With the adoption of the Deutsche Mark (DM) as a currency in 1999, Montenegro made a step forward in its relations with Europe and now it will be adopting the Euro next year. What was your experience in this major change and how did it reflect on the country's international relations?
It was a very important decision of the Government of Montenegro motivated basically by two factors. First: the dissociation from the policy and from the regime of the then Belgrade authorities personified in Slobodan Milosevic. Montenegro has adopted a totally different policy of democratization, of comprehensive economic reforms and of pro-European orientation. The adaptation of our own monetary policy was a strong move towards the independence of Montenegro in its relations with the Belgrade regime and policy.
Second, the adoption of the DMark was a kind of defense against the pressure and measures to destabilize Montenegro, including using the monetary policy in Dinars to ruin our economy and social and political life and living standard of the people. Montenegro was expelled from the federal institutions, including the Central Bank. Belgrade did not accept the results of the presidential and parliamentary elections, because it was in sharp confrontation with their policy. They had chosen their own cronies to represent Montenegro. Therefore, the monetary policy was not the result of two states making Yugoslavia, but of the sole interest of the regime.
In this case, we have been the victims of the permanent policy of printing new money and, on a daily basis, our social and economic situation was deteriorating. Hence, we decided to legalize something that was in practice for a decade or more - that, alongside with Dinar, both business and common people preferred hard currency. It was used everywhere in the region but it was not legalized. All genuine transactions have been in DMs. People have been protecting their values in that way.
So the decision was made to officially legalize that tender and, in the months to come, most of those transactions moved to DM from Dinar. It completely changed the economic and social situation. From the traditional 70 percent of economic and social standard of Serbia, Montenegro moved to the level of having two times higher average salaries and pensions from those in Serbia, only because of opting for DM, with a fixed value at the beginning and at the end of the month, unlike Dinar, which was losing value on a daily basis. Now, we will definitely continue in that way, with DM, until the end of this year and then move to Euro.
In this context, where is the situation now, as far as we know, with EU trade agreements, partnerships and associated membership with EU?
We are now approaching the beginning of negotiations with the EU and we are in a specific situation because, in practice, on the institutional level and on the level of legislation, Montenegro and Serbia are two separate states. However, the international community recognizes the legitimacy of only the FRY (Federal republic of Yugoslavia) - that is the contradiction. Foreign partners insist on FRY, which does not exist in practice, and the same contradiction exists with regard to the EU, because the EU is prepared to enter the process of negotiations, to prepare the agreement on stabilization and association, and would prefer to deal with FRY, while FRY internally does not exist, or is not recognized by Montenegro...
The Federal Republic of Yugoslavia is not representing Montenegro, as there are no FRY structures that have the legitimacy of Montenegro. So what can we do? We are interested in the process, yet we cannot ACCEPT AND LEGITIMIZE something that does not exist AS COMMON FEDERAL INSTITUTION. Therefore, we believe that the only possible way is, while the international community is guided with FRY legitimacy, we internally agree, THAT FRY is Serbia and Montenegro or Montenegro and Serbia, nothing in between or above them, because above them there is no legitimacy of Montenegro. Then we can negotiate with them on the parity principle and equal representation.
The Prime Minister of Serbia, Mr Djindjic, has stated: "We are negotiating for Serbia to achieve EU membership by 2004 or in 10 years." Do you encourage such a strategy of separate negotiations?
Absolutely. That is the only possible way. We have a totally different monetary policy, we have our own Central Bank, our own foreign trade policy, our own customs. - we do not have anything in common. Therefore, we have to negotiate ourselves, and we have been leading our own reform programs with our own priorities for three years. In contrast, Serbia has only started these reforms recently, with their own priorities.
Our trade policy is based on the structure of Montenegro, which is totally different from Serbia. Our economy is based on the service sector because of tourism and transportation, for example. Serbia has industry that they need to protect for the next few years. We do not have the processing industry to protect. So we have lowered the duties to the minimum level and we have adjusted them to the World Trade Organization and Europe, at an average of 3% duty. By comparison, in Serbia the average duty is at 13% or 14%, because they need protection.
