Growing pains. Montenegro after 16 years of independence

After 16 years of independence, there are no significant political forces in Montenegro that could openly challenge this status and seek to re-establish a federation with Serbia. However, the relationship with Serbia continues to be among the key issues shaping the young state’s politics. Its relations with Belgrade are the source of a protracted dispute between the Democratic Party of Socialists of Montenegro (DPS), which had spent over three decades in power until 2020, and a Church-backed alliance of more than a dozen parties, mostly with a centre-right profile, united in their intention to remove DPS from power. The legacy of DPS, who view themselves as the founding fathers of Montenegrin independence, is associated with certain successes (the launch of accession talks with the EU, Montenegro joining NATO, the country’s economic development), but also has major drawbacks, such as the reduction of democratic standards, the concentration of economic and financial resources in the hands of the ruling elite, increased financial dependence on China and a rise in corruption and organised crime. Although a centre-right coalition has been in power in Montenegro since 2020, it is affected by instability resulting in high social polarisation and by a conflict over the status of the Serbian Orthodox Church operating in the country, which is viewed as an instrument of leverage used by Serbia and as a regional centre of cultural influence associated with the “Serbian world”.

The genesis of sovereignty

Montenegro’s rise to independence followed a process which bore the hallmarks of a similar process which the states of the former USSR underwent, where a portion of local Communist elites took advantage of the former union state’s disintegration in order to acquire property and to “privatise governance structures”. Montenegro became independent of Serbia in 2006 in consequence of the tendencies associated with the break-up of the Yugoslavia that had begun in 1990.

After the Second World War, Montenegro became one of the republics making up the Socialist Federal Republic of Yugoslavia and, in 1992, on the ruins of this former state, it co-formed the Federal Republic of Yugoslavia alongside Serbia. In this republic, Montenegro enjoyed major independence (it had its own president and a separate parliament), while foreign and defence policy remained in the capacity of the federal authorities in Belgrade. Due to controversy among the Montenegrin post-Communist elite over their country’s cooperation with Serbia, which started to increase in the mid-1990s, Montenegro’s institutions began to gradually transform into genuine centres of power.

The fundamental conflict in the local post-Communist political elite happened between the supporters of the group led by Slobodan Milošević (Momir Bulatović, Predrag Bulatović) and politicians who, in the mid-1990s severed their relations with the leadership in Belgrade (Milo Đukanović, Filip Vujanović, Željko Šturanović). They criticised the Federal Republic of Yugoslavia’s increasing isolation on the international scene and Milošević’s increasingly authoritarian style of governance. The group centred around Đukanović (who served as Montenegro’s prime minister from 1991, and as president from 1998) started to build Montenegro’s image as a pro-Western country both domestically and abroad, in contrast to Milošević’s Serbia, which at that time was viewed in Europe as the country that should be held accountable for the bloody wars in the Balkans and as a non-democratically ruled state with an anti-Western orientation. Đukanović’s line of thinking was supported by a major portion of society – one that was pro-Western and increasingly willing to sever all ties with Yugoslavia. At that time, the pro-Serbian group in Montenegrin politics, for its part, adopted a passive attitude and waited for Belgrade’s actions.

The Montenegrins’ independence ambitions took shape following the fall of Milošević in 2000, when Belgrade began to seek a new formula for how the state, weakened by a decade of wars, territorial disintegration, international sanctions and economic crisis, should function. In 2006, Montenegro decided to use it right to hold an independence referendum, which had been introduced in 2003, when the country’s confederation with Serbia was formed (to replace the Federal Republic of Yugoslavia). 55% of the Montenegrins who took part in the vote (the turnout was 86%) were in favour of their country’s independence (44% were against).

