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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2006
MONTENEGRO STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Politic and Economic Environment
Montenegro emerged as a sovereign state
after just over the required 55% of the
population opted for independence in a May
2006 referendum. The vote heralded the end
of the former Union of Serbia and
Montenegro which had existed since 2003
and which was itself the rump of the former
Yugoslavia.
The EU-brokered deal forming it was
intended to stabilize the region by settling
Montenegrin demands for independence
from Serbia and preventing further changes
to Balkan borders. The same deal also
contained the seeds of the union's
dissolution. It stipulated that after three years
the two republics could hold referendums on
whether to keep or scrap it. Montenegro
opted for the latter.
Montenegro last experienced independence
nearly 90 years earlier. It was absorbed into
the newly-formed Yugoslavia at the end of
World War I. There were fears that the 2006
independence vote could lead to unrest in
the areas of Montenegro where ethnic Serbs,
who make up roughly a third of the
population, form the majority and strongly
oppose separation from Serbia. There was
backing for independence from most ethnic
Montenegrins and ethnic Albanians living in
Montenegro.
The pro-independence camp led by Prime
Minister Djukanovic argued that the
association with Serbia was holding the
republic back, not least with its bid for EU
membership. Montenegro will now seek
negotiations on a stability and association
agreement with the EU in its own right.
As the successor state to the union, Serbia
inherited its seat at the UN and other
international organizations. The newlyindependent
Montenegro has since been
admitted to the UN in its own right
Montenegro, which means "Black Mountain",
borders Croatia, Bosnia, Serbia, Serbia's
breakaway province of Kosovo and Albania.
About half of it is covered in thick forest.
The tiny republic encompasses an Adriatic
coastline, lowlands and high mountain
ranges. The Tara River canyon is the
deepest and longest in Europe.
Filip Vujanovic, a pro-independence
candidate and an ally of the prime minister,
has been president since May 2003.
Milo Djukanovic, the spearhead of
Montenegrin independence, is to step down,
just a month after winning the September
2006 general elections. President Vujanovic
says the prime minister is leaving for
personal reasons.
Mr. Djukanovic said his election victory
proved that Montenegro was firmly on the
European track. One of the major tasks for
parliament will be to draft a constitution.
Milo Djukanovic is the only Balkan leader to
have remained in office - as prime minister or
president - since the disintegration of the
former Yugoslavia in 1991.
At the time of his first premiership he was an
ally of then Serbian leader Slobodan
Milosevic and favored the preservation of a
federal Yugoslavia. Under his premiership
Montenegrin forces within the Yugoslav army
played an important role in the siege of
Croatia's historic city of Dubrovnik.
A rift with Mr Milosevic developed from the
mid 1990s on. The split was underlined in
1997 when Mr. Djukanovic defeated the pro-
Milosevic candidate in Montenegro's
presidential election.
He went on to win favor with the EU when he
declared that Montenegro was not a party to
the conflict over Kosovo when President
Milosevic's actions there led to Nato air
strikes. Parties allied with Mr Djukanovic won
Montenegro's general elections in October
2002. At that point he gave up the
presidency to resume the more hands-on
role of coalition prime minister, a job he first
carried out in 1991 at the age of 29.
His pursuit of independence rang EU alarm
bells over potential dangers for Balkan
stability. Under EU pressure, he reluctantly
agreed to the formation of the new, looser
Union of Serbia and Montenegro in 2003 -
but only after it was agreed that the crucial
referendum on its future could be held three
years later.*
* BBC Country Profile.
http://news.bbc.co.uk/2/hi/europe/country_profiles/5033274.stm
Key Information Contacts
Securities Commission of Montenegro www.scmn.cg.yu
Central Depositary Agency www.cda.cg.yu
Central Bank of Montenegro www.cb-cg.org
Ministry of Finance www.ministarstvo-finansija.cg.yu
Montenegro Statistical Office www.monstat.cg.yu
2003-FOREIGN TRADE - IMPORT (%) 2003-FOREIGN TRADE - EXPORT (%)
Europe Asia South America
North and Central America
Europe
Other
North and Central America
85.8 7.1
3.1
4.0
96.6 3.0
0.4
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