In Focus Montenegro

Montenegro 2019

MONTENEGRO & SERBIA

EXCELLENT ECONOMIC RELATIONSHIP DARKO RADUNOVIĆ

PAVLE RADULOVIĆ

VLASTIMIR GOLUBOVIĆ

Montenegro’s Minister of Finance

Montenegro’s Minister of Tourism and Sustainable Development

President of the Chamber of Economy of Montenegro

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BLACK MOUNTAIN

Montenegro translates from Venetian Italian as ‘Black Mountain’. The name refers to Mount Lovćen which rises 1,749m (5,738ft) above sea level in southwestern Montenegro.

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E UROPE’S BIGGEST CANYON In terms of volume, Tara Canyon in Montenegro is Europe’s biggest canyon.

It is 82km (51mi) in length, 1,300m (4,300ft) deep and 914m (3,000ft) at its widest point.

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NJEGUSI PROSCUITTO

Njegusi village is the home of Montenegrin prosciutto. Every day tourists and locals alike take the drive up the Serpentine Road with 25 hairpin turns to get their fix of Njegusi prosciutto in Njegusi village. The climate and altitude combine to create the perfect conditions for making prosciutto here.

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SPECIFIC RIVER

Bojana is the only river in the world that flows downstream and upstream due to the configuration of the terrain.

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ICONIC SITES

Sveti Stefan is one of the most iconic sites in Montenegro.

The fortified island village is connected to the mainland by a narrow causeway.

Sadly, the site is owned by a luxury resort making it off limits to all but paying guests.

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BIRDWATCHER'S PARADISE

Montenegro's Skadar Lake is one of the largest bird reserves in Europe. It's home to over 270 species of birds and is a vitally important stop for migrating birds.

Among the most popular on the lake are the Dalmatian Pelicans.

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THE OLDEST OLIVE TREES IN THE WORLD

The village of Mitrovica in Montenegro is home to one of the oldest olive trees in the world.

Stara Maslina is said to be over 2,000 years old!

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RAINFORESTS

Biogradska Gora is one of the few remaining rainforests in Europe. This rainforest is home to numerous plant and animal species.

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Montenegro 2019

TANJA BANKOVIĆ Editor in Chief

tanja.bankovic@color.rs

SANJA ŠOJIĆ Journalist

sanja.sojic@color.rs

ILIJA PETROVIĆ INDIGOCHILD” Art director

indigochild.ilija@gmail.com

NATAŠA NEŠIĆ

Advertising director natasa.nesic@color.rs

JOVANA MARKOVIĆ Advertising manager

jovana.markovic@color.rs

JELENA RANDJELOVIĆ Advertising manager

jelena.randjelovic@color.rs

DRAGANA RADOVIĆ Advertising manager

dragana.radovic@color.rs

RUŽA RISTANOVIĆ

AGAINST THE 12 OFFENSIVE SHADOW ECONOMY DARKO RADUNOVIĆ

Montenegro’s Minister of Finance

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INTERNATIONAL BRANDS BOOST COMPETITION

PAVLE RADULOVIĆ

Montenegro’s Minister of Tourism and Sustainable Development

THE COMPETITIVENESS OF 20 DOMESTIC ENTERPRISES AS ONE OF MAIN CHALLENGES

Magazine director

ruza.ristanovic@color.rs

ROBERT ČOBAN

VLASTIMIR GOLUBOVIĆ

Director

President of the Chamber of Economy of Montenegro

robert.coban@color.rs

26 STRONG ECONOMIC GROWTH

Photos

GORAN ZLATKOVIĆ

RADOJE ŽUGIĆ

Translation

SNEŽANA BJELOTOMIĆ Print

ZLATNA KNJIGA Jagodina, Bagrdanski put bb

PhD, Governor of Central Bank of Montenegro (CBM)

NOVI AS A UNIQUE 32 HERCEG CHALLENGE 35 AT THE CROSSROADS TO Herceg Novi

Economy

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37 FAIR AND QUALITY BUSINESS ECONOMY LEADS 39 DIPLOMACY SYNONYMOUS WITH TRUST 42 45 SYMBOL OF THE NATION 47 #TIVTING IN TIVAT FLAVOUR OF “OLD 48 THEMONTENEGRO” 51 SOMETHING FOR EVERYBODY THE PLACE THAT WILL NOT 52 LEAVE YOU INDIFFERENT SAVO IČEVIĆ

Country Manager at Gebrüder Weiss

Cooperation

PREDRAG KOVAČEVIĆ

Executive Director of Korming Company

Culture

TO Tivat

Tradition

TO Ulcinj

Tourism

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OFFENSIVE AGAINST THE SHADOW ECONOMY DARKO RADUNOVIĆ

Montenegro’s Minister of Finance

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We are continuing with the implementation of fiscal consolidation measures while reducing the financial risks of large investment projects to the smallest possible extent

n this interview, the Montenegrin Minister of Finance, Darko Radunović talks about the country’s fight against the shadow economy, tobacco excise, new laws, state budget and investments.

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The government has announced an offensive against the shadow economy.

What effects do you expect to see this year?  The shadow economy is a pest that attacks not only of our economy but also the economies of the neighbouring countries, as well as many countries that are more developed and better regulated.

As you said yourself, the Government of Montenegro has announced an offensive against the shadow economy through a series of activities. The Government's work programme for 2019 stipulates drafting of a "Report on activities to combat the shadow economy with a proposal for measures to combat the shadow economy" which was discussed at the recent government session, at which the participants gave suggestions for its improvement, which is related to the concrete activities that have to be implemented in practice.

A special government commission has been formed that deals with this issue and comprises all relevant system institutions. As a result, we had a series of concrete activities in practice like the seizure of goods and preventing illicit trade. Furthermore, the Tax Administration Reform and electronic fiscalization projects are at the core of reform activities which aim is reducing the effects of the shadow economy. The increase in the minimum wage, on one side, and as a counter-measure for reducing the

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burden that employers have in relation to paying salary tax and contributions, is an additional measure for a segment of the labour market that should be an incentive for a legalizing business in this field.

Growth trends are also recorded in the tobacco industry, labour market, employee registration, tourism revenue, business registration, accommodation...

Did the shadow economy subside somewhat and did budget revenue increase after the tobacco excise was reinstated?

FURTHERMORE, THE TAX ADMINISTRATION REFORM AND ELECTRONIC FISCALIZATION PROJECTS ARE AT THE CORE OF REFORM ACTIVITIES WHICH AIM IS REDUCING THE EFFECTS OF THE SHADOW ECONOMY  As a result of the redefined excise policy, implemented in September 2018, changes were made to the so-called "excise calendar" for cigarettes in a way specific excise duties for cigarettes were reduced while the proportional excise rate was kept at the same level, that is 32% of the retail price of cigarettes. The same excise duty will be applied in 2019. The Excise Law also stipulates the dynamics of gradually increasing the specific excise

and reducing the proportional excise for the period from 2020 to 2025, in order to continue with the harmonization of excise calendars in accordance with EU standards. In the period January-May 2019, the revenue from excise duties on tobacco and tobacco-based products amounted to EUR 14.6 million, which is slightly lower than in the same period of the previous year, but it is important to note that this drop was just slightly lower compared to the same period last year, and that, in May, we recorded a 0.5 million EUR or 15% increase compared to the same month of the previous year.

Taking into account that in the January-May period of this year, the sale of tobacco products grew by about 36% and that, in the same period, a strong increase in cigarette imports of 59.5% was recorded, the recovery of the tobacco products market is evident, which is, again, a result of the redefined excise policy. Accordingly, we expect the revenue from excise to grow in the upcoming period, as seen in the number of excise stamps, ordered by the entities that pay excise to the Customs Administration. In terms of the share that the shadow economy has in cigarette traffic, the Ministry of Finance monitors the quantities of excise stamps ordered by excise payers, as well as data on cigarette imports. Also, all relevant institutions and the Shadow Economy are continually working on reducing the shadow economy’s share in the tobacco market.

This year, amendments to the VAT Law, the Personal Income Tax, and the Corporate Tax are all planned. Are there going to be substantial changes in terms of reducing tax rates or new taxes will be introduced?

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THE TOTAL AMOUNT OF WITHDRAWN FUNDS ON THE BASIS OF LOANS GRANTED BY THE WORLD BANK FOR EXPORT FINANCING AMOUNTED TO EUR 464.3 MILLION MONTENEGRO 2019

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 The Government of Montenegro has devised the Draft Law on Changes and Amendments to the Personal Income Tax Law which stipulates that income from sporting activities, copyright and related rights, patents and trademarks, and the income generated by independent culture experts are not subject to the personal income tax. Thus young, promising, top athletes are encouraged to continue developing in sports, while artists with the best creative references have special treatment. The defined legal solutions do not create new obligations for taxpayers, but rather a detailed regulation of revenues and expenditures of the separate types of income, which have been subject to taxation under the current law. Also, the 2019 work programme of the Montenegrin government envisages amendments to the Corporate Tax Law for the third quarter of the current year.

