Lundberg: Private sector plays important role in shaping a sustainable future

Chamber of Economy: Interview with Peter Lundberg, UN Resident Coordinator in Montenegro  

Chamber of Economy: The Sustainable Development Goals are both an obligation, but also an opportunity for the countries that inherit the principles of the UN. Our perception of the obligations arising from the UN membership is certainly responsible and dedicated, but the analysis of the situation in this area conducted by the Permanent EU Mission to Montenegro, represents actually a close look at us, and our systemic challenges, opportunities and even weaknesses. What else could you clarify to us in this context?

Lundberg: First of all, I would like to commend Montenegro for being a responsible and committed member of the United Nations, having had a very active role in the process of building the 2030 Agenda for Sustainable Development, six years ago. The Agenda 2030 is a collective 15-year development plan aiming to create a better future for all, while leaving no one behind. This vision of a better world, articulated through 17 Sustainable Development Goals (SDGs), was the first development plan developed jointly by the world leaders and people of the world, and Montenegro’s ability to mobilize over 2% of its population in this process which was exemplary. Moreover, Montenegro was one of the first countries to nationalize SDGs into its strategic framework, as an additional move to “walk the talk” and confirm its strategic orientation towards sustainable future.

But this was just a beginning. Setting the stage to fulfil the vision was only the starting point, with hard work ahead on accomplishing such a vision. Progress on achieving the SDGs is an area where the UN takes particular interest to observe and support. While the country’s commitment and progress is this area is unquestionable, we clearly see space for greater progress, especially in increasing ownership and structural enhancement i.e. strengthening the national sustainable development structure which should ensure the full ownership and consistency in steering the process of SDGs achievement.

The good news is that a major development process – the EU accession – is highly complementary with the 2030 Agenda for Sustainable Development. Over two thirds of 2030 Agenda is covered by the EU accession process, making the country’s strategic orientation a great comparative advantage of Montenegro’s development prospects.

Only when people put aside their differences can we collectively make a sustainable and long-lasting impact. Montenegro could lead the way in this regard. 

Chamber of Economy: What is your assessment of the activities that Montenegro has been undertaking over a number of years related to defining the strategic and general approximation to the system of sustainable development, which is part of the program goals of the UN system?

Lundberg: Prior to the COVID-19 pandemic Montenegro had made broad progress towards the SDGs. This is reflected in its very high development scoring in the Human Development Index. In 2019, Montenegro scored better than some countries which are higher income or are already in the European Union such as Romania and Bulgaria. In fact, Montenegro was achieving human development outcomes far exceeding its GNI per capita, with its human development rank thirteen places better than its expected value. Montenegro is a self-declared ecological state and had reduced its emissions by 30% on its 1990 levels by 2018, part of its Nationally Determined Contributions.

Under the National Strategy for Sustainable Development, Montenegro has made progress towards the SDGs. The Progress Report on the implementation of Millennium Development Goals in Montenegro (March 2017) identified EU accession as one of the key factors that contributed to development achievements, including progress in reaching the MDGs. All 33 EU chapters have been opened, of which 3 are provisionally closed. This represents the most progress among Western Balkans countries. Montenegro is beginning to integrate elements of EU rules, which guarantee a greater focus on human rights and social development, into national legislation. Yet Montenegro is the country that has negotiated for the longest period and the pace of progress has slowed in recent years. In light of the current economic crisis it is becoming even more critical to accelerate progress on these goals which, due to their interlinked nature, will also enhance the SDGs at the same time.

But as always, we are seeing that statistics mean little to the individual; despite these positive trends from a broad perspective, there are still serious challenges for vulnerable groups who are being left behind. Central to the SDGs is the premise that we should support the most vulnerable and ensure that no one is left behind. Despite the high performance on Human Development Indicators the economy was not creating opportunities for all and the system was not able to ensure that no one was being left behind. This was creating obvious inequalities, between the North and the coastal regions, urban and rural areas and between men and women. These issues will need to be rectified to make real progress towards the SDGs.

Now we are seeing that the COVID-19 pandemic has brought a lot of these vulnerabilities and inequalities back into context. Unfortunately, the pandemic is worsening vulnerability, poverty and inequality indicators. Some of the indicators have worsened, set back by several years, with Montenegro’s score on human development falling back to its 2014 level. This has heightened the need to address the underlying vulnerabilities that Montenegro faces and to accelerate the pace of implementation of key reforms that will support all Montenegrins.

Statistics mean little to the individual. Despite positive trends from a broad perspective, there are still serious challenges for vulnerable. Central to the SDGs is the support the most vulnerable and leaving no one behind.

Chamber of Economy: In your opinion, what are the current normative and legal deficiencies or the operational challenges in implementing the policies that are in line with the international standards?

Lundberg: In 2019, Montenegro had the highest GDP per capita among non-EU Western Balkans nations. GDP per capita is often used to proxy living standards and overall welfare. However, GDP per capita is not always the best measure of progress and whilst Montenegro had made much progress in previous years, many challenges remained. Montenegro was already embarking on the difficult process of moving from a public sector-oriented economy to a market-based economic model. These brought many challenges to the process of legal and policy reform.

