Prague, 28 January 2001 (RFE/RL) -- The South Slavic Service's Radio Most (Bridge) program this week was a discussion with Dr. Steve H. Hanke, professor of Applied Economics at The Johns Hopkins University, Baltimore; and Dr. Daniel Serwer, director of The Balkans Initiative, the United States Institute of Peace. Dr. Hanke also serves as an economic adviser to Montenegrin President Milo Djukanovic. The discussion was moderated by the South Slavic Service's Branka Trivic. Branka Trivic: All is not well between Serbia and Montenegro, as we already know. We cannot solve the problem, but we could at least try to focus for a moment on that ongoing political impasse between Serbia and Montenegro over their future arrangement. President Milo Djukanovic and Montenegro's other ruling officials have demanded that the republic and Serbia be internationally recognized as separate states within a loose union. Serbian and Yugoslav federal leaders oppose that, calling for the two republics to stay together.
I would like to ask you how you understand Djukanovic's call for a separate state of Montenegro right after Milosevic's downfall? He hadn't come up with that agenda while the Serbian dictator was in power, but after his ouster. What do you make of it? Mr. Serwer how about you answering first?
Daniel Serwer: I'm not sure what to make of it. It is true that Djukanovic has been much clearer about the goal of independence since the downfall of [former Yugoslav President Slobodan] Milosevic. I think the fact is that there are reasons other than Milosevic's dictatorship in Belgrade for Montenegrins to want independence and that those reasons have gained credibility within Montenegro over the past few years and that is not easily reversible.
Trivic: Mr. Hanke, could we hear your opinion?
Steve Hanke: Well, I concur completely with Mr. Serwer's observations and I would also add that the reality is one in which Montenegro has de facto become independent in virtually all of its governmental functions and its monetary functions and its economic functions and so forth. So, I think after the fall of Milosevic this reality is kind of struck in Montenegro. And I think that Montenegrin reaction is one of wanting independence more than they ever wanted it in the past, because in reality they have more independence than they ever had in the past.
Trivic: So, what's then the difference between what you called "de facto independence" and this formalized, internationally recognized independence? Couldn't they be happy with de facto independence?
Hanke: Well, I don't think so. If I may interject an answer first. I don't think so, because formal independence would be required, for example, to have memberships in international organizations like the United Nations, the IMF, and the World Bank. So, even though they have de facto independence, they don't really have a voice in these international bodies. So, as a practical matter, when the IMF money, let's assume, starts going to Yugoslavia and the current arrangement prevails, they will never see any of that money in Podgorica, that all will be dictated, the allocation of it, by Belgrade and that's the other reality that Montenegrins realize.
Trivic: Mr. Serwer, what would you say about this issue? Isn't "de facto independence" enough? How important is this voice in international organizations?
Serwer: It is up to Montenegrins to decide how important it is. But I think Mr. Hanke puts his finger right on the issue, because when you ask Montenegrins what aspects of independence they don't already have, one of the crucial ones they point to is this question of being able to approach the IMF and the World Bank directly, which they can't do today but which they could do if they were recognized as independent. I'm a little bit more hopeful about the prospects for a negotiated or peaceful resolution of this issue than some might be. I have been reading President [Vojislav] Kostunica's statement on these issues. He actually refers to both Montenegro and Serbia as old European states internationally recognized two centuries ago. It's an interesting phrase for him to use. That seems to me half a step at least in the Montenegrin direction. The question is whether that recognition is still valid today. It seems to me that there are prospects for a negotiated solution. The intention of Montenegrins to hold elections and then the referendum seems to me to be a wise intention. The elections will give quite a clear reading on the sentiment on this issue within Montenegro. And in the meantime it's my hope that the negotiations will continue, with the hopes of being able to put a specific proposition in front of Montenegro's people.
Trivic: The latest opinion poll in Montenegro, published the other day, shows that 49.8 percent of the interviewees (1,028 of them) want independence from Yugoslavia against 39.8 percent saying no to such a project. If these figures were a referendum result, would it promise a successful start for a new state? Mr. Hanke?
Hanke: I think the answer on that is a tentative "yes" and let me give you some examples of how this might work. If you look at Estonia, for example, they voted for independence in March of 1991 and almost 78 percent voted in favor of independence, which is a larger figure than the one you have given me from this polling data in Montenegro. But the fact is, if you recall, there is a very large and powerful Russian population in Estonia and that provided a motivation for internal threats to destabilize Estonia. There were also external threats from Russia itself. Well, what happened? They became independent as the other two Baltic states, Lithuania and Latvia, which were in much the same situation, they moved towards stable money, more free market orientated economies and so forth, and the problem is settled down and gone away. All these tensions have gone into the background.