The proposed amendments will improve the existing legal solutions regarding the definition of related parties, the methods needed to determine the prices that are out of reach, so to speak, deadlines for filing tax returns, and the deadlines for keeping and submitting the necessary documentation on transfer prices in order to justify the listed transactions. The amendments also define the provisions regarding the prevention of capitalization reduction, that is, the limitation of the recognition of expenses incurred on the basis of loan interest rates and the related costs, i.e. the loan in a certain amount of the value of the taxpayer's capital.

The aim of the amendments to the Value Added Tax Law is to establish an equitable and non-discriminatory system of taxing the revenue from services rendered in hotel facilities and partly harmonize it with the European Union directives regulating this area. The proposal is to equalize the VAT rate in taxing the revenue from hotel products and services, regardless of the category they belong to and the region in which they are located. We expect that the implementation of the proposed norm will contribute to boosting the competitiveness of the tourism economy as a whole, as well as to the reduction of the shadow economy, which will consequently have a positive impact on tourism revenues and the overall budget revenue.

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COMPARED TO THE SIXMONTH PLAN, REVENUES ARE HIGHER BY EUR 20.7 MILLION OR 2.6% What do you think of the results of reprogramming and payment of tax debt? How satisfied are you with the tax discipline in the country and what could improve it?  Bearing in mind that the previous results of the implementation of this legal solution generated over EUR 50 million in collected tax arrears, we are quite satisfied, and considering the fact that the timeframe for payment of the reprogrammed debt is set at 5 years, the final results can be determined at the end of the five-year period. At this point, the rate of collection of the reprogrammed tax debt is 72%, and for a number of taxpayers, there is evidently a delay in settling both the reprogrammed and current obligations. We have issued over 1,500 official decisions that have abolished the reprogramming option for taxpayers who did not comply with the provisions of the aforementioned regulation, and some of these related to blacklisted taxpayers.

The taxpayers who have been removed

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from the reprogramming option have to pay the entire tax debt at once. We are continuously implementing all available collection measures, including the initiation of bankruptcy, which has been applied in the case of 386 taxpayers so far, owning a total of EUR 21 million, in order to collect the entire debt.

The widening of the tax base and the increase in the level of compliance with tax regulations are the primary goals of the Tax Administration, and in this sense, our activities are aimed at encouraging voluntary fulfilment of tax obligations, on the one hand, and sanctioning irregular operations, on the other. It should be noted that the inspection procedures are preceded by a risk analysis in order to increase the efficiency of the inspection work and direct the available inspection resources to those activities and segments related to taxpayers who are at the greatest risk for non-compliance with tax regulations, and relaxing the control of taxpayers who regularly pay their taxes.

In 2018, the tax inspectors carried out 2,600 full controls, as well as 11,767 checks, on the basis of which misdemeanour warrants were issued in the total value of over EUR 1 million and additional tax liabilities in the amount of almost EUR 50 million were determined. The Tax Administration’s success in increasing tax discipline can be seen from the data showing an increase in the collection of tax reve-

nues by EUR 117 million compared to 2017.

With the exception of value-added tax, there have been no significant changes in tax rates for years and there has been continuous growth of the number of newly registered taxpayers, whose tax base is expanding continuously.

What activities are you planning to carry out in order to maintain a stable credit rating and obtaining a better credit rating in the future?  Montenegro's credit rating is B1 with a positive outlook (Moody's) and B+ with a stable outlook (Standard & Poor's). In order to improve our credit rating, we need to continue with structural reforms to strengthen our competitive position, as well as continue implementing development projects in tourism and energy.

At the same time, we are continuing with the implementation of fiscal consolidation measures, while minimizing the fiscal risks of large investment projects.

How much support does Montenegro expect from the World Bank and in which areas?  The total amount of withdrawn funds on the basis of loans granted by the World Bank for export financing amounted to EUR 464.3 million. They relate to projects in education, health care, energy efficiency, environmental protection, agriculture, etc. One of the important projects, financed from the World Bank credit line and implemented by the Ministry of Finance and the Tax Administration, is the "Tax Administration Reform Project", which aims to introduce electronic fiscalization and a new electronic revenue collection system. In accordance with the limits that Montenegro has in terms of loans granted by the World Bank, in the upcoming period, we will also apply for development loans. In 2018, Montenegro received the Development Policy Guarantee from the World Bank, which we used to borrow from commercial banks to refinance debt. We are currently working on implementing earlier activities in order to be given another guarantee.

last year. In the January-June 2019 period, the budget revenue amounted to EUR 824 million which, compared to the same period last year is a 7.9% increase, or EUR 60.1 million.

Compared to the six-month plan, revenues are higher by EUR 20.7 million or 2.6%. Collection in all budget revenue categories has surpassed our plan, while excise revenues are slightly below the projections, but have increased compared to the same period last year, which was also helped by the recovery of the tobacco market.

How can Serbia and Montenegro cooperate even better?  In terms of economic cooperation, which is at a significant level, there is room for improvement. Montenegro and Serbia, along with five other countries in Southeast Europe, are the signato-

WE EXPECT TO CONTRIBUTE TO BOOSTING THE COMPETITIVENESS OF THE TOURISM ECONOMY AS A WHOLE, AS WELL AS TO REDUCE THE SHADOW ECONOMY

ries of the Central European Free Trade Agreement (CEFTA). Trading in goods with Serbia is at a high level, and Serbia is one of Montenegro's most important external trade partners. We are also working on improving trading in services in the development of the regional economic space of the Western Balkan countries.

This means that, apart from the provision of tourist services and significant participation of tourist services in the overall cooperation, we will promote the movement of other services in accordance with the CEFTA agreement. Also, in the context of regional cooperation, infrastructure integration, in particular, the construction of road and energy infrastructure, as well as the process of digital integration, all play a very important role. The Bar-Boljare motorway is one of the most important projects that link Montenegro to the Serbian border and to the European corridors. Montenegro expects that the feasibility study related to the construction of the remaining motorway sections stretching to the border with Serbia to have been completed by the end of 2020, and that the study will contribute to the finding ways of financing the construction of other motorway segments in Montenegro with the lowest possible fiscal risk. The construction of the Požega-Boljare motorway segment in the Republic of Serbia is important for the further infrastructural connection between not only Montenegro and Serbia, but also the region as a whole.

What has the budget revenue inflow been so far this year?  In the first half of 2019, the budget revenue inflow exceeded our plans and has gone up relative to the same period

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INTERNATIONAL BRANDS BOOST COMPETITION PAVLE RADULOVIĆ

Montenegro’s Minister of Tourism and Sustainable Development

Last year, for the first time ever, we exceeded the limit of one billion euro of tourism revenue, but we look at that moment only as a step forward ontenegro stands shoulder to shoulder with the leading, elite tourist destinations. Investing in tourism is a priority. In the first four months of this year, according to official data, German tourists occupy the first place in terms of tourism revenue generated in collective accommodation with the number of tourist arrivals from Germany being five times higher than in the same period last year.

A large number of tourists from Austria, France, Great Britain, Sweden, Turkey and Croatia have been registered too. The total assigned revenue, which includes income from the residence tax, membership fees

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and tourist tax, collected since the beginning of the year, amounts to 891.38 thousand euros, which is 20.9% higher in relation to the comparative period. We have

ABOUT 13% OF MONTENEGRO’S TERRITORY IS UNDER SOME KIND OF PROTECTION, AND IN THE FOLLOWING PERIOD, THIS PERCENTAGE WILL GO UP

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talked to Montenegro’s Minister of Tourism and Sustainable Development, Pavle Radulović about further expectations, everything that has been done in tourism so far and the upcoming period.

Summer season is upon us. Do you think that 2019 will be a record year for tourism and what revenue do you expect?  In the last few years, both summer and winter season in Montenegro have been starting earlier and lasting longer, so it is very difficult to discern when the winter post-season ends and summer pre-season begins, and whether its end

actually means the beginning of a new winter cycle. That is precisely why the preparation for the period when the biggest number of tourists resides in our country, started last year. From the beginning of the year to the end of April, about 44% more tourists stayed in hotels in Montenegro compared to the same period the previous year, which was a record year. This data, as well as data on announced reservations and new flights, give us the reason for optimism, so we expect that all tourism parameters will increase significantly this year. Montenegro will be connected by air to 68 destinations this year, and we expect this number to increase in the coming years.

Last year, for the first time ever, we exceeded the limit of one billion euro of tourism revenue, but we look at that moment only as a step forward. We have more potential for growth and we expect this year to generate revenues significantly above 1 billion euros.

Extending the season is one of the priority goals of all tourism officials. What should be done in order for this goal to be accomplished?  The extension of the season is very important to us both because of our strategic goal and the fact that the system is quite encumbered during the season’s peak. The diversification of offers and putting the focus on forms of tourism that do not depend entirely on summer and nice weather are crucial. Festival, rural, cultural, active and conference tourism bring guests in before and after the season, and the Ministry support such tourist offers through the Incentive Measures Programme. This year, close to 800,000 euros was allocated for the pro-

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gramme. I must point out that we are getting better results in the period after the season, and that the tourism industry is developing its offer in order to attract tourists throughout the year.

vesting in new capacities in the northern part of Montenegro, which bring about a more balanced regional development and enable more tourists to stay in this part of the country.

