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In the newly founded Union of "Serbia and Montenegro" there
will be five ministries on the federal level. One of them,
the Federal Ministry for National and Ethnic Communities,
refers to the minorities and has the task to find a homogenous
legal regulation for minorities. The Federal Ministry of Economy
and Internal Trade has to arrange the integration of the two
quite different economic areas by creating a domestic market
in Serbia and Montenegro. These efforts were received with
some scepticism in Montenegro.
1. Minorities
Tolerance in the Country
Montenegro is the only one of the former Republics in which
there has not been a war for inter-ethnic reasons. From the
beginning of the war, Montenegro has sheltered refugees from
Croatia and later on from Bosnia and Hercegovina and Kosovo.
These two reasons are often used to explain the special atmosphere
of tolerance within the country. There are, indeed, de jure
minority standards in Montenegro, which can definitely be
compared with European ones. The preconditions for an adequate
implementation would therefore be given. Actually, however,
again and again problems arise when it comes to teaching in
native language, education and training, media and the representation
in public life of the minorities. Especially the ethnic Albanians
reclaim deficiencies in implementation of the minority rights.
In figures, the situation can roughly be described as follows:
15% Muslims, 9% Serbs, 7% Albanians (according to the census
in 1991), an estimated 3% Roma residing in Montenegro and
approximately around 16,000 Roma who came into the country
as refugees from Bosnia and Kosovo - all in all 5% Roma and
about 1% Croats.
Roma
Roma are not represented in the "National Council of Minorities".
In addition, the Roma are the ethnic group which suffers the
most from war, sanctions and totally insufficient economic
circumstances. In former times the Roma represented a more
or less tolerated part of the society, they had jobs and/or
could pursue their traditional trade. Due to the war and the
embargo, the situation of the Roma deteriorated drastically.
They lost their jobs, their lives are marked by poverty and
they are not established in public and social life. In addition,
the great number of refugees, the so-called "displaced persons"
among the Roma, has shifted the sensitive balance of coexistence
and acceptance into a direction in which the Roma now have
to face prejudices and reservation. Roma, local and immigrated
ones, dwell at the edge of society. Missing jobs, educational
deficiencies and incomplete medical care are the biggest problems.
During the past two years, the Roma have started to organize
themselves in order to take charge of the coordination of
their requests.
Charter of Human and
Minority Rights and Civil Liberties
The Charter of Human and Minority Rights and Civil Liberties
presents a basic component of the new Constitutional Charta
and was passed by the Parliament of the Republic of Montenegro
recently. The parliamentarian members of the Albanian political
parties voted against it. They criticized that no adequate
protection is provided for the minorities. For them the establishment
of an Ombudsman for minorities and the power of veto in questions
of substance and of decisive importance for minorities were
crucial postulations.
The efforts to solve the problem of minority rights homogenously
for both republics have led to concerns in Montenegro that
the basically better conditions for minorities in Montenegro
could be downgraded during the process of adaptation. Thus
it is feared that the status quo will deteriorate by shifting
the percentage, referring to the total level in Serbia and
Montenegro. In Montenegro, for example, there are 15% Muslims
but in the Union "Serbia and Montenegro" only 2-3%. NGOs criticize
the elaboration process for the Charta as being only little
transparent, there would be no defined status for minorities
and their rights would be unsettled. On the other hand, the
Charta is a positive attempt to solve the minority question
union-wide. So for the first time, the Roma are accepted as
minority and will also be included in the Charta. As a matter
of principle, the elaboration of the Charta offers the possibility
to present proposals for improving the implementation of minority
rights and to close the existing gaps. The ethnic Albanians
for example, have presented a catalogue of proposals. They
mainly deal with improving teaching in native language, education
and training, and an increase of the Albanian percentage in
administration and public life through positive discrimination
measures.
2. Creating a Domestic
Market
Until 1997/98, there has been a common economic area and domestic
market in Montenegro and Serbia within the Federal Republic
of Yugoslavia. As concerns foodstuffs, for example, the Montenegrin
needs were covered through imports from Serbia. After the
break with the Milosevic regime in 1997/98, a separate single
market has developed in Montenegro within almost four years.
After blocking the borders between Montenegro and Serbia in
1999 (by order of Milosevic), the necessary goods were imported
from West European countries. To enable the supply with essential
goods, tax relieves or exemptions were introduced, e.g. for
foodstuffs. Montenegro rather looks at the reintroduction
of a domestic market and a common economic system with great
scepticism.
Currency
In 1999, Montenegro introduced the German Mark, in 2002 the
Euro, while Serbia still has the Dinar as its currency. Returning
to the Dinar is completely unacceptable for Montenegro. There
was a short-term idea of introducing an own currency for Montenegro
in order to stop the Euro-run. This option, however, was rejected
and is no longer discussed. There are no prospects for an
agreement on a common currency.
Custom Duties
Montenegro has average customs tariffs of 3-4%, whereas the
average of duties in Serbia is 12%. The alignment of tariff
rates is observed by the Montenegrins with great scepticism.
An increase of the duties in Montenegro would lead to an increase
in prices and to inflation. They argue that high duties directly
damage the very foundation of a small economic system that
is import-oriented. The Montenegrins would like to align the
tariff rates on a low level, because this is also in accordance
with the developments in the EU. Serbia, however, prefers
high duties to protect its own economy, its own production.
The Center for European Policy Studies (CEPS) expects negative
effects for Montenegro in case of uniform tariff regulations.
