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Montenegro in transition, waiting for law and order

Only "New Capitalists" New

The whole philosophy of the privatization process is based on the idea that "if you know someone who can [illegally] arrange that for you, you don't need money to buy a company - you'll get it for free"

by Nebojsa MEDOJEVIC

Reporter, Banja Luka, Srpska, B-H, August 22, 2001

After more than ten years of experience of post-communist transition of some thirty countries in the region, some things have become generally accepted as unwritten rules. Thus, every reformist prime minister should know that at least three important preconditions must be provided for an efficient transition of the economy and society as a whole:

First, the political will of the ruling oligarchy and the clear mandate of the government, second, a social consensus and finally a clear legal framework.

Even a superficial look at the state of the transition in Montenegro today indicates that none of the mentioned preconditions has been fulfilled, but also that it is uncertain whether they will even be fulfilled. Namely, the ruling DPS with its coalition partners SDP and the Liberal Alliance of Montenegro (LSCG) still hasn't clearly and comprehensively presented any reform strategy, a program or any document that could with a degree of confidence be identified as a clear declared political will that in Montenegro finally something will start and something will concretely be done on the dismantling of this sick system of uncontrolled government and uncontrolled and reckless abuse of that sated government by a narrow circle of powerful individuals concentrated around the most important instruments of power. The current situation, as far as the providing of necessary political will for the reforms and transition in Montenegro is concerned, is made even more hopeless by the fact that even this anti-reform and corrupt government has no alternative in the opposition. Namely, the opposition in Montenegro consists of predominantly anti-reform and anti-democratic, and even perhaps anti-modern and anti-European political forces whose political ideal is exactly to replace the current authorities at the top of the pyramid of this uncontrolled and undemocratic administration. In the past both the Socialist People's Party (SNP) and the People's Party (NS) were for several years in power and those periods did not yield any results as far as implementation of reforms is concerned. Besides, scandals that are shaking up the Montenegrin public are related to abuses in KAP [Aluminum Company], Institute "Simo Milosevic", the brewery "Trebjesa", and Koding are the best illustration of the strength of the links between the so-called government and the so-called opposition as far as the personal material benefit stemming from abuse of status in the political establishment is concerned.

Referendum: Lacking any ideas and vision that they could offer to the exhausted, impoverished and unjustly plundered population, Montenegrin politicians have opted for interminable empty talk in the guise of interchanging periods of artificially provoked tension and some idiotic negotiations and trades, which they later proclaim for historical agreements preventing an outbreak of disturbances in Montenegro. Of course, after every bout of such artificially provoked clashes and agreements, the population is increasingly impoverished, while they are increasingly wealthy and reckless. Consequently, clear and final solutions, such as a referendum, are not in their interest. Because, when the farce is over, regardless of whether Montenegro gains independence or not, then they will have to turn towards the resolution of burning problems affecting Montenegrin population and the state, such as unemployment, high prices, empty state treasury, organized crime and corrupt state administration, reforms in education, health care, the state pension fund...

Namely, after ten years of postponement of essential reforms in Montenegro we are now on the best path to carry out a perverse transition from an undemocratic and totalitarian society, where the source of lack of freedom was an ideology, to another, also undemocratic and totalitarian, where the source of lack of freedom will be the uncontrolled political and economic power of this oligarchy or, more specifically, the "new capitalists".

Code of ethics: The authorities in Montenegro have for the last ten years skillfully and deliberately destroyed all those positive accomplishments of the old system, such as respect for law and institutions of the system and traditional moral code of conduct. On the other hand they jealously preserved everything that in the context of reform is negative or very harmful heritage from the Communist period, such as strong influence of politics and authorities on the economy, selection of state officials based on their loyalty, rather on their capabilities, and the control of the media.

This combination of the abolishment of the rules of the game and moral codes of conduct and uncontrolled handling of economic resources, created an ideal atmosphere for the unprecedented reallocation of the national wealth that is now, after ten years, under exclusive control of the members of this new class, or the clan of the "new capitalists".

Thus, by the way, the whole philosophy of the privatization process is based on the idea that "if you know someone who can [illegally] arrange that for you, you don't need money to buy a company - you'll get it for free".

Unfortunately, those who believe that the capitalism being created today in Montenegro will lead to a market economy with free market that will benefit everyone in the society (as happened in the US early in this century) are making a terrible mistake. Namely, at the time the US already had a strongly developed middle class with work ethics and government that with due attention followed and at every step sanctioned the activities of these "players".

Corruption: Besides damage to the economy, which is enormous, this political elite, which for the last ten years has in one form or another ruled Montenegro, bears the responsibility for the destruction of all positive ethical values of the society and creation of another ethical system in which the rights of powerful and wealthy individuals, rather than laws, are of paramount importance. That is why I believe that Montenegro, besides financial assistance and investments from abroad, which are essential, now more than ever needs an internal cleansing and introduction of order and law in the way that is in everything in accordance with the modern European environment.

The first step on that road is the strict separation between the political power and business and the flow of the economy, with the goal of preventing corruption among the highest-ranking politicians, where its effect is the worst for the people and the state. It is necessary to move the power and strength of the authorities from the government to the laws and institutions that control the implementation of those laws.

The existing system of management of large state-owned companies must be replaced by a modern managerial relationship, in which managers will be highly motivated to achieve good business results and the only individuals responsible for the bad business results. The practice of low salaries and lack of responsibility in which directors of these companies swim like fishes in the sea, leaving every year behind themselves huge losses in state-owned companies run by them and on the other hand huge personal profits in friendly privately owned companies is unacceptable. On the other hand, cruel rules of competition must rule the market, and those companies that are not able to make profit must be immediately shut down.

International standards, for example, recognize as a crime the practice that members of the government or their relatives have private companies that do business with the government or any state-owned companies or the situation in which government officials arrange investments in the construction of apartments and commercial space worth tens of millions of dollars without a public tender and in secret direct negotiations.

Experience of the governments in Latin America from the fifties and sixties, as well as experience of numerous unsuccessful transitions (Russia, Romania, Ukraine, Belarus, Croatia, Bulgaria, and others) mercilessly indicate that societies based on corruption and legal and institutional chaos, do not provide the necessary environment for a long-term growth of the economy. On the other hand, similar political and economic systems are very unstable and have tendency to very dangerous political and even wider clashes and conflicts.


Translated on November 1, 2001
SRPSKA