In 2018, 25 new hotels were opened, of which 15 hotels are four- and five-star.

Is Montenegro striving towards becoming an elite tourist destination?

What does Montenegro’s tourism offer lack in order to become even more prestigious?  The offer is expanding and improving year-on-year, but the offer of accommodation that is not hotels is not yet at the appropriate level for the high-paying guests. Therefore, it is necessary to provide a range of top-notch experiences that will attract tourists to get acquainted with the destination, but also to spend more money there. I'm glad that the tourism industry is increasingly recognizing the potential in this segment and we have more offers for tourists that stay at 5-star hotels.

MONTENEGRO'S STRATEGIC GOAL IS TO BECOME TOP QUALITY, YEAR-ROUND TOURIST DESTINATION AND ALL OUR ACTIVITIES, AND EVEN THE RESULTS, ARE GEARED TOWARDS THIS GOAL  Montenegro's strategic goal is to become top quality, year-round tourist destination and all our activities, and even the results, are geared towards this goal, which is slowly being accomplished. Today, Montenegro has 21 fivestar hotels with nearly 3,000 beds and 162 four-star hotels with over 19,000 beds, while several more projects are in the preparatory stage. The Economic Citizenship Programme also envisages the construction of several high-category hotels, so, in the coming period, we expect an expansion of investments in such accommodation capacities. I am particularly pleased that there is great interest in in-

In recent years, Montenegrin tourism has attracted global tourism brands.

Are there any world-famous brands that are interested in entering the market and invest in tourism development in the north of Montenegro?  Despite being a small country, there are many international brands operating in Montenegro such as Hilton, Regent (which recently joined the InterContinental chain), Aman, Chedi, Falkensteiner, Four Points by Sheraton and others. This is proof that we have created an environment conducive to investments and that we have recognized the potential that the tourism sector in Montenegro has. The famous One & Only brand will open its first European resort right in Montenegro, while H Hotels from Abu Dhabi is the first city four-star hotel opened in Podgorica,

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DESPITE BEING A SMALL COUNTRY, THERE ARE MANY INTERNATIONAL BRANDS OPERATING IN MONTENEGRO MONTENEGRO 2019

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under the CenterVille brand. International brands boost the competition here, but also service standards, which is another benefit for our tourism. There is interest both for the country’s north and south.

For instance, the Westin Hotel will be built in the town of Kolašin under the auspices of an economic citizenship project.

There is interest in Žabljak too, but we cannot reveal any names, as yet.

How much will Montenegro profit from economic citizenship?  Montenegro will achieve significant financial and other benefits from the economic citizenship programme. Thanks to this programme, foreign investors will have a new incentive to invest and a more balanced regional development will be accomplished. The pilot program is limited by time and number of applicants, while each applicant must invest at least 450,000 euros in the south and in Podgorica and at least 250,000 euros in the north of Montenegro in development projects defined by the Government. Regardless which part of the country receives the investment, each applicant has to pay 100,000 euros into a special budget account that will be used for development and infrastructure projects in lesser developed parts of Montenegro.

Development projects from the tourism sector, that will be offered to investors, entail hotels or mixed 5-star complexes in the south and in Podgorica, and the four- and five-star accommodation in

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IN THE LAST FEW YEARS, BOTH SUMMER AND WINTER SEASON IN MONTENEGRO HAVE BEEN STARTING EARLIER AND LASTING LONGER the north. If the investment is made in the country’s south, the investor has to create at least 80 jobs or 25 if the investment is made in the north.

Therefore, in addition to new high-category capacities, and direct financial revenues for the budget, a large number of new jobs will be created through the economic citizenship programme. The programme has already attracted great attention from investors from all over the world, and recently, the implementation of the very first project was announced in Kolašin. I am particularly pleased to note that this is a project in Montenegro’s north, which exceeds the minimum required parameters by approximately 2.5 times. We expect new project applications to be made soon.

Can tourism, if it implies the construction of new hotels and other accommodation facilities in the most attractive natural sites and environmental protection go hand in hand?

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 The very name of the Ministry that I am at the helm of – the Ministry of Tourism and Sustainable Development - highlights our obligation towards creating conditions for development that will not be harmful to the environment. It is still possible to take advantage of the tourist potential of nature, and to preserve and protect it, at the same time so that tourists and our children can enjoy it in the future. Each major project has to be accompanied by an environmental impact assessment study in for the natural resources, that are very important to Montenegro, to be preserved. Also, about 13% of Montenegro’s territory is under some kind of protection, and in the following period, this percentage will go up. As you have pointed out, the most attractive natural sites will always be attractive to tourists, and we will be valued accordingly, although it is not easy to balance between conservation and profit.

You've opened chapter 27. According to current projections, you need to invest about 1.43 billion euros in the environment by 2035. How do you plan to get that money?  Chapter 27 is one of the most significant and most demanding in the EU accession process, in terms of required funding and complying with standards.

The aforementioned investments will include the construction of new and maintenance of existing ecological infrastructure and elimination of the consequences of pollution and degradation of natural resources. In addition to the state and municipal budgets, the main sources of funding will be IPA funds, donations and favourable credit arrangements. Eco Fund will be another important source of funding, which will be set up in line with the "polluter pays" principle, which means that companies - polluters will pay special fees. Also, when Montenegro becomes an EU member, the available funds will be significantly higher and we will be able to use the EU’s Structural Funds. There are still many challenges ahead of us in this process, including building up administrative capacities and raising environmental awareness among all citizens.

However, all efforts and investments will be result-worthy, meaning that the environment will be preserved for future generations in the best possible condition.

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THE COMPETITIVENESS OF DOMESTIC ENTERPRISES AS ONE OF MAIN CHALLENGES VLASTIMIR GOLUBOVIĆ

President of the Chamber of Economy of Montenegro

In the following period, the activities will be focused on creating a stimulating regulatory framework that will bring more predictable and safer business, growth of profitability and employment, a better credit rating for Montenegro e have talked to the President of the Chamber of Economy of Montenegro (CEM), Vlastimir Golubović about the economic environment in Montenegro, what business people are struggling with, what has been done so far, and what remains to be done.

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What are the most common obstacles that business people have been pointing to?  In addition to stimulating business activities, Montenegro's commitment to joining the EU is a reason for a serious re-examination of market conditions and opportunities, primarily for the analysis of the business environment, business obstacles and other constraints affecting the sustainability and development of domestic companies.

The most common barriers that business people are pointing to are shadow economy and unfair competition, collection of claims, high labour costs, that is, high salary taxes and contributions, high cost of capital and difficult access

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WE HAD OVER 1,300 VISITS TO COMPANIES AND WE ARE CONTINUING TO DO SO THIS YEAR TOO

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to credit, legislative barriers, problems with insufficient flexibility of the labour market, lack of qualified staff, frequent changes to regulations, and others.

You have said on several occasions that the shadow economy remains the biggest obstacle to boosting the competitiveness of the domestic economy

and its development. Has something changed in this respect?  The degree of the shadow economy is very difficult to measure in Montenegro as there are no precise data on its share.

In the part of the research that dealt with the issue of undocumented workers, it was pointed out that, in the last ten years, the number of undocumented workers amounted to about 1/3 of the total workforce. Overall, it is estimated that the shadow economy’s share in the national GDP ranges from 25% to 30%.

Together with the unfair competition, the shadow economy remains the biggest obstacle to boosting the competitiveness of the domestic economy. The most effective response in terms of combating shadow economy is improving the tax system, which is based on simple legal solutions, unique and low tax rates and as few tax exemptions as possible.

Respecting the principle of predictability of business conditions and consistent implementation of regulations would significantly contribute to solving this problem, which would have a positive effect on the overall economy.

In order to solve this problem, the Government of Montenegro has set up a Shadow Economy Commission which consists of company representatives, as well as operative teams composed of representatives of competent authorities and institutions.

 The new Chamber of Economy Law additionally fortifies the Chamber’s foundation in line with the best European practices and creates a legal framework for advancing the cooperation with the Government, state bodies and local self-governments.

The implementation of the new Law has additionally bolstered the Chamber's work in the segment of improving the business environment and raising the competitiveness of Montenegrin companies. With this law, our association

TOGETHER WITH THE UNFAIR COMPETITION, SHADOW ECONOMY REMAINS THE BIGGEST OBSTACLE TO BOOSTING THE COMPETITIVENESS OF THE DOMESTIC ECONOMY became an institutional partner to decision-makers at the state and local level, which resulted in numerous benefits for the economy. Now, every text of the law affecting businesses must take into consideration the opinions of business people before it is considered by the Government. During 2018, the Chamber analyzed about 50 regulations. The adoption of new regulation, as well as amendments and supplements to the existing laws and bylaws, have been initiated.

In the following period, the work on creating a stimulating regulatory framework that will bring more predictable and safer

At the beginning of last year, a new Chamber of Economy Law came into force, which profiles CEM as a fullfledged institutional partner to the Government. What has changed in the Chamber’s operations, activities and powers since then?

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business, growth of profitability and employment, a better credit rating for Montenegro, as well as a better position on the competitiveness lists of renowned international organizations, will be continued.