As I have previously highlighted, COVID-19 has exacerbated many of the challenges that we face. More fundamentally, the pandemic has exposed and exacerbated structural weaknesses that mean that Montenegro has been one of the worst affected countries economically. Prior to the pandemic Montenegro was subject to internal and external imbalances that had culminated in an economy, heavily dependent on tourism and with little fiscal space to respond to such an economic shock. Added to these structural weaknesses, many jobs were being created in sectors that have median wages below the national average, leaving many at risk of poverty. These structural weaknesses are now creating the results we are seeing, such as the rising level of inactivity and falling employment. There is a real danger that if we do not address these structural weaknesses and move towards a more inclusive and sustainable growth model that history will repeat itself at the next major economic shock.

That means that the big challenge for Montenegro in the coming few years will be not only the element of diversifying the economy, but also the need to create better jobs for all (regardless of where they are geographically located, ethnic background, gender, age etc) Montenegrins. Montenegro will need to implement the necessary policies and reforms to create the conditions for inclusive growth – one that is focussed on creating new jobs but also formalising the informal economy. Raising the level of income and creating more formal jobs will not only improve the prospects for Montenegrins but will bring in greater fiscal revenues which can then be spent on essential public goods, such as health and education, improving the prospects for long-term prosperity.

Big challenge for Montenegro in the coming few years will be not only the element of diversifying the economy, but also the need to create better jobs for all, regardless of where they are geographically located, ethnic background, gender, age, etc.

Chamber of Economy: The Chamber of Economy of Montenegro has been investing a lot of efforts in the development of human resources as an important social capital, as well as in the projects of gender equality, inclusion of the most vulnerable groups, and the encouraging of the creative capacities in all these categories. Where do you see additional resources for further action of the Chamber of Economy, and to which partners and projects could you direct the Chamber as an umbrella association of the Montenegrin business community?

Lundberg: Stronger involvement of the private sector is absolutely imperative to reach Agenda 2030 and the SDGs, and that does not go only for Montenegro but for other countries, as well. It has been proven that for such an overarching agenda, we need all other actors in the society to contribute to it, such as the NGO sector, civil sector, and also the private sector. The role of each actor is important, especially as Montenegro continues to progress and moves towards EU accession, traditional support to the SDGs such as Overseas Development Assistance will play a smaller and smaller role. Whereas, the private sector will need to play a bigger role in shaping a sustainable future for Montenegro.

These issues go beyond simply the private sector improving the quality of corporate social responsibility, but the private sector taking an active role in developing a more sustainable, greener economy. One of the key steps will be to develop a growing, more prosperous private sector as part of the transition from a public-oriented to a market-oriented one. A private sector that can offer opportunities to more Montenegrins is needed. This private sector will need to embrace new economic models that support these sustainable endeavours. This means not only embracing the digital revolution that COVID-19 has helped to accelerate, but supporting a shift to gender equality, green energy, diversity in employment and more sustainable practices.

I would invite the Chamber of Economy, together with other associations representing the Montenegrin business community, to actively promote Agenda 2030 and SDGs among its members and we at the UN remain open to discuss different models and mechanisms for involving the private sector.

The private sector will need to play a bigger role in shaping a sustainable future for Montenegro.

Chamber of Economy: Montenegro adopted the National Strategy for Sustainable Development. What is your opinion related to the implementation of this document and in this regard, what would you suggest to the institutions and what to the business community?

Lundberg: Montenegro was one of the first countries to adopt the National Strategy for Sustainable Development. We would certainly like to see a higher level of commitment when it comes to the Strategy and involvement of all actors, as we see it as the overarching strategy, which could contribute to achieving Agenda 2030 and SDGs. However, the adoption of the strategy is only part of the battle. It’s really the implementation that counts at the end of the day. We need to move away from supporting processes to moving towards delivering outcomes and change that lead to improvements in peoples’ lives. What the SDG analysis shows us is that time is running out and that we are left with nine years to deliver these major national and global commitments.

We can all benefit from a healthy, environmentally friendly, economically sustainable, well-educated society, equal for everyone and with strong institutions, but we can all also contribute to it. A concept of doing well by doing good was never as important as in the recent years. A fight against the invisible enemy – COVID19 has proven, once again, that the only way to successfully overcome such a difficult situation was through the active involvement of all actors in society.

Montenegro is well placed to make impactful changes with the SDGs. It does not take much to move the needle. What is really needed is different groups coming together in collaboration and partnerships to deliver the change that is needed to benefit all Montenegrins. Currently there is too much polarisation. This needs to be addressed. Only when people put aside their differences can we collectively make a sustainable and long-lasting impact. I believe Montenegro could lead the way in this regard. Montenegro has good strong, dedicated people, who with the wise moves and a clear vision can unlock great potentials that this country has, in a relatively short period of time.