A slow march westwards

When Montenegro declared independence, its political elite was hoping for the country’s rapid accession to the European Union, which seemed a natural choice for a country with a population of 600,000, a small economy and strong tourism potential. In 2007, Montenegro signed a Stabilisation and Association Agreement with the EU, and in 2008 it submitted its application for EU membership. Although accession talks were launched in 2012, their pace is very slow due to the absence of political will in EU member states to continue to expand the bloc, and due to persistent dysfunctions affecting the Montenegrin state. While maintaining their pro-EU rhetoric, the government in Podgorica have made little progress over the years when it comes to building transparent democratic institutions, in particular in spheres such as the judiciary, combatting corruption and organised crime, and the fight against the shadow economy. So far, only three negotiating chapters have been closed (science and research, education and culture, and external relations). The greatest difficulties have been recorded in negotiations regarding chapters 23 and 24, which relate to the judiciary and fundamental rights, as well as justice, freedom and security, and in talks focused on regional policy and structural instruments. Despite problems with achieving progress in the accession process, Montenegro’s EU membership continues to enjoy the support of more than 75% of citizens.^[1]

Montenegro’s accession to NATO in 2017 was the culmination of its efforts (involving, for example, sending small military contingents to Afghanistan) which had enabled it to be granted candidate status in 2010 and to receive a formal invitation to join NATO in 2015. The Montenegrin army has a minor military potential including just over 2,000 troops, a fleet of several warships, and around fifteen helicopters and fighter jets.^[2] In spite of this, Montenegro’s accession to NATO was a highly important development because it consolidated NATO’s potential in the Adriatic Sea due to it gaining access to the Montenegrin ports of Bar and Kotor (following on from Albania and Croatia’s NATO accession in 2009). NATO’s enlargement prevented Russia from pursuing its ambitions in the Balkans and boosting its military presence in the Mediterranean region.

Montenegro’s integration with NATO happened despite the absence of social consensus on this matter – the proportion of supporters of NATO membership was more or less equal to the proportion of its opponents – around 39%, while 18% of those surveyed had no opinion on this matter.^[3] The relatively high anti-NATO sentiment in Montenegro resulted from society’s then still vivid memory of NATO’s bombardments of Yugoslavia back in 1999, which inflicted damage on Montenegro’s infrastructure. However, the proportions of NATO supporters and opponents changed significantly over subsequent years – in June 2021 67% of Montenegro’s citizens supported their country’s NATO membership, while the opposite view was declared by 33% of them.^[4]

Difficult economic development

When Montenegro gained independence, its economy flourished, albeit its growth dynamic was undermined by global market turbulences. Despite the fact that back in its Yugoslav era, Montenegro had successfully developed its agriculture, industry and tourism, the level of its prosperity decreased rapidly due to hyperinflation recorded during the decade under Milošević. A major decline in the share of the industrial sector in the country’s GDP was recorded at that time – from 45% in 1989 down to 12% in 2000.^[5] However, the dynamic development of the tourist sector emerged as the new impetus for the economy – its share in the country’s GDP increased from 2.5% in 2000 to 7.8% in 2019.^[6]

In Montenegro, the economic transition processes towards a modern market economy model operated differently than in Serbia, mainly due to the country unilaterally adopting the euro in 2002. This helped to reduce the Montenegrin inflation rate from a double-digit one recorded in the 1990s to a single-digit one recorded since 2003. On the other hand, it limited the possibilities of devaluing the national currency. However, in this respect, Montenegro achieved better results than Serbia. Back in 2006, the country’s GDP per capita stood at US$ 3,618 and was 17.6% lower than that recorded in Serbia (US$ 4,393)^[7] but in the following years these proportions reversed. In 2021, Montenegro’s GDP per capita was higher than Serbia’s (US$ 7,339 vs. US$ 7,089). Despite this success, the country’s unemployment rate remains high (in 2006 and 2021 it was 14% and 15%, respectively),^[8] which is due to the continuously large grey zone and a low effectiveness of the state fiscal administration.

