New York Times October 18, 1999 Montenegrins See Split With Serbia By STEVEN ERLANGER 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 market. 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 self-isolation." 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 February. 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 Medojevic. But the formal economy is propped up by corruption, sanctions-busting and smuggling. 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. ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com --- from list [EMAIL PROTECTED] ---
