South Slavic: February 10, 2000

What Future For Montenegro? Part I

Omer Karabeg: In today's Radio Most (Bridge), we will discuss whether the introduction of a dual currency system--the introduction last November of the German mark as legal tender along with the dinar--is a measure that protects the economy of Montenegro, as is claimed by the government, or is it damaging the economy, as the opposition Socialist People's Party (SNP) claims.

Our guests are Vojin Djukanovic, the Montenegrin Minister of Energy, and Dusko Jovanovic, who is a member of the steering committee of the SNP. Mr. Jovanovic, the president of your party and federal prime minister, Momir Bulatovic, has announced legal measures against those responsible for the introduction of the dual currency system. He claims that it has inflicted damage on the economy and citizens of Montenegro. Mr. Jovanovic, what are your arguments for that claim?

Jovanovic: First, it is just one more unconstitutional move by the government and authorities of Montenegro. The damage has obviously been done, and citizens of Montenegro know it all too well since prices instantly rose right after the introduction of the dual currency system. According to my information, living expenses have since risen between 20 and 30 percent.

What we have here is a purely political decision, not a measure by the government of Montenegro aimed at protecting the citizens. I would like Mr. Djukanovic to explain to me whose economy has been "protected" by this measure. I think that the economy of Montenegro has been damaged because it has been detached from the Serbian market. It is well known that those segments of the Montenegrin economy that remained productive [after the breakup of the former Yugoslavia] were oriented towards Serbian market, not towards the market of the European Union.

Djukanovic: The introduction of the German mark as an official currency has stabilized economic relations--admittedly, on a more general level. At least, it has made clear economic relationships within Montenegro, between Montenegro and Serbia, as well as between Montenegro and the world. Those relationships used to be vague until the mark was introduced, since the National Bank [in Belgrade] had become a political institution that prints money, sets off inflation, and therefore inflicts huge damage on Montenegro.

Jovanovic: Excuse me, Mr. Djukanovic, but what relations are you talking about? What works in Montenegro, except the black market and underground economy? What does Montenegro export, Minister Djukanovic?

Djukanovic: I will quote you some figures, Mr. Jovanovic.

Jovanovic: Forget figures, explain to me what exactly we export from Montenegro.

Djukanovic: Montenegrin industrial production fell only 7.8 percent in 1999, compared to 25 percent in Serbia.

Jovanovic: Minister, no one is interested in those figures that you have prepared to present to the Montenegrin parliament. Tell me, what does Montenegro export--except aluminum--to any foreign market?

Djukanovic: Take, for example, wood and timber products, or textiles.

Jovanovic: Minister Djukanovic, the only thing you export is Mr. President [Djukanovic], a relative of yours [who makes frequent trips abroad--ed.]. There is nothing else that you could export, Mr. Djukanovic. And you are being paid for that product in hard currency [an apparent allusion to the charge by the Belgrade regime and its backers in Montenegro that the Podgorica leadership is in Western pay--ed.].

Djukanovic: Those who have no arguments talk like that. You are well known in Montenegro as someone who talks offhand and without arguments.

Jovanovic: I am saying that there is no other economy in Montenegro but the underground economy and black market. You are one of those responsible for that, Minister Djukanovic.

Djukanovic: That is rubbish that you keep repeating. You are repeating it in order to conceal what cannot be concealed: the fact that Serbian economy is ruined and you are supporting such an economy since Belgrade has ordered you to do so.

Jovanovic: Minister Djukanovic, we live in Montenegro and we know very well what is going on here, what is functioning and what is not functioning. Except for the state-sponsored black market and the latest Kosovo transit business controlled by KFOR, there is nothing else that operates here.

Djukanovic: The rubbish you keep repeating has nothing to do with reality. Take, for example, the aluminum plant, the Niksic brewery, the Agrokombinat firm, the textile industry, the wood and timber industry, and the tourism that you have ruined [through Belgrade's policies].

Jovanovic: All you have done, Minister Djukanovic, is that you have raised prices. Nothing else. You have allowed monopolists to make some quick money, that is all.

Djukanovic: The GNP in Montenegro is $1,140 per capita, while in Serbia it is some $600, according to the real, not the official exchange rate. It is therefore obvious that the standard of living of citizens of Serbia is some 40-50 percent lower than the one of citizens of Montenegro.

Jovanovic: Now that you have mentioned the standard of living, have the Montenegrin government's measures raised the standard of living of the population of Montenegro, or have they lowered it? By introducing the German mark in Montenegro, you have endangered the remains of the Montenegrin economy. What you had not ruined before, you are destroying with these measures.

Djukanovic: An average income in Montenegro--and you know that very well--is 130 German marks. It is financed from effective sources. The one in Serbia is some 50-60 German marks, financed from ineffective sources.

Jovanovic: Forget the average income. Prices are up 30 percent.

Djukanovic: The German mark is in circulation in Montenegro, while in Serbia, it is the worthless dinar. You talk about unconstitutional decisions of the Montenegrin government, but you know very well who started with unconstitutional decisions, who politicized the Constitutional Court of Yugoslavia and the National Bank, and who expelled all the Montenegrin staff from the National Bank. There is no one from Montenegro in the National Bank right now, not even from your Socialist People's Party.