Montenegro’s close ties with Serbia are evident in its foreign trade figures – Belgrade continues to be its main trading partner. In Q1 2022, the Serbian market’s share in Montenegro’s exports stood at 32%, and in its imports – 50%.^[9] Montenegro’s principal export activity involves the sale of aluminium and electricity (in 2020 it was worth US$ 65 million and US$ 56 million, respectively), as well as medicines. In 2021, revenue generated by the tourist sector stood at more than 700 million euros, which accounted for more than 30% of the country’s GDP. As a consequence, Montenegro has become most dependent on tourism among all European countries.^[10] The Covid-19 pandemic and Russia’s invasion of Ukraine delivered a major blow to the Montenegrin economy because they halted the inflow of tourists to the country. In 2020–2021, as many as 58% of companies operating in the hotel and leisure business and 72% of entrepreneurs active in other branches of the tourist sector were forced to temporarily halt their business activity.^[11] According to estimates, almost 20% of visitors travelling to Montenegro at that time were Russians and Ukrainians.^[12]

One of Montenegro’s problems is its major debt which was generated in large part due to expensive loans extended to Montenegro by China for the implementation of unprofitable road infrastructure investments. The EU refused to fund a portion of these projects, fearing that Montenegro would be unable to repay its loans. As a consequence, the Montenegrin authorities began to borrow money from Chinese financial institutions and Beijing became the creditor of around a fifth of Montenegro’s sovereign debt. In 2014, the Montenegrin state borrowed more than 809 million euros from the Chinese Exim bank for the construction of a motorway from the port of Bar to Serbia. In April 2021, ahead of the deadline for repayment of the first instalment of this loan in the amount of more than 55 million euros, Podgorica turned to the European Commission for help. The European Commission helped Montenegro to sign a debt restructuring agreement, involving a portion of its debt owed to China, with German, French and American banks, which enabled it to repay the subsequent instalments.^[13] At present, the government representatives emphasise the need to end Montenegro’s loan dependence on China due to increasing concerns about a scenario in which the country would be forced to cede control of the port in Bar to Beijing.

Even before its declaration of independence, Montenegro was within the reach of significant Russian economic influence. The most typical example of this situation involved the takeover in 2005 of the aluminium-producing KAP plant in Podgorica by the CEAC company owned by oligarch Oleg Deripaska, a close associate of the Kremlin. Until the outbreak of the financial crisis in 2008, the company had generated 14% of Montenegro’s GDP and accounted for nearly half of its exports. In addition, it was among the country’s biggest employers (with a headcount of nearly 3,000 individuals). However, in 2013 the company announced its insolvency and in 2014 it was purchased by Montenegrin businessmen. Russian influence in Montenegro continues to be noticeable, although in recent years it has been on the wane. Until the outbreak of the war in Ukraine, Montenegro was among the locations in which Russian oligarchs kept their luxury assets – for example Roman Abramovich’s yachts worth nearly 500 million euros docked in a port in Montenegro.

An ethnic and religious mosaic

Divisions along ethnic and religious lines continue to be a potential source of instability in the young Montenegrin state. According to the most recent census carried out in 2011, 44% of Montenegro’s residents declare themselves as Montenegrins,^[14] 28% as Serbs, 8% as Bosniaks, 5% as Albanians, 0.8% as Croats, and 3% describe their nationality as “Muslim”. Although the state’s constitution indicates that the country’s official language is Montenegrin, a mere 36% of its residents declare that they speak it, while 42% indicate Serbian as their country’s official language, and 2% indicate Serbo-Croatian.^[15] Albanian and Bosnian are both spoken by 5% of the country’s citizens. 72% of Montenegro’s residents are Eastern Orthodox Christians and belong to the Metropolitanate of Montenegro and the Littoral (MML) of the Serbian Orthodox Church. It is difficult to estimate the number of followers of the Montenegrin Orthodox Church which is not recognised by other autocephalous churches (most estimates suggest that around 8% of Montenegro’s residents belong to this church). Formally, it was not registered as a religious community but as a non-governmental organisation. More than 19% of Montenegro’s citizens declare themselves as believers in Islam, and slightly more than 3% as Catholics.