Another place that is really quite interesting and very similar to Montenegro is Singapore. In 1965 Singapore was in effect thrown out from Malaysia. It was very poor, poorer than Montenegro. They had no natural resources or anything. They had very poor race relations between the Malaysian, Chinese, and Indian populations. They had race riots and things like this going on internally, so there were big internal destabilizations. And also Indonesia was threatening to invade Singapore and take it over at the time. All that settled down too, because again they went for a stable money, a free-market economy, an open economy, a rule of law with low criminality and low corruption and there you have it. Singapore now is one of the richest places in the world, highly successful -- and that is how they started in essentially the same situation Montenegro is in. So, this instability kind of argument I don't buy, because if the policies are correct in Montenegro, there shouldn't be any problem. Even though you have large chunks of the population who might not be too keen on independence when it starts, they'll come round, if you have prosperity and people are free to do what they want to do.
Trivic: Thank you very much, Mr. Hanke. Mr. Serwer, could we hear your opinion? According to this polling there is a very narrow margin between the pro-independence block in Montenegro and the one that prefers to stay within Yugoslavia. Having in mind the circumstances in the region, if this should be the referendum vote, do you think that this state would be stable?
Serwer: I'm less optimistic than Mr. Hanke on this point. He's absolutely right of course that if a state is economically successful, wonderful things can happen in terms of curing interethnic or political instability problems. But the initiation of an independent Montenegrin state with a very small margin -- and, frankly, the margin you mentioned is not sufficient legally, I mean 49.8 percent doesn't get Montenegro independence under its own constitution -- would be problematic. But let's assume that that would be something over 40 percent and something under 55 percent. It seems to me that that represents a rather narrow margin and that is going to prove problematic for the new state. But I don't assume that these opinion polls are accurate or that they represent an outcome that would actually take place after a major campaign both in favor and against independence. I think that the margin might be considerably wider. I think it's also possible that an independence referendum would fail. But, frankly, right now what is happening in Belgrade, the failure to complete the revolution in Belgrade, to move aggressively to change the police forces, change the army, I think that goes in favor of Montenegrins voting for independence.
Trivic: European foreign ministers urged leaders of Montenegro to drop independence demands and strike a deal which would keep their republic in the Yugoslav federation. They also said any new agreement had to be consistent with regional stability. Montenegrin Foreign Minister Branko Lukovac interpreted this message as one favoring the Belgrade position. How would you interpret this EU stance? We also heard that Mr. [Philip] Reeker, State Department spokesman, said something similar. Would you be the first one to answer this question, Mr. Hanke?
Hanke: In a way this has always been what I consider to be in effect a misguided Western position on Yugoslavia. And that is an old saw: Yugoslav unity at all cost. In April of 1991 Secretary of State [James] Baker in effect gave the same speech in Belgrade. So, that has been an old policy and obviously hasn't worked in the past. I think what we will see, assuming there is a vote for independence in Montenegro, the West, whether it be Europe or the United States, will come round and support a free and independent Montenegro. So, before the fact is one thing, after the fact we will definitely see support of a free and independent Montenegro, assuming there's some kind of fair election and a referendum on the issue.
Trivic: Mr. Serwer, how do you understand this message sent by European foreign ministers and also from the State Department the other day?
Serwer: I think it's a very strong message against independence. I think Mr. Hanke is right. You can expect both the Europeans and the Americans to oppose independence before it happens and to recognize an independent Montenegro if it does happen. The problem for the Americans and the Europeans is the real one and this is something that isn't well understood in Montenegro. It is not just continuation of the old opposition to dissolution of Yugoslavia, but it's a fear of the repercussions of Montenegrin independence, especially if it is achieved unilaterally, for Kosovo and for Republika Srpska. There are a lot of legal arguments about why an independent Montenegro is not comparable to independence for Kosovo or for Republika Srpska. But none of those legal arguments really solve the problem. The fear in the West is that Montenegrin independence will lead inevitably and quickly to Kosovo independence and possibly to Republika Srpska independence or at least attempts at achieving independence and that that would be destabilizing. And that is what they are worried about. Still, it seems to me in this case Montenegrin independence can be decided by the Montenegrins themselves. They don't really need the concurrence of the international community, if they want independence enough. The problem they've got, of course, is that the international community will condition assistance on not going for independence and that kind of thing. They are going to have their arms twisted very, very hard.
Trivic: What do you gentlemen think will be the Bush administration's policy regarding this issue? Will the Bush administration be interested in this issue or in the region at all? Mr. Hanke?
Hanke: You put it in the context of the region itself and obviously they have a major interest in the region. One of their primary focal points is reducing the U.S. presence in Kosovo, getting our troops reduced in the area. So, we do have an interest in the region and Montenegro obviously factors into that. So, there will be some focus on what's going on in Montenegro as the election as well as potential referendum go forward. I don't think the Bush administration will be as unfriendly to a free and independent Montenegro as a Gore administration would have been, however.
