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Montenegro

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MONTENEGRO


  
  

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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $
         
GNI per capita
 US $ 106
Ranking is given out of 208 nations - (data from the World Bank)


Update No: 118 - (29/03/07)

The world has a new country 
Montenegro declared its independence on June 3 after its electorate voted to dissolve the union with Serbia in a referendum on May 21. Serbia and Montenegro both gave up their sovereignty to join the Kingdom of Serbs, Croats and Slovenians in 1918, which eventually became the federal Yugoslavia. Yugoslavia fell apart in violence in the early 1990's, but Serbia and Montenegro remained in a federation until 2003, when it was transformed into the now defunct union of Serbia-Montenegro.

Montenegro has become the 192nd member of the United Nations, one of its smallest members. 'Montenegro' means 'black mountain' in English. Montenegro is, indeed, a very rugged and mountainous country. But it is green, indeed verdant in its numerous valleys, while it has a resplendent coastline on the magnificent blue of the Adriatic Sea.

The whole country is green in another sense. It has just acquired independence and is not quite sure what to do with it, although the main drift is clear enough, join the West beyond that magnificent sea, leaving the murkily black history of its annexation to the now defunct Yugoslavia behind.

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. There is something exhilarating about being master of one's own fate, as they now are.

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. 

All of Montenegro's main political parties are united in their support for EU membership. Analysts said that Djukanovic, the longest-serving prime minister in the Balkans until replaced by Zeljko Sturanovic, owed his victory to the failure of the pro-Serbian opposition to recover from defeat in the referendum in May.

The new government is expected to push for a new constitution. The new prime minister 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 its victory would help the pace of reforms, but some questioned whether the government would have the resolve to implement them.

Stabilisation and Association pact signed with EU
The tiny Balkan republic of Montenegro has made a significant step towards joining the European Union, after signing a Stabilization and Association agreement (SSA) with the bloc, surging ahead of Serbia from which it seceded in May last year following a referendum. The first step on the long road to possible EU membership, the accord makes Montenegro an official EU candidate, along with the other two republics of the former Yugoslavia - Macedonia and Croatia. 

Montenegrin Prime Minister Sturanovic and EU enlargement commissioner Ollie Rehn inked the accord in Montenegro's capital, Podgorica on March 16th. 

Rehn said the agreement would facilitate trade between Montenegro and EU and promised European help in Montenegro's struggle against organised crime and corruption. "Further progress on Montenegro's road to EU will depend on the implementation of the agreement and the struggle against corruption and organised crime and based on the reforms of judiciary and administrative capacities," said Rehn.

Sturanovic said the agreement represented the first phase of substantial integration of Montenegro into the EU," and "the best verification of everything Montenegro has done so far on its road towards the EU." Montenegro president Filip Vujanovic hailed the agreement as a "great step forward for Montenegro," and pledged his country would continue to fulfil all its obligations in the process of European integration.

The new tiger economy
"Mediterranean tiger" is a match to original "Asian tigers": Singapore, Hong Kong, Taiwan, and South Korea. In 1960's and in 1990's they had a great growth of the economy, which several years in a row was up by 15%.

Montenegro in transition could use the experiences of other countries such as Estonia, and become the first "Mediterranean tiger" - it is a hallmark of the case by Frederic Sautet and Kyle McKenzie, researchers of Mercatus centre alongside the American University George Mason. 

The future of Montenegro without any doubt is optimistic still. The country is at a crossroads and it has many decisions to make, which will be keys for its long-term success. It no longer has Serbia to retain her or to throw its blame on Montenegro. 

The possibility of Montenegro to become a "Mediterranean tiger" was for the first time mentioned by the ex Prime Minister Milo Djukanovic, who four years ago said that Government and the Parliament have to strive to create a secure and attractive surrounding for the investors in order to have a speedy economic growth and opening of new employment opportunities. He added that, if they fulfil the goal, "the commentators in the next few years will maybe speak about Montenegro as the Mediterranean tiger."

Their success in great part was based on direct investments from USA and Japan. "Asian tigers: have focused themselves on a stimulation of production for export to developed countries, they have discouraged domestic expenditure with high custom rates, and they invested in the growth of productivity and improvement of the educational system, from primary schools to universities.

Even though it is compared with "Asian tigers" the authors praise the fact that Montenegro has reduced the custom rates and refused their increase during the time when it was in Union with Serbia. They also commended the acts about privatisation and the success of the market of capital funds. As challenges, they cited the relatively high level of public expenditure of 44, 6% of GDI (Gross Domestic Income) at the end of 2006, the labour market which needs to be liberalized, and the high participation of the grey economy. 

