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Update No: 112 - (26/09/06)
The newest country in the world
The Montenegrins voted on September 10th in the first parliamentary elections
since their tiny Balkan state split from Serbia on May 21. It was predictably
won by the pro-independence, pro presidential bloc. Although the vote in May was
on a knife edge, popular opinion has swung strongly in favour of independence
now that it is an established reality.
The vote for the 81-seat assembly was key to Montenegro's hopes for joining the
European Union and NATO, as the new parliament will be charged with drafting and
passing a new national constitution for the world's newest country.
Prime Minister Milo Djukanovic won a comfortable victory in parliamentary
elections, preliminary results showed on September 11th, leaving the pro-Serbian
opposition in disarray. The results, gathered by two independent monitoring
groups and based on a parallel count of all votes, showed that Djukanovic's
coalition of Socialists and Social Democrats won at least 40 seats in the
81-seat Parliament.
The prime minister declared victory, saying that the result was a vindication of
his pro-European stance during the campaign. "These elections have shown
that Montenegro is stable and firmly on the European track," he said.
All of Montenegro's main political parties were united in their support for EU
membership. Analysts said that Djukanovic, the longest-serving prime minister in
the Balkans, owed his victory to the failure of the pro-Serbian opposition to
recover from defeat in the referendum in May that saw Montenegro emerge as an
independent state and break its ties with Serbia.
The Serbian Socialist People's Party, led by Predrag Bulatovic, which campaigned
during the referendum against independence, lost its position as the main
opposition party.
It was expected to win 11 seats, the same number as a newly formed,
anti-corruption group, the Movement for Changes.
Once final results are confirmed, Djukanovic's new government is expected to
push for a new Constitution. The prime minister has also promised speedy entry
into the Partnership for Peace, a first step toward NATO membership, and a deal
on closer political and economic ties with the European Union.
The new government also has to eradicate a reputation for corruption and weak
institutions. The margin of Djukanovic's victory would help the pace of reforms,
but some questioned whether his government would have the resolve to implement
them.
"He can do whatever he wants," said Mihailo Jovovic, political editor
of Vijesti, one of Montenegro's leading daily newspapers. "But you can
expect that the problem is going to be in implementation of the laws. The
question is whether the institutions will be strong enough to apply them."
Trouble at the ballot
Meanwhile police announced a crackdown on an alleged ethnic Albanian
terrorist group that authorities said had threatened the ballot. Every positive
seems to inspire a negative.
Police said 14 ethnic Albanians were arrested on September 9th in the southern
border village of Tuzi, including three US citizens, because they
"represented a danger to the people of Montenegro."
The Albanian problem
However, the leader of an ethnic Albanian party in Tuzi said the arrests
represented a political provocation, as most of the suspects were either party
supporters or candidates. He said several people were beaten and their homes
were ransacked in the police action.
"If they had plans to arrest a 'terrorist group,' they chose a wrong moment
to do it," said Vasej Sinistaj, head of the Albanian Alternative party.
"The government is nervous because it is aware it is losing (ethnic)
Albanian votes."
Ethnic Albanians comprise about 10 percent of Montenegro's population of
620,000. They are slated to win five seats in the assembly, and could help
decide the formation of a new government by joining one of the larger blocs in a
coalition.
******
The new country is attracting a great deal of interest from abroad. It is a
fabulously beautiful place right on the Adriatic. In a sense it is the most
Balkan state in the region never having been fully occupied by the Turks.
The following article from the Christian Science Monitor is self-explanatory:-
Montenegro: Country for sale
By Beth Kampschror
After ending its union with Serbia, Montenegro's land is a hot commodity.
After spending a week in coastal Montenegro, eavesdropping on English couples
discussing per-square-meter property prices; watching an Irish television crew
follow two house-hunting brothers; and interviewing agents, developers, and
buyers in the nearly one dozen real estate companies in the small town of Kotor
alone, I had a hard time fathoming real estate agent Sasa Vukicevic's
reminiscing of the bad old days of just two years ago.
"If you mentioned the Balkans to John Smith, it was still these pictures of
AK-47s, nationalism, bad guys," he told me at the Dream Property Montenegro
offices on one of the narrow streets of Kotor's walled town, where property
prices have jumped threefold since last year. "Now I get the feeling that
every granny in the Kotor old town is in the real estate business."
It's not only real estate that's selling well. Since Montenegro voted to pull
out of its state union with Serbia earlier this year, and is enjoying its first
summer out from under Serbia's shadow. It's become a country for sale.
Companies, hotels, land, private houses - it seems as if everything is on the
block, mostly bought by people and investors from central Europe, the Britain
and Ireland, though to hear the local gossip, it's shadowy Russian money
launderers who are buying up most of the country.
The reasons for this sale of the century are simple. Montenegro's Serbia-free
image comes as the government is eager to attract foreign investment to help the
tiny country of just 650,000 get on its feet. Registering a company here takes
just four days. Required starting capital for a limited-liability company is one
euro. Foreigners have the same legal status as nationals. And Montenegro is an
emerging market that daring investors are keen to get into while it's hot. Even
before the independence referendum, foreign direct investment per head in this
tiny country had shot up from 85 euros in 2004 to 618 euros in 2005. Norwegian
and Hungarian telecoms have snapped up both Montenegrin telecoms.