Does the Government listen to the advice of business people, and if it does, to what extent?  Both businesses, on the one hand, and state bodies, on the other, are getting to see the Chamber of Economy as the only place where the institutional cooperation between the state authorities and businesses is being implemented. Via their representatives in the Chamber, companies use their power, consolidated under the auspices of this institution, to influence the flows of economic development, while the Government, through the Chamber of Economy, as its important partner, now better understands the problems that businesses have been facing, as well as their requirements and recommendations.

Last year, in accordance with the requirements of businesses, the Chamber, as I have already mentioned, initiated changes to numerous regulations. Some of these include the Law on Administrative Fees, the Law on Local Communal Taxes, the Law on Tourist Boards and others. FFor instance, as a result of the implementation of the new Law on Administrative Fees, 72 fees were reduced, or 11% of the total number. Also, 49 fees were abolished, or 7% of the total number.

A significant number of administrative fees relating to food safety and protection of intellectual property rights have been reduced, which is especially significant for alleviating businesses, especially micro, small and medium ones.

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A SIGNIFICANT NUMBER OF ADMINISTRATIVE FEES RELATING TO FOOD SAFETY AND PROTECTION OF INTELLECTUAL PROPERTY RIGHTS HAVE BEEN REDUCED WHICH IS ESPECIALLY SIGNIFICANT FOR ALLEVIATING BUSINESSES MONTENEGRO 2019

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Does the Montenegrin government sufficiently encourage the development of the domestic and private business?  The competitiveness of domestic enterprises is one of the basic challenges that the Montenegrin government is facing and some of the activities that are undertaken in this direction are the following: encouraging the development of existing and creating new economic capacities, boosting export performances of companies, promoting Montenegrin potentials and others.

In order to develop the private sector and increase competitiveness, in March 2019, the Government adopted a new Decree on the allocation of funds for facilitating direct investments and improving the economy’s competitiveness, based on which the Ministry of Economy created the Programme for Improving the Competitiveness of the Economy. Through 10 lines, this programme defines activities and measures for rendering financial and non-financial support to potential and existing entrepreneurs, micro, small, medium and large enterprises, as well as formation of clusters with the goal of increasing the competitiveness in the national and international market, bolstering the development and business performances, facilitating modernization of the industry, developing innovative potentials, promoting entrepreneurship and crafts, and implementing international standards in the field of product improvement, business processes, methods, techniques, management strategies and marketing.

The Programme will support domestic and foreign investments all across Montenegro and thus contribute to increasing the country’s export potential, boosting the recognition of Montenegrin products and services, enabling creation of new jobs, and ultimately contributing to the economic and regional development of Montenegro.

What should be done to create a stimulating regulatory framework? How can CEM contribute to this?  In the framework of its programme activities, the Chamber of Economy of Montenegro continuously monitors activities of companies through reviewing and analyzing their activities, and conditions for doing business, as well as initi-

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WE NEED TO IMPROVE SYSTEMIC REGULATION SUCH AS LABOUR LAW, COMPANY LAW AND PUBLIC PROCUREMENT LAW ating changes in regulations, all with the aim of creating a regulatory framework that is tailor-made for businesses.

In order to have a stimulating regulatory framework, first and foremost, we need to improve systemic regulation such as Labour Law, Company Law and Public Procurement Law. The draft Labour Law contains provisions that pose a challenge for employers. We consider it necessary for this regulation to stipulate simpler procedures for the conclusion and cancellation of job contracts, thus ensuring greater employment, more successful business and faster development of companies.

The draft Company Law also requires further improvement. Among other things, business people consider that this Law should prescribe measures, such as increasing the initial capital and inspecting businesses ex officio, which will prevent the increasingly frequent occurrence of abuse relating to the institution of the legal subject when establishing companies.

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Shadow economy remains the biggest obstacle to increasing the level of competitiveness of the domestic economy.

No matter how much the state has been trying to regulate the performance of economic activities, there are always segments with executed transactions in the shadow zone, to a greater or lesser extent, which, in turn, leads to the stifling of legally conducted business, as well as stripping the state budget of revenue. In order to ensure legal safety, predictability, removal of business barriers and inception of new companies, it is necessary to ensure a more efficient implementation of the current regulations. It is also necessary to include all market participants in the system of recording the turnover from the sale of products and services, and for the competent authorities to carry out coordinated activities towards reducing illegal business, thus making the burden of paying taxes equally distributed to all participants.

As of March 2018, with the goal of further improving its communication with businesses and exchanging information about doing business, obstacles and difficulties, the Chamber has been paying more visits to companies. We had over 1,300 visits to companies, and we are continuing to do so this year too.

This is just one of the activities and ways in which we receive input from businesses, and accordingly, propose initiatives to decision-makers while contributing to the creation of a stimulating environment for doing business.

TEN YEARS OF SUCCESSFUL OPERATIONS Electro Team is a family company that operates in the electric power segment. It was founded in 2009 and it provides services in construction and design of power infrastructure facilities such as cable lines, power lines and substations. The company has been steadily growing in the past ten years, which was recognized by the relevant institutions in Montenegro - the Chamber of Commerce of Montenegro and service providers in the public and private sector, as well as the solvency assessors from the country and the region. We are the recipients of numerous awards for our successful business operations that are featured on this site.

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STRONG ECONOMIC GROWTH RADOJE ŽUGIĆ

PhD, Governor of Central Bank of Montenegro (CBM)

In the last few years, we have been recording a strong growth of the Montenegrin economy

n this interview, the Governor of the Central Bank of Montenegro (CBM), Radoje Žugić, PhD, talks about the developments in the country’s banking sector, the challenges and capacity of its economy and current trends.

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What was the independent external auditor's assessment of the Central Bank's operations for last year? What results do you expect to achieve this year?  The independent external auditor gave a positive opinion regarding the financial statements of the CBM for the

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previous year and assessed that they showed the true and objective financial position of the CBM, as well as the results of its operations and cash flows

THE MONTENEGRIN BANKING SYSTEM CAN BE CHARACTERIZED AS HIGHLY LIQUID, SOLVENT AND PROFITABLE

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in accordance with international standards. CBM's total realized revenue in 2018 stood at 16.7 million euro, which is 17% higher than planned and 14% higher than in 2017. These data, in addition to the fact that in 2017 and 2018, our tariff policy did not change in terms of the increase in tariffs that the CBM collects for the services it provides, confirm that the bank's financial performance in 2018 was very successful. As a result of this, in 2018, the bank recorded a net profit of approximately 3.57 million euro, which is close to a 30% increase relative to 2017. According to our projections, we expect that we are going

to end 2019 with positive business results at the last year's level.

We often hear that new banks are still actively interested in entering the Montenegrin market. Do you think that the banking sector will undergo a reorganization or new banks are going to come here, and if they do, which ones?  Potential investors are interested in establishing new banks. There are currently no formal requests for the establishment of new banks in Montenegro.

CBM has prepared a new Law on Credit Institutions which, among other things, makes the conditions for the establishment of new banks in Montenegro much stricter, in terms of the minimum level of founding capital, which will in the future amount to 7.5 million euro. The implementation of this law is expected to begin in 2020. Recently, CBM gave its consent to Crnogorska Komercijalna Banka AD Podgorica, a member of OTP Group, acquiring Societe Generale Bank Montenegro. After realization of the mentioned transaction, Societe Generale Bank continues to operate in Montenegro as an independent financial institution, owned by CKB and as a member of the OTP Group.

CBM will decide on the potential merger of these two banks after obtaining their formal request.

CBM has released a new list containing the names of the companies that had their bank accounts frozen. This year's list has 8 more companies on it compared to the previous one. What is the current situation in the Montenegrin economy like and are the numbers optimistic?  In the last few years, we have been

recording a strong growth of the Montenegrin economy. The Montenegrin authorities deciding to join the Euro-Atlantic integration process has materialized the interest of foreign investors in Montenegro to a significant extent, which is recognized as a politically stable and economically promising investment destination. This is confirmed by the fact that the total FDI influx in the 2006-2018 period amounted to 9.5 billion euro, i.e.

6.6 billion euro net. The strong growth

CBM HAS PREPARED A NEW LAW ON CREDIT INSTITUTIONS WHICH, AMONG OTHER THINGS, MAKES THE CONDITIONS FOR THE ESTABLISHMENT OF NEW BANKS IN MONTENEGRO MUCH STRICTER was stimulated by the implementation of large-scale infrastructure projects, with the engagement of domestic resources and an increasingly attractive tourist offer, which resulted in positive GDP growth rates. According to the preliminary data compiled by MONSTAT, the country’s GDP grew by 4.9% in 2018. The further validation of these tendencies was provided by the banking sector which recorded positive trends that are important for the economy, namely credit growth and continuous decline in interest rates

and non-performing loans.

However, insufficient diversification and inadequate competitiveness of the Montenegrin economy in the international market continue to be limiting factors of economic growth. Positive trends in the economy are expected to continue in the upcoming period, which cannot be jeopardized by the systemically recognized vulnerability relating to a certain segment of illiquid entities being temporarily or permanently immobilized in the financial flows.

