Montenegro has recently
established a political and economic union with Serbia.
According to many analysts, including the ones from the
EU and US, Montenegro has finally reached political stability
and security. How do you expect this will influence FDI
(Foreign Direct Investment)?
As we all know, the expected flow of investment is
directly connected with stability and Montenegro was
not in a position to achieve this during the last decade.
Fortunately, it was the only place in the region where
there was no war during the last decade, but it was
not sufficient to attract foreign investors with the
overall conflicts at the borders of Montenegro. Today,
security and stability have been finally achieved and
all the spots have been pacified. Only the Kosovo issue
is still to be solved. Over the past five years, after
5 different elections, a new political stability has
been reached thanks to a considerable majority. Montenegro
has a new President, who is pro-European and pro-democratic.
Montenegro has everything it needs to attract foreign
investments. The Government now has to demonstrate its
ability to create an economic development model. After
the first 100 days of Government, the policy of the
Government to create an attractive business framework
is based on 3 strategic documents: the Economic Reform
Agenda (for the next 4 years), the Public Administration
Reform, and the Educational Reform. In the medium term,
we want to meet European standards.
Due to the steps our Government is taking, Montenegro
is becoming part of the mainstream and the conditions
are not that different from the ones in other EU countries.
We want to strengthen the confidence of foreign investors
through the legal system. In Montenegro, investments
are safe and the ownership is protected by the Constitution.
The main aim is to restore the confidence in the banking
system, since the foreign currency deposits from the
former Republic of Yugoslavia have not been yet restituted.
The irresponsibility of commercial banks brought loss
to investors, both national and international. Montenegro
is strongly working to resolve the problem we have regarding
patrimony, and by solving this, we are sending a message
not only to foreign investors, but to Montenegrin people
also. We already have an important growth in this area,
concerning both banking deposits and FDI, so we are
sure that future years would just further improve these
two fields of the economy.
In which sectors does Montenegro offer important
investment opportunities and what is your Government
doing to set up an attractive business framework?
Investment opportunities in Montenegro are mainly
in tourism, services, maritime economy and production
of organic food. Our government is working hard on restructuring
several sectors of the economy because after the Second
World War we focused, as many other similar countries,
on heavy industry thereby neglecting our natural resources.
Now we have to strengthen our development potentials,
which are natural resource based industries, such as
tourism and agriculture. They give Montenegro a great
opportunity to find a place in the international market
and to become competitive.
How do you see Montenegro in 5/10 years?
The Economic Reform Agenda shows we have set some
key objectives which we want to achieve by 2006. And
when undertaking this Agenda, we have been very realistic
as to its aims. The estimated GDP of Montenegro by the
end of 2002 was around 1,2 billion Euros. Growth projection
of GDP, as we see it, should reach 1.62 billion Euros
by the end of 2006 - which means that the GDP per capita
should increase from 1,800 to 2,400 Euros. We have planned
to reduce inflation from 9.4% last year to 2% by the
end of 2006 and to turn around the deficit in foreign
payments of around 50 million Euros we had in 2002,
and to achieve instead a 40 million Euros surplus by
the end of 2006. We also want to increase FDI from the
75 million Euros we had in 2002 to 200 million Euros
in 2006; and reduce unaccounted for economic activity
from the 30% of the GDP we had in 2002 to 11% of the
GDP by 2006. Naturally we want to achieve these results,
but primarily I have in mind the growth of the GDP and
the growth of the employment rate through a better use
of our natural resources - which represent a comparative
advantage for Montenegro - and by developing private
business in these areas.
We have just discussed the expectations your Government
has in terms of figures; but what about the status,
that is to say an independent Republic of Montenegro?
More than a year ago, we proposed to Serbia a method
to regulate our mutual relationship, which implied that
both Serbia and Montenegro should be independent states.
Serbia did not accept that proposal. EU faced the differences
of opinion of Serbia and Montenegro on the subject,
and insisted that we retain a single international personality
for Serbia and Montenegro - with the right of Serbia
and Montenegro to put to the test the mood of their
citizens as to whether they want to become independent
or not after three years.
