Dušan Janjić: Can you please provide us with a summary of the most prominent political and social actors who helped to bring about the renewal of Montenegro’s independent statehood?

Milo Đukanović: An important milestone of the more recent Montenegrin history, which has been crowned by restoration of Montenegrin statehood, was the 1997 crisis in top-level politics in Montenegro.

I would like to remind you that the idea of independence was introduced in the 90s, through the political program of the Liberal Alliance of Montenegro, which in the elections during that decade polled  12-13 percent. However, in 1997, during the period of a major political crisis in Montenegro, the political scene was changed by a regrouping of political forces and the Montenegrin policy clearly shifted towards emancipation from the policy pursued at the federal level. Although not defined from the beginning as pursuit of restoration of independence, this idea meant a clear imperative to achieve for Montenegro an equal position within the federation, expressed through the request for a full respect of our autonomy in defining and exercising Montenegrin interests within the federal institutions.
 
At that time, the government of Montenegro and the president of the Republic  (after my victory in the presidential elections) became the pillars of a policy whose final goal was restoration of Montenegrin independence. Thus, the support of this idea from the institutions added a new quality to economic, political and overall emancipation of Montenegro. This has very much strengthened the cause of independence, brining about an accelerated mobilization of the political structures, as well as citizens for its achievement. In fact, it was then that the political movement for the renewal of independence started gaining momentum .

 The originators of the independence idea in the 90s, and primarily the Liberal Alliance of Montenegro, became impatient and unsatisfied with the pace of its implementation as managed by the Montenegrin state leadership. They criticized us and were becoming suspicious, claiming that the goal could, and must be, achieved more quickly. They even warned us that slowing down the process could put Montenegro in a hopeless situation due to possible outcome on the European political scene. They thought that this outcome could close the door on establishment of new independent states in Europe, and especially in the Western Balkans.

However, it is thanks to a patient and well thought-out management, along with carefully planned dynamics over the last ten years, that the restoration of independence has been accomplished in the referendum of  May 21, 2006. 

One of the most decisive moments in this process was the signing of the Belgrade Agreement, (i.e. the Agreement on Principles of Relations between Serbia and Montenegro within the State Union) between Belgrade and Podgorica, with active participation of the EU, represented by Javier Solana.  It was a necessary midway step between the non-functional federation of FRY and the independence of Montenegro, as well as Serbia.

The Belgrade Agreement was viewed by many people, especially in Serbia and among the opposition in Montenegro as a good timing for exerting pressure against Montenegrin independence and, therefore, as an opportunity for preserving the state union, which had even changed its name to Serbia and Montenegro. Even then, I believed that The Belgrade  Agreementwas important only as an instrument providing the time necessary to prepare the public in Montenegro and Serbia for the new political reality: the existence of two independent states and subsequent cooperation between them.

It turned out that proper management of the independence project under the specific circumstances that existed in Montenegro, Serbia and the region, as well as efficient management of the time factor, has brought about the outcome desired by the advocates of independence. That is why the result and quality of the process for restoration of Montenegrin statehood has been assessed positively and viewed with respect by Europe and the entire democratic world.
 
No less important than the referendum outcome is the way in which we have achieved the referendum result.  There was no longer any  skepticism as to the ability of the Montenegrin society to peacefully go through a referendum process.  At the same time, this process strengthened the hope among people in Europe who believed that democracy in the Western Balkans was maturing and demonstrating the ability of this region  to apply the highest democratic standards in  processes as demanding as  referendums on state status.

One can conclude that, when it comes to the main political actors and progenitors of independence, at the beginning of the last decade of the 20th century it was the Liberal Alliance and the Social Democratic Party which were certainly at the forefront. As of 1997, the independence idea turned into a strong independence movement, whose victory bears the hallmark of the Democratic Party of Socialists (DPS), as the dominant party on the Montenegrin political scene.

Dušan Janjić: Many politicians in Europe, including Javier Solana, were in favor of maintaining the state union of Serbia and Montenegro and turning it into a “functional federation.”  The most frequently used arguments were the economic capacity of Montenegro to be a sustainable state and fear of possible conflicts as a result. To what extent were these realistic and were they partly a result of the need of EU politicians to somehow compensate for political inefficiency in communication with Belgrade?