In recent years, the MML became a participant in heated political disputes. For years, DPS have promoted the idea of its autocephaly due to concerns that its structures are dependent on Serbia. They view these structures as a channel used for spreading Serbian influence and anti-Western sentiment. For some time already, the MML has been closely associated with the Serbian ruling elite and has manifested an ambivalent attitude towards geopolitical issues, in particular those relating to Russia, which is a source of instability of the socio-political situation in Montenegro. DPS argue that a Church independent of Belgrade could be viewed as a crowning achievement in the process of building the independent Montenegrin state. Metropolitan Amfilohije, who was the head of the MML from 1991 until his death in 2020, was opposed to this idea and supported the view that there was no contradiction between Serbian culture and Montenegrin culture. He even viewed Montenegrin heritage as a type of Serbian identity. Although his critics accused him of maintaining close relations with Serbian nationalist groups, and the fact that he repeatedly – until his death – claimed that he felt both Montenegrin and Serbian, in 2006 he acknowledged the outcome of the independence referendum and the resulting Montenegrin statehood. He attempted to make himself partly independent of Belgrade and unilaterally decided to manage his metropolitanate and its finances via the Congregation of Bishops of Montenegro. This institution was important not due to its mandate enshrined in the canon law but due to the metropolitan’s personality as he was generally seen as the most-revered religious authority in Montenegro after the break-up of Yugoslavia. Joanikije II, Metropolitan Amfilohije’s successor elected in May 2021, has not yet convened this body.

The enactment by DPS in 2019 of the law on the freedom of religion or belief, which authorised the state to seize the MML’s property that is more than 100 years old, sparked violent protests nationwide under the slogan “We won’t give our churches back!” and cast a shadow on Montenegro’s relations with Serbia. Religious tension flared up again when the new Serbian metropolitan of Montenegro, Joanikije II, was enthroned in September 2021 at Cetinje Monastery. Milo Đukanović’s camp interpreted this event as provocative (the monastery is a place of special significance for the history of Montenegro and many Montenegrins view it as the centre of their country’s cultural identity).^[16]

The founding fathers of Montenegrin independence appropriating the state

The divisions present on the Montenegrin political scene are rooted in the disputes that emerged in the 1990s between the camp advocating independence and the political forces seeking to maintain the country’s ties with Serbia. However, after 16 years of the existence of an independent Montenegro, its parliament has no parties that would openly challenge the country’s independence or would seek to re-establish its former state relations with neighbouring Serbia. Despite this, recent years have seen regular tensions between Belgrade and Podgorica, in particular over the potential autocephaly of the branch of the Orthodox Church operating in Montenegro. The country’s main line of division is the conflict between Milo Đukanović’s presidential camp, represented by the currently biggest opposition party in parliament (DPS) and its political allies (small left-wing and liberal parties) on the one hand, and the ruling centre-right coalition composed of several different parties united in their opposition to DPS and its allies, on the other.

Đukanović’s camp emphasises Montenegro’s multi-ethnic nature and criticises specific nationalist tendencies (in particular the Serbian and Albanian ones) and supports the new concept of historical policy based on emphasising Montenegrin state traditions: the vladikat which existed between the 17^th and the 19^th centuries (in which power was held by Orthodox bishops hailing from the country’s most prominent families) and the independent Kingdom of Montenegro which existed from 1910–1918. This group is critical of Serbia’s activity in the region – it supports Kosovo’s independence, is opposed to changes to the political system of Bosnia and Herzegovina, which was consolidated by the Dayton Agreement, and is wary of Russia. Furthermore, it supports the proposed autocephaly of the MML.