They call Montenegro "an extremely small country with just a little bit more than 620.000 citizens" and they quote the professor of the economic faculty Veselin Vukotic who suggests a concept of micro state and says that the "key idea is to build a minimal but efficient state, in stead of a paternalistic, all present, but weak one which we now have". 

Sautet and McKenzie as a positive example state the growth of tourism "thanks to the newest James Bond movie and glamorously presented vacant hotel places in the country". Still, they forget that the vacant hotel places, in the movie displayed as Montenegrin, are in fact located in Czech Karlovy Vary.

A cloud on the horizon- dark and menacing 
What will the new fate of Montenegro be? Ironically, it will probably be decided from outside.

Ex-Prime Minister Milo Djukanovic long advocated integration with the West as the goal. But there is a problem. Montenegro still has a black aspect - it is rife with corruption, smuggling and crime.

It is most unlikely that the EU will want to permit its worst elements to enter unopposed. There is a need for clarification all around.

The bandits that afflict the country have existed for centuries. They were basically people with entrepreneurial talent, excoriated and banned by communism and all other forms of outside authority. Are they prepared with self-rule, apart from the out and out criminal element, to settle down to legitimate outlets for their enterprise. Why not now tourism and hotels, and all that is entailed in rejoining the comity of nations again?

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 originally 'Balkan' state in the region never having been fully occupied by the Turks.

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AVIATION

Jat Airways and Montenegro Airlines merger talk rebuffed 

The Belgrade daily, Politika, recently published an article which mentioned that the national airline of Serbia, Jat Airways, and Montenegro Airlines plans to merge for their future co-operation. Montenegro Airlines, Ministry of Transport and Jat Airways Managing Board Director jointly rebuffed allegations that the two companies plan to merge, Mnnews reported. 
Company officials stated that Jat Airways has no plans to merge with Montenegro Airlines. Montenegro Airlines officials recently stated that their company might only co-operate with Jat Airways, while the Serbian Ministry for Capital investments mentioned the possibility of a merger. Rados Sucur, Montenegrin Associate Minister of Transport, denied that his ministry allowed the merging of the two companies. 

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ENERGY

LUKoil to participate in privatisations

LUKoil Montenegro will participate in all privatisations of energy-related companies in Montenegro, and also plans to open more than 20 petrol stations throughout the country in 2007, Serbia & Montenegro Today reported. 
Opening of the first petrol station is planned for June this year, LUKoil Montenegro Executive Director, Robert Ferluga, was cited as saying. Russian oil company LUKoil opened its representative office in Montenegro last year.

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FOREIGN INVESTMENT

Hungarian firm will invest 3bn Euro

The Hungarian corporation Trigranit said in Budapest that it will invest three billion Euro in Montenegro. This was announced by the general director of the company, Loran Varga, and the chief of the sector for investment, Zolt Cabo, Mnnews reported. 
Both officials of the company said that Trigranit is interested in investing in Podgorica, Ulcinj, Skadar Lake, and Budva. Varga said that if the project were approved then the income in tourism would double. He added that the company is interested in construction of business centres, as the company has already built such centres in Ljubljana, Zagreb, Bratislava and Budapest. He recalled that per year their shopping malls are visited by about 60 million people. As Varga pointed out, they would work in Montenegro based on the cooperation of the state and the private sector. Trigranit is interested in the construction of roads and investment in energy. It is expected that the capital city could soon announce an open competition for the construction of a Millennium centre at the location of the former military caserne "Moraca."