Milo Đukanović: At that time I thought, and now I am convinced, that any doubts about the economic sustainability of Montenegro expressed by some representatives of international community were aimed at discouraging us from independence and were not a result of grounded judgment that Montenegro was an unsustainable economic system.  Most of the major European policy-makers were determined and consistent in their efforts to discourage Montenegro from independence.

According to my opinion, such an approach was influenced by several factors:

First, the tragic “Balkan experience” from the time of the break-up of the former SFRY caused in Europe grounded doubts about sustainability of Balkan states and their ability to solve important political issues, such as that of state status, in a democratic way, while at the same time preserving security and political stability.

The second factor has to do with the relations with Serbia.  The policy of Brussels on Serbia evidently contained a guilty conscience of sorts  caused by the tragic context in which the international community, provoked by Milosevic's policy, decided to bomb a country in the heart of Europe at the end of 20th century. Although it was forced by the Milosevic policy, I view this act by the international community as a serious defeat and recognition of impotence.
Also, in relation to Serbia, the European policy was taking into account expectations of the outcome of the Kosovo status.

These were the reasons for defining a kind of strategy according to which democratic stability of Serbia should not be provoked by raising issues that might be interpreted by its public as yet another defeat. It was thought that independence of Montenegro could be interpreted that way. Europe knew that the powerful  nationalistic and hegemonic structures in Serbia still viewed Montenegro as their own property.

The third reason for discouraging the independence idea was fear that approval of this idea could be misinterpreted by the public in some European states and might inspire disintegration processes in these countries.

These were the circumstances that influenced some of the most important  European policy-makers to be very persistent in opposing Montenegrin independence. In this context, they made public statements about economic non-sustainability of Montenegro and its ending up in a war in  case of unilateral referendum. The extent of determination to discourage Montenegro from independence can be illustrated by  some details from the period of unsuccessful attempts to harmonize the economic systems of Montenegro and Serbia. At that time, European economic experts suggested to their Montenegrin colleagues , as an allegedly economically superior idea, that  Montenegro abandon the euro and revert to the dinar as its legal tender instead.

Faced with persistent and aggressive efforts to thwart Montenegrin independence , we were determined to persist. Our determination had nothing to do with any romantic ideas – we were simply convinced  that we needed independence in order to take charge of our European and Euro-Atlantic future in a responsible way. In this process, in addition to determination, we demonstrated a new and uncommon feature of Montenegrin policy – we approached our goal without rashness and major confrontations. We were aware of being actors in a fight of David and Goliath. Hence, we did all we could to preserve the opportunity for making our idea reality, and at the same time not fall out with those who were very important to us in view of the future phases of implementation of our strategic goals - the European and Euro-Atlantic integration.
 
Dušan Janjić: There is no doubt that Montenegro today represents a »successful example« of nation – state building. It is cited as a “good example” of negotiations in which Slovak diplomat Miroslav Lajčak played an important part. Yet, the role of government and political opposition was crucial. How do you view the role of opposition in the most critical times of the process?

Milo Đukanović: Political maturity of the opposition developed along with the process and reached full maturity after the referendum. I have in mind in the first place the segment of the opposition represented by SNP.

After signing  of the Belgrade Agreement  and in the initial phase of negotiations on the referendum, the intention of all the opposition parties was to obstruct the process by using the authority of Serbia and the international community, primarily the EU.

Their expectation was that Mr. Vojislav Koštunica, former President of FRY and now prime minister of the Republic of Serbia, who was their ally in Belgrade, would support the idea to prevent the referendum. They were persistently trying to deepen doubts among key players in the international community about Montenegro’s ability to organize a peaceful and democratic referendum. The goal behind these attempts was to prevent its holding through European pressure on the grounds that a fragile Balkan stability should not be provoked.