Calculating the example of a textile tax of 25% (Serbia's
proposal to Montenegro to protect the Serbian textile industry),
this would lead to an additional annual burden of 150 Euro
on the average for each household, which is equivalent to
the approximate monthly average income. The EU designates
different compensations for successively realising the integration.
In addition, Brussels reasons that a bigger domestic market
would also bring advantages for Montenegro and positive incentives
for foreign investments. Although the Montenegrins are quite
sceptical about the integration within the State Union of
Serbia and Montenegro, it is also acknowledged that the union
brings certain stability. Montenegro is open for every harmonising
effort that presents a step towards an accordance with the
EU.
3. Economy in Montenegro
Besides the economic aspects, which are strongly connected
to the definition of the State Union and the domestic market
with Serbia, also the economic situation in Montenegro itself
was part of the agenda in the Working Group. The questions,
which were lively and controversially discussed, can be classified
as follows: problems, challenges and perspectives. The topics
unemployment, shadow economy, corruption, privatisation, and
the basic conditions for foreign direct investments were in
the centre of the discussion.
A first inventory showed that the general economic situation
of Montenegro is quite difficult. In order to evaluate the
actual overall situation, the first impression of the beautiful
surroundings of Herceg Novi is not enough, it is also important
to see behind the curtain. This would show a great contrast
between "glamour" and prevalent poverty in the backyard of
the country. There was great accordance regarding the evaluation
of the transformation process so far. Many times necessary
reforms were not started consequently but were often just
postponed. Emphasise was put on the low international competitiveness
of the Montenegrin economy. In addition, the slow set-up of
a civil society was criticised as well as the thus resulting
little influence and the missing controlling means for economical
and political decisions.
Unemployment and Shadow
Economy
The high unemployment rate was discussed as a big problem
of the Montenegrin economy. The rates range, depending on
the investigation method, between 15 and 30 percent. The difficulties
of obtaining detailed unemployment rates often result from
the fact that many people are officially employed but only
get little or no wages at all. In many cases the social insurance
is the single reason for these employments.
The difficult economical circumstances foster black economy.
The figures for the black economy show big differences as
well. Approximately 13 to 27 percent of the population are
working in the informal sector, which adds another 20-50%,
referring to the official Montenegrin economic output. According
to an investigation in the fields of trade, hotels and restaurants,
construction industry, and transports, almost 30% of the people
- i.e. 70,000 - employed there are working in the black economy.
The decline of various traditional industries during the 1990s
was given as the reason for the high unemployment rates. In
addition, also shortfalls in adapting to nowadays requirements
were hold responsible for the high unemployment rate. Textile
technicians, for example, are still being trained, even though
there has not been any textile industry in Montenegro for
the past 10 years. The high unemployment rate has also negative
effects on taking necessary steps like cutting back subsidies
and closing non-competitive companies. Therefore, the necessary
restructuring of the Montenegrin economy is encumbered and
delayed.
Corruption
Corruption has been realised as an additional serious problem.
Especially privatisation and public acquisition are considered
to be main sources of corruption in the whole region. The
results of the Anti-corruption Agency have shown positive
signs and progress in fighting corruption in the public sector.
It remains a problem, however, that only 5% of the criminal
cases can be closed successfully. It is also a hindrance that
there is still no law against money laundering. A closer interlinking/cooperation
of Montenegro with international organisations was requested
as a necessary tool for the successful abatement of corruption.
Privatisation and Foreign
Direct Investment
Great progress was made in the privatisation field. Approximately
64% of the former social enterprises has been privatised already,
mainly by distribution of Vouchers. In addition, many companies
are still in the process of privatisation, which has not been
finalised as yet. Jugopetrol was mentioned as the most recent
privatisation project, which is supposed to be sold to a Greek
company. At the same time it was indicated that in many cases
privatisation did not show the desired results and especially
private initiatives are missing. A further point of discussion
in this context was the role of foreign investors. Up to now
there is only little interest in investments in Montenegro,
therefore the question came up what has to be done to attract
foreign direct investments (FDI). The unfavourable economic
climate was ascertained as a disadvantage, especially long-winded,
bureaucratic authorisation procedures and missing legal security.
Sometimes bankruptcy proceedings last longer than eight years.
Besides a negative effect on the influx of FDI, overflowing
bureaucracy is also a permanent source of corruption.
Tourism as a Ray of Hope
Besides ecological farming and traditional branches of industry,
especially tourism was regarded as a ray of hope. According
to a study - a master plan of German experts - Montenegro
could produce roughly 1 bn USD per year in the field of tourism
in 10 to 15 years. In order to utilise this potential, the
main focus should not be put on the coastal regions alone
but rather the strong points in the fields of culture, historical
sites and natural landscapes should be demonstrated. In this
context also the competitiveness of Montenegro's tourism was
critically examined. Due to the lack of investments, Montenegro
today has a lag of 10 years compared to destinations like
Romania, Bulgaria or Croatia. An additional problem is the
fact that existing development laws, especially along the
coastline, are not observed, which will have drastic consequences
for the future attractiveness of tourist areas. Since the
whole tourism market is getting narrower, great efforts and
investments will be necessary to stand up against competition
and to utilise own potentials.
Conclusion
At the end of the discussion it was agreed that increased
marketing is necessary for the product "Montenegro". An improved
outward presentation is especially important to inform possible
investors about the reforms carried out so far as well as
about the economical and political orientation of Montenegro.
Translation: Claudia Puscher
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