The European Bank for Reconstruction and Development (EBRD) and the International Labour Organisation (ILO) are joining forces to respond to the coronavirus crisis in Montenegro.
A joint report, presented to the authorities in Podgorica and published on 19 June, 2020, assesses the impact of the crisis on the country’s labour market and sets a list of policy recommendations aimed at creating employment and protecting vulnerable workers and at-risk enterprises.
EBRD and ILO developed policy options to support labour markets in Montenegro. The assessment found out that the coronavirus pandemic severely affected local employment, and that the manufacturing, retail and hospitality top the list of sectors at high risk.
Policy options for expanding protection of workers and families during the reactivation phase include:
- the introduction of temporary safety nets for the new poor and new vulnerable;
- the introduction of an unemployment allowance targeted to young people of working age;
- the establishment of an additional employment retention programme, to last until September 2020;
- the restructuring of the current expensive graduate professional training programme into a universal and open-ended internship programme, aligned with similar EU practices;
- a promotion of in-work intergenerational solidarity by linking the revised internship scheme to an innovative framework for job sharing,
- and the introduction of active employment measures in response to the crisis, including job sharing schemes, voluntary reductions of working hours, job rotation and teleworking.
The Social Council in Montenegro invited the EBRD-ILO task force in April to facilitate dialogue among government, social partners and other relevant stakeholders, and to develop coherent policy responses to support workers, families and enterprises in times of the Covid-19 pandemic.
The first local case of coronavirus in Montenegro came to light on March 2020. Since then, the country has imposed wide-reaching restrictions to flatten the contagion curve. It managed to limit the number of deaths to 9 out of 324 registered cases of infections, before declaring itself coronavirus-free earlier in May.
Nevertheless, the lockdown measures have severely impacted the economy. According to ILO estimates, 36,000 jobs are at immediate risk, which could imply a loss of 15 percentage points in the employment rate.
In its most recent forecast, the EBRD in May expects a drop in economic performance in Montenegro in 2020 by 8 per cent, before a recovery by 10.5 per cent in 2021.
ILO/EBRD conducts a rapid assessment of the impact of COVID19 on the 6 economies of the Western Balkans. The report on Montenegro follows the rapid assessment of North Macedonia.