What does CBM propose in terms of reducing the economy's illiquidity as soon as possible and providing more loans for businesses?  A problem that has been growing over a longer period of time cannot be solved overnight. I would like to remind that, in order to stimulate the resolution of the problem with non-performing loans and restructuring of corporate debt outside the banking sector, in recent years we have undertaken a number of activities with the aim of improving the framework for the forced collection of receivables.

CBM has carried out intensive activities on the implementation of the Law on Consensual Financial Restructuring of Debt Toward Financial Institutions, which resulted in the restructuring of 36.8 million euro worth of receivables, out of which 35.2 million euro were the receivables of legal entities. As a result of all implemented measures, as well as the recent elimination of the contaminated segment of the banking system, embodied in two banks of non-systemic importance that declared bankruptcy, non-performing loans were reduced from 25.9% in June 2011 to 4.7% in April 2019.

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Fiscal Sustainability

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PRESERVING FISCAL SUSTAINABILITY WILL BE A KEY CHALLENGE FOR ECONOMIC POLICYMAKERS IN 2019 MONTENEGRO 2019

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In terms of corporate loans, the March data suggest that of the total granted loans, banks approved 1,071.3 million euro worth of loans, or 35.4%, to businesses which is a 3.8% increase compared to December 2018, i.e. a growth of 6.3% annually. In the first three months of this year, the banks approved 267.4 million euro worth of new loans at the system level, which is 27.4 million euro or 11.4% more than in the same period of 2018. Growing credit activity has largely influenced macroeconomic stability through stimulation of growth and recovery of the economy, which, as a consequence, has had an expansion of the tax base and reducing fiscal pressures.

A Montenegrin delegation, which you were a member of, took part in the spring session of the International Monetary Fund and the World Bank. What is your cooperation with these institutions like and how much your assistance means to them?  Cooperation with these institutions is very important for Montenegro. I can confidently say that we have excellent, mutually satisfying cooperation. We received a lot of technical assistance from both institutions owing to which we improved the functioning of a large number of institutions in Montenegro. The World Bank granted us a significant number of loans aimed at protecting the environment, education, agriculture, etc. We are currently negotiating with the World Bank on a loan for development policy that would facilitate budget financing.

How did the situation with Atlas Bank and IBM Bank affect the market?  The fact that Atlas Bank and IBM Bank first went into administration and later declared bankruptcy did not interrupt positive trends that were already present in the banking system. The Montenegrin banking system can be characterized as highly liquid, solvent and profitable.

After implementing bankruptcy procedure in these two banks in late April this year, the non-performing loans, at the system level, were only 4.74% of total loans, while the loans, which repayment was late more than 90 days, amounted to only 2.96% of total loans. Solvency ratio is at a significantly higher level than the prescribed 10% and amounted to 16.64%. Also,

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WE ARE CURRENTLY NEGOTIATING WITH THE WORLD BANK ON A LOAN FOR DEVELOPMENT POLICY THAT WOULD FACILITATE BUDGET FINANCING net profit at the system level amounted to almost 20 million euro. Furthermore, the growth trend in total deposits continued at the system level, while the liquid assets remained at a high level and represented 21.54% of the total assets.

At the same time, confidence in the banking system has been preserved, which is a special quality given the experience with the pyramid banks from the 1990s. Payment of guaranteed deposits to these two banks runs smoothly. The Deposit Protection Fund has sufficient funds for the payment of guaranteed deposits.

What will be the biggest risks for the Montenegrin economy in 2020?

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 Preserving fiscal sustainability will be a key challenge for economic policymakers in 2019. The total amount of public debt, as well as the expected future growth, due to the more intense implementation of planned infrastructure projects, points to the need to pursue fiscal consolidation measures that will ensure the sustainability of public debt in the medium term. The emphasis is on balanced development and implementation of priority measures in structural reforms, with the aim of increasing the economy's competitiveness and accelerating economic growth.

Bearing in mind the stable and favourable macroeconomic environment, recently confirmed by Moody's and Standard & Poor's ratings, the projected GDP growth in 2019 will be dominated by two factors - the continuation of a strong investment cycle and the continued implementation of intense fiscal consolidation measures. According to CBM's projections, GDP growth is expected to be around 3% in 2019. We also expect that the stimulating macroeconomic environment will lead to the increase in the volume of banking sector operations in 2019, especially considering the continuous growth of the key balance sheet items and the improvement of banks' performances.

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CORPORATE

Herceg Novi as a

UNIQUE CHALLENGE Opened to the entrance to one of the most beautiful bays in the world, Boka Kotorska, located at the foot of Mount Orjen, Herceg Novi is known as a town of sun, sea, greenery and festivals

H

erceg Novi is an ideal destination for active vacation since it has an abundance of hidden bays of tamed wilderness and urban beaches, while it fascinates the visitors with beautiful views from numerous viewpoints.

Thanks to its hinterland with the villages of the typical Mediterranean architecture, the Orjen Mountain known for its endemic plant species, the Luštica peninsula and the typical fishing village Rose, Herceg Novi represents a unique Mediterranean destination.

The idea that mountaineering, paragliding, hiking, mountain biking or visiting the Vrbanj adventure park, as well as the sea activities such as sailing, diving, kayaking, swimming and fishing, can be done all on the same day is a challenge that is hard to resist. Herceg Novi is one of those rare destinations in the world where it is possible to enjoy two completely opposite motives under the slogan "Two experiences in a day" in a short amount of time.

The irreplaceable cultural, artistic and historical heritage creates a unique impression for anyone visiting Herceg Novi. Monuments of culture that testify to this, such as the Kanli Kula, Clock Tower, Španjola Fortress, Mamula, Forte Mare, Citadela,

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and sacral monuments, 89 of them, take the centre spot in the immobile monument fund of the Herceg Novi region.

Herceg Novi is a town with a festival identity and in a specific way, part of the wide European and global auditorium thanks to the great festivals held here throughout the year. Each new summer brings a new festival season, which is usually opened

IMPRESSION

The irreplaceable cultural, artistic and historical heritage creates a unique impression for anyone visiting Herceg Novi by "The Days of Music". This international festival of artistic music is traditionally held from 10th to 20th July, with the renowned artists from all over the world taking part in concert repertoire. The event called ‘Trg od Knjige’ (The Book Square) takes place immediately after, from 21st to 28th July.

This year, the event will be held for the 17th consecutive time and during it, the Belavista

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Square will be transformed into a meeting place for writers, readers and publishers, all honouring books. In the first week in August, Herceg Novi will host the Montenegro Film Festival for the 33rd time which has a status of an event of special importance for Montenegro’s culture.

This cultural event showcases the best films from Southeast Europe, enriches the city's tourist offer and welcomes film fans with a promise of enjoyable outdoor screenings. Next in line is the international acoustic guitar festival called the Guitar Art Summer Festival which takes place from 15th to 20th August. The star of this year’s festival is Dulce Pontes, a Portuguese music diva and one of the best vocals in the world. In the same month, from 22nd to 25th, Operosa Montenegro is on the repertoire. As a festival of operatic and classical music that combines the unique performances of international operatic talents with the richness of local cultural heritage, the festival showcases the opera in a modern and entertaining form. September is reserved for the Comic Books Festival (Strip Festival), one of the most significant comic book events not only in Herceg Novi and Montenegro but also in the region.

DID YOU KNOW

TOURIST ARRIVALS he number of visitors from abroad to Montenegro rose by 14.2 percent from a year earlier to 125,492 in May 2019, following a 39.1 percent gain in the previous month. Foreign visitors accounted for 88.9 percent and domestic ones for the remaining 11.1 percent. Considering the first five months of 2019, the number of tourist arrivals increased by 30.3 percent compared to the same period of 2018. Tourist Arrivals in Montenegro averaged 63347.22 from 2010 until 2019, reaching an all time high of 194968 in August of 2018..

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ECONOMY

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AT THE CROSSROADS

Construction of motorways, implementation of projects related to real estate in the coastal area and extremely strong tourist season, as well as further growth of private consumption, are the main driving forces behind the Montenegrin economy

ince the country gaining independence, the Montenegrin economy has had its ups and downs. In the last few years, it has been booming as evidenced in the GDP growth. Namely, economic growth has never been greater. According to the economic growth data, Montenegro is among the leading countries in Europe for the past several years, but it will take time for the effects of this to be felt by the general population. The GDP growth began after the construction of the first Montenegrin motorway - Bar – Boljare - in 2015. Last year, it stood at

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almost 5%, with the construction of motorways, implementation of projects related to real estate in the coastal area and extremely strong tourist season, as well as the further growth of private consumption, being the main driving forces behind the Montenegrin economy.

The current investments in the Montenegrin tourism sector amount to 3 billion euro. By the end of next year, in addition to tourism, the biggest investments will be made in the transport and energy sector, and there is interest in the construction of a gas power plant in Montenegro. In the first quarter of 2019, there was a significant increase in the number of foreign direct investments relative to the same period last year. The value of the gross FDI influx amounted to approximately 182 million euro and grew about 31.5%, while the net inflow stood close to 83 million euro, which is a 63% increase compared to the first quarter of 2018. The analyses will show whether existing investments have created prerequisites for the development of specific capital greenfield investments, which will, to a certain extent, contribute to greater economic development.

