May 29 (SeeNews) - Montenegro should enhance human capital development, while local companies need to grow and step up efforts to increase international competitiveness, the European Commission said on Wednesday.
"The development of infrastructure in a number of areas is gradually setting the preconditions for improved economic competitiveness. However, further efforts are needed to enhance human capital development and to reduce the mismatch between education outcomes and labour market needs," the Commission said in a statement on its annual assessment and recommendations for the Western Balkans and Turkey.
Despite positive export dynamics, the current account deficit, fuelled by strong domestic demand, remains very large and is only partially financed by net inflows of foreign direct investment. Financial sector solvency and liquidity ratios improve, but access to finance for small companies remains hampered by tight lending conditions, the EU's executive body said.
Private sector development remains constrained by weaknesses in the business environment, the judiciary, and a high prevalence of informality, reflecting poor implementation capacity in key state institutions responsible to enforce the rule of law and market competition.
"Strong political will is still needed to effectively address the de-politicisation of the public service and the optimisation of the state administration, inclusive and evidence-based policy development, the delegation of decision-making and managerial accountability," the Commission said.
Montenegro has achieved some level of preparation in the fight against corruption, but challenges to the credibility, independence and priority-setting of the Anti-Corruption Agency still need to be addressed. Financial investigations and seizure and confiscation of assets remain to be improved.
"Further results are needed to produce a convincing track record on the more complex types of organised crimes, where local vested interests are at stake, including in money laundering, trafficking in human beings and tobacco smuggling, as well as in the confiscation of proceeds of crime."
The country needs to ensure that adequate institutional mechanisms are in place to protect vulnerable groups from discrimination. Implementation of the legislation remains weak and institutional capacity on human rights needs to be increased, the Commission noted.
Concerning Montenegro's ability to assume the obligations of membership, important work on alignment and preparation for the implementation of the acquis has taken place in most areas, but there have been very limited developments regarding investigations into cases of violence against journalists.
EU accession negotiations with Montenegro were opened in June 2012. To date, 32 negotiating chapters have been opened, of which three have been provisionally closed. Two negotiating chapters were opened during the reporting period between March 2018 and March 2019 and no further chapter was provisionally closed.