On the other hand, we had a very strong foundation in the constitutional state union acts and throughout demonstrated the necessary flexibility by accepting some for us less favorable solutions. We did it purposefully in order to avoid obstructions and create conditions for a constructive process that would make the referendum epilogue acceptable for as much of the body politic in Montenegro as possible.

Over time, the opposition, which at first took a generally obstructive stance, split. I particularly have in mind that the SNP started participating in preparing the environment for the holding of the referendum. The truth is that they did it convinced that the 55% threshold would  be an insurmountable obstacle for us, while we were convinced that the threshold would be surpassed. This is how the critical mass of political support to the referendum process and its propositions was created, which brought about the outcome that was finally recognized by all.

In this way the key opposition players demonstrated the necessary level of political responsibility, resulting in preservation of political stability in Montenegro and an atmosphere conducive to holding parliamentary elections and continuing democratic development of Montenegro without major tensions.

Dušan Janjić: What are, according to your opinion, the main trends that will mark the political scene in Montenegro? How will your political party DPS reform in the future? How will the relations between DPS and SNP, once a single political party, develop? How do you view the emergence of the Serb List on the political scene of Montenegro?

Milo Đukanović: Regrouping on the political scene of Montenegro is inevitable and in a way this process has already started.

The definition of state status closed one issue that had occupied the full attention of the Montenegrin democratic public.  Now, we have created a stable political environment for the next four-year period. This enables us to completely focus on the implementation of the European and Euro-Atlantic agenda. 
This will definitely be the most important topic on the Montenegrin political scene in the coming period.  It implies the issue of economic development and of the living standards of the citizens. I think that this issue will be the focus of attention for both the parliamentary parties and the general public in Montenegro.

Although SNP was the fiercest opponent to my party and to the government, I regret that  it had not been able to understand the processes well enough and in a good time, since it was a party that had a solid political substance. SNP missed the opportunity to abandon the futile idea of preserving a non-functional state union and lost the initial edge that would have allowed it to position itself well as an opposition party  to a government that is forced to implement deep and politically unpopular reforms with social implications that were inevitable in all societies in transition.  

SNP failed to understand the political reality and did not have the leadership capacity to turn away from a path that was undoubtedly wrong, although it had clear signals of this already after the signing of the Belgrade Agreement and especially after the first couple of years of its implementation, when it became clear that the state union was not functional, as was confirmed even by the European Commission.
 
A reform government does not have any other alternative but to decisively implement reforms. At the same time,  opposition parties have an ideal opportunity to criticize such a government. SNP did not use this opportunity. Once the most important opposition party, it became the biggest loser on the Montenegrin political scene, as many of its members turned to the radicalized political structures, like the Serb List.

The emergence of the Serb List in some ways means a revitalization and beautifying of the same political party that existed in the political life of Montenegro in the 90s. At that time, it was the Serb Radical Party , which  had quite a few seats in the Montenegrin parliament.  This will, at least for a while, imply restoration of the right wing on the Montenegrin political scene. However, in future, just as in the 90s and now, this idea is not likely to gain much support.

Substantial redesigning of the Montenegrin political scene will take place with a clear definition of opposition parties that will use social and demagogic rhetoric to oppose an inevitably  reformist policy of the ruling coalition. The government will, of course, continue to implement a reform policy that is to bring us closer to our strategic goals.

Dušan Janjić:  It is obvious that during the constitutional debates the Serb List will insist on a concept according to which the Serbs are a constitutive people. Do you think that this concept brings ethnic divisions in the Montenegrin society? What are the consequences of accepting or rejecting this concept?

Milo Đukanović: I view this idea as being rather retrograde. It is not possible to talk about Serbs as a constituent people without mentioning others, who are an integral part of the multiethnic and multicultural Montenegrin scene and who are also authentic on the Montenegrin social scene. The retrograde feature is reflected in the following fact: instead of continuing to develop  a civic concept that proved its viability in the difficult years of the former Yugoslavia, the Serb List proposals are belatedly trying to promote an idea of the Montenegrin society as a confederation of national communities. This idea showed serious weaknesses in the last decade of 20th century and led to tragic crises on the territory of all the countries of former Yugoslavia, with the exception of Montenegro.

