As Minister of Tourism, what are you proposing in order to bring tourism back to Montenegro?
In 1990, we had 11 million overnights in Montenegro and 35% of the total number of tourists came from abroad. Yet we had three wars in the region, the embargo imposed on the Federal Republic of Yugoslavia, the hyperinflation in Montenegro and now, a new crisis in Macedonia. All these objective reasons have contributed to this situation.
There are also some other reasons that are of another nature: we used to focus on mass tourism in Montenegro in the 60s, 70s and 90s. We were known as a cheap, low-budget destination in the Mediterranean. It is the image not only of Montenegro, but also of the whole Adriatic coast.
However, the situation has drastically changed. The time of violence, at least in this area here is over. We cannot influence the conflict in Macedonia, even Kosovo is very close to Montenegro and there are so many new destinations all over the world and people look at the map and see that there is only one centimeter between Kosovo and Montenegro and they decide to go to another place. So, this is an issue we have to be very careful with and which we cannot predict. The security concern is something very important, which we must take into consideration when discussing foreign investments, country risk, etc. I can assure you that, according to the reports of international experts, the country risk is decreasing every day, which is very good information for us.
Our plan is already completed. We have developed the strategy for development of Montenegrin tourism for the next 20 years, and our experts as well as the international community experts were involved in the preparatory work for this strategy. It will be adopted very soon as an official document of the Government. The main goals are the increase of living standard in Montenegro and the increase of employment. We will no longer just declare that tourism is the most important strategic and economic field of Montenegro but it will really become the strategic goal of Montenegro and this sector will really be developed.
What we plan is to have 100 000 beds in Montenegro. Now we have 26 000 beds in hotel capacities. We will decrease all other kinds of accommodation and put under control the private apartments, houses, which do not benefit to the development of tourism. The plan is 100.000 beds in hotel capacities and meeting upscale tourism.
In order to achieve that we have to proceed step by step. At the end of August and the beginning of September, we will present, discuss and adopt new marketing concept for Montenegro, which will give Montenegro the image for the whole country because we are small enough to regard Montenegro as only one product.
Montenegro really has something to offer: the coast, the central part, the northern part, three areas, two different climates, three or four different religions and different cultures throughout history. This will be our approach: step by step we will increase the level of the services we are offering. Our Strategy is pointed at western and northern Europe but we have also to focus on the existing lower market, which are former Yugoslav republics and central and south-east Europeans. In five or six years, our service and the demands of lower market will be of that level that they will just fit into demands of western and northern Europe. So, at that time, we would have a very good product that could be offered to the international market.
For the time being, we have only 3 000 - 5 000 beds to offer to the tourist from western and northern Europe and that is exactly how many foreign tourists we have now in Montenegro but, we plan to increase that number gradually. According to the official statistics, there are currently 74 000 tourists but we assume that there are about 150 000 and only 10 percent are foreigners.
Our plan is to prolong the season and to change the structure of tourists. In 10 years we plan to have 50 percent and in 20 years to have at least 75 percent of foreign tourists.
All this requires important investments. How do you plan to attract foreign investors into the country?
The legal framework is very important. We have been working on it for several years and, according to my opinion, there is already attractive legal framework for foreign investments. There are different laws, which are protecting the property rights, foreign investors, we have the Foreign Investment Act in Montenegro. There are other, banking laws, which are being adjusted to the international standards. There is a Central Bank of Montenegro, our currency is DM and we will switch to Euro.
We are currently working on investment incentives. There are already some incentives for tourism, but we will improve all these incentives because we realize that we have eight-month season and we intend to prolong our season to 10 months. We also have to take into consideration our competitors and to develop our own framework.
The main tool will be privatization, which has already started. We have the institutional framework for that, there have been some tenders launched for all companies, for major stakes of all companies, and for hotels case by case sale. There have already been and would be new tenders for management contracts.
Three or four months ago, there was a conference in Igalo and more than 200 decision- makers were present in Montenegro. Many of them were from the United States. The response and the impression were very good. The goal was to invite them to see, to become aware of the opportunities Montenegro is offering and now we are waiting for the feedback. Some of them are already coming to Montenegro with concrete proposals.
Everything has to be according to the procedure. There is the institutional framework, the Privatization Council, the necessary bodies, tender procedure, financial advisors and legal advisors. The Ministry of Tourism already has and will have the very significant role in the whole process.
You mentioned competitors among the countries in the area. How can Montenegro compete with Croatia or and how can it distinguish itself from similar countries in the region?