Having said this, we cannot harmonize both our systems - we are not going back and they cannot achieve what we already have, because they need a grace period.
Is the size of Montenegro helping it to be more flexible?
Both the size and the structure of the economy helps Montenegro to be more flexible. Serbia does not have coastal tourism, and as a result their servicing sector is not as important. They have huge industry and agriculture that they need to protect, with processing industry, machinery and electro-industry as well, so they really need protection. Here in Montenegro we have an important aluminum industry, but that is a commodity which needs no protection.
When we are approaching the time to discuss future relations with them, as two independent states, we will have to see, in the area of free trade, how to harmonize the custom issues , given the structural and size differences we have.
How are you promoting Montenegro as an off-shore free trade zone?
That is one of our main directions in the development of our economy. Number one priority is tourism, then maritime transport and the general transiting sector as a crossroad of communications going to the north and east. We are also developing certain sectors of the Mediterranean type like agriculture, with a focus on livestock, fruits, vegetables and vineyards. The small and medium sized industry is also a promising area.
With regard to the steel and aluminum industry, that is not a priority and is intended for potential strategic partners that might be interested in joint ventures or partnerships. They must satisfy very high European standards with regard to the environment, because, by our constitution, we are an ecological state, so we have to protect our natural and cultural sites.
You have also been very active in setting up international trade and diplomatic reperesentatives abroad, in Washington, Brussels…
Yes, although we do not expect to have a very large network since we are a small republic with a limited capacity of finance. We want to set up a network that will go along with our priorities, with approximately 20 missions in neighbouring countries and in big centers. We are also establishing agreements with other countries, together with Serbia, if they will agree on the association of two independent states. They may represent our interests elsewhere, where we would not be able to be represented independently.
How will that be received by the international community?
We know that we are not an independent, internationally recognized state yet. Our missions cannot have a diplomatic character, full privileges and diplomatic immunity. Therefore, we accept the status of representative offices, with non-diplomatic status, even though these are practically working as diplomatic missions abroad. We understand other countries that cannot extend privileges of such missions until we have full international recognition.
Now that the political situation has changed in Yugoslavia and Milosevic is no longer in power, the United States and EU are encouraging Montenegro and Serbia to reconcile their differences in order to avoid another constitutional battle. They say that a referendum could tear the country apart again. What would you respond to that?
We understand that these are their preferences. At the end of the day it is our own issue. It is up to our people to determine what is the best for our life, future and relations with neighbours, including Serbia.
| Traditionally the international community prefers the status quo, especially in a region with so many problems and bad experiences. We can understand their position, but on the other hand, it is the sovereign right of our people to decide. When we say we do not have the option they are recommending, it is because we are deeply convinced that the former structure, former framework is no longer relevant. We cannot FIX replace the glass jar that has been broken. It is useless and it is totally inappropriate to try to restore what Milosevic created to satisfy the aim of his regime. The past nine years have failed in all aspects - even in practice it is impossible to harmonize these two extremes, with a lage country on one side and a small country in the region, and to achieve equal states, behaving like equals and providing an equal position of their citizens... To try to impose such a scheme would not encourage national harmony. On the contrary, it would create the feeling among the MAJORITY minority population that they are deprived of equal status in the region of new countries from former Yugoslavia. This could even create elements of instability and mistrust, which is absolutely against the goals of peaceful and mutual relations in the region.
The only way to encourage stability and healthy relations is to allow the process be completed, so that we can build a new architecture of individual countries who are independent. By developing our mutual relations, we can remove the walls which this war has created, start building new trust and new bridges of relations and co-operation.
How are you promoting this message within the international community to let the world know of the current realities in Montenegro?
The past decade demonstrated that a better understanding of the situation in the Balkans by the international community would have prevented many problems. For instance, if internal dialogue had been encouraged, respecting each individual situation, perhaps the international community could have helped reach an arrangement to reconstruct the former common state. Unfortunately, Europe was faced with the sudden destruction of the former Soviet Union, the unification of Germany and many other issues which meant that they acted late and inadequately.
