by Milorad VESIC
"Such decisions are never based solely on rational reasons. There are always other, less rational moments that are equally important for human identity. These are usually historical, cultural, national, ideological, religious and other factors. The only important factor in similar situations is that there is a critical majority and political will to implement the decision. Both the political elites and the citizens only later face and deal with the problems brought by the new situation. The new situation, of course, by definition does not have to be better or worse then the one left behind," believes Srdjan Darmanovic, the director of the Podgorica Center for Democracy and Human Rights.
No regrets: "It is difficult to say to what extent the citizens are aware of the consequences. A very open discussion is necessary for something like that and the interests of all groups should be represented in it. So far the media, and they are rather closed in Montenegro, are dominated by the already seen mold. There are divisions to theirs and ours, and ours have, of course, always through history been victims of theirs; how long are we going to tolerate that; an end must be put on that; history is written these days... It would make sense if the economists presented all the consequences of the separation, if some lawyers explained to the citizens of Montenegro what sorts of problems their relatives currently living in Serbia would have, so that those citizens can discuss that in the media, and to have a sober and rational discussion. I do not see such a discussion, or it is at least overshadowed by pseudo-historical discussions, which we have already had way too many in the past and which simply make us tired," Dr. Srbobran Brankovic, the director of the Belgrade public opinion agency Medium, says.
However, there is no similar discussion in Serbia, either, nor has anyone of the representatives of the new Serbian authorities explained what is the economic interest of the citizens of Serbia to insist on the common state and in practice finance two administrations, the federal and the state administration, which is the case at the moment.
From own pocket: The Montenegrin authorities claim that their concept of the redefinition of the relations implies that in the daily lives of the citizens nothing would change, that the flow of goods, money, and people will remain free. On the other hand, the Serbian side increasingly frequently mentions that if the separation does take place, the future alliance of the two states would not necessarily follow. In that case, it is unlikely that that would not be reflected in the living standard of the citizens.
Postal, telephone, land, rail, and air transport between two sovereign countries, Montenegro and Serbia, would become international traffic, which would increase the price of services and, having in mind numerous families living in both republics, would significantly affect their expenses. The transfer of fuel and energy would become more expensive, as well as the tuition, because students from the other states would be treated as foreigners. Property taxes for the citizens of the other state would also increase. Or would they? So far neither side has taken a stand on these issues.
Dr. Aleksandar Gracanac, the advisor for the economic cooperation with the European Union countries in the Yugoslav Chamber of Commerce, says that these states are very interested in this market, but only under the condition that it remains united. If that does not happen, Serbia would, he believes, have a slight advantage, above all because it represents a market of nine million consumers, which makes is much more interesting than a market of half a million of consumers.
Black and gray: "Besides, Serbia has good potential in certain branches of economy, such as agricultural-food complex, a part of the metal-production complex, wood, textile and a part of the chemical industry. Such infrastructure does not exist in Montenegro. Montenegro covers about 60 percent of its needs with goods imported from Serbia. Montenegrins were forced to import the remaining 40 percent from other countries. However, the basic problem of Montenegro is that it has almost no production and that about a half of GNP is created in the gray economy," believes Gracanac. However, the separation would, according to him, also affect the living standard of the citizens of Serbia, because the trade with Montenegro would decrease, and that is one of the few markets where Serbian companies can successfully sell their goods.
Montenegrin economist and a member of G17 Nebojsa Medojevic says that the economic price of the Montenegrin independence and the economic relations of two sovereign and internationally recognized states will depend on numerous factors, and primarily on whether that separation will be amicable, peaceful and civilized, or based on a typical Balkan model and followed with blackmail, blockades, obstruction, arguments and attempts to harm the neighbor.
"During the last ten years in this region we had both types of examples. Serbia separated from Slovenia, Bosnia-Hercegovina and Croatia in more or less horrendous war operations which were preceded by economic blockades and boycotts, confiscation of real estate and property, unsettled financial relations and cutting off of every official economic and political cooperation. Contrary to those examples, Serbia separated in an unexpectedly cultural and civilized manner from Macedonia and even increased economic and political cooperation with it since 1992. Many bilateral agreements which eased business between these two states were signed. Thus customs for certain types of goods from Macedonia have been abolished and there is also a famous example in which a Serbian company, connected with Dragan Tomic, bought the majority stake in the Skopje ironworks. All the time since the independence of Macedonia, and especially during the UN sanctions, the business with Macedonia intensified and no one was bothered by either the independence or the Macedonian Orthodox church, nor the position of Serbs in Macedonia," says Medojevic.
