all|
|Goal 8.||Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all|
|Goal 9.||Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation|
|Goal 10.||Reduce inequality within and among countries|
|Goal 11.||Make cities and human settlements inclusive, safe, resilient and sustainable|
|Goal 12.||Ensure sustainable consumption and production patterns|
|Goal 13.||Take urgent action to combat climate change and its impacts*|
|Goal 14.||Conserve and sustainably use the oceans, seas and marine resources for sustainable development|
|Goal 15.||Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss|
|Goal 16.||Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels|
|Goal 17.||Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development|
Priority topics, strategic goals and targets of sustainable development until 2030 represent at the same time the response of Montenegro to the challenges and responsibilities related to the implementation of the UN Agenda for Sustainable Development until 2030. A coherent set of measures and sub-measures in NSSD until 2030 sets the platform for translating global targets and indicators of sustainable development in the national framework, in order to link, to the extent possible, the monitoring of progress in the implementation of the NSSD Action Plan until 2030 with the UN Agenda for Sustainable Development until 2030. The complexity of global sustainable development goals and the high number of associated targets and indicators resulted in the need for a comprehensive analysis of a complex institutional system in the country, in order to introduce a stable and functional system of monitoring and reporting on the implementation of sustainable development policies in the long run.
The strategic goals and measures of sustainable development of Montenegro until 2030 are defined taking into account national circumstances as well as national commitments in the context of implementation of the UN Agenda 2030. In order to define the strategic goals and measures in response to the key issues in the management and use of human, social, natural and economic resources, as well as in the governance for sustainable development, targets defined by the UN agenda 2030 were analyzed in terms of types of obligations generated for the responsible entities at the national level and it was assessed whether these are obligations which have been identified in the context of the analysis of problems in national development (which was conducted in the manner explained in the NSSD methodology).
The analysis showed a high degree of compatibility of the responses to be provided in the national context in order to overcome the unsustainable patterns of development and harmonization of national development with the requirements of the UN Agenda 2030. Specificities of the sustainable development targets in the national circumstances are recognized by defining additional measures and sub-measures, or the measures that have been defined as responses to the problems of sustainable development of Montenegro in the previous period, identified using the DPSI method, were upgraded by expanding their scope in a way to connect them with the related tasks from the Agenda for sustainable development.
Another valuable example of good practice which Montenegro may share is experience on transposition of recently proposed list of 241 indicators for global monitoring of sustainable development into NSSD until 2030 as the main tool for planning future monitoring and evaluation of NSSD`s implementation. The assessment of the needs related to transposition of the list of 241 indicators into NSSD until 2030 is presented in detail in the Strategy.
MEANS OF IMPLEMENTATION: ECONOMIC SCENARIO
The means for the implementation of the NSSD 2030 are mobilized from various funding sources and their available amount will depend, amongst other things, on the achievement of the projected macroeconomic trends of the national economy, the achievement of development projections of Montenegro on the principles of sustainable development – assumption which integrates the capacity of domestic sustainable development funding sources (public and private sources), country’s position in international economic relations (international trade), as well as the capacity for the mobilization of funds from international public and private sources (FDI, credits, international development cooperation). In accordance with the recommendations of the Addis Ababa Action Agenda, the mobilization of funds for the financing of sustainable development is of crucial importance for the successful implementation of the NSSD 2030.
Figure 1. Real GDP growth in Montenegro 1991-2015 and projections by 2017
As shown in the above Graph, twenty-five years of Montenegrin transition have been marked by a decade of transitional recession (1990-1999), a period of gradual recovery up to the renewal of Montenegrin independence, followed by triennial period of investment boom, with average GDP growth rate of 9%, then six-year period of deep economic crisis and gradual recovery of economic activity. Real GDP from the year 1990 was reached only in 2007. In 2015 Montenegrin GDP reached € 3.595 mil, with GDP/pc 5,780 €.
- Mid-term growth projections (and development, which includes the change of economic structure) range around the average real growth rate of 4% per year until 2020, and/or 5% per year in the NSSD implementation period, which means that Montenegrin GDP might be doubled in 15 years’ time, which again coincides with the period of the implementation of the Strategy (2016-2030). In the option of constantpopulation growth fertility until 2030, per capita revenue in 2030 would reach the level of € 11,440 (BDP/pc).
- Until 2030, the planned NSSD measures, especially in the area of economic resources, population activity rate (15-64) might be increased from 63% to 69%, rather from 86 to 95% in relation to the average population activity rate (15-64) in the EU.
- Reduction of unemployment rate, with the tendency of approaching the EU average, i.e. single-figure unemployment.
- Following the projected rate of economic growth until 2030, the employment rate in the age group 15-64 might be increased from 52.5% to 57.5%, which would, with the proportionate growth of the working contingent 15-64, enable the creation of more than 32,000 new jobs by 2030.