I also believe that the Montenegrin democratic public will show maturity and take an adequate position on these retrograde ideas in the final stage of enactment of our supreme legal act, the new Constitution of Montenegro. The constitution should legally verify the multiethnic vitality of Montenegrin society that has been proven in everyday life and that inspired hope in a multiethnic society in the Balkans.

Dušan Janjić: Montenegro is viewed as a “successful example” of the relation towards Albanians and the relation of Albanian minority towards the country in which they live. This especially relates to successful political cooperation and an agreement between Albanian leaders and your government. How do you view this relation and will the “Malesija Case” (arresting and forthcoming prosecution of the organizers of a paramilitary formation) have any negative impact on Albanian and Montenegrin relations?

Milo Đukanović:  Montenegro has distinguished itself  in the region as a state that has not had problems with integration of the Albanian national community into social life, while all others had these problems to a certain extent.  I will remind you of many international conferences that addressed the so-called  “Albanian Complex'' in the Balkans. It was always nice to listen to representatives of the Albanian communities from all Balkan countries making positive statements about Montenegrin policy towards the Albanian and other minorities living on its territory.

Multiethnic harmony in Montenegro is not a product of a new and unexpected skill of the present-day Montenegrin policy. It is  part of a long tradition dating back to the time of the Petrović Dynasty. It was as early as that time that Montenegro started  cherishing good relations with minorities, including the Albanian minority, when  the Montenegrin Royal Court placed a high level of trust in the Albanians and Muslims. Therefore, the Montenegrin tradition provides a good foundation for the present-day policy of building and promoting multiethnic democracy in Montenegro.

On the other side, there was an incident that occurred in Malesija on September 9, one day before the parliamentary elections. I believe that this is an isolated incident that will not have any significant negative impact on future multiethnic relations and the trust of the state of Montenegro in its minorities.

I think that Montenegro is showing by its overall policy an honest intention to provide equal opportunities to its minorities and the majority people. In return, the minorities have demonstrated that they respect Montenegro and view it as their own country.  This quality will not be impaired by this isolated incident.
Nevertheless, it is a fact that this incident did occur and during a time of political stability at that. In this stage of its legal process this incident shows that - like in some other incidents in the past - an important role in attempts aimed at destabilizing multiethnic communities may be played by segments of the diaspora.  This is a circumstance that the Montenegrin citizens and state authorities must be alert to, along with the countries from whose territories this segment of the diaspora is operating.

I do not think that this incident can impair the quality of relations between Montenegrins and Albanians because I am convinced that an overwhelming majority of Albanians in Montenegro by no means share the idea behind this incident, i.e. the idea of ethnic and religious cleansing of the territory occupied by Albanians. I do not think that Albanians who live in Montenegro can share this idea, or that the state of Montenegro can fall for a provocation and equate this incident with the attitude of an entire minority.

This incident is a dangerous game with a serious admixture of terrorism in its projections. It must not be equated with all Albanians in Montenegro. We are speaking of a group of paramilitaries that showed up in Malesija, but it could have been any other place. In any case, the state of Montenegro would respond equally energetically and efficiently.

This incident has not impaired the good relations between Montenegro and Albania either. After the police operation ''Eagle’s Flight'' I met in New York with President Moisiu and in Tirana I met the Prime Minister of Albania, Dr. Sali Berisha. Recently, in Podgorica I met with the Prime Minister of Kosovo, Agim Cheku. I mention this meeting because of the importance of the Albanian community in the Balkans. All of them confirmed the vitality of relations that Montenegro cherishes with Albania and Albanians, based on principle.  I believe that the explanations that we exchanged confirm that we all have the same goal – to keep our region free from any form of extremism.

Dušan Janjić:  The consequences of Kosovo’s future status for the region – Will the definition of Kosovo’s future status expected in the next few months have an impact on Montenegro? Will it have a destabilizing or perhaps a stabilizing effect?

Milo Đukanović: I have, logically, always viewed solutions to problems as something promising and positive.