Bad relations between the two states have affected several areas of Montenegrin economy. "As a result of the rigorous economic embargo, the tobacco industry of Montenegro recorded a 56% drop in its production, and the metal industry recorded a 13.6% drop. However, in general the level of industrial production has remained on the relatively identical level as before the introduction of the embargo. It is true that Montenegro was forced to pay more for certain food products, then when it used to buy them in Serbia, but low prices of these products in Serbia were the result of administrative setting of prices, rather than of higher productivity, so that now, when Serbia is liberalizing prices, it is questionable whether they will be lower then the prices abroad," says Medojevic.
Environment: Dr. Srbobran Brankovic believes that the citizens of both republics have more interests to stay in a common state. Montenegrins because of already existing economic relations (which would in separate states definitely be more difficult), and the dependence of the vital branch of Montenegrin economy (tourism) on Serbia. Also, those Montenegrin citizens who live in Serbia, unless they change their citizenship, will have many personal problems.
"Besides, Montenegro is not located in exactly peaceful surroundings, it has an undefined border with Croatia, and Albania for a neighbor. In Albania strong political forces advocate the unification of all territories inhabited by Albanians, and such territories exist also in Montenegro. Therefore, Montenegro must have a relatively strong military and extensive and well organized diplomatic service. Can 600,000 people finance a strong army (including a navy) and diplomacy?", wonders Brankovic.
"As far as the citizens of Serbia are concerned, a common state is also in their interest. It is the vital interest of Serbia to preserve FR Yugoslavia, because that is the only framework in which it is possible to maintain any sort of connection with Kosovo and Serbs who live there. In case of Serbia, historical and psychological reasons are also very strong. Many Serbian citizens to a large extent remain devoted to the idea that as many Montenegrins and Serbs as possible should remain in a single state. There are also very concrete reasons related to the sea access, as well as already mentioned problems of Serbian citizens hailing from Montenegro," he explains.
Srdjan Darmanovic believes that the survival of a common state would imply for Montenegro the continuation of the struggle for constitutional equality with a seventeen times larger partner which, as he says, is very difficult, if at all possible. "On the other hand, the independence, of course, is not a magic wand for the solution of all problems of Montenegro. All important problems of post-Communist transition will remain, or will become even worse after the declaration of independence. Systemic, economic and political reforms, as well as the question of the new constitution of Montenegro will come to the forefront and these issues are always difficult and sensitive. However, the independence of Montenegro is probably a logical consequence of the break up of the former Yugoslavia. Montenegro was one of six constituent and equal republics and it was only a matter of time when in the republic the critical mass that wants to get not only what others had already obtained but also what it had had centuries before others would be created. That moment has obviously come. There is a critical and decisive will of the majority of the political elite, and the public opinion polls indicate that there is also a majority of citizens that would vote for the independence."
Oasis of donations: Based on what can be seen in Podgorica and Cetinje, it could be concluded that Darmanovic's conclusion about the mood of the citizens of Montenegro is correct. However, it is frequently ignored that this had been created in the situation in which Montenegro was proclaimed for an "oasis of democracy" because of its opposition to Milosevic's regime and in which, mostly due to that fact, it received significant donations from abroad. This, in addition to almost legalized gray economy, allowed the Montenegrin authorities to improve the living standard in the republic.
"Montenegro in the last three years had an unprecedented special status with the USA and the EU. Namely because of momentary pragmatic needs of the international community in the showdown with Milosevic, they averted their gaze from obvious anti-reform and anti-democratic activities of the Montenegrin government, tolerated smuggling and corruption and crimes, and on the other hand supplied direct assistance for the state budget, covering the deficit in public funds and budget in the form of direct financial assistance. Now when Milosevic is politically gone, the Montenegrin government will have to get used to totally new conditions in order to obtain funds from abroad, both credits and private investment. There will be no more unconditional assistance, that is certain," claims Medojevic.
Assistance per head: It is difficult to asses whether Montenegrins are aware that, since Milosevic is gone, donations could dry up, and that the introduction of western standards also implies uprooting of the gray economy.
"Results of the poll conducted by UN OCHA for Montenegro indicate that 40 percent of Montenegrin families earn extra income in the gray or black market, which is a striking indicator and shows that the gray and black economy is becoming a dominant economic activity in Montenegro. However, if the Montenegrin authorities want to be a part of modern and developed Europe, they will have to give up this type of business. It is another question whether the same authorities that organized smuggling and made a fortune through monopolistic control of those smuggling channels can change overnight and fight against that. I believe that they cannot and that because of that reforms in Montenegro will have to await a change of the political will of the citizens," assesses Medojevic.
