About the ILO in Montenegro

An advanced EU accession candidate with structural labour market challenges

The COVID-19 pandemic hit the tourism-dependent country particularly hard. GDP dropped by 15% in 2020. The economy recovered faster than expected from the pandemic with an estimated GDP growth rate of 12% in 2021. However, the much-needed recovery of labour markets is lagging.

According to ILO calculations, the country saw a decline in working hours of 11.4% in 2020 which is equivalent to 30,000 full time jobs. In 2021, the loss of working hours decreased but was still at 6.1% (equivalent to the loss of 16,000 full-time jobs). For 2022, ILO models predict a light increase of working hours of 2%, but there are a lot of uncertainties concerning the pandemic and the new tourist season.

As in other countries of Southeast Europe, employment losses mainly translated into rising inactivity rather than unemployment. The pandemic exacerbated the structural problems of the Montenegrin labour markets from before the pandemic. The main issues are low employment and high inactivity, especially for youth, women, and the low skilled, as well as elevated levels of informal employment.

ILO Interventions in Montenegro

Since gaining independence in 2006, the country ratified 76 International Labour Standards (Conventions), including all eight Fundamental Conventions. Montenegro is a candidate country for EU membership and negotiations are relatively advanced as compared to other countries from the Western Balkans. The ILO technical assistance focuses therefore on developing an EU-compatible framework for labour laws, as well as social and employment policies. The new Labor Code adopted by the Parliament in 2019 is an example for ILO support to EU alignment.
The main framework for the delivery of ILO support to Montenegro is the Decent Country Work Programme 2019 to 2021. The current ILO support focuses on:
  • Provide better access to public employment services for vulnerable groups such as persons with disabilities, long term unemployed or youth;
  • Modernize labour market administration processes through digitalization;
  • Design a Youth Guarantee Scheme;
  • Improve safety at work and strengthen labour inspectorates;
  • Support social and economic councils;  
  • Promote alternative dispute resolution for labour conflicts, and
  • Support Employers and Workers’ organizations in improving advocacy and service delivery to members.   
Text last updated 2/22.