The region of the Western Balkans has an outstanding issue, which has been carried over from the troubled past and which objectively hampers us as we strive to achieve our strategic goals of European and Euro-Atlantic integration. It is the issue of Kosovo, the only security issue in our region. Therefore it is important that a sustainable solution to this issue, too, be found sooner rather than later.

I will certainly agree with all who warn that it is not wise to rush into any hasty and not well thought-out solutions.  The political approach to this issue and the way it has been treated so far cannot indeed qualify as efficient and effective.  On the contrary, it can rather be considered too relaxed. I think that after the adoption of Resolution 1244, the international community relaxed its attention in relation to Kosovo, assuming at first that the resolution was itself a kind of solution.  Yet, with each successive year it was  more and more obvious that the room for maneuver  was narrowing  in terms of possible solutions to the Kosovo status issue. As a matter a fact, this leeway was much bigger up to the year 1999 than after this year.

Therefore the Kosovo status issue should be resolved and after this we will have a more stable political environment in the Balkans and prerequisites for a more dynamic rebuilding of confidence that should result in our taking full responsibility for the future of the Western Balkans. This will enhance the stability in Europe, too.

I always opposed the opinions that viewed the Balkans as a hopelessly inferior region that will need tutorship forever. We now have new generations of people in the Balkans who are trying to take care of themselves. Therefore, after the Kosovo issue - in which the international community is deeply involved – is resolved, conditions ought to be created for the Balkans to take full charge of its European and Euro-Atlantic future.

Solving the Kosovo issue will, I think, ensure that local political forces in each of the Balkan countries can fully focus on reaching European goals more speedily, so the unification of Europe in the Western Balkans should be completed within the next decade.  Of course, this process is linked with some risky elements. Let me point to two of them:

The first is Serbia. I think that the risk in Serbia is increasing with every day that the Serbian leadership is unwilling to do what is necessary in terms of preparing the public for the epilogue of the Kosovo issue. It would not be wise to prejudge the outcome and I do not wish to do so. I think that it would be reasonable and constructive to let those who have been directly involved finish their task. These are the leaderships of Belgrade and Priština with UN representatives led by Mr. Ahtisaari. It is clear from the policy of the international community thus far that the Kosovo status will be defined in the first months of the next year. It is also clear that the international community is not ready to revise the solutions defined by UN Security Council Resolution 1244.  And we know that Serbia does not perform any state functions in Kosovo. I think that responsibility of a statesman in Serbia today implies the obligation to prepare the Serbian public for what is to come. Instead of doing that, they pander to nationalists and radicals by keeping alive some illusions and manipulating the public for political purposes. Therefore, Serbia is essentially unprepared for the solution that will come. They risk bringing about a state of shock in the public and wasting more precious time that we all need in order to meet the standards required for EU integration. At the same time, Serbia should become the key factor of stability in the region and, if not the driving engine, then at least an important part of the train towards Europe. This is our common interest. It is clear to Montenegro, and I know from contacts with other politicians that it is clear to Croatia, Macedonia and Bosnia, too, that this train will not make progress towards Europe at the same speed it could, unless Serbia is part of it.

The second risk is linked with the projection of development after the Kosovo status definition. The new definition of the Kosovo status must not become the generator of a retrograde idea of the 1990s – that of ethnically based integrations. If anything like this should  happen, we could only say with bitterness: welcome to the 1990s. This would bring back the dilemmas in Bosnia and revive tragic memories in the region.  Regardless of what the future status of Kosovo will be, we must all be aware, including the international community, that it must not trigger revitalization of the aforementioned retrograde idea. I mention this not because I have doubts that the leadership in Tirana understands it. On the contrary, I think that they understand this perfectly .  But, the case of Malesija shows that retrograde ideas can come from the outskirts and from some very remote places. It proves that distance is not an obstacle for retrograde ideas, which, unfortunately, have often found fertile soil in the turbulent Balkans and were successful enough to have wasted more than a decade of our future. 

