The making of a state: transition in Montenegro.

• Author: Luksic, Igor
• Position: Report

The first Montenegrin state started to take shape in the 8th century with the arrival of the Slavs and their mingling with the local population. Originally it was called Doclea, whose ruler received a royal insignia by the Pope Gregory VII in 1078 (Andrijasevic and Rastoder 2006). Montenegro fell under the Ottomans in the late 15th century, but acted as a de facto independent state until formal recognition came at the Berlin Congress in 1878. Despite being on the victors' side in the Balkan Wars and in World War I, it was annexed by Serbia and lost its sovereignty in 1918. After the Second World War it became a part of socialist Yugoslavia, where it remained until 1992.

Montenegro's political transition started in earnest after the Belgrade Agreement signed in March 2002. Montenegro held an independence referendum in 2006 and was subsequently admitted to the United Nations and other international organizations. Today Montenegro is engaged in accession talks with the European Union (EU).

Political Aspects of Transition in Montenegro

At the beginning of the 1990s, the process of opening a socialist society began in Montenegro, as it did in most other countries undergoing transition. The first multiparty ballot elections and the establishment of the first democratic government took place. Since the beginning of transition, the Democratic Party of Socialists (DPS), successor of the League of Communists, has been the main political driver in the country. One can say that the transition in Montenegro has been characterized by program changes of the DPS, which also defined the country's path.

At the beginning of transition, the political and economic processes in Montenegro were under the dominant influence of the transition processes in the bigger member of the federation, Serbia. At the same time, the character of the Montenegrin society, which was predominantly a traditional society, made for a slow opening up to Europe. This stage of transition is characterized by a clash within the communist elite, as a pro-reform opposition never took form (Darmanovic 2003). Shortly after the changes, the Democratic Forum was established, a roundtable which prompted the establishment of multipartism.

In order to understand Montenegro's institutional setting, it is important to remember that the Yugoslav republics enjoyed significant rights stemming from the 1974 federal Constitution. Even prior to 1992, Montenegro had a number of institutions such as the constitutional court, parliament, government, Ministry of Foreign Affairs, and central bank. This institutional history makes Montenegro's situation somewhat different from other newly independent countries. Slovakia, for example, started creating institutions from scratch after the Velvet Divorce. So did the three Baltic countries after 1991.

Still, most of the political decisions were made in Belgrade, and Montenegro's institutions were quite weak. Additionally, the political process of transition in Montenegro was weighed down by civil wars in the former Yugoslavia and sanctions imposed by the United Nations in 1992. Thus, the political transition in Montenegro truly started after the clash in the ruling Democratic Party of Socialists in 1996. The DPS split into two factions: one that remained loyal to the Milosevic regime in Belgrade with the then President Momir Bulatovic at the helm; and the other, a pro-Western faction, led by Prime Minister Milo Djukanovic. These intraparty clashes created conditions for a new stage in transition and resulted in the Agreement on Minimum Principles for Development of a Democratic Infrastructure in Montenegro. It provided guarantees to the opposition that the electoral process would be fair and to the pro-reform part of the ruling party that it would receive the necessary support to oppose the official stance of Belgrade. The result was the election of Djukanovic as the President of Montenegro in 1997.

Not only did Djukanovic oppose Milosevic at a great personal risk, but he also steered the country toward economic reform. Montenegro was able to pursue many reforms including those in the second wave (mid- to end 2000s) that we were in the position to propose and implement. (1) On many occasions, such as the decision to introduce the German mark as a legal tender in late 1999, President Djukanovic was under significant pressure from the international community to reconsider, but he did not waver.

However, this period did not see a democratic consolidation of Montenegro's political regime due to the unresolved issue of sovereignty. The political clash between Podgorica and Belgrade at times threatened to turn into a military clash. The defeated candidate in the 1997 elections, Bulatovic, was later appointed federal prime minister in an attempt to discipline Montenegro--a position he retained until the fall of Milosevic in 2000. This stage lasted until a political agreement was reached on transforming the Federal Republic of Yugoslavia into a new entity called Serbia and Montenegro in March 2002. The agreement established a union between Montenegro and Serbia for a three-year term. This was a crucial interim step toward independence. However, the implementation of the union took a full year following the signing of the Belgrade Agreement.

The watershed year was 2006, at which time referendum rules were defined with the intermediation of the international community. Those rules included the provision that more than 55 percent of those casting their vote must opt for independence for Montenegro to restore its statehood. The referendum was held on May 21, 2006, bringing victory to supporters of independence by a margin of 55.5 percent to 44.5 percent, with an almost 90 percent turnout.

The newly established independence and the smooth divorce from Serbia meant that the process of institutional development could start for real." Immediately following the declaration of independence and after gaining international recognition, two key strategic state objectives were defined: membership in the European Union and in NATO. Those two goals largely act as an anchor for political reforms. Montenegro also signed the Stabilization and Association Agreement with the EU in October 2007, and shortly thereafter adopted the new Constitution, while acquiring EU candidate status at the end of 2010.

Entry into the EU meant progress in six institutional and legal areas as a condition for opening accession negotiations: the electoral process, judicial independence, fundamental human rights, the fight against corruption and organized crime, cooperation with the civil sector, and strengthening the independence of the media. By mid-2012, sufficient progress was made and Montenegro opened membership negotiations with the EU, thus entering the latest stage of economic transition. By June 2016, out of the total of 35 negotiating chapters 22 were opened. (3) Assuming a successful completion of negotiations by 2019 and the ensuing ratification of the future membership agreement, Montenegro could become a full member of the EU in 2021.

Concurrently with the process of European integration, Montenegro is taking steps toward NATO membership, at first in the form of the Partnership for Peace, and then through the Membership Action Plan. At the end of 2015, NATO made the decision to invite Montenegro to join the alliance, with full-fledged membership to occur in 2017.

The further development of democracy and economic reform in Montenegro should be geared toward developing a modern state. According to Freedom House (2015), Montenegro today is a "partially free country." The rule of law needs to be further developed by encouraging a political culture of dialogue, tolerance, transparency, and accountability. Countries in transition that have steered their political system in this direction have built functioning democracies and successfully implemented economic reforms--in particular, we studied the experience of Poland, Estonia, and Slovakia.

Economic Aspects of Transition in Montenegro

The economic transition in Montenegro, like the political one, is a process taking place in several stages. The first stage is related to the period since the beginning of the 1990s, with the introduction of multipartism. The second relates to the period 1998-2002 when a definite discord took place between Podgorica and Belgrade. The third stage started with the election of the new government in January 2003 and lasted until the declaration of independence in 2007. The fourth stage occurred during the period between the restoration of independence and the opening of EU membership negotiations in 2012. The current and final stage will last until EU membership is obtained, hopefully in 2021.

Even though economic transition in Montenegro started in the same period as in other countries of the former eastern bloc, it was soon thwarted due to irregular political conditions in which the economic transformation was taking place. Politics came to dominate the economic process, and progress toward greater economic freedoms came to a halt. This period is characterized by the economic blockade imposed on Montenegro due to international sanctions introduced by the United Nations on the Federal Republic of Yugoslavia in 1992. Gradual withdrawal of sanctions began only in 1996. At the same time, due to the loss of the common market of socialist Yugoslavia on which Montenegro's economy predominantly depended, as well as wars in the neighborhood, the GDP took a...