EBRD-ILO advise Montenegro on labour market policies after coronavirus

By Cecilia Calatrava

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  • EBRD and ILO develop policy options to support labour markets in Montenegro
  • Coronavirus pandemic may severely affect local employment
  • Manufacturing, retail and hospitality top the list of sectors at high risk

The European Bank for Reconstruction and Development (EBRD) and the International Labour Organization (ILO) are joining forces to support the policy response to the coronavirus crisis in Montenegro.

A joint report, presented to the authorities in Podgorica and published today, assesses the impact of the crisis on the country’s labour market and sets out a list of policy recommendations aimed at creating employment and protecting vulnerable workers and at-risk enterprises.

Policy options for expanding the protection of workers and families during the reactivation phase include:

  • the introduction of temporary safety nets for the new poor and newly vulnerable
  • the introduction of an unemployment allowance targeted at young people of working age
  • the establishment of an additional employment retention programme, to last until September 2020
  • the restructuring of the current graduate professional training programme into a more cost-effective universal and open-ended internship programme, aligned with similar EU practices
  • the promotion of in-work intergenerational solidarity by linking the revised internship scheme to an innovative framework for job sharing
  • the introduction of active employment measures in response to the crisis, including job-sharing schemes, voluntary reductions in working hours, job rotation and teleworking.

The Social Council in Montenegro invited the EBRD-ILO taskforce in April to facilitate dialogue among government, social partners and other relevant stakeholders, and to develop coherent policy responses to support workers, families and enterprises amid the Covid-19 pandemic.

The first local case of coronavirus in Montenegro came to light in mid-March 2020. Since then, the country imposed wide-reaching restrictions to flatten the contagion curve. It successfully managed to limit the number of deaths to nine out of 324 registered cases of infections, before declaring itself coronavirus-free earlier in May and relaxing the restrictions.

Nevertheless, the lockdown measures have severely impacted the economy. According to ILO estimates, 36,000 jobs (15 per cent of the labour market) are at immediate risk.

In its most recent forecast, the EBRD expects the economy of Montenegro to shrink by 8 per cent in 2020, before recovering by 10.5 per cent in 2021.

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