NYTimes: Montenegro leaving Yugoslav Federation?

Macdonald Stainsby mstainsby at SPAMhotmail.com
Mon Oct 18 04:01:05 MDT 1999

New York Times

October 18, 1999

Montenegrins See Split With Serbia


ETINJE, Montenegro -- With its economy spinning toward disaster, tiny
Montenegro is close to taking one more formal step toward independence from
Slobodan Milosevic's Yugoslavia: the establishment of its own currency.

In an interview in this ancient capital, its democratic-minded President,
Milo Djukanovic, a former protégé of Milosevic, said that Montenegro would
create a second currency tied to the German mark within days if Belgrade
formally devalued the Yugoslav dinar. In the last month alone, the dinar has
lost at least 15 percent of its value against the German mark on the black

For two years now, Djukanovic has been moving toward separating Montenegro,
famous for its mountain monasteries and Adriatic coastal resorts, from the
authoritarian Serbia of Milosevic. Montenegro will become an independent
state, he said, if Serbian officials "adhere to their retrograde path of

For now, Djukanovic is apparently as reluctant as Milosevic to bring matters
to a confrontation. While his officials privately exude assurance that
Montenegro will become independent, he talks publicly of "democratization
and decentralization," not independence or secession.

To that end, Montenegro in August offered the Yugoslav Government
negotiations on a more equal relationship within Yugoslavia as a
commonwealth, with Montenegro maintaining its own army and currency. After
stalling more than two months, Milosevic's governing party agreed to talks
with Djukanovic's party -- rather less than the government-to-government
talks Montenegro seeks.

Senior Montenegrin officials say privately that Milosevic cannot delay
forever and that they expect a referendum on independence by the end of

Nervous senior Western diplomats and officials worry that this is a lull
before a storm and that Milosevic may provoke civil strife inside Montenegro
or even use his army to crush any move toward independence before a
referendum, creating another crisis to divert the Serbian population.

Strife is possible even without Milosevic's manipulations.

Despite the outward confidence of the Djukanovic Government, there is
significant support inside Montenegro, a land of just 650,000 people, for
maintaining relations with Serbia and for Milosevic himself. Djukanovic only
narrowly won the presidency in 1997 over his former best friend, Momir
Bulatovic, who remains a staunch Milosevic ally.

Djukanovic's party and its allies triumphed in parliamentary elections in
1998, but Milosevic continues to give Bulatovic's defeated Socialist
People's Party Montenegro's premiership in the federal Government and seats
in the federal Parliament.

Polls indicate that at least 40 percent of Montenegro's population is
against breaking ties with Serbia, with about the same percentage favoring
independence. A major Djukanovic campaign for a yes vote would probably
produce a majority, but as Djukanovic himself said, "Who could be happy with
40 percent against?"

Much of the pro-Serbian, pro-Milosevic support is concentrated in the north
of the republic, leading some officials here to worry that Milosevic might
try to engineer a local rebellion leading to partition.

Some Montenegrin officials suggest that Milosevic might actually prefer a
final breakup of Yugoslavia because that would allow him to draw up a new
constitution permitting him to run again for office. His current term as
Yugoslav President ends in mid-2001 and cannot be extended.

At the moment, following Milosevic's pattern, Djukanovic has strong control
over the state media and has built up a reasonably well-armed police force
of some 12,000 men, roughly matching the size of the Yugoslav army
garrisoned in Montenegro.

During the NATO bombing war this spring, Montenegro was spared some of the
destruction, but Yugoslav army and naval installations were hit hard, and
there were tensions between the army and the police.

Montenegrin officials say they have no intention of causing a war or a
crisis, but privately they are committed to an independent state, which
would complete the breakup of Tito's Yugoslavia.

"We know how to listen," said Dragisa Burzan, the Deputy Prime Minister. "We
can be careful and cautious. But we are in a difficult interregnum with no
protections." He predicted independence within a year.

The Foreign Minister, Branko Perovic, said, "We do not want to stir things
up, but we want to set things right." He said that all proposals have
deadlines and that he did not expect negotiations with the Government in
Belgrade and any independence referendum to go much past next April.

While the current stalemate may suit both Milosevic and Djukanovic for now,
no one regards the situation as stable.

The Clinton Administration is opposed to Montenegrin independence. This
month, the State Department spokesman, James P. Rubin, praised local leaders
for "a measured and rational approach to political and economic reform"
within Yugoslavia.

While Montenegro has some way to go before becoming a real, open democratic
polity, the changes here are already having an impact in Serbia, and
opposition politicians on the run from Belgrade find a welcome here.

Clinton Administration officials say they want "predictability," not any new
crisis that would provoke Milosevic into military action. NATO's promise
during the war over Kosovo to defend Montenegro has not been renewed.

Perovic, the Montenegro Foreign Minister, said he understood the American
position against independence, but noted, "No one has taken away our right
to self-determination."

Talk of independence aside, the root of Montenegro's troubles is its
economy, which is just 5 percent of Yugoslavia's war- and
sanctions-shattered economy. The Kosovo war further reduced Montenegro's
tourist trade, which has come to consist largely of Serbs -- who have less
money to spend than Western Europeans -- and investment is tiny.
Unemployment is nearly 80 percent, said an independent economist, Nebojsa

But the formal economy is propped up by corruption, sanctions-busting and

It is a popular spot for smuggling cigarettes to Italy, three hours across
the Adriatic in fast "cigarette boats." The Mafia is deeply embedded in the
trade, according to local legend and reports in the Italian media.

Officials said smuggling totals no more than $40 million or so a year, but
that is an important source of income for this tiny place and helps cover
the budget deficit.

Montenegro's size and close family and clan ties create other problems of
crony capitalism. One large aluminum factory, the Podgorica Aluminum
Kombinat, represents about 50 percent of the gross national product. A Swiss
company now leases it from a local holding company called Vektra, which
diplomats believe is a front for the governing elite. The United States
wants the contract broken, and Montenegro officials promise a better
privatization process to come.

But as a part of Yugoslavia and under international sanctions, Montenegro is
still denied access to institutions like the World Bank and International
Monetary Fund, which could provide loans, advice and oversight. The West is
reconsidering that ban, as it has lifted other bans on air travel and fuel
supplies to Montenegro, but not Serbia.

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