Could the Montenegro Poverty Rate Increase with EU Accession?
Montenegro is a small Balkan country that declared independence from Serbia in 2006. Since that time, the poverty rate in Montenegro has varied rather significantly, rising as high as 11.3 percent (2006, 2012) and falling as low as 4.9 percent (2008). The most recent data available, from 2013, lists the Montenegro poverty rate at 8.6 percent.
Prior to Montenegro’s independence, the country of Serbia and Montenegro was attempting accession into the European Union. Now an independent country, Montenegro is in its own process of accession into the EU. If and when Montenegro becomes an EU member, the Montenegro poverty rate has the potential for a fairly dramatic change, due to differences in how poverty is calculated.
Montenegro currently uses an absolute poverty rate. The poverty line as reported in 2013 was €186.54 per month. This line was calculated using basic costs of life needs, consisting of food costs and non-food needs. In contrast, the EU uses a relative poverty rate calculation. The poverty line in EU member states is calculated as 60 percent of the median income.
Attempting to calculate the relative poverty rate in Montenegro to demonstrate the difference is not easy. Monstat, Montenegro’s statistical office, currently provides average income rather than median income, so determining the relative poverty rate based on median income is not immediately possible. Using markers such as the given average income and income inequality index to estimate median income suggest the poverty line would rise using a relative calculation. Using EU member poverty rates as a guideline would also seem to suggest the potential for a higher poverty rate in a relative system.
Montenegro’s foreign minister Srđan Darmanović stated earlier this year that Montenegrin accession into the EU could happen as early as 2022. Even with the relative volatility of the Montenegro poverty rate over the last decade, a sudden rise around the point of accession need not be an immediate concern if understood as a change in the calculation system.
– Erik Beck