Unfortunately, the international community has not learned its lesson, and today they contnue to devise old recipes to maintain existing structures. This has served to ignore specific situations, and to forget about a friend that has been a reliable partner of the European Union for many years.
At the end of the day, we are not going to accept anything imposed on us from abroad. Of course, we are interested in becoming a member of the European Union, but not at all costs. First of all, we are interested in our own house, to be the master of our own destiny, to be an equal member of the international community and one day to become a member of the European Union. Our image of the European Union is that it could become comfortable place for all of us, for small as well as large countries.
How important is the Stability Pact for Montenegro?
After a decade of nightmares, it is good to see that Europe has come up with a scheme, not just with a fire brigade to extinguish the flames, but with something wider and long-term which will support the democratization and restructuring of the countries in the region, as well as to rehabilitation of the economy, reconstruction and development. They have been acting in a harmonized way to encourage regional cooperation, but it is really leading to symbolic results instead of substantive transformations. Even the resources they have dedicated at the founding conference was more a combination of existing programs with new titles, like the fund for Quick Start package, for example.
After changes in Belgrade, Europe has concentrated on Serbia and the Stability Pact elsewhere is loosing its dynamism. Yet Europe has to reflect diversity, and we think that Europe should be ready to respect diversities to a greater extent, irrespective of economic levels and standards.
As Minister of Foreign Affairs for the Government of Montenegro, what is your greatest success?
Being such a small country, and having survived an outbrake of the fascist policy in Europe during the second World War, we managed to impress Europe and the international community to recognize our process and then to support the option of Montenegro, though only a limited support was given. First, support was given for humanitarian needs, since Montenegro was a safe haven for so many refugees coming from Croatia, Bosnia and Kosovo. It was essential for humanitarian needs. However, we have always been left alone with risks of surviving, of maintaining our safety, and avoiding war within Montenegro.
Europe did not recognize that the Former Republic of Yugoslavia, which was Milosevic's product, does not exist as a single state, but as two states. They are still unable to recognize and accept that reality, insisting that we should eventually accept the product of a disastrous federal policy.
Now that Kostunica is President of FRY, some people beleive that it is actually the best time to influence changes in a democratic manner. Do you agree?
Yes. Now, is the best chance to have democratic changes because the power in Belgrade is no longer ready to use its power structures to destabilize Montenegro. A democratic Serbia offers us the opportunity to discuss our future together.
We need to repair our relations and bring them to a new, solid basis in order to portray a positive example. This includes building a mutual coexistence, recognizing our differences and creating a new basis for relations.
Why you are fighting this diplomatic battle to free Montenegro?
The biggest part of my career took place in former Yugoslavia, working for the idea of Yugoslavia and, sentimentally, I am very much related to the former state. All of us lived in a state of equal opportunities, equal positions - in Slovenia, Macedonia, Bosnia and Herzegivina, Croatia, Serbia and Montenegro. But that is now history and we should be able to continue living in this area in different administrative structures and state organizations but with a challenge to overcome the barriers, to respect each other, to provide the people even more opportunities for movement, for prosperity, for integration into wider European structures, with a readiness to accept each other.
This is a chance to proclaim: "Each of us is the master of our own fate". If we would cooperate we could help each other, we could have the common interest in benefiting from sharing, creating markets, harmonizing infrastructures, and as a result we could be better prepared for wider European integration.
What would be your final message to the readers of Forbes magazine?
I would like to welcome business people here and to visit Montenegro. This is a country of unspoiled resources, linked to Europe and the Mediterranean, with unique beauties and an undisturbed nature. Investment opportunities are numerous, and we are prepared to offer the best terms, the best attractions when investing into the tourism sector, energy, transportation, or new technologies. Moreover, Montenegro has a much higher level of young, highly qualified and well-educated people than the average country in this region. Combined with our natural resources, the duty free zone for trade, industry, processing and banking, we belive that Montenegro can represent investment opportunities for the whole region.
Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions. |
V.I.P. INTERVIEWS 