Dušan Janjić: The issue of Western Balkans sub-regional cooperation was raised by itself. In this content, a lot is expected from Montenegro considering its favorable political position. Montenegro can become an important actor of regional cooperation and security. What are the priorities of Montenegro in relation to the Western Balkans?
 
Milo Đukanović: It is persistence in preserving our multi-ethnic life that I regard as the most valuable credential of Montenegro in the region and before the international community. Suffice it to say that Montenegro is the only state of former Yugoslavia to have been spared war on its territory in the last decade of the 20th century. No columns of refugees fled Montenegro  to seek refuge abroad. During the war in the former Yugoslavia, a huge number of refugees of different religious and ethnic backgrounds found shelter in Montenegro. So in 1999 we had 120,000 refugees, or over 20% of our total population.
 
Montenegro managed to preserve the vitality of the idea of a multiethnic community at a time when this idea was dead and buried in the Balkans,  when ethnic and religious wars were raging across our borders . That’ s why I believe that the greatest moral strength of Montenegro lies in the fact that by its example it is promoting in this part of Europe a multiethnic model of life.

Through history Montenegro had very close relations with Serbia. Besides, it is important to understand that Serbia, as the biggest and most populous country and the country with a huge economic potential, must be the key factor of stability and positive dynamics of a Western Balkans heading towards European integration. For that reason, and especially because of our historically close ties, Montenegro, although a small country, must show initiative towards building friendly relations of openness  towards Serbia, on a new basis, so as to become a stimulating  model for others in the region to intensify these processes, towards Serbia and with each other.  This is necessary in order to ensure sufficient homogeneity of regional structures for fulfillment of European and Euro-Atlantic goals. I think that Montenegro can play this positive role through its own example and initiatives.  I consider it most important for our common European and Euro-Atlantic future that there is a growing awareness in the region that we must cooperate with each other and that people living in the region should develop closer relations. By establishing constructive cooperation between all sectors we can best help ourselves so that Europe and other friends in the world can help us integrate the Balkans into the modern world.

In future Montenegro will continue to pursue an active policy of good-neighborly and regional cooperation, which we see as an inseparable part of our European and global integration and of the EU policy towards this region. This is in the interest of the national and regional development and stability. Therefore, it is important to continue with active measures to enable free movement of people, goods, services and capital by implementing the single Free Trade Agreement for Southeast Europe. Other regional initiatives in the sector of energy,  infrastructure, investments, environment, combating corruption and all forms of organized crime, visa regime, asylum and migrations, as well as other projects to this end should also be promoted.
It is particularly beneficial for small economies to develop regional cooperation and to try to integrate in the regional and wider context. Indeed, small economies like ours in the Western Balkans do not have any other choice if they want to capitalize on their considerable development and investment potential. The more so, as in the situation of tough international competition and globalization, the attractiveness for business and investment is measured by regional, rather than a national context.

Therefore, encouraging regional cooperation and active participation in it, at the level of the state, as well as business level, is becoming imperative. Under the conditions where the strategic goal of all the countries is to become members of the EU, we must ensure a much higher level of economic freedoms within the national and regional framework, so that we can get closer to the level of freedoms in the EU. This means that we must develop the principle of an integrated market, i.e. simultaneous functioning of all markets – goods, services, labor, capital and information. The strategic development and policy of Montenegro are based on these principles. We are governed by the following premise: if our aspiration is to join EU as soon as possible, we cannot keep protectionist measures among each other.

Dušan Janjić: How do you view the dynamics of Montenegro’s integration into NATO and the EU?

Milo Đukanović: We view European and Euro-Atlantic integration as a vindication for results achieved in implementing the highest standards in all sectors.

Therefore, we are not obsessed by any timetables for membership of EU and NATO. Our main concern is to implement as well and as soon as we can the standards that apply in the developed world.

