The Economic Picture of Montenegro

Is Autumn Bringing Social Unrest?

While information keep coming from all parts of Montenegro about workers' hunger strikes or road blockades, very few Montenegrin officials care for this problem. They still most heatedly argue over political problems. No one is even thinking about the social ones.

AIM Podgorica, June 24, 2001

"We shall be able to preserve the social peace in Montenegro only over the summer", warns Slavko Drljevic, Director of the "Hipotekarna banka" (The Mortgage Bank). Drljevic predicts that "great problems will emerge in the autumn, and everyone should know it, while the authorities should do everything so as to avoid the consequences of that situation".

The growing number of workers' protests also confirms that Montenegro is on the brink of social unrest. Montenegrin roads are probably the best indicator of the social situation. Lately, workers often choose roadblocks as a means for expressing their dissatisfaction. Thus, workers of the Cetinje factory "Obod" for days blocked the traffic on one of the busiest roads in Montenegro: Podgorica-Budva. The daily papers reported: "Assembly President Marovic late for work because of a road block".

It seems that the only problem everyone had was how to remove blockades and send workers home. Ho one was interested in sending workers back to factories. In the meantime, seeing that the "Obod" workers were "honoured" by President Djukanovic's visit, after which that firm concluded a business arrangement with Slovenian entrepreneurs, many others got up their courage and decided to also resort to "traffic control". Consequently, "trade union barricades" sprang up all over Montenegro. Seemingly, workers are not asking much. They mostly want their unpaid salaries. They have been forced to do that because some firms owe as many as fifty personal incomes to their workers.

However, workers of ruined factories were not the only ones who decided on such a move. Associations of Private Entrepreneurs also informed that they would demonstrate their dissatisfaction by putting up road blockades. What are their reasons?

Late last year, the Montenegrin Government decided to finally bring private businessmen into line and "force" them to pay taxes, which they have been evading for years. The black market, fictitious firms which issued false bills, the authorities which looked the other way because of the already bad situation in the country - all that enabled private businessmen to survive, but also made it possible for some of them to profit and even make a fortune. However, by its decision that all catering and crafts establishments must have tax cash registers which automatically calculate turnover tax the state put a stop to all that.

Without tricks or lies. As the Directorate of Public Revenues, which is in charge of the entire deal, entitled the campaign - "It's time for order". Nevertheless, no matter how things stand now, the planned introduction of order has only caused a mess. In a costly and noisy media campaign, private businessmen started an avalanche of accusations against the authorities. In the first place, they accuse them of monopoly. Namely, the Government of Montenegro established an enterprise SEKAS for the servicing of all cash registers that private firms first have to buy from the Directorate of Public Revenues. To put it simply - the Government decided for someone else which cash registers they would use, whom they would buy them from and where to repair them. The cash register in question is a "Sharp" model for which the private businessmen claim to be an old outdated type which is no longer used anywhere else in the world so that they are now forced to change their modern equipment with inferior one because the Government says so!

Although according under the law every firm was under obligation to acquire such cash register by this January 1 so that all firms could start using them gradually, depending on their economic activity, many private firms still do not have them. They refuse to be victims of state monopoly. Consequently, the Financial Police closed down several private shops because they did not have these cash registers.

Now, private firm owners, just like workers, are threatening to block the roads. However, they have come up with another form of protest. Namely, if they are not allowed to obtain cash registers from other suppliers, private businessmen, who had been forced to buy these cash registers from the state, announced that they will bring them in front of the Montenegrin Parliament building during its session and leave them to delegates "to decide what to do with them", as an owner of a coffee-shop in the centre of Podgorica told us.

"Everything that they are preparing is of rather dubious quality and devoid of any transparency", comments Slavko Drljevic the current tax reform. "I am a supporter of the introduction of tax registers and tax order, but judging by reactions, this has to be done differently", says Drljevic.

While information keep coming from all parts of Montenegro about workers' hunger strikes or road blockades, very few Montenegrin officials care about this problem. They still most heatedly argue about political problems. No one is even thinking about the social ones.

"I am afraid that we are unaware of the situation we are in", warns Drljevic. "However, foreigners should know it much better. On the basis of their sources, the Slovenes forecast a rather bleak economic future for Montenegro. Long ago they had all the data on the last year's annual financial report of the Montenegrin economy, which has been published here only now", claims Drnjevic.

Now the Montenegrin public is awaiting the formation of a minority Government which will, in all likelihood, be faced with some major challenges. At this moment, it would be realistic to expect for the political problems and question of Montenegrin statehood to be pushed into the background by the social problems. However, if forecasts of some experts that the autumn will bring social unrest prove correct, it is hard to tell what will happen next.

In the meantime, the Government has decided to make a radical move – to sell "Telekom", currently the most valuable Montenegrin enterprise. Will it be able to fill "budget gaps" with proceeds from this sale and buy some more social peace remains to be seen.

Marijana KADIC

(AIM)