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Today,
I am still convinced that our proposal a year ago would
have been the most rational and sensible one, because
it was not just another Balkan nationalistic whim. It
was a rational proposal, which started from the assumption
that one needed to put a logical end to the dissolution
process of the former Yugoslavia, and then start building
new relationships within the Western Balkans on a new
basis. Despite the fact that I am still convinced of the
superiority of this approach, with respect to the model
that we are currently implementing, it is clear that one
cannot and must not insist on his own proposal only, disregarding
all the others. We were inevitably faced with a compromise,
which takes into account Serbia's interests as well as
international interests in this region. We are now in
the initial phase of implementing the Belgrade Agreement,
and the Constitutional Charter, which has been adopted
on the basis of this Agreement. Such implementation is
now allowing us, in a way, to push in the background the
status issue and to fully concentrate on the reform agenda
and on the adoption of EU standards. If, after three years,
both the citizens of Montenegro and Serbia want -or if
just one side wants- to put to the test the mood for independence
via a Referendum, there is no doubt that in Montenegro,
we will give them that opportunity. We will make sure
we can, because we don't believe the International Community
should be afraid that a Referendum could jeopardize the
political stability. I'm convinced a Referendum is a democratic
instrument for mature people and for mature nations, and
Montenegrin people are mature people.
Concerning the integration into international institutions,
Serbia and Montenegro became part of the Council of
Europe on the 3rd of April. What does this represent
for the Montenegrin aspirations towards future EU entry?
This is the first, but nevertheless, very important
step. Of course, this is not just a tribute of recognition,
moreover, it is an obligation. By becoming members,
Serbia and Montenegro have taken over a package of obligations
towards this institution. Just as the other states,
after the integration, we are exposed to very strict
monitoring in terms of our compliance with the obligations
that we have undertaken. I think that we are successfully
fulfilling our obligations towards the Council of Europe,
and I hope that this circumstance, along with the successful
process of stabilization and association, will be an
important step for Serbia and Montenegro towards membership
within the EU.
After Mass Voucher Privatization, the largest companies
are still to be privatized. Which are the next ones
on your schedule and what do you expect from foreign
investors?
60% of the social capital in Montenegro has already
been privatized. What remains are 17 companies in which
the state has a major stake. And for these companies,
we have prepared privatization tenders which, of course,
have to be international tenders. We have adopted a
privatization plan for 2003, including a strong increase
of the pace in this process.
In addition to the privatization of these 17 companies
under international tenders, currently looking for strategic
international partners are another 270 companies in
which state funds are minor shareholders. For these
companies we have also accelerated the sale schedule
of such minority stakes - by auctions, or by sale on
the stock exchange markets - to the end of this year.
For these 17 large companies, the priority for this
year is the Niksic Steel Company and I think that this
tender will be announced in a month's time maximum.
The Aluminium Plant of Podgorica (KAP), Tobacco industry
of Podgorica, Podgorica Bank, and hotel companies in
the South of Montenegro, will most probably be subjected
to purchase agreements sooner than any others by the
end of this year. This does not mean that we will be
hesitant with the other companies. We have absolutely
prepared the tender for the sale of Telecom Montenegro.
But according to foreign consultants, this is not the
most appropriate moment to sell the Telecom company.
On the contrary, this is a very favourable moment to
sell the Niksic Steel Company. After the privatization
in early June this year of the tobacco industries in
Serbia, it will be a very good timing for the sale of
our tobacco industry too. Therefore, we shall be calling
a tender depending on the assessment of our domestic
and foreign consultants as to the most propitious moment
on the market.
To conclude this interview, would you have a final
message for the readers of L'Express, and what will
be your main challenges as Prime Minister?
The main challenge is to further strengthen political
and economic stability and to ensure overall stability
which would allow for a more intensive presence of foreign
investors. Montenegro has an excellent position in the
Mediterranean area. We have very beautiful natural resources
from the coasts to the mountains, which lend themselves
very well to tourism development. We are working very
intensively to achieve a better quality of life and
European standards within a new legal, political and
economic system. Moreover, we also need foreign capital
along with a new quality of managerial know-how and
skills for managing Montenegrin enterprises.
That is why our message to foreign investors is that
by coming to Montenegro, they are coming to a part of
what is the European civilization and what are European
rules of conduct, all their efforts in Montenegro will
be very carefully taken into account and appreciated
by the government of Montenegro, and finally their investment
in Montenegro will be fully protected.
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