Asked what he would do if smuggling is banned in Montenegro, a resident of Cetinje laconically replied: "Well, perhaps, factories will again work." A slightly different thesis was repeated by Montenegrin Prime Minister Filip Vujanovic in his last week's debate with the future Prime Minister of Serbia, Zoran Djindjic, on the TV Politika. To Djindjic's conclusion that after Israel, Montenegro had the biggest foreign assistance per capita in the world, and that that would not last forever, Vujanovic replied that that was true, but that because of Milosevic Montenegro used to be under a blockade and could not use its attractive resources.
That, however, will not be that simple, having in mind that, according to Medojevic, today in Montenegro only somewhat more than 15 percent of work-capable population is actually employed and receives a salary, and that this state during the last decade in a common state with a large Serbian market lost 100,000 jobs and that for the creation of the same number of jobs it will need between $1.5 billion and $2 billion. "It is absolutely clear that Montenegro does not have those funds today and that it has to seek them abroad, either in the form of loans or private investment. Montenegro must do its homework for both, and provide macro economic and political stability and align its legal system with the EU standards."
The Federal budget is therefore only paying for the Yugoslav Army, federal institutions, and pensions and social security. On the Montenegrin territory the federal budget pays for the part of the Yugoslav Army stationed in Montenegro as well as the pensions of the members of the Yugoslav Army and the federal Ministry of Internal Affairs. Due to the lack of financial traffic and the refusal of Montenegro to recognize the federal institutions, there are no activities that would in normal circumstances finance for example investments in the economy. Montenegro does not pay the collected customs and taxes into the Federal budget, which is a violation of the FRY constitution.
Nebojsa Medojevic, however, believes that these two economies are not dependent on each other to any larger extent than the economies of any of the others former Yugoslav republics. "Between 1970 and 1988 the deliveries from Montenegro to Serbia made up 35 percent of total deliveries, while Serbia purchased in the same period between 33 and 35 percent of goods from Serbia. On the other hand, Serbia sent about 10 percent of its deliveries to Montenegro, and purchased from there all together 5 percent of goods."
"For the sake of comparison of inter-republican dependencies in the former Yugoslavia, I would like to mention that, for example, Slovenia purchased more than 40 percent of its imports in Serbia, and sent 37 of its exports to Serbia. Therefore, Slovenia depended much more on Serbia than Montenegro and, as you can see, ten years after independence, they haven't starved, as some fired up Serb nationalists claimed in the late eighties," says Medojevic and reminds that in 1998 Montenegro obtained about 77 percent of goods from Serbia and had a trade deficit amounting to $180 million.
"As far as the Montenegrin authorities are concerned I do not see that there is a significant political interest of individuals or groups that would pull in one of another direction. Namely, Djukanovic and his DPS could stay in power even in a common state, as well as they will in an independent state. In the former case they could find new partners in the republic and the DOS on the federal level, and in the latter they would again most likely remain a core of some new ruling coalition. I think that something else is at work. The independence option has with time become a majority option in Montenegro, as well as in the DPS itself. Simply that is the spirit of the times and in Montenegro, I believe that process is unstoppable," says Srdjan Darmanovic.
"As far as the DOS is concerned I must admit that I do not understand their attitude. Instead of expressing a natural view, as the biggest state we can deal with any arrangement, including the independence of Serbia, the political leadership of Serbia is slowly sliding towards a political confrontation with Montenegro regarding the issue of its independence. That is now justified by the issue of Kosovo, but any even remotely serious individual knows that Montenegro will not be able to resolve that question nor should, this is the bottom line, remain its hostage," believes Darmanovic.
In Serbia, on the other hand, many wonder, if the authorities in Montenegro truly want to live together, why do they insist on separating. The Serbian political elite, it seems, so far has a realistic assessment of the Serbian interests," assesses Srbobran Brankovic.
"Very quickly it will be possible to pose the issue of the common state in the following form: why would we rearrange our relations in such a way that a vital interest of Serbia (Kosovo) is excluded from the common project, while only vital interests of Montenegro (defense, diplomacy) remain? Tomorrow, someone could say: 'Fine, Montenegrin brothers, is we want to live separately, we shall reorient our trade to the port in Salonika [Greece] (incomparably better infrastructure and setting), and our tourists to Greece (it is insolent to even compare the quality of Greek and Montenegrin tourist industry)'."