Monténégro

Subnational governments play a significant role in ensuring good public governance. The way that they are organised and function has a direct impact on the economic and social well-being of citizens and public trust in government. This report presents the system of multi-level government in the six Western Balkan economies, comparing them both with one another and in the context of broader international trends in multi-level governance. The report covers territorial and institutional organisation, competences of local governments, human resources and accountability, public financial management and vertical and horizontal co-ordination, in each case identifying key characteristics and recent trends.

Small and medium-sized enterprises (SMEs) are essential drivers of sustainable economic growth in the Western Balkans and Turkey, where they make up 99% of all firms, generate 65% value added and account for 75% of employment. Nevertheless, SMEs across the region continue to face obstacles such as difficulties accessing financing, low levels of digital uptake, regulatory barriers and relatively low participation in international trade. The situation has been further exacerbated by the COVID-19 pandemic: SMEs found themselves fighting for survival amidst reduced demand, lockdowns and travel restrictions, and supply chain disruptions.  This report provides an overview of the implementation of the Small Business Act for Europe during the period 2019-22. It is designed to help policy makers design, implement and monitor policies to support the recovery of SMEs from the pandemic, boost their competitiveness based on OECD and EU good practices, and further enhance the region’s economic growth and resilience.  

Robust SME sectors are critical to the prosperity of the six Western Balkan economies and Turkey, accounting for over 70% of those employed in the business sector and generating 65% of value added in these seven economies. Yet their potential remains untapped, as SMEs across the region grapple with numerous challenges that hamper their growth and productivity. They are still under-represented in international trade, and their contributions to value-added remain comparatively low as they have difficulties in moving or expanding into high value-added activities. This report provides a comprehensive overview of the implementation of the ten principles of the Small Business Act for Europe (SBA) in the seven EU pre-accession economies over the period 2016-18. It monitors progress against similar assessments performed over the past decade and identifies the outstanding challenges affecting SMEs. It also provides targeted recommendations to remove barriers to SME development and unleashing their potential for driving inclusive economic growth.