They [i.e. the Belgrade regime] do not trust you, they do not want you to come close to the money supply. It was 10 billion dinars, now it is almost 20 billion dinars. You are protecting a failed policy that brought about economic disaster in Serbia. That policy keeps robbing its people by maintaining the unrealistic exchange rate of six dinars for a German mark, instead of 22 dinars, which is a realistic rate. I am talking about highway robbery. You are, Mr. Jovanovic, well aware of it, but you remain silent. In only two years, the damage caused by inflation in Montenegro was 160 million German marks.

Jovanovic: But Montenegro earned twice that amount thanks to the black market. Let me ask you something. Do you and your government support a single Yugoslav market?

Djukanovic: With the robbery of the people, carried out by the Serbian government, the single Yugoslav market cannot operate. The Serbian government prints one billion dinars every month and your party is involved in it. You are nothing but an appendage and an exponent of that government, and you have to do what you are told. Citizens of Serbia are suffering the consequences of that policy. One cannot live on 60 German marks, Mr. Jovanovic.

Jovanovic: You should not worry about Serbia. We are not discussing the situation in Serbia right now, we are talking about Montenegro.

Djukanovic: If you think that Yugoslavia should be destroyed, go ahead. But Montenegro and its citizens will not accept a policy that will lead them into a disaster. That is out of the question.

Jovanovic: Tell me, is there, anywhere in the world, a country with a unified market but with two centers to control that market, two centers to control the flow of commodities, and two centers to control the financial market? There have been two centers since 1991; it has not happened recently.

Djukanovic: Montenegro has never imposed control over the flow of commodities, as Serbia has. The federal government of Mr. Bulatovic did it. You should read a study by the Economic Studies Institute in Belgrade. There you will see that, of 27 countries in transition, Yugoslavia is in 27th place. That is shameful, Mr. Jovanovic. You support a policy that has isolated Yugoslavia from the rest of the world. Citizens of Montenegro do not want that.

Jovanovic: How much money is the Montenegrin government earning from smuggling for Kosovo?

Djukanovic: There is no smuggling, Mr. Jovanovic. The trade is completely legal. You imagine that you see smuggling everywhere because you have grown familiar with it in Serbia. People there are used to money printed without funds to back it up.

Jovanovic: Forget the Serbian economy, we are talking about Montenegro.

Djukanovic: We have to compare it with the Serbian economy because you are trying to direct the Montenegrin economy from Belgrade.

Jovanovic: We are not comparing it with the Serbian economy, but with the Albanian and Macedonian ones. Your prime minister has recently met with the Albanian prime minister, therefore we have to compare those two economies.

Djukanovic: And you would rather close off Montenegro and Yugoslavia within their borders? You do not need friends in the world?

Jovanovic: We are certainly not ready to look for them outside our own house, but first of all inside.

Djukanovic: Relationships with neighbors must be correct, whether they are Albanians, Croats, Bosnians, or Serbs. If someone cannot live in peace with its neighbors, there will be no prosperity in his house. One should ask himself why it is so.

Jovanovic: There will be no prosperity if one cannot live in peace with his brother.

Djukanovic: Brothers cannot live in peace when they live together. They should split in order to have correct relations.

Jovanovic: Mr. Djukanovic is talking about citizens of Montenegro. What citizens? Citizens of Montenegro did not vote for things that the Montenegrin government is doing now. More that 90 percent of citizens of Montenegro voted for a united state.

What the government of Montenegro is doing right now is not what it was saying before the elections.... The federal government and Mr. Milosevic were an alibi for all your failures, Mr. Djukanovic. You have achieved none of the things that your government was promising two years ago.

You have repeatedly violated the constitution and broken laws. The introduction of the dual currency system is just another breach of the Constitution of the Federal Republic of Yugoslavia. Nevertheless, the government of Montenegro has now assumed responsibility; it cannot blame Belgrade or the federal government any more. You are completely responsible for the economy of Montenegro, and the economic situation in Montenegro has worsened a lot since the introduction of the dual currency system. People know how it is, what they were able to buy for their money before and after the introduction of the dual currency system. Those are the facts, there is nothing to discuss, it is so obvious.

Djukanovic: It seems that you would like things to become worse in Montenegro. Well, Mr. Jovanovic, it will not happen. People will be living better in Montenegro. Does not it mean anything to you that the average income in Montenegro is almost twice as large as the one in Serbia? Does not it explain who lives better and where a realistic economic policy is being carried out?

The level of development and standard of living of a country are expressed by its average income and the GNP. You know very well how pensions are being paid in Serbia, that pensioners are getting coupons instead of money. Some 3.5 billion coupons were printed for that purpose, meaning that money without real funds was printed. The National Bank of Yugoslavia is doing it.

It is actually the National Bank of Serbia, or National Bank of the Yugoslav Left [i.e. the party headed by Milosevic's wife--ed.]. Since you are from the Socialist People's Party, you are not allowed in that bank. You have access only where your boss, Mr. Milosevic, allows you. The National Bank has obviously become the architect of an unsound policy that will ruin Serbia. Montenegro did not accept that and Montenegro will soon improve the standard of living of its citizens. The average income will soon rise from 130 German marks to 200 or 300 German marks. But watch and see what will happen in Serbia.