Our goal is to provide for our citizens the same economic, political and security conditions that exist in other Euro-Atlantic countries in the 21st century.  Montenegro has more than enough economic potential and prerequisites for this.  Montenegro has also shown to have enough wisdom to cherish its stability and create conditions for an accelerated economic development. I think that once she has done her “homework”, Montenegro will see in a near future, as a logical vindication of her efforts, membership of NATO and of the EU.
                                                                
Membership of the Partnership for Peace is a major recognition of Montenegro’s efforts and a strong incentive to speed up its overall reform process.   We will soon be initialing and, following the established procedure, signing a Stabilization and Association Agreement to the EU.  Montenegro will then have institutionalized relations with NATO and the EU and I believe that each successive phase towards these structures will depend solely on our ability to implement in a timely fashion all the standards that can recommend us for this select club.

Montenegro is a small and manageable system, so it has considerable advantages that its leadership will know how to use and that will in due course recommend it for membership of the EU and NATO. Besides, I think that all of the Western Balkans should join the EU within the next decade. It is thankless to try to predict whether this will be achieved in 7 or in 9 years, but I think that the entire Western Balkans, to which Montenegro belongs, has set out on the road of full integration into the EU.

Dušan Janjić: The political and institutional framework of the reforms in independent Montenegro look optimistic. Tell us please about the investment prospects. Are you satisfied with the achieved level of economic development and what type of projects can be expected as a part of a Montenegrin offer to domestic and international businesses?

Milo Đukanović:I am very satisfied with the pace at which our economic policy is being implemented.

The last few years were characterized by full macroeconomic stability. The inflation rate will remain within the range of 3 %. I think that at the end of this year the budget deficit will be zero, with a growth rate in tourist industry of about 20% for the third consecutive year. The GDP growth rate will be about 7%.

I wish to stress in particular the significant results achieved in bringing unemployment down. Five years ago the unemployment rate was 32%, while this year it will not exceed 14.5%. These achievements indicate that Montenegro is putting her house in order in terms of macroeconomic situation, which results in an increasing interest of entrepreneurs in doing business in Montenegro and an increased number of SMEs.

A great interest shown by foreign investors and the increased level of foreign investments are of special importance for Montenegro. In terms of the level of FDI per capita in 2005 Montenegro was the leader in the region and third in Europe.  This year the situation appears even better, because we have a high level of investments whose structure is changing in a desirable direction. In 2005 the majority of investment flows in Montenegro were achieved through the privatization process. It was in the year 2005 that the telecommunication company Telecom was privatized.  This year the structure of investments has changed towards greenfield investments. This is another proof of a growing confidence of foreign investors. As you know,  greenfield investments as a rule come at a later stage and are an expression of investors’ greater trust in the stability and capacity of the country they are investing in. And the structure of foreign investors has been considerably improved, too. Today, we have here some very good investors in the sector of tourism, like the  Amanresorts, and one of key investors in the world, a leader in gold production, Peter Munk. Also, the aluminum production leader, Russal. We have seen some very strong expressions of interest by investors in construction of water supply and wastewater treatment systems in  the Montenegrin coastal area. We are talking about highly reputable investors,  which inspires confidence and optimism that Montenegro, in addition to becoming a stable country, has already entered the phase of dynamic economic development and growth.

The privatization process is continuing. Our goal is to complete this process by the end of this government’s term in office. In the next year, we expect to complete the privatization of the tourist and financial sector, and start the privatization of the transportation sector. We will intensify the activities for the privatization of the energy and utility sector by combining it with a concession model.

We are planning to have dynamic investment activities. Primarily through reconstruction of the existing and the construction of  new capital infrastructure facilities. Special emphasis is being placed on the creation of conditions for building a highway connecting Montenegro with Serbia and the Montenegrin section of the Adriatic-Ionian highway.

Activities that lie ahead include: implementation of strategic documents in the field of the environment,  the master plan for the water supply for the Montenegrin Coast, the master plan for solid waste management, the master plan for waste water treatment in the Montenegrin coastal and Cetinje municipality area, as well as the sewage and waste water master plan for the central and northern part of Montenegro. We will be intensifying cooperation with the key international partners in the sector of environmental protection.

We will be focusing on the further implementation of the master plan for development of tourism until 2020 and creation of all the necessary prerequisites for capitalizing on the potential in this strategic sector, along with a whole set of activities aimed at strengthening the institutional capacity in all the sectors.