- Starting from the projected investments in tourism and the estimates of the WTTC, employment in tourism will grow considerably faster than the overall employment, i.e. faster than the employment in other sectors, therefore from 10.3% in the current employment structure, it will increase its share to 13.8% by 2026, i.e. to 15% in the overall employment by 2030.
- The structure of the Montenegrin GDP will continue to be predominantly determinedby services (up to 75%, including civil engineering, then industry with 15%, agriculture with 10% in the structure of the gross added value). The revitalization of industry on the principles of sustainable development might increase its share up to 20% of the gross added value, reducing thus the exposure to sudden changes of external demand which have strong impact on the service sector.
- Projected economic growth and development, in accordance with sustainable development principles, might be achieved solely with the reduction of domestic material consumption (DMC)36 by 20% until 2020 in relation to the average for 2005-2012 (through the objectives projected by sectors), raising resource productivity and achieving bio-capacity balance (difference between environmental footprint and bio-capacity).
- Planned projections also include achieving outflow ”balance” on the basis of the balance of current transactions and inflow on the basis of foreign direct investments (FDI)37 relative to the total GDP. By reducing import dependency and strengthening priority sectors of economy, positive trends can be expected in the reduction of trade deficit and/or reduction of current transactions account deficit.
- The level of debt in Montenegro should be managed in accordance with legislation and the so called Maastricht criteria related to the Euro zone countries; starting ground for the future policy of state borrowing should be for the revenue achieved using these funds to be higher than the costs of borrowing; achieving public debt sustainability improves country’s credit rating, and responsible management and control of public spending, and the strengthening of capacities of revenue gaining institutions will enable credible mid-term planning and create the space for greatersustainable development budget.
Main sources of sustainable development funding should be state budget, but also the budgets of local self-governments and earmarked funds. Funds can also be secured through donations, credits, international assistance, as well as from the instruments, programmes and funds of the EU, UN and other international development partners Montenegro has.
Domestic funding sources are generated by the achieved economic growth and development, which include the change of economic structure and production and consumption patterns. For all countries, public policies and mobilization and efficient use of domestic resources constitute central actions to be conducted on the principles of national ownership over management process, i.e. sustainable development funding. Improved social, environmental and overall economic policy, which includes counter-cyclical fiscal policy, good management on all levels and developed people friendly institutions – are necessary for achieving sustainable development goals. This primarily means strengthening fiscal policy tools and the ones of tax administration itself, in order to collect additional tax revenues at the level of the state and at the level of local self- governments, respecting the principle of fairness, transparency, efficiency and effectiveness of the tax system.
In order to achieve sustainable development goals by 2030 additional domestic public sources are necessary, which are supplemented by the appropriate international support.
In line with the UN sustainable development agenda 2030, Montenegro will continuously:
- Implement fiscal consolidation, especially on the revenue side of the budget (strengthening the capacities of revenue gaining institutions, strengthening tax base, implementation of measures for the integration of informal economy into legal economic flows, fight against tax evasion, active anticorruption policy, as well as anti-money laundering and terrorism funding policy),
- It is also necessary to introduce good practices and strengthen the capacities for fair and transparent contracting of concession arrangements and related control of revenues, with the monitoring of the execution of such contracts,
- On the expenditure side of the budget, tax reliefs are to be introduced for the investments in processing facilities that use domestic natural resources as their raw materials, in order to increase the degree of their processing, i.e. develop export product of higher processing stage (for instance, wood processing),
- Establish transparent framework for green public procurement and implement competitiveness strengthening programmes through the development of green economy – its key sectors which foster the creation of additional (green) jobs,
- Special attention is to be paid to the implementation of the agreement on avoiding double taxation, with the inclusion of the necessary clauses on the prevention of tax abuses in international financial transactions,
- Additionally mobilize local revenues for sustainable development funding. This should be followed by the model of sustainable funding of local communities and/or inclusion of local self-government units’ debt management into the system of national public debt management; concurrently, international sustainable development assistancemust also be turning more towards local community, for the projects related to local infrastructure, preservation of environment and inclusive growth,
- Innovative financial mechanisms for the funding of sustainable development: using the funds from the games of chance, special fees, introduction of financial transaction tax, voluntary contribution etc., with clear purpose of these funds for the funding of sustainable development projects, actions related to climate change and in favour of general public wellbeing,
- Involve more strongly regional development banks in sustainable development funding, where commercial banks are not fully engaged, especially in providing credits for the projects of sustainable infrastructure, energy, agriculture, industrialization, sciences, technology and innovation, as well as to support the strengthening of the SMEs,
- Promote the participation of Montenegroin international initiatives for the strengthening of the transparency of work, responsibility of state institutions and for the improvement of the quality of public services (for instance, Open Government Partnership),
- Foster domestic development efforts stimulating direct investments, both domestic and foreign ones in Montenegrin economy (strengthening regulatory framework and dispersion of incentives, especially for the attraction of FDIs),
- Update national investment plan, unified list of infrastructural development projectsin the area of attracting investments in infrastructural projects (Single Project Pipeline), which will enable integration of domestic public sources, EU pre-accession assistance and credit lines of international financial institutions and banks,
- Develop a model of business behaviour of the private sector which takes into consideration environmental and social impacts of their activity and investments (socially responsible behaviour),
- Foster development partnerships as an efficient instrument for the mobilization of human and financial resources, technology and knowledge (for instance, Global Environment Facility),
- Finally, but not less important, Montenegro will, in accordance with the Law on Budgetand Fiscal Responsibility, strengthen public debt management on the principles of inter-generation balance; with the purpose of achieving the sustainability of public debt it is necessary to have higher quality monitoring and reporting on public debt, define and establish clear procedures related to debt management and analyses of indebtedness, cash management and realization of debt payment transactions; besides these, in order not to allow for public debt to grow more than it was envisaged and to secure its gradual decrease, following the completion of the project of the construction of the priority section of the motorway Smokovac – Mateševo, it will be necessary to undertake further measures of fiscal consolidation, which would, beside macroeconomic fluctuations, lead to the stabilization of the fluctuation of public debt.