Trivic: Mr. Serwer, what would you say? Do you agree with Mr. Hanke's opinion on this?
Serwer: I think it's difficult to predict the new administration's attitude on this issue. They're just getting organized. Certainly, if Montenegrin independence somehow requires a greater U.S. commitment, the new administration is going to have some doubts about it. But I think it's early to predict their attitude. I would think that they probably go more with continuity than with a sharp break of present policy. If only to smooth relations with the West Europeans. The Americans at this point do not want major new sources of contention within the NATO alliance.
Trivic: Montenegrin officials calling for independence argue that their republic cannot be kept hostage of Serbia's unresolved Kosovo issue. They go on to say that Montenegro doesn't have anything to do with Kosovo. How would you comment on this argument? Mr. Hanke?
Hanke: Well, I don't think the Montenegrins want to be hostage to anything. And in particular, if you look at it from the context of the past decade, Montenegro has been played with by Belgrade like a cat plays with a mouse and now the mouse has decided to roar. And in fact that's part of the international community's concern, I think. The mouse has roared and it's essentially said that it doesn't want to be played with and dictated to anymore by Belgrade. It has been intimidated for at least 10 years we know of. So, they are weighing their options and they will ultimately decide whether they're going to be independent or stay in the Yugoslav arrangement, either under a federal or confederal setup.
One thing that Mr. Serwer mentioned earlier in terms of the negotiations or continued discussions, my own view is slightly different on this, and of course I'm not an expert negotiator like Mr. Serwer, but the point is, if you look at what the Serbs have offered to Montenegrins, you will understand they really don't want to go back to in effect the status quo ante situation. And I have recommended to the president Djukanovic that he reject this out of hand, because why should Montenegro want to go backwards and give up some money, the kind of economic orientation that it already has? I just don't think the negotiations really are going to be very fruitful. I think the best thing to do is just have the independence referendum and then sort out what kind of new relations they would have between an independent Serbia and an independent Montenegro. If you look at what Kostunica said on this by the way -- Kostunica is the man of many contradictions -- he was interviewed in his visit to Sarajevo and when asked about his views on Montenegrin independence, he said: "Well, on the one hand, of course, we in Serbia think they should be free in Montenegro to decide what they want to do and if they want to be independent, that's fine." And then there's a pregnant pause and he said: "But, of course, they would have to do this under the Yugoslav Constitution," or, should I say, Milosevic's constitution. So, you see these contradictions and so on, so I see very little point in negotiating at this stage further with Serbs. I think the best thing is to have the referendum, let Montenegrins decide what they want to do, if it is independence, fine, recognize Montenegro and then let Montenegro sort out its relations with its neighbors as they see fit.
Trivic: Thank you very much, Mr. Hanke. Mr. Serwer, I would ask you the same question. Is it true that Montenegro doesn't have anything to do with the Kosovo issue?
Serwer: No, that's not true. I think it's disingenuous of Montenegrins to claim that. Kosovo, whatever you regard as today, was for a long time part of Yugoslavia as well as Montenegro. Montenegro did have a relationship to Kosovo within the context of the Yugoslav federation. In addition, there's no avoiding the fact that whether Montenegro is independent or not, it will have a relationship with Kosovo. Whether Kosovo is independent or not, they border each other. There's an Albanian population within Montenegro. And it is in Montenegro's interest to make sure that whatever solution is found for Kosovo, is one that Montenegro can also live with. I don't mean to say that Montenegro can't live with Kosovo's independence, but Kosovo's independence would have to be achieved in a way that guarantees the borders of all of its neighbors, including Macedonia and Montenegro. I think it's wrong to say that two neighbors who have been in a federation together have nothing to do with each other. That's not true. And it seems to me quite clear, in fact Kosovars and Montenegrins have been consulting each other now for several years, because they have come to realize that they have similar problems vis a vis Belgrade. I understand why Montenegrins wouldn't want their independence conditioned on the Kosovo issue, but still they have to take the Kosovo issue into account.
Trivic: Could we switch our focus for a moment onto Serbia? Some in Serbia think that their republic should break away from any federal framework, too. A few argue even that Serbia set free from Montenegro and Kosovo would be better off, because it would finally concentrate on coping with its own problems instead of looking for scapegoats. How does this sound to you? Mr. Hanke?
Hanke: Well, I think the best thing that Serbia really could do would be to follow [French] General [Charles] De Gaulle's solution that the French had for Algeria. That is simply to drop off Serbia's intentions to either run Montenegro or run Kosovo and let them go and be independent. Then they could obviously focus on getting the immense problems sorted out inside Serbia and getting the economy going in Serbia. Another thing that they should do in this context, another big thing in addition to letting Kosovo and Montenegro go free, if they would prefer to go free, is send Milosevic to The Hague. And until they do that the situation will remain unstable and unclarified in Serbia. The problem is, in my view, I don't think Serbs will send Milosevic to The Hague, because Milosevic simply knows too much about too many Serbs and they don't want him talking in The Hague. So, I think that's the bottom line why he's staying in Belgrade, because he simply knows too much. There've been too many Serbs, many of them in the so-called democratic opposition, who've been involved in dirty business and Milosevic knows about all this.
