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Reuters: Interview - Montenegro leader sees slow economic recovery

Published date: 10.12.2009 15:32 | Author: Kliping inostranih medija

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Reuters: 08.12.09

INTERVIEW-Montenegro leader sees slow economic recovery

By Adam Tanner

PODGORICA, Dec 7 (Reuters) - Montenegro's economy will emerge from recession in mid-2010 and grow about 0.5 percent for the year after suffering a big slowdown this year, the prime minister said on Monday.

After growing 10.7 percent in 2007 and 7.5 percent in 2008, the former Yugoslav republic of 650,000 has seen investment slow, exports fall and the global economic crisis shrink its GDP by about 4 percent this year, Milo Djukanovic told Reuters in an interview.

"In our economic projections for 2010, the government foresees continued impact from the world economic crisis for the first six months in Montenegro, but then six months that could bring growth again," the prime minister said.

"By the end of 2010, we can realistically speak of growth from 0.5 percent."
Montenegro declared independence from Serbia in 2006 and enjoyed a boom in investment and growth as foreigners, including many Russians, rushed to invest in its scenic coastline and other opportunities.

The government expects to seek an international loan of at least 100 million euros ($149 million) in 2010, said Djukanovic, the dominant political figure in his country for two decades.
Montenegro's central bank has advocated turning to the IMF because its loans are cheaper than other options, but the government has been slow to embrace the idea.


Privately, some officials say one obstacle is IMF scrutiny of Prva Banka, a bank in which Djukanovic's brother is a major shareholder and the prime minister holds around 2 percent.
"Today it is clear that we will need funds from some creditors in 2010 to balance out our expenses," Djukanovic said.

"We have the possibility of turning to the IMF, but we can also look to others," he added, mentioning the World Bank and the European Bank for Reconstruction and Development.
To stop a run on its banks, Montenegro last year offered unlimited deposit guarantees until the end of 2009. That offer won't be repeated, Djukanovic said, although the government will provide limited guarantees in line with EU standards.

In recent years, Djukanovic has lobbied Abu Dhabi to consider investing in multi-billion euro projects such as the development of a long beach in the country's south.

The proposed restructuring of Dubai World's debt won't directly impact the country, he said, as Montenegro only has investment from Abu Dhabi, not Dubai, in two smaller private real estate development projects.

Djukanovic said he would personally hand in Montenegro's questionnaire to the European Union in Brussels on Wednesday after applying for membership earlier this year. The prime minister said he hoped to gain candidate status in 2010.

The EU executive said in a progress report in October that Montenegro needed to show concrete results in consolidating the rule of law, particularly on judicial reform and the fight against corruption.

Even if the country completes EU negotiations within three years, as Djukanovic hopes, he said he does not expect to stay in office that long.

"I don't think it is necessary to carry out my whole mandate as prime minister," said Djukanovic, who was re-elected for a four-year term earlier this year.

"I have given enough to politics, more than 20 years." (Additional reporting by Petar Komnenic, editing by Paul Taylor)

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