PODGORICA (Montenegro), February 2 (SeeNews) – Montenegro has climbed 15 positions to 68th spot in the 2018 Economic Freedom Index published by The Heritage Foundation on the back of a dramatic increase in the score for the fiscal health indicator far outpacing a decline in government integrity.
Montenegro's overall score rose by 2.3 points to 64.3 from 62.0 in the 2017 edition of the annual index and remained below the European average but above the world average. The index covers 12 freedoms - from property rights to entrepreneurship - measured on a scale from 0 to 100 through 12 quantitative and qualitative factors, grouped into four broad categories: Rule of law, Government size, Regulatory efficiency and Open markets.
"Illustrating Montenegro’s radical transition to a market-driven economy is the privatisation of 90% of its state-owned companies. The main challenges now are strengthening public-sector finances and reining in the large current-account deficit while trying to spur economic growth," the US-based think-tank said in the 2018 Economic Freedom Index report.
However, the politicisation of the inadequately funded judiciary is a long-standing problem. Cronyism and corruption are pervasive in healthcare, education, and all levels of government including law enforcement. Impunity, political favouritism, nepotism, and selective prosecution are common.
The business regulatory system is relatively streamlined, but there is room for improvement compared to the systems in many other European countries. The salaries offered by the bloated public sector are higher than those offered by private companies. The government has increased the tariff subsidy for electricity from renewable energy sources, The Heritage Foundation said.
In general, government policies do not significantly deter foreign investment. The financial sector has become more competitive and diversified. The effectiveness of a new law on restructuring nonperforming loans has yet to be determined, according to the report.