MONITORING AND REPORTING
For the future monitoring and reporting on the progress in the achievement of sustainable development goals in Montenegro very important is the strategic NSSD goal ”Establish the system for monitoring the sustainability of national development including the monitoring of the implementation of sustainable development goals”. This goal comprises priority implementation of the following measures:
- Enable continuous implementation of the programme of translation of sustainable development goals into the national context and building national capacities for their efficient implementation in the forthcoming biennial, SDG 16 and
- Establish the information system for the NSSD implementation monitoring based on sustainable development goals and indicators, SDG 17.
These measures, accompanied by the appropriate sub-measures will enable a functional system for the monitoring of sustainable development policy implementation until 2030 contributing to the wellbeing of the society and the quality of citizens’ lives. Such methodology, besides the horizontal dimension of data collection and processing for the purpose of monitoring the NSSD strategic goals, has also got its vertical dimension – linking of Montenegro with the system of reporting on the implementation of the UN sustainable development goals.
In order to establish the system for progress monitoring and for reporting on NSSD 2030 implementation, the analysis of 241 sustainable development indicators was made.
Besides the indicators from the UN list for progress monitoring and reporting on the NSSD 2030 implementation, the integrated system of indicators consists of three more groups of indicators: relevant national indicators, selected indicators of relevant international organizations and selected cumulative indicators.
Following the adoption of the NSSD 2030 by the Government of Montenegro commences the period of its gradual implementation. Expected main challenges in the forthcoming NSSD implementation period are:
- Priority institutional issues in accordance with the proposed model of the reform of sustainable development governance system
- Introduction of programme budgeting which recognizes sustainable development programmes and projects
- Strengthening NSSD monitoring mechanisms– statistical data generators and coordination and reporting model
- Harmonization of sectoral strategies with the NSSD 2030– which requires full political and institutional support in all segments of Montenegrin national resources.
Successfulness of the implementation of the NSSD 2030 as a strategic framework that translated the UN Sustainable Development Agenda into the national context will depend to a considerably degree on the efficiency of securing strong and integrated support of the UN system, especially in the context of creating conditions for the implementation of the targets relevant for SDG 17 – Enhance the means for implementation and renew Global Partnership for Sustainable Development. Also, the successfulness will be conditioned by enabling the compatibility of the process of the implementation of the NSSD with the priorities in the context of Montenegrin EU integrations, and the harmonization with relevant regional processes like the implementation of the Mediterranean Sustainable Development Strategy.
Montenegro is in the group of UN member countries which officially adopted key development document – National Sustainable Development Strategy until 2030, which follows the UN Agenda 2030.
Environmental, economic and social aspects of the development of Montenegro in recent decades have indicated that the needs of future generations might be endangered not only through qualitative and quantitative degradation of natural resources, but also ever so smaller availability of other resources (human resources as development assumption and economic capital). On the basis of the own experience and lessons learnt, and in relation to the duties towards future generations and from the experiences of key international actors which trace the path towards sustainability through global dialogue, in the period by 2030 it is necessary to establish four-dimension development concept based on access according to which the production of assets and delivering of services that are crucial for the improvement of material, mental and spiritual wellbeing of every generation requires four fundamental, necessary resources: human, social, natural and economic. These are key national resources which must be sustainable, preserving the ”right to development” for every subsequent generation. The right to development is viewed in relation to the right of individuals, families and family values and broadest social groups in the framework of governance at the national level and at the level of local communities. Our responsibility towards future generations obliges us to the approach in according to which humans are in the centre of development which enables sustainable and mutually linked valorization of the four groups of national resources.
* University of Montenegro