Easily. When discussing strategies a German investment fund provided funds within the Stability Pact for South Eastern Europe. In the first sage, the intention was to prepare a Master Plan for both of the countries, Croatia and Montenegro. When we started to work, we realized that there have to be two different, and there are now two different Master Plans for development. Because, there are so many different things, which one or the other country can offer.
| Montenegro, for example, has several unique spots, which Croatia cannot offer. These are Sandy Beach, the only fjord in the Mediterranean - Boka Kotorska, the old capital Cetinje, Skadar Lake, the biggest and the closest lake to the sea in the whole world in crypto-depression, the national parks, the second deepest canyon in the world.
This is something that makes Montenegrin product very much different and we agreed, Croats, us and the experts assisting us in preparing the strategy, that we can make complementary products. We know that Dubrovnik and the area cannot live without us, their tourism cannot develop without us and our tourism cannot develop without them. We have already opened the border. There are about 50 buses with tourists from Dubrovnik crossing the border every day and taking Montenegro tour. The border is something we would definitely have to forget about in the future. We are discussing the ways of liberalizing the procedure for tourists in order to develop common product for these two regions, which is offering different sub-products or different opportunities.
It is natural that after Croatia, which has all these beautiful islands but does not have sandy beaches, people would move to Montenegro. For those people who want to become familiar with the culture of a certain country, who want to discover the country, Croatia and Bosnia are not enough. They want to travel the whole region so Montenegro is something completely different. That is definitely a competitive advantage.
As I have said, we have to proceed step by step. In the first stage, we will offer the culture tourism, adventure and discoveries. This is something that makes Montenegro special and we will use marketing tools in order to make this country something really special on the tourist map of Europe because our main goal is definitely Europe.
Since tourism is an engine for the national economy, how do you plan to improve the infrastructure, airports and roads, for example?
We are working on that. We have been analyzing all those issues because tourism is everything, tourism is the whole environment. Our task is to provide the whole environment favorable for tourism, starting with electricity. We have some problems because of the surrounding countries but, regarding electricity capacities we can say it is OK.
Telecommunications are also all right, apart from some temporary problems with mobile phone network, which will be solved very soon. The capacities are good. We have two mobile operators and Montenegrin Telecom is also in a very good shape.
The water supply is a problem for Montenegro, which is already being solved. We have already established a joint venture and more than 60 percent of this joint venture is international capital in a consortium with our company. It is Public Private Partnership, the new model, very popular for the time being. It is the project for all the municipalities in the coastal area plus for the old capital of Cetinje. According to our estimations, the water capacities will increase by 30 percent in the next year and in three years we would have 100 percent increase. Right now, we have the leakage of more than 70 percent so we have to reconstruct the existing networks and to improve the system from Skadar Lake. There is already more than DM 60 million invested in this project.
The wastewater treatment is also part of this project. Solid waste is also a problem for Montenegro and this is something we are now trying to solve. This is a huge issue since we have declared ourselves ecological state. On the other hand, you can see so many places that are not very beautiful. We also have to work on that. It is a very demanding project but we think that we can solve it very soon because it is the precondition.
The last issue, the traffic, the transport is something that is very important for us because we are the air destination for Europe. It is not as easy as it used to be to reach Montenegro by car. Now you have to cross many countries. Ten years ago it was much easier because it was only Yugoslavia. There are several problems that have to be solved. First of all, it is the infrastructure - the airports. We will focus on Podgorica and Dubrovnik airports, Tivat airport will be only of regional importance in the future. There have to be some ownership structure issues solved on the federal level, between Montenegro and Serbia, but we hope to have them solved by September.
Tour operators and charter companies are willing to fly and we are expecting more international companies signing contracts with us.
What are the most important projects for the potential foreign investors?
First of all, I would mention the tenders for six companies, which have been launched and are still valid. The deadline is in one moth. It is the sale of shares of these tourism companies. I would point out two hotels: Hotel Avala in Budva and Hotel As, which is not far from St. Stefan, and I would like to announce a tender for the management of several hotels. This is something that will give first results during the next season already or, if not in the next, then in 2003 definitely.
In general terms, how would you describe the beauties of Montenegro?
It is not easy to describe Montenegro in few words because there are so many different places. It is a mixture of different religions, there are too many contrasts, long history, three religions, two climates, sandy beaches, lakes, high mountains and all that in only
12,000 square kilometers. That is something that is definitely unique.
What would be you favorite destination in the country?
In summertime it is the Bay of Kotor (Boka Kotorska) - Kotor, Herceg Novi Tivat. You have to visit it, it is something that has long, long tradition, history and the soul of ancient times. In the wintertime it is Mountain Durmitor.
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