In the past three decades, the authorities announced four projects that were supposed to economically revive Montenegro and bring prosperity to the citizens.
The first two - "Montenegro Offshore Destination" from 1996 and Mass Voucher Privatization from 2001 failed ingloriously, but individuals close to the then authorities came out of them with great wealth. The third project was finding oil and gas in the Montenegrin seabed - last year we learned that there is no oil, but there might still be gas.
The fourth project was recently announced by the former Minister of Finance, Milojko Spajić, and is based on the involvement of Montenegro in the business of crypto-currencies and so-called blockchain technology.
The law that would enable this business remained only a draft, while it is not clear whether the new government will continue it.
Good ideas until DPS gets hold of them
One of the witnesses of the off-shore project and mass voucher privatization (MVP), the current member of the People's Party and briefly minister Predrag Drecun, says that both projects were good ideas but turned into the opposite, i.e. they did not bring economic benefits to the state and citizens, but only to a small number of individuals "who have managed".
"Offshore was the idea of the Liberal Alliance. They believed that an offshore business zone based on the Cyprus model would be a winning combination. The People's Party and I personally were against that idea because we thought that Montenegro would be criminalized in that way. Even on the basis of one of my discussions in the parliament, on the topic of off-shore, and during the Narodne Sloga campaign, a very successful rap recording was made, which was very popular at that time on independent radio stations and cafes. Later, DPS appropriated that idea like many others," said Drecun.
Both regular and dirty jobs
After the then Government of Milo Đukanović took over the project, about ten thousand offshore banks were registered in Montenegro.
"Sometime during the year 2000, Western partners came and ordered us to shut down that project, with the explanation that it is possible to finance international terrorism through those banks. Montenegro thus lost a lot of income, without gaining much on the other side. At the same time, the offshore business continued in the jurisdictions of Switzerland, USA, Great Britain, UAE, Cyprus, etc. Offshore in itself does not necessarily mean illegal business, but the epithet tax haven has caused many questionable businesses to be transferred to offshore destinations. There were dirty jobs in those zones, but there was also regular business. All in all, the offshore project brought economic benefits, but it was also politically controlled by those who protected their interests through us," said Drecun.
It is also interesting that voucher privatization was first mentioned by the Liberal Alliance, but the DPS government implemented it in a very compromised manner.
"MVP was mentioned for the first time in the parliament by Milorad Vukotić, MP from LSCG. I started thinking about it, and concluded that it is the fairest privatization technique. With the entry into the Government of Filip Vujanović in February 1998, I got the opportunity to deal with the creation of the MFA. It was a model in which all social property would be divided equally among all adult citizens. A fairer model could not be invented, because there is no ideally fair model," said Drecun.
Vukotić forced the funds
He states that at that time he advocated that everyone receive an equal share of social property through a certain number of voucher points, and with that right to bid for shares in a company that is on the list for privatization, considering it to be the fairest model.
"Until that moment, I somehow managed to control the situation, in the coalition government. To that end, I visited the Czech Republic and Poland and some other countries that were completing the transition at the time. I believed that all social property should be divided, excluding some strategically important enterprises. The conversation with Vaclav Klas in Prague was crucial for me to opt for the Czech model. However, a group of people headed by Veselin Vukotić, the president of the Privatization Council, advocated for the Polish model. That, in my opinion, was the key flaw of the MVP process. If we had opted for the Czech model, there would be no privatization funds, which ruined most of the companies that came under their majority or minority control. Unfortunately, I remained in the minority, and the advocates of the so-called Polish model won," said Drecun.
This model envisaged the formation of privatization funds in which citizens would invest vouchers, and the management of these funds would manage their actions for a certain fee.