Trivic: Thank you very much. Mr. Serwer, what do you make of such arguments that Serbia would be better off braking away from any federal arrangement with Montenegro and dropping off?
Serwer: I think there is some merit in such arguments. I think that the issues of Montenegro and Kosovo are tremendous distraction for Belgrade from the very real problems of completing the democratic transition within Serbia, including sending Milosevic to The Hague and doing many other things to establish the rule of law and affirm democracy, to clean up the police and the army and things of that sort. Kosovo and Montenegro are distracting Belgrade from doing these things. And there's merit in the argument. The problem is that no one has convinced president Kostunica and his government that they should give up their jobs. Until they do, you're not going to see Yugoslavia turn around and say -- ok, let us break up.
Let's see how the evolution of the political situation goes in Yugoslavia, though. Because quite obviously there's today an issue between Serbia and Yugoslavia or between the Serbian government and the Yugoslav government. Because the real constitutional power should lie with Serbia. And yet, because of the Milosevic and Tito tradition it in fact has lain recently with Yugoslavia, at least with the president of Yugoslavia. I think there may be some rebalancing to do there as well, but I don't think it's easy to predict exactly how that will come out.
Trivic: May I ask you now a somewhat blunt question? It's been said of Kostunica that he's a legalist and a moderate nationalist or a nationalist. Is Mr. Djukanovic a nationalist too? Mr. Hanke, how would you define Mr. Djukanovic? Is he a nationalist?
Hanke: I really don't know if I am qualified to answer that. I mean, you can view the independence referendum as a nationalist initiative, because independence does have some nationalist overtones. However, I think his policy in general economic terms has been one of complete openness, where individuals will be empowered with as much freedom as possible, backed with the sound money to do whatever they want to do and make their own choices within the bounds of the law.
Trivic: Mr. Serwer, may I ask you the same question? Is Mr. Djukanovic a nationalist and is there a nationalistic tide in Montenegro and in Serbia, of course?
Serwer: I think he's not a nationalist of the type that brought us all the problems of the 1990s, let's put it that way. Kostunica claims to be a patriot and it seems to me that Djukanovic can claim to be the same thing. The problem is that the patriotism that they talk of is a patriotism of two different entities. One to Yugoslavia and one to Montenegro. And it seems to me that Djukanovic has proven himself not only in the economic ways that Mr. Hanke refers to, as a man of openness and Western style of thought, but also in political terms, in particular in the treatment of non-Montenegrins within Montenegro. He's demonstrated an enormous capacity to make life for them reasonable and to treat them equally under the law. Certainly, compared to other countries in the region, Montenegro has a very good record in that respect. So, I think to call him a nationalist in the Balkan context would be to paint him with the wrong brush. Kostunica and he can both claim to be patriots committed to the rule of law. The problem is that their two patriotisms may not be consistent with each other.
Trivic: Gentlemen, I suggest we bring this discussion to an end, if you woud agree. I'll just ask you to sum up your expectations of what's going to happen between Belgrade and Podgorica. Mr. Hanke?
Hanke: I think there will be political elections as scheduled, that the pro-independence faction will remain in power in Podgorica. There will be a referendum sometime in the summer. The referendum will pass. Montenegro will become independent. So, we will make what is de facto an independent entity officially an independent entity. Western or international community will put their stamp of approval on this and than the hard work will begin, that is for Montenegro and Serbia to work out what kind of relationship they want between their two independent states.
Trivic: Mr. Serwer, what do you think? What would be the final solution and how long would it take?
Serwer: I'm not in the predicting business, perhaps, as much as Mr. Hanke is. The scenario he'd described is certainly a possible one, but I can think of others too. The important thing is that now this issue can be resolved peacefully. There's no real threat of the use of force. The Montenegrins have clear rights under their own constitution. I think they're going to exercise those rights. I don't know exactly how it's going to come out. I also don't know how the negotiations will come out for reassociation with Serbia. The Slovenian referendum, I think also the Croatian and Macedonian ones, also had provisions for reassociation with Serbia after independence and none of those reassociations occurred. Montenegro will not be in a strong bargaining position after independence, it seems to me, vis a vis Serbia. They might prefer to have a negotiated solution before, they might not. But the key thing is that this will all be resolved peacefully. Whatever the international community is saying now, they will except an outcome that's reached peacefully and democratically.
Trivic: Mr. Serwer, Mr. Hanke, thank you very much for taking part in this discussion.
Serwer: Thank you.
Hanke: Thank you very much.