Key Recommendations for the Development of Social Economy in Montenegro


The social economy development should be an integral part of the strategy for the overall development of Montenegro. It is necessary to adopt regulations and policies that will define different types of the social economy organizations [1], as well as various financing mechanisms that will encourage employment of hardly employable persons [2], but also to activate different economic resources that are at our disposal (land, forests, rivers, industrial buildings… that are not in use) in order to fulfill specific needs of the local community with missing products and services. The social enterprises may be one solution, but also, it is necessary to support other types of the social economy organizations.

It is necessary to adopt the National Strategy for development of the social economy, with a clear Action plan and to network of all key stakeholders involved in the process [3]. In defining the Strategy, it is necessary to not only to focus on financing of the social economy organizations, but also on more efficient use of existing resources available to social economy organizations, as well as providing support to development of different mechanisms of non-financial support.

Particular attention should be given to development of mechanisms of non-financial support, such as incubators, training centers, counseling and mentoring, networking, etc., as well as the use of available resources, such as Employment Bureau programs, business schools, business associations etc.

It is necessary to establish a better coordination between state institutions such as Ministry of Social Welfare, the Employment Bureau, the Investment and Development Fund, Ministry of Finance, Ministry of Agriculture and Rural Development, Ministry of Science …, given that they provide different types of financial and non-financial support necessary for the social economy development.

Specific body, established by the Government, or as an independent agency [4], should be responsible for implementation, monitoring and promotion of the social economy development (including implementation of the National Strategy for development of the social economy and its Action Plan), in order to strengthen the dialogue between key partners, develop monitoring mechanisms and create policy proposals in this field. This body / agency should work with local, national and regional / international partners in order to support coordination of policies and programs in the field of social economy.

It is necessary to continue reforms in order to improve the system of data collection, the business environment, financing CSOs from public funds and procurement process, taking into account the impact of these reforms on the development of the social economy sector. Reducing barriers to starting a business and the principle of “one-stop shop”, should be introduced at all administrative levels.

It is necessary to continue reforms in order to improve data collection, business environment, funding of CSOs from public funds and public procurement processes, taking into consideration impact of the reforms on development of SE sector. Reducing the barriers for starting businesses and the principle of “one-stop shop” should be introduced in all levels of administrative process.

A detailed analysis on implementation of the Law on professional rehabilitation and employment of persons with disabilities should be made in accordance with the State Audit Agency findings, in order to find key obstacles and more efficient ways in using available funds and the supportive measures. In order to support integration of disabled in the society, special attention should be given to different programs that can involve other hardly employable groups. In doing so, given the height of the Fund and the inability of its absorption by persons with disabilities, it should be developed a model that will the unused portion of the Fund transfer to employment of other hardly employable groups and development of different mechanisms of financial and non-financial support, rather than in public spending (as it is now).

Due to lack of know-how among members/founders of CSOs, corporate management might be implemented [5], by separating managerial from the ownership/proprietary function . This will not only increase transparency of work, but also significantly increase efficiency of doing business – while founders of SE organizations will be focused on control function, externally employed managers can focus on operations.

Networking, mutual programs and exchange of experience among local and regional partners should be supported by the Government, as well as international organizations. Cross-regional cooperation is essential for transfer of know-how, exchange of experience and usage of available cross-border funds.

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[1] One of the option is through amendments to the Law on Enterprises, which would prevent the adoption of a separate law on social economy organizations. Another option is to regulate this area by a separate law.

[2] Persons with disabilities, ex-addicts, former prisoners, single parents, persons without qualifications, older persons who were declared redundant, etc.

[3] CSOs, Ministry of Labor and Social Welfare, Ministry of Agriculture and Rural Development, Ministry of Science, Ministry of Economy, Investment Development Fund, Employment Bureau, business schools, business associations, etc.

[4] Different models are possible, but primarily this Agency should report to the Government in order to have more efficient policy making and coordination of state institutions. Still, it is necessary to provide independence in decision making, though an independent budget line and independent supervisory board that will gather all stakeholders in the process.

[5] The founders of CSOs, which often lack with the necessary business knowledge and skills, will have a control function, while external managers will focus on business operations. We can achieve here an additional effect on the labor market by employing persons with higher education as managers of the social economy organizations, who are in the records of the Employment Bureau – there is a potential of several thousand people which should be transferred from the Employment Bureau records to social economy business.

* Source: ““Strategic Study on Social Economy Development in the Context of the South East Europe 2020 Strategy