The system of power built by DPS, who ruled the country for three decades, has resulted in them appropriating the important spheres of public life, including the judiciary, the economy and the media, and in a rise in corruption, the abuse of power and tolerance for organised crime. The government has accumulated the majority of the state’s economic assets. It has seized control of the black market and Montenegro has become one of Europe’s hotspots of tobacco and drug smuggling in which the port in Bar is playing a key role.^[17] The country’s two main criminal gangs (the Kavač clan and the Škaljari clan) are competing for control of it. They have strong ties not only with the Montenegrin political elite, but also with Serbian politicians and groups associated with collaborators of Serbian President Aleksandar Vučić.^[18]

The initially pro-Serbian centre-right camp, which opposes DPS, has evolved and assumed a more moderate attitude. It no longer openly supports the idea of rapprochement with Serbia and is aware of the fact that Serbia’s ambivalent stance in the sphere of foreign policy is unpopular with Montenegrin society. Instead, it seeks to combine a pro-Western orientation with openness to cooperation with Belgrade. Despite numerous contentious political and economic issues, at present what binds the ruling coalition together is its criticism of the system built by DPS. Its more liberal and pro-Western part, represented by pro-Western politicians of the younger generation such as Dritan Abazović (who served as Montenegro’s prime minister from April to August 2022) and his party (the United Reform Action, URA), is in favour of turning the temperature down on disputes related to politics, history and the outlook on life by focusing on European integration, efforts to build civil society and on ecology. Furthermore, it intends to defuse tension in Montenegro’s relations with Serbia and to normalise the contacts between the state and the MML. However, the most conservative portion of the ruling camp is sceptical about Kosovo’s independence and supports Serbia’s position towards Bosnia and Herzegovina. Strong pro-Russian sentiment was present in this group starting from 2020, although in recent years it has been on the wane.

2020 was a watershed moment because DPS – after almost three decades of uninterrupted rule – lost the parliamentary elections. This was in part due to the protests against the planned seizure of churches; the demonstrations mobilised those voters who opposed the ruling party to take part in the elections. However, the agency of the centre-right coalition that has been in power since 2020 is undermined by the lack of internal cohesion and the need to co-exist with President Đukanović. The new government signed an agreement to regulate the activity of the MML on 3 August 2022 which sparked the most serious crisis in the coalition to date and may culminate in a snap election. The politicians who have been in power since 2020 emphasised that it was necessary to regulate the Church’s functioning in the long-term perspective due to the fact that the law on the freedom of religion or belief enacted at the end of DPS’s rule copied certain legislative solutions introduced in the Communist Yugoslavia era and limited its freedom in various spheres of life, including: education, health care and the state-controlled media.

Attempts at a rapprochement with Serbia

In the first decade of Montenegro’s independence, Đukanović’s camp emphasised the need to maintain good relations with Belgrade. The situation changed when the ruling camp centred around President Vučić consolidated its position in Serbia. Another reason behind the crisis in Montenegrin-Serbian relations involved the events that followed the 2016 parliamentary elections in Montenegro, when Podgorica accused Russia (and, indirectly, Serbia) of attempting to carry out a coup d’état intended to scupper the country’s accession to NATO. Despite the fact that the DPS-led government failed to present any credible evidence to corroborate their suspicions, these accusations enabled Đukanović to promote his political camp as a dam to block any attempts to build a “Serbian world” in the Balkans – this latter idea is an exact copy of the “Russian world” ideology.

DPS is strongly opposed to Montenegro’s participation in the Open Balkan initiative promoted by Belgrade because they view it as an attempt to revive Serbia’s domination in the region.^[19] The governments formed following the 2020 elections have sought opportunities to improve their country’s relations with Serbia while maintaining a clearly pro-Western course in its foreign policy. On the one hand, the centre-right coalition’s pro-Serbian gestures are frequently viewed as insufficient for Belgrade and, on the other, they meet with harsh criticism from DPS. One example of this was the change in the government’s stance on the Open Balkan initiative. The Dritan Abazović government began to emphasise that Montenegro joining this initiative might improve the country’s regional, and even European, standing. However, this view was criticised by the Đukanović camp. To refute the accusations of being pro-Serbian, Abazović stressed that he supported the plan to accelerate the process of European integration for North Macedonia, Albania, Bosnia and Herzegovina, and Serbia, and criticised the prolonged period of these countries being on the EU waiting list.