"Those funds, and there were six or seven of them, collected vouchers through paid agents, who went door to door and convinced citizens that they should invest their vouchers in privatization funds, and not directly in companies. I appealed to citizens not to invest in funds, but to buy shares of companies that they consider attractive. Those who invested vouchers in EPCG or Telekom fared relatively well, but those who invested in mutual funds remained short-handed. I remember my last meeting with Veselin Vukotić, in which he advised me that I should deal with the promotional side of the MFA, because I'm good at it, and that he should deal with setting up the infrastructure necessary for the MFA (Stock Exchange, KHOV, CDA...). I knew then that my concept had lost the battle and that the MFA would be created the way the champion of the neoliberal economic model wanted. My party leaves the Government very soon after that, and I was sure then that the process would be compromised. The funds were a very negative consequence of the MFA. There is almost no company that has been under the management of any fund and has continued to operate successfully, or is operating successfully today. A few exceptions are just enough to confirm the rule," said Drecun.
When asked whether these projects were generally conceived as projects of general interest or for businessmen from the 90s to preserve and increase their wealth, Dreceun says that he cannot say about offshore because the project was quickly shut down, but that he can say about MVP that it was designed in such a way as to deliberately direct citizens to invest in privatization funds, which, as he states, created space for suitable insiders.
Companies were won by incompetents who managed
"A great chance to fairly share our society was missed. Better to say, the chance is permanently destroyed, because nothing can be returned to the previous state. It is obvious that the Polish model served to create a new capitalist class, which unfortunately has not shown that it knows how to handle capital at all. Capital is a good generator of development only if it gets into the hands of enterprising and innovative individuals. I remember that a few years ago, in an interview, journalist Tamara Nikčević asked the President of Montenegro, Milo Đukanović, whether the transition capital was in the hands of the most capable people. He then answered very clearly NO. To her additional question, then who got the capital, he replied that it was those who did the best. I think that answer is the best definition of our transition. Someone coped in one way, someone in another, someone in a third. Be that as it may, it is clear that social capital came into the hands of those who did not have enough knowledge to maintain and increase it. The result of the process was a small number of big transitional winners, and a very large number of transitional losers," said Drecun.
When asked whether the recently announced cryptocurrency and blockchain technology development project can have a chance of success, or whether it will end up like these previous projects, Drecun stated that Montenegro is already late and that blockchain technology is the future of the planet.
He believes that it would be a great success if Montenegro could produce products based on blockchain technology in ten years.
"I think that Spajić has found a way to promote himself well, that is, to present himself to foreigners as the only one in Montenegro who is thinking about this. I claim that today in Montenegro there are not a thousand people who understand blockchain technology and who could implement it. Unfortunately, CG is miles away from blockchain, because it has neither the knowledge nor the technical capacity for such a thing," said Drecun.
MKI is optimistic that there will be enough gas for new industries
Montenegro has so far concluded two concession contracts for oil and gas exploration and production, the first with the Eni/Novatek consortium in 2016, and the second with the Greek company Energean a year later.
The first exploratory drilling conducted last year by Eni/Novatek showed that there are no commercial oil reserves in the seabed.
The Ministry of Capital Investments (MKI) told "Vijesta" that concessionaires have identified several possible gas deposits, and exploration will begin next year.
"If the assumed quantities were confirmed, they would be significant for Montenegro, which would contribute to the expansion of the industry, further research and even the export of gas in the case of new deposits. All this would certainly give a positive impulse to the economy of Montenegro", said the MKI.
Director of the Hydrocarbons Administration Marko Adžić told "Vijesti" that he is optimistic when it comes to gas exploration.
"Further operations of the Energean company depend on finding a partner, because they are contractually obligated to be able to enter phase two of research if they sign a contract with a partner. Negotiations are ongoing and we will see what the outcome will be. If the project of drilling gas prospects is started, it will be followed by an assessment of the impact on the environment, the approval of the drilling plan and program and finally the drilling", said Adžić.
According to him, they are waiting for the decision of the concessionaires Eni and Novatek to drill the shallower prospect, for which there is already an approved drilling plan and program.
"The administration is working on writing the necessary rules and regulations and we are planning to amend the law according to the experience gained. Also, by the end of the year, we plan to publish a public call for new concession contracts", explained Adžić.