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FOREIGN RELATIONS

Croatia-Montenegro relations improving

Montenegro's President Filip Vujanovic went on an official visit to Croatia at the invitation of his Croatian counterpart, Stepan Mesic, the Montenegrin agency MINA told Mnnews. 
Vujanovic was welcomed by Croatia's President, Stjepan Mesic, and Parliament Speaker, Vladimir Seks.
On March 10th, the two heads of state said in Zagreb that Croatia-Montenegro relations are developing well and the two countries should turn to the future, while simultaneously drawing lessons from the past and closing all outstanding issues through talks.
"Let's turn to the future, let's draw lessons from the past. Montenegro sees in Croatia its friend and wants to close all outstanding issues by agreement," said Vujanovic, on his first official visit to Croatia since Montenegro declared independence last spring.
Mesic stated that the unsolved issues would not hinder the further development of the relations between the two states. He said bilateral relations were developing well but "can and must be better." "We are not running away from problems or... pushing them under the carpet. We are talking about everything and believe that talks, negotiations and agreements are the only way to resolve existing problems," said Mesic.
He underlined that Croatia did not have unsolvable problems with any of its neighbours and that those problems which seemed such were due to lack of political will or courage or vision. Speaking of the border with Montenegro near the southern Adriatic tip of Prevlaka, Mesic said it was regulated by a temporary solution. "Of course, it is not final and prejudges nothing. But it works perfectly and at this moment there is absolutely no need to tighten it in any way." 
Speaking of Euro-Atlantic integration, Mesic said Montenegro knew that Croatia's accession to the EU was in its interest as well. He added Croatia was ready to share its experience in accession negotiations. Vujanovic said that he and his host had recalled two of their initiatives that were accepted by state authorities.
In 2005 an initiative was launched that Montenegro pay for property seized by the former Yugoslav People's Army (JNA) in the southern Croatian sea resort of Dubrovnik and, according to Vujanovic, "show that it is ready to rehabilitate in this way... that part of the past and thus overcome the problem that existed on that ugly page of Montenegro's history... a history in which, guided and misled by the JNA, it took part on the Dubrovnik battlefield."
Vujanovic said the initiative had not been welcomed and four days was spent in parliament to establish if the initiative clashed with the constitution. He reiterated that Montenegro had publicly apologised and expressed genuine regret for the Dubrovnik battlefield as well as saying that war crimes had been committed there and that those responsible must end up before the Hague war crimes tribunal. 
In July 2006 an agreement was signed by the two countries' state prosecutor's offices on cooperation and the prosecution of perpetrators of war crimes, crimes against humanity and genocide. "Croatia and Montenegro essentially want the same, a peaceful and stable region and a European future. I am sure that by building our relations we are contributing to the stabilisation of the region. I am pleased with the talks we had and believe that Croatian-Montenegrin relations have a good prospect, in the interest of the two countries and all their citizens as well as in the interest of the region and Europe," said Mesic. 
War-ravaged Croatia will take a softer approach towards newly independent Montenegro by accepting shares in state companies instead of monetary compensation from Montenegro, Mnnews reported.
In lieu of full war reparations to Croatia, Montenegro could offer shares in state companies. Military attacks that were launched from Montenegrin territory in 1991 wreaked havoc and destruction in the Croatian city of Dubrovnik. While expressing regret for the destruction caused, the Montenegrin authorities said that the republic was not the decision-maker in the former Yugoslavia and cannot be considered the aggressor. 
On February 27, Montenegrin Parliament Speaker Ranko Krivokapic, speaking after a meeting with Croatian counterpart Vladimir Seks, said the two states would agree on Montenegro's "political and moral responsibility" for the attacks.
However, the apologetic tone of Montenegro's pro-independence parties, which have run the republic for the last decade, has been criticised by pro-Serbian parties in Montenegro. 
The Democratic Serbian Party accused Krivokapic of defending Croatian interests, and the Serbian People's Party said they would seek the speaker's resignation. "Krivokapic obviously wants to raise new tensions and disputes between the Montenegrin citizens," the Socialist People's Party said.

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TELECOMMUNICATIONS

Telekom Srbija bids for mobile operator 

Telekom Srbija and Amsterdam-based Ogalar Company (owned by powerful Serbian businessman Miroslav Miskovic) were the only bidders for a third mobile telephony operator in Montenegro, Italian News Agency ANSA reported on February 20th. 
They are offering US$16 million for the licence, although the reserve price was set at US$ six million, it was reported. Telekom officials have confirmed that Ogalar is part of Miskovic's Delta Holding and that the company has been working on promoting Telekom. The consortium plans to invest about US$90 million, and is ready to become operational in the summer, it was reported.

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TOURISM

Donald Trump to invest in coastal hotel market

American billionaire, Donald Trump, has announced plans to invest in the hotel business in the coastal area of Montenegro. Trump is interested in the acquisition of hotel company HTP Ulcinjska Rivijera in Ulcinj, close to the Albanian-Montenegrin border. This investment is one of the largest in Montenegro since the republic became independent in 2006, according to media reports. Local authorities have already received a letter of intent from Trump, Mnnews reported. 
Trump also announced plans to construct hotels and other facilities linked to tourism. The local media have reported such an investment would be the largest in Montenegro since the republic became independent last year. 

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