Despite certain tension within the coalition, following Russia’s invasion of Ukraine Montenegro’s government backed EU sanctions, expelled Russian diplomats and froze assets belonging to Russian oligarchs (e.g. it seized Roman Abramovich’s yacht). Furthermore, Montenegro took in more than 7,000 Ukrainian refugees. These decisions likely corroborate the evolution of the position of the ruling camp which DPS continue to accuse of supporting pro-Serbian and pro-Russian views. However, several less influential politicians from the ruling coalition warned against exacerbating Montenegro’s relations with Moscow, and the Montenegrin media – citing US sources – reported that in 2010–2020, Russia had sponsored several pro-Serbian parties including the Democratic Front which now co-forms the government.^[20]

The young state’s outlook

Montenegro’s greatest success is its ability to maintain its pro-Western course despite its post-Yugoslav legacy and the strong anti-Western sentiment associated with it. The country has joined NATO, embarked on the path of European integration and is viewed as the leader among the Western Balkan countries on the EU waiting list. Macroeconomic indicators suggest that although the two countries had a similar starting point, Montenegro’s pace of development is faster than Serbia’s. However, issues such as the lack of independence of the country’s judiciary and corruption continue to slow down Montenegro’s EU accession process. The country has seen numerous instances of EU pre-accession funds being wasted or embezzled by its elites, both those linked to DPS and those in power since 2020. The halt in the EU accession process makes the country vulnerable to the influence of stronger regional and global actors, in particular China and Russia.

Unlike in other Western Balkan states, in Montenegro ethnic tensions are insignificant, and politicians hailing from national minorities – mainly Albanian, Bosnian and Croatian – take part in public life (although the acting Prime Minister Abazović is an ethnic Albanian, in public he only speaks Montenegrin which is the country’s sole official language). However, given the intricate ethnic mosaic, one important question is how many of the country’s citizens who do not identify as ethnic Montenegrins would be loyal towards the young state in the event of renewed international problems and conflicts in the Balkans that would pose a risk to Montenegro’s sovereignty and territorial integrity.

Due to Serbia’s significant role in Montenegrin politics, the dispute between the camp centred around DPS and President Đukanović on the one hand, and the coalition that has been in power since 2020 on the other hand, is something more than an internal conflict. Belgrade continues to have an impact on Montenegro when it comes to key international challenges such as the country’s attitude towards Russia, China, Kosovo’s independence and the future of Bosnia and Herzegovina. Issues related to the Church (which spark controversy in society) are another sphere of Serbia’s influence in Montenegro. The MML is dependent on religious leadership operating from abroad and its very existence triggers disputes regarding the relations between the Montenegrin identity and the Serbian identity. In addition, the Serbian Orthodox Church continues to be an ally of the Russian Orthodox Church which promotes Russophile thinking and backs the policy pursued by the Kremlin.^[21] This conflict is likely to endure and will continue to polarise society, although it is favourable to both sides: to DPS because it enables it to position itself as the guarantor of the state’s secular nature, and to the elite in power since 2020 because it helps it to continue its narrative emphasising the defence of the Serbian Orthodox Church and the promotion of traditional values in public life.

The prolonged political crisis, which has been ongoing since the vote of no confidence towards the Abazović government was passed in August 2022, will most likely lead to early elections being called. It cannot be ruled out that DPS will return to power in consequence of these elections. Should Đukanović continue to be the country’s president at least until April 2023 (and possibly longer, if he chooses to run in the next presidential election and is successful), this may lead to an attempt to revive the system that had operated until 2020. One consequence of this would involve a renewed conflict with the Church, which could potentially result in an escalation of the internal dispute and serious deterioration in relations with Serbia. Despite its NATO membership and its uninterrupted European integration course, Montenegro continues to be a potential element of instability in the region, and the process of building efficient state institutions are likely to last many years.