The first and main effect is inhibited by the fact that the potential and existing investors feel much more secure in the event of potential investing or re-investing in Montenegro. Namely, there is a big competition between countries on the global level in attracting foreign direct investments. Potential investors invest in countries where their investments will be safe and will yield return. Their decision to invest in Montenegro contributes to the growth of foreign direct investments, which directly effects the GDP and economy’s growth. The largest foreign investors

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THE INVESTMENTS THAT ARE CURRENTLY BEING DEVELOPED OR WILL BE DEVELOPING THE MOST BY 2020 ARE THOSE IN TOURISM, TRANSPORT AND ENERGY in Montenegro are currently in tourism, more precisely, in tourism in the country’s south.

The investments that are currently being developed or will be developing the most by 2020 are those in tourism, transport and energy. In particular, and based on the current situation and projections, tourism participates with around 32 percent, transport with around 30

Tourism worth billions

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THE CURRENT INVESTMENTS IN THE MONTENEGRIN TOURISM SECTOR AMOUNT TO 3 BILLION EURO 36

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percent and energy with around 22 percent in the total investments on which economic growth is based. In line with these total investments, both domestic and foreign, we expect a similar trend to continue in particular in regard to foreign investments. We also expect growth in the transport sector, which will be in line with the new law that affects private-public partnerships, but also in the energy sector, in accordance with the new energy projects that will be developed.

The existing big investors in Montenegro have not only brought money to the country and contributed to its economic development but also transferred the know-how and technologies that are very important. The South itself is actually developing itself with the help of large investments that have been developed there or are in the process of being developed, which put Montenegro on the global map of famous tourist destinations and created the image of a prestigious tourist destination. There are also announcements regarding new ski resorts in the north of Montenegro, which can be classified as potential large investments.

The development of new capital investments in the field of energy is expected too, primarily in the sector of renewable energy sources such as wind, solar and hydro energy.

Also, there is a circle of renowned investors who are interested in building a second block in the thermal power plant and building a gas plant in Montenegro.

The government has announced major investments in the infrastructure sector, following the imminent adoption of the law on the private-public partnership which should facilitate, concretize and evaluate specific infrastructure projects.

CORPORATE

Fair and Quality

BUSINESS

It was important for us to transfer the basic values of Gebrüder Weiss to our branch, and to highlight the quality of work

SAVO IČEVIĆ Country Manager at Gebrüder Weiss

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e talked about the company’s experiences so far and further plans with Savo Ičević, Country Manager at Gebrüder Weiss Montenegro.

When you look back, what moments marked the company’s operations?

— Gebrüder Weiss is a world-renowned company that operates in almost all countries of the world and deals with transport, freight forwarding and logistics. The company has been operational in Montenegro since 2011. It was important for us to transfer the basic values of Gebrüder Weiss to our branch, and to highlight the quality of work, the speed and the scope of our services, as well as the reliability. We would like to note that, in these last eight years since our inception in Montenegro, we have managed to demonstrate that there is better quality and to show clients how things are done at the global level.

We have managed to acquire big and significant clients in the Montenegrin market, who have witnessed the quality of our work. Our clients stay with us and they become our satisfied customers, who can count on us doing more than what they require.

We have proven that the policy of fair and quality business cannot fail, and the Montenegrin market knows how to appreciate it.

What results did you achieve in 2018, and what results do you expect to achieve in 2019?

— We have to say that, since the company’s inception in Montenegro, we have recorded business growth and we are in a position to increase the scope of our activities and the number of our employees. We started with small, safe and reliable steps and subsequently, we began to be recognized by important clients. In 2018, we recorded growth and positive results. Our services are mostly based on working with large companies and significant clients, who operate

PROJECTS

Our new projects include further business growth, further conquering of the market and acquiring as many trusted partners as possible at the same level as we do. We are aware that there are still challenges in a market as small as Montenegro’s, but we will not deviate from our quality policy. We will adhere to it in 2019 too, and we expect further growth and positive results to continue.

What obstacles do you usually face in your business?

— We try to always choose trusted clients for partners, and we reject offers that are sometimes very appealing if they do not meet our standards, even at the cost of losing profit because we are aware that we will continue to be successful only if we stick to our course. We are becoming a brand, and a brand has to have a certain character and recognizability. The problems we face are with companies that do not know or do not operate according to global business standards, with the established local business habits which sometimes are not conducive to progress and with inadequate ways of doing business of various types.

The formula for success is simple, but not always easy to accomplish. However, we are proof that that is possible.

Are you planning new investments and projects and hiring more staff?

— We are definitely going to need more staff as we continue to expand. As our company’s requirements grow, so does the need for new employees. We always provide detailed training, give instructions and advice, but we are also willing to listen to our employees, thus creating a team atmosphere.

Our new projects include further business growth, further conquering of the market and acquiring as many trusted partners as possible. That's why we are growing as individuals, as employees and as a company, because once cannot exist without the other. I think that the Montenegrin market will soon be unimaginable without us. We are on the right path to achieve this.

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C OOPERATION

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ECONOMY LEADS DIPLOMACY Montenegro’s export to Serbia went up by close to 40% last year

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erbia and Montenegro are connected via motorways and the economy but disconnected by other topics. However, for the sake of the Serbs living in Montenegro and the Montenegrins living in Serbia, there must be a consensus on important issues.

Due to the aforementioned, it is difficult to assess the relations between Serbia and Montenegro after a decade since the separation and proclamation of independence. The pessimists predicted worse, the optimists hoped for the better. However, the factual

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situation is that economic cooperation is good, but the relations between the two brotherly states could certainly be better.

In 2018, the value of the external trade between Montenegro and Serbia amounted to EUR 585 million, with the export amounting to EUR 93 million. It is encouraging to note that, in 2018, Montenegro’s export to Serbia went up by close to 40%. Also, growth has been recorded in trading in services, especially in tourism, where the tourists from Serbia had 3 million overnight stays at hotels, which is a 25% increase relative to the year before.

The export of products from Montenegro to Serbia has increased too, although the growth trend in external trade should be mutual. There is cooperation in the fruit and vegetable sector where Vojvodina, through subsidies, has achieved positive results, especially in the development of small producers. Serbia is the main external trade partner to Montenegro in agriculture, as about 40% of the total Montenegrin food imports come from Serbia.

At the same time, Montenegrin exports of agro-food products to Serbia amount to 35% of the total export of agricultural products from our country.

Serbian citizens own around 120,000 flats and houses in Montenegro. The money, of course, travels in the opposite direction too - the Montenegrins have

contributed to the higher real estate prices in Belgrade and other cities in Serbia where they usually buy real estate after they had sold their land on the Montenegrin coast to foreigners.

IN 2018, THE VALUE OF THE EXTERNAL TRADE BETWEEN MONTENEGRO AND SERBIA AMOUNTED TO EUR 585 MILLION, WITH THE EXPORT AMOUNTING TO EUR 93 MILLION

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SCIENCE AND PROJECTS The proof that the cooperation between Serbia and Montenegro is possible and even desirable can be seen in the fact that the two countries have signed agreements stipulating the implementation of five projects funded by the IPA Cross Border Cooperation Programme by 2020. Under the auspices of the Cross Border Cooperation Programme – Serbia – Montenegro 2014-2020, a total of EUR 8.4 million in grants has been allocated to promoting social and economic development in the cross border area of Serbia and Montenegro. The cooperation between Montenegro and Serbia, under this cross-border cooperation programme, started in 2008, when 34 pro-

Agriculture as a link

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SERBIA IS THE MAIN EXTERNAL TRADE PARTNER TO MONTENEGRO IN AGRICULTURE, AS ABOUT 40% OF THE TOTAL MONTENEGRIN FOOD IMPORTS COME FROM SERBIA MONTENEGRO 2019

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jects were implemented in the segment of environmental protection, agriculture, economic development, social and health care, culture and entrepreneurship development.

Furthermore, Montenegro’s Ministry of Science the Ministry of Education, Science and Technological Development of the Republic of Serbia have signed a Protocol on Scientific and Technological Cooperation between Montenegro and Serbia for the period 2019/2020, which creates an administrative framework for the implementation of joint projects, as well as stipulates a work program of cooperation. The Mixed Montenegrin-Serbian Committee has approved a total of 35 joint projects from different scientific fields that were submitted to the competition for co-financing of the scientific and technological cooperation between the two countries. It was also agreed that the next Joint Project Competition will be launched in April 2020.

There is also a strong common interest in establishing bilateral scientific cooperation between scientists from Montenegro and Serbia. One of the aims of the successful partnership in bilateral scientific and technological cooperation is increasing the joint participation of Montenegrin and Serbian institutions in research pro-

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THE PLAN IS TO HAVE UP TO SEVEN FLIGHTS A DAY ALONG THE BELGRADEPODGORICA AND BELGRADE-TIVAT ROUTE grammes and projects, in particular, the EU research and innovation framework programme - Horizon 2020 by December 31st, 2020, when the programme ends.

