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Last Updated: Tuesday, 18 September 2007, 10:24 GMT 11:24 UK
Montenegro seeks fruits of statehood

A year has passed since the former Yugoslav Republic of Montenegro held its first general election after becoming an independent state. The BBC's Nick Hawton finds out how Europe's newest country, with a population of just 650,000, is coping.

In a steel factory in the town of Niksic, in northern Montenegro, the carcasses of Soviet-era T-55 tanks lie burning and smouldering.

Tank being melted down
The recycling of old tanks is symbolic, the government says

Their precious steel is being fed to the furnaces and turned into objects for civilian use.

After 15 years of war, economic crisis and political turmoil, the voluntary destruction of weapons is something of a rarity in this part of the world.

It is a sign of changing times.

"The cutting of the tanks has had a good impact - political, psychological, symbolic," says Ljubisa Perovic, the deputy defence minister.

"We have been welcomed into the world community and we want to play our part. We want to build our democracy," she says.

The money made from selling the steel will be used to further reduce surplus stockpiles of weapons in the country.

It is part of a major reform of the military that has seen conscription abolished and the army reduced by half.

'Strong achievements'

About an hour's drive from the steel factory is the capital, Podgorica, the scene of street celebrations a year ago when the country voted in a national referendum to break from its union with Serbia.

Mirjana Kuljak
This country has had the same ruling elite for nearly 20 years
Mirjana Kuljak,
economics professor

Finance Minister Igor Luksic is upbeat about economic progress.

"We are in the midst of an economic boom. GDP growth is assessed to reach 7% this year, inflation is around 2%, public debt is going down rapidly and the unemployment rate is below 12%.

"These are very strong economic achievements," he says.

The country is due to move a step closer to joining the EU with the signing of a Stabilisation and Association Agreement in October.

'Greater accountability'

But not everyone is convinced by the good news story.

"If we are a serious country, we would develop the infrastructure, in terms of roads and water supply," says Mirjana Kuljak, economics professor at the University of Montenegro.

There just isn't much questioning or criticism about the state of affairs
Ana, student

"They are just not developed to the same degree like in neighbouring Croatia."

She is also concerned about the origin of foreign money coming into the country, especially from Russia.

"It would be good if this injection was very healthy but we do not know what is the source of that money. There needs to be greater accountability," Prof Kuljak says.

"One of the big problems is that this country has had the same ruling elite for nearly 20 years."

Incomplete process

Much of the money coming into the country is being invested on the beautiful Montenegrin coastline, which is booming.

It is estimated around 20% of the country's GDP is accounted for by direct, or indirect, tourism. New hotels and businesses are opening almost all the time.

The coastal resort of Budva
Montenegro's coastal tourism has boosted its economy
The wealth generated on the coastline is in stark contrast to the poverty and unemployment that still exists in the mountainous hinterland.

International organisations, like the UN Development Programme, believe there is a growing gap between rich and poor.

Back in Niksic, and the Art Bar in the centre of town, students sip coffee and listen to music.

"Montenegro has not changed much since independence," says Ana, 22, who is studying political science.

"We have a few new sports teams but not much else. This country still doesn't have a fully functional civil society.

"There just isn't much questioning or criticism about the state of affairs. But I guess that is going to take time."

Montenegro is beginning to stand on its own two feet, at least economically.

But no-one believes the process of change and reform is anywhere near finished.

Veteran Montenegro PM 'to quit'
03 Oct 06 |  Europe
Europe diary: Montenegro mood
26 May 06 |  Europe

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