KBP Legal collaborated with the World Bank and a selected team of governance specialist as well as Montenegrin authorities to prepare the new Montenegro Integrated State-Owned Enterprises Framework (iSOEF) Assessment, officially released by the World Bank. This report is the first application of the Bank’s comprehensive iSOEF methodology in Montenegro. It delivers a “360°” analysis of the country’s state-owned and municipally-owned enterprises across financial, fiscal, market, and governance dimensions1, reflecting a thorough technical and policy-driven approach.
The assessment identifies at least 61 active SOEs and 133 MOEs in Montenegro, which together account for roughly 17% of GDP and a significant share of employment. Crucially, the report finds that many of these firms are underperforming, raising concerns about sustainability. High labor costs, inefficiencies and weak compensation for public service obligations are cited as major issues driving these results. In short, the study highlights significant governance and oversight weaknesses: for example, data gaps and outdated policies are hampering effective performance monitoring and accountability.
By way of background, the World Bank’s iSOEF is a modular framework for diagnosing SOE roles in the economy and recommending reforms. Montenegro’s ongoing EU accession process has already spurred SOE reform commitments. In particular, the government has drafted a State Ownership Policy and plans to adopt a new SOE law, which we also drafted along with engaged World Bank experts. The iSOEF report was designed to inform these reforms by summarizing the key challenges and proposing priority actions. It explicitly prioritizes two near-term reforms: establishing a strong Ownership Coordination Unit within the Ministry of Finance, and conducting a transparent, rules-based review (or “portfolio triage”) of all SOEs to guide restructuring or privatisation decisions.
KBP Legal supported this project at every stage – from gathering and analyzing data to drafting the recommendations. The team brought together legal and policy expertise to ensure the report combined rigorous analysis with practical relevance. This collaborative effort reflects KBP Legal’s commitment to strengthening Montenegro’s institutional frameworks and economic resilience.
We congratulate the World Bank, the Government of Montenegro and all partners for completing this important study. As noted in the assessment, this report represents a critical first step in Montenegro’s SOE reform journey. KBP Legal is proud to have supported this milestone and looks forward to continuing to advise on the next phases of Montenegro’s public sector reform process.
Article published: Montenegro Integrated State-Owned Enterprises Framework (iSOEF) Assessment