JOINT TOURIST OFFER Excellent cooperation between Serbia and Montenegro exists in tourism too. In the last five years, many things have been done towards creating a joint tourist product and a joint appearance in attracting tourists from other countries. Montenegro has been a must-go destination for Serbian tourists for years. Over the past year, over 403,000 tourists from Serbia visited Montenegro and had three million overnight stays. In the overall tourist traffic, the share of Serbian tourists in arrivals is 19.78% and 24.59% in overnight

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stays. Positive trends are expected to continue this year too, bearing in mind the diversity of the offer, the affordable prices, and the market projections. The national airline "Montenegro Airlines" flies to Belgrade from Podgorica four times a day, while during the summer season, the plan is to have up to seven flights a day along the Belgrade-Podgorica and Belgrade-Tivat route.

We also work together in winter tourism, because the representatives of the ski resorts of Montenegro, Serbia and Jahorina have signed an agreement stipulating business cooperation at the International Tourism Fair in Belgrade at the beginning of this year. This agreement stipulates the continuation of the cooperation between ski centres and ski resorts in Montenegro, Serbia and Jahorina. The agreement also implies that the guests who purchased season tickets for any of these three ski resorts can enjoy free skiing for three consecutive days in the Montenegrin ski centres Savin Kuk, Kolašin 1600, Kolašin 1450, Vučje on the Kopaonik Mountain, Stara Planina, Tornik or Jahorina. The ski pass bought in Montenegro will be valid for three days in the ski resorts in Serbia and the Jahorina Olympic Centre and vice versa. Currently, there are six active ski resorts in Montenegro.

CORPORATE

Synonymous

WITH TRUST

Our company is known for professional attitude towards business deals, quality contracting and adherence to contracted deadline which all results in efficient business growth

PREDRAG KOVAČEVIĆ Executive Director of Korming Company

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he Korming Company from Danilovgrad was founded in early 2010. The company’s basic business activity includes rough construction works such as the construction of residential and commercial buildings, hotels, villas, etc. In the implementation of the construction projects, Korming is guided by the idea of meeting client requirements in an efficient, fast and top manner. Korming offers quality construction work at market prices to contractors.

In this interview, Executive Director of Korming Company Predrag Kovačević talks about its further plans in the Montenegrin construction market.

In 2020, you are going to mark the company’s 10 anniversary. Take us back to the very beginning and could you compare it to the current situation?

— Beginnings are always hard, challenging, with many open questions and very few answers. Our company was founded in a country that was, back then, going

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through a transition period, and were unfair competition dominated. Since its inception, the company’s main principle is total legitimacy – we are continuing with the same things we have been doing in the very beginning. In such condi-

DRIVING FORCE

Our professional, topnotch staff with decades of experience in construction, in addition to our construction tools and equipment, are all the driving force behind our company tions, companies were fighting to survive in the market. As time passed and the country fighting the problems associated with unfair competition through the use its successful mechanisms and by helping companies to do business legally, we have managed to become a company that is a market stakeholder. Thanks to

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this legitimacy, we have managed to become the first choice for large projects with significant performance capacities.

We are satisfied, but we can also always do better. We have travelled a long road since our inception until the present time and we must be satisfied.

How is Korming developing? In which way are you expanding your portfolio?

— In the beginning, the Korming Company was able to offer only its workforce i.e. manual work. After several years, we purchased, with our own money, the equipment for the execution of the most complex construction work. This includes cranes, panelling, support structures, etc. We are equipped to carry out the construction of approximately 50,000 square metres of residential and business facilities annually.

Your construction company is engaged in many large-scale projects. What projects are you currently engaged in, and what references would you like to single out?

— We have to ongoing large-scale projects – one in Podgorica, the Zagorič quarter, the City Kej complex, and one in Budva, the 5-star Slavija Hotel. We have participated

in many projects so far, but I would like to single out the most representative ones like City Mall, the Hilton Hotel, the Harmonia Hotel in Budva and the City Kvart business and residential facility.

In order to take part in large-scale projects, a company has to have a high standard in services and substantial capacities as a contractor. How would you recommend your company for this kind of projects?

— I would recommend it by saying that the company is known for its professional attitude towards business deals, quality contracting and adherence to contracted deadline which all results in efficient business growth.

We strive to be a synonym for trust, precision, loyalty and quality in the performed works. In the implementation of the construction projects, Korming is guided by the idea of meeting client requirements

in an efficient, fast and top manner. Our professional, top-notch staff with decades of experience in construction, in addition to our construction tools and equipment, are all the driving force behind our company. Our engineering team is always ready to respond to the most complex market requirements so that all possible irregularities are immediately eliminated through constant communication with pro-

GUIDELINES

In the implementation of the construction projects, Korming is guided by the idea of meeting client requirements in an efficient, fast and top manner

ject procurers (contractors). As a result of our commitment to clients and the quality construction, Korming has been growing continuously since its inception. Our company’s work is executed by the domestic workforce. Currently, Korming d.o.o. employs 75 workers.

What are your expectations for the next year in terms of your company and the status of the Montenegrin construction industry?

— Our realistic expectations are that the next year will be better than the previous one. We have enough work to last us until the end of next year and to keep our staff busy. Construction in Montenegro is undergoing a huge expansion. Stronger economic infrastructure, road construction, hotels and smaller and larger housing blocks are being built, so it is realistic to expect that this growth trend will continue in the coming years.

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DID YOU KNOW

WORLD HERITAGE SITES or a whole lot of heritage packed into a relatively small area, it’s hard to beat Montenegro. It has four World Heritage Sites inside its 13,812 km², or one site per 3,363 km². Only Malta, Lebanon, Israel, Belgium, Cyprus and Switzerland can do better. Durmitor National Park is one; another is the spectacular Bay of Kotor.

With its mountainous backdrop, beautiful blue waters and medieval and Venetian-era settlements, this butterfly-shaped bay is the jewel in Montenegro’s crown.

The walled town of Kotor itself is a wonder of cobbled streets and squares, churches and a lovely museum bearing proud testimony to the region’s seafaring prowess.

Farther around the bay, the baroque town of Perast is the site of a famous victory against the Ottomans. From here it is possible to make a very special pilgrimage by boat to the island known as Our Lady of the Rocks: truly a place to inspire princely reflection and a sense of wellbeing.

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C ULTURE

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SYMBOL OF THE NATION

The towny of honour, bravery and loyalty to the country

t is safe to describe Cetinje by using the words of an anonymous man who, passing through the town, said: “At the foot of Lovćen, far enough and hidden from enemies but close enough and opened to all friends lies Cetinje – town, museum, Montenegro’s capital for centuries and the origin of its spirituality and state organization”. It’s hard to find a town that has been so vitally connected with its people throughout its entire history like Cetinje. Once you visit Cetinje, with all its sights and landmarks, you will understand everything that is important in the Montenegrin history.

Cetinje is the symbol of the Montenegrin nation and state, built in the middle ages during the war for independence and freedom. This is the town of honour,

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bravery and loyalty to the country. Cetinje has always been the cultural and spiritual heart of Montenegro. The town was founded in 1482 by Ivan Crnojević, the ruler of the Zeta state, after leaving his previous capital near Lake Skadar, Žabljak Crnojevića, to the Ottomans. Today, a large statue of him stands near the main square. Cetinje was the capital of Montenegro until the country was subsumed into first Yugoslavia in 1918.

The town’s name is derived from Cetina River which flows through the valley. Over time, Cetinje became the centre of the Orthodox Church, and also the main place of gathering for the opposition against the Turkish invaders. Cetinje was developed the most during the reign of King Nikola I Petrović Njegoš.

Nowadays, Cetinje is the historical

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and cultural centre of Montenegro. Many museums are located here, along with historical monuments, the Ministry of Culture and the official residence of the country’s president. The most important part of the movable cultural heritage of Montenegro is located in Cetinje, housed at the National Museum of Montenegro, the Treasury of Cetinje Monastery, the Djurdje Crnojević Central National Library and in the State Archives of Montenegro.

Unlike the coastal cities, Cetinje isn’t the centre of Montenegrian tourism, however, that doesn’t make it less valuable. There are so many things to see here for the seekers of all things spiritual and splendid.

When it comes to culture, Cetinje is famous for its monuments, but also for renowned writers, poets, painters, actors, and athletes. The oldest part of the town is the Vlaška church, built in 1405. Old Greek frescos are stored here, and the church’s fence was made from 2,000 trophy guns captured by the Montenegrins during the battles with the Turks.

The Palace of King Nikola is another important historical monument. Today, this is a museum with thousands of archaeological, ethnographical, and historical artefacts, including the collection of medals, weapons, stamps, coats of arms, flags and photographs. The palace of Biljarda, a former residence of Petar II Petrović Njeguš, built in 1838, now houses a collection of poems written by this famous Montenegrian ruler and poet.

The Cetinje Monastery is the main landmark in the town. It was built in 1483 and it was the place from where the former Montenegrian rulers reigned. The right hand of John the Baptist is stored here, as is the fragment of the Holy Christ along with the relics of Saint Peter of

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WHEN IT COMES TO CULTURE, CETINJE IS FAMOUS FOR ITS MONUMENTS, BUT ALSO FOR RENOWNED WRITERS, POETS, PAINTERS, ACTORS, AND ATHLETES Cetinje. Museums, archives, galleries and art academies make Cetinje one of the most attractive places in Montenegro. The Mausoleum on the Lovćen Mountain is a must see. It is situated 1,660 metres above sea level, 15km from Cetinje. The remains of the most renowned Montenegrin ruler, Petar II Petrović Njegoš, are buried here.