Creating a crypto ecosystem can make an immeasurable contribution to development
Until recently, the director of the Directorate for Blockchain and Cryptocurrencies in the Ministry of Finance, Andrej Milović, told the "News" that by creating a crypto ecosystem, Montenegro could become one of the pioneer countries in accepting cryptocurrencies and blockchain, which in the case of full regulation of this area and related sectors would lead to a huge inflow of capital, foreign investments and development of entrepreneurship.
"Although 12 years have passed since the creation of the first blockchain and cryptocurrency bitcoin, the use and trade of cryptocurrencies in Montenegro is not legally regulated, and tax laws do not recognize cryptocurrencies as digital assets. Currently, in Montenegro, there is unregulated trade and mining of cryptocurrencies, given that banks do not accept trade in cryptocurrencies, as well as deposit payments on crypto exchanges, while only some of the banks accept the payment of money sent from some of the crypto exchanges", he pointed out. Milović.
According to him, the number of people engaged in mining is evident, whether they use private networks and power sources or equipment illegally connected to the electricity network (connection to construction sites due to flat-rate electricity payments, use of electricity in buildings from the common rooms of all apartment owners... ).
"Since it is a legally unregulated market, the state has no record of
values of digital assets - cryptocurrencies of its citizens, as well as data on daily transactions - trade in cryptocurrencies, which takes place directly or through intermediaries. The state does not have registered crypto exchanges, banks that
they accept cryptocurrencies, trading companies, cryptocurrency investment funds and blockchain projects, as well as cryptocurrency mining companies.
The formation of the Directorate was the initial step towards the initiation, creation and adoption of legislation that will regulate this area", said Milović.
He believes that the effects can be immeasurable for Montenegro, whether it is about cryptocurrency trading, the development of companies in this area, the development and use of blockchain as a technology in the public and private sector, to the development of the academic community, which would train staff to work in this field. areas.
Milović said that by changing the banking regulations in the direction of the regulation of cryptocurrencies, the conditions would be created for the opening of the banking sector towards cryptocurrencies and companies for which cryptocurrencies, and jobs related to them, would be the main activity.
"Regulating the cryptocurrency market and connecting it with the banking sector would enable the arrival of foreign banks that recognize the importance of cryptocurrencies, especially understand their potential in the future," explained Milović, adding that by regulating the entire market, conditions would be created for the arrival of large crypto exchanges and establishment of domestic crypto exchanges.
Milović said that, while he was at the helm, the Directorate finished the draft law on blockchain technology and crypto assets at the end of December last year and sent it to domestic and foreign partners for comments. According to his information, an amended version is being worked on, which should soon appear in the parliamentary procedure.
"Tax haven" shut down due to suspicions of the US services about money laundering
The law, which enabled the registration of offshore companies and banks, was adopted in 1996, with a term of 15 years.
"If everything was in order, the project would still be alive today, and Montenegro would have earned significant funds in that way by now," said the creator and director of the Off-Shore project for "Free Europe" in 2017. Montenegro, Dragan Rosandić, who assessed that offshore is a completely acceptable and legitimate concept, but that it still represents a problem for many serious countries.
"The state can rarely do anything more serious, nor can the international community. The Germans have problems with Switzerland, with Liechtenstein, where a large number of their taxpayers are registered and keep money there. This fight is very difficult, especially in Montenegro, where this big business has grown together with the institutions and the top of the state", said Rosandić.
He believes that the Montenegrin offshore would have survived and succeeded if the rules of the game had been respected, but that personal interests got involved in the whole story, which meant a death sentence for this project:
"There was no control. We started to establish some companies, some offshore banks, some diplomas were stamped in the Ministry of Finance on offshore banks. Allegedly, about 500 offshore banks were founded wildly or semi-wildly. It all turned into vulgar money laundering. When a serious circulation and money laundering had already started there, in 2000, strictly by order of the American services and under American influence, we had to stop that project. That law was put ad-acta in 2002, right after the elections".
In this way, another project that was originally presented as a life-saving solution ended ingloriously.
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