Delegation of the European Union to Montenegro

Orav: Informality has multiple causes

15/04/2019 - 13:43
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Informal economy and informal employment are two major barriers to enabling economic prosperity in Montenegro. This was a statement made by the EU Ambassador in Montenegro, Aivo Orav, at the national workshop about informal employment, which was organised within EU funded project Employment and Social Affairs Platform ESAP.

Available data shows that a third of Montenegrin GDP occurs within the grey economy, up to 30,000 employees work without a contract, and over a quarter of the current VAT revenue is unexploited.

“Montenegro must effectively and diligently tackle undeclared work. EU projects have contributed to reducing the mismatch between the demand and the offer of the labour market, as well as to improve the employment situation, but a number of obstacles still stand in Montenegro’s way in achieving smart growth,” Orav said.

Ambassador Orav also pointed out that Montenegro, like all EU member states, has committed itself to smart, sustainable, and inclusive growth as a way to overcome the structural weaknesses of the economy, improve its competitiveness and productivity while reinforcing a sustainable social market economy.

“In addition, please do consider that informality has multiple causes, it affects diverse labour categories, different income levels, different sectors, as well as different types of enterprises. It is a very complex issue and we need to understand it in-depth if we are to devise responsive public policies” stated Orav.

The Minister of Labour and Social Welfare, Kemal Purisic, said that national policies need to have a comprehensive strategic approach in order to fight against informal employment.

“As support to this process, the government’s priority for this year is the elimination of business barriers on a state and local level“, Purisic said. 

The “Employment and Social Affairs Platform” (ESAP) promotes cooperation across the Western Balkans and support development and implementation of effective employment and social policies through building capacities of public administrations, and employers’ and workers’ organisations. The project is funded by the European Union and is jointly implemented by the Regional Cooperation Council (RCC) and the International Labour Organisation (ILO).



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