Canadian billionaire Peter Mank is said to be buying the Tivat shipyard for some
100 million euros. The Russian-Montenegrin Montenegro Stars hotel group has
invested 50 million euros in the new five-star Hotel Splendid, and Britain's
Beppler & Jacobson have invested Ý9 million in Hotel Bianca, the north
Montenegrin five-star spa. Headlines in the daily Vijesti range from
"Mysterious millions from Holland," about a tender for one of the
coast's boxy state-owned hotels, to "airports for sale," about
government plans to privatise two airports. There are even rumours the
government might sell off some submarines.
But this summer, worries about Russian investors are the talk in many
Montenegrin cafes and bars. Concerns are so prevalent that one night I flicked
on the state television news to see a segment protesting that investors from
Russia ranked far down on the list - 10th - of all the foreign investors here.
But central bank figures indicate that Russian Federation investors are sixth,
after central European countries and Britain, with 2.7 percent of investments
here over the past four years. But the talk persists - probably because you
can't spit on the coast without hitting squat, greying Russians with their much
younger and taller trophy wives. At least one investor here finds the rumours
enjoyable. "Every time we're about to close a deal, i.e., buy a plot of
land, it's like, 'You've gotta sign today, because a Russian is coming with a
suitcase of cash, and is going to buy it if you don't sign,' " says Justin
Faiz, director of Pluto Capital, Ltd., a British-Montenegrin development fund.
"Of course the Russian is never around the corner, so is this the fictional
Russian we love to hear about."
Mr Vukicevic at Dream Property says most Montenegrins don't mind Russians as
tourists. "Whoever buys an ice cream or dines in a restaurant - and is not
a hooligan - is welcome," he says. "But people are not very happy with
the Russians buying companies. The way they manage it once they buy it is not
pleasant for the workers." He cites the notorious example of an inland
steel mill that was bought by a Russian investor who after several months,
cancelled the contract. Though the Russian threat has been blown out of
proportion, another real estate agent warned there may eventually be a backlash.
"Montenegrins fought very hard for their land and their territory, and they
don't want to give it up," says Robin Gellately-Smith, a building surveyor
at Kotor's Total Group Real Estate, referring to Montenegrins' pride in
resisting the Ottoman Empire for 500 years.
I saw that for myself in Zoran Lemajic, who rented me a room at his pension
outside Kotor. "Some Russian guy stopped by a few months ago and asked,
'How much for this place?' I told him three million.'"
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CONSTRUCTION
TriGranit plans to investing 2bn Euro
Hungary's TriGranit, one of the biggest construction companies in the region, is
preparing to make Greenfield tourism developments in Montenegro worth as much as
two billion Euro, more than country's annual GDP, Budapest Business Journal
reported on September 4th.
TriGranit President Sandor Demjan met with Montenegro's Tourism Minister Predrag
Nemezic on August 31st to discuss the plans, which involve building quality
accommodation along the country's coast in order to expand the tourist season to
nine months. The project could result in the creation of as many as 10,000 new
jobs.
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TOURISM
Tourism profits surge
Tourism profits in Montenegro for the last seven months reached a total of
123.6m Euro - one fifth more than in the same period last year, Italian news
agency ANSA reported.
According to the ministry of tourism, there are currently 102,000 tourists
(72,000 local tourists and 20,000 foreigner) on vacation in Montenegro, a record
in the last fifteen years. The number of local guests has risen by more than six
per cent, and of foreigners by one-third, ANSA reported.
Montenegro attracts tourist away from Croatia
Tourists experts say that Montenegro will be taking away a portion of Croatian
tourists very soon, B92 reported recently.
Rijeka daily Novi List wrote that since Montenegro is the fastest growing
tourist destination, Croatia's tourism in the coming years must make
improvements in its quality of services. The daily wrote that the fact that
Montenegro is becoming more attractive for tourists and that the rising prices
in the southern region of Croatia have been turning off tourists will lead to
Croatia losing a significant amount of business. "Only several kilometres
south, tourists are receiving cheaper accommodation with the ability to take a
one-day trip to Dubrovnik," Novi List wrote, adding that there are
currently 230 categorised tourist buildings in Montenegro with 35,000 available
beds. Montenegrin Tourism Minister, Predrag Nenezic said that this season will
probably be the best for Montenegro since the dissolving of the former
Yugoslavia. He expects about 900,000 guests and a planned income of about 300m
Euro.
Dinars not acceptable, tourists flounder
Although many of the tourists vacationing in Montenegro come from Serbia -where
the currency is dinar - it is difficult to exchange dinars, B92 reported.
Montenegro uses the Euro currency. Even with two thirds of guests coming from
Serbia, banks do not consider the dinar a convertible currency. Many banks and
exchange offices send the tourists with dinars in their hands back, including
Atlas Mont and Montenegrin Commercial. Podgoricka bank, recently acquired by
Societe Generale, enforces the same policy.
Only "Komercijalna banka ad Budva" in Herceg Novi, still exchanges
dinars for Euro. The bank says they have continued to do so even after the
demise of the state union. The Montenegrin Central bank currently has
approximately 180m Euro in circulation. As much is placed in various kinds of
deposits, which total 360m Euro.
Although the Euro has assumed the role of the Montenegrin currency, it has to be
purchased from the Central European Bank, at considerable cost, since Montenegro
is not a member state.
Therefore, it is understandable that the Montenegrin bankers hesitate to accept
dinars, which would drain the expensive hard currency. Reports said that is
unlikely that the National Bank of Serbia would take part in this process, given
that some of the far more important issues between the two now sovereign states
remain unsolved.
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