The Mausoleum was designed by the sculptor Ivan Meštrović and boasts a fantastic view of the country.

The Eagle Mountain is another location that offers stunning views. Here lies the founder of the Petrović dynasty, Prince Danilo I. One of the most picturesque small towns of Montenegro is

Town’s inception

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CETINJE IS SITUATED AT THE FOOT OF THE LOVĆEN MOUNTAIN. IT WAS FOUNDED IN 1482 WHEN THE THEN MONTENEGRIN RULER WAS FORCED TO FIND A MORE SAFE CAPITAL DURING THE WAR WITH THE TURKS 46

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located 15km from Cetinje. It is called Rijeka Crnojevića, and it is named after the eponymous river that runs through it. The first book in the Cyrillic script was written here. Cetinje is also valuable for the country’s heritage due to the fact that it has three most revered Christian relics, which are authentic testimonies of history, culture and human civilization in this area. They are Saint John the Baptist's Right Hand and a Particle of the Holy Cross, housed in Cetinje Monastery Treasury, as well as the Icon of Our Lady of Phileremos, one the most revered relics in the Christian world and a masterpiece of universal value which is stored at the Art Museum of the National Museum of Montenegro. The values of Cetinje’s historic core in synergy with the broader context of Cetinje plain and Mount Lovćen, with the Mausoleum at its summit, can be defined as a specific cultural landscape.

Cetinje is a 'Town of Books', where books have been written, printed, read and preserved over centuries. The long history of Montenegrin literacy, Greek, Latin and then Slavic, gave birth to printed books, following the establishment of the first printing facility in 1492 which printed the first book of the South Slavs.

CORPORATE

#tivting

IN TIVAT #tivting is a term that implies Tivat’s enjoyment and enjoying Tivat

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his year, pick Tivat as the ideal destination for your vacation and enjoyment. Tivat is a combination of traditional and modern, rural and elite, Mediterranean and global.

Embraced by mountain ranges and coastline, Tivat is a town with an extremely favourable geographical position and the biggest number of sunny days per year.

This is the place where culture, tradition, local attractions and abundant cultural life intertwine to make your holiday unforgettable.

Tivat’s diverse tourism offer will satisfy everyone's taste. In addition to luxury hotels and restaurants, which serve specialties from all over the world, you will also be able to taste the traditional Mediterranean cuisine while enjoying the local atmosphere and the beautiful nature surrounding you.

Good transport connections are one more reason why you should choose Tivat as your destination. It really doesn’t matter how you travel - by road, sea or air, because all roads lead to Tivat.

Tivat has already been recognized as an event destination too which offers diverse cultural and entertainment programmes that are overseen by the Tivat Tourist Board and its partners. Numerous traditional events, thematic fairs and exhibitions, popular festivals, folk festivities, theatre performances, sporting and musical events will complete your stay in Tivat in the best possible way.

Tivat offers many reasons to do #tivting this summer. So, come on over and let’s enjoy Tivat together.

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T R ADI T I ON

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THE FLAVOUR OF “OLD MONTENEGRO” The largest and most beautiful vineyards in Europe are located in Montenegro

estled on the western side of the Balkan Peninsula, where the Ionian and Adriatic seas meet, Montenegro is a small and exquisite country which boasts a fantastic array of wines. A relatively dry climate, mountainous terrain and the

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southern Mediterranean soil have led to a long-established tradition of viticulture and winemaking. Vranac – an intense, deeply coloured varietal wine – has put Montenegro on the map. This local wine rivals the better-known wines of southern France, and, owing to the cooler alti-

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tude of Montenegro, has a fresher acid balance that can be seen across the sea in Puglia. A multitude of other vine varieties are grown in Montenegro, in addition to this local specialty. They are grown mostly in the central and southern parts of the country.

Many families make their own homemade wines. Among the 28 grape varieties, the most famous wines are Krstač and Vranac. The basin of Skadar Lake has the best conditions for wine making. The biggest and most beautiful vineyard in Europe is Čemovsko field, which covers an area of 2,310ha and has 11 million grapevines. There are several wine cellars, but the largest is Šipčanik with about 28,000 bottles of various wines aged over 10 years, a tasting room and specialized stores.

While Cabernet Sauvignon and other Western European varieties are grown here, this wine cellar takes particular pride in wines made from its native red grape, Vranac. Red grapes grow in about 70 per cent of its vineyards and of those, 70 per cent are Vranac. The name Vranac means ''black stallion'' and it is an award-winning wine which won its first prize at the 1907 London Exhibition.

Vranac is best served after sitting in a bottle for several years, and with judi-

cious use of oak. It is a perfect wine for summer barbecues. Vranac’s colour tends to be ink-deep, its flavours reminiscent of black cherries and black currants. Its body is dense, and it shows a hint of spice and vanilla. A sturdy wine that lives up to the meaning of its name - black stallion.

Among white grapes, Montenegro favours its native Krstač. The grape’s clus-

WITH THE ARRIVAL OF THE ROMANS IN THE 2ND CENTURY AD, GRAPES STARTED TO BE USED FOR WINE PRODUCTION, AND THE STORY OF MONTENEGRIN WINES BEGAN

ters grow in a shape similar to a cross, hence the name Krstač, or in translation, “cross.” Krstač, the indigenous Montenegrin variety, has been grown since ancient times in the vineyards of Podgorica. It best grows in the Nikolaj Church micro-location in the Čemovsko field and every attempt to grow it in other areas abroad was fruitless. Montenegro’s Chardonnay makes a full-bodied wine that has its own individual flavour. Cabernet Sauvignon, labelled simply Cabernet, is dark-shaded, medium-full wine with a deep, earthy aroma, while Merlot is even deeper in colour, a delicious vigorous red wine that pairs beautifully with any kind of barbecue meat.

WINE REGION IN MONTENEGRO Crmnica is one of the most fertile regions in Montenegro. Apart from the variety of fruit being cultivated here, the region of Crmnica is famous for its

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vineyards and wine production. The toponym Crmnica is derived from the reddish colour of the soil characteristic for this region. Some of the earlier names given to this region were Cremenzia, Cermenica (red) and Črmnica and Cernica (black). Situated at an ideal altitude above the sea level and exposed to the sun during many days of the year, Crmnica is Montenegro’s primary wine region. Being home to dozens of family-run wineries, it is the place of origin

In Montenegro, viticulture dates back to the Illyrians who once grew vines on the banks of Lake Skadar. With the arrival of the Romans in the 2nd century AD, grapes started to be used for wine production, and the story of Montenegrin wines began. It was only in the second half of the 19th century that wine-producing was officially recognized and regulated in Montenegro. There are many family-run wineries around Skadar Lake that organize wine tasting.

CRMNICA IS MONTENEGRO’S PRIMARY WINE REGION of Vranac, the autochthonous Montenegrin variety of grapes that have been growing in the Skadar Lake valley since the 14th century.

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Vranac

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THE NAME VRANAC MEANS ''BLACK STALLION'' AND IT IS AN AWARD-WINNING WINE WHICH WON ITS FIRST PRIZE AT THE 1907 LONDON EXHIBITION 50

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CORPORATE

Something for

EVERYBODY While vacationing in Ulcinj, you can get anything you want at very fair prices

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ou can find everything you want as a tourist on the Ulcinj Riviera.

This town has the most beautiful sandy beaches in the Mediterranean, excellent food, great service and friendly hosts, all at affordable prices.

This season started on May 1st on an excellent note with close to 10,000 guests from the region coming to Ulcinj. Also, large hotels that are part of the complex Holliday Village Montenegro and Otranto opened their doors to mostly foreign guests, while over 800 tourists from Poland came to Ada. The town embarked on a new tourist season with about 400 new beds in high-category hotels, coupled with the expansion in the construction and refurbishment of private apartments.

Apart from a series of events that we organize every year (such as the Summer Scene in the Old Town, Book Fair at Pristan, Poetry Kalimera, Ulcinj Fashion Nights, etc.), we also have music festivals like the Southern Soul Festival 2019, which is held for the seventh time. In late July, there is also the Waveul Electronic Music, which takes place in Ulcinj for the first time ever, and features electronic music stars from around the world. We are also going to have a host of other events, including the Balkan folklore festival, and the making of a sequel to the iconic TV series "Biser Bojane". The eponymous film was seen by over 250,000 people who were delighted with the beauty of Ulcinj depicted in the film.

In the last few years, Ulcinj has become a must-go destination for kite surfing. Our Velika Plaža (The Big Beach) is, as experts

CONTACT

claim, one of the three best places in the world for kite surfing.

Also, Ulcinj has embarked on substantial investments in restoring tourist capacities, overall infrastructure, and education and training of young people. This investment tide will benefit tourism and the entire economy, as well as extend the season and boost employment.

The aim is to restore the splendour of old Ulcinj and for the town to become a year-round tourist destination frequented

FACTS

This town has the most beautiful sandy beaches in the Mediterranean, excellent food, great service and friendly hosts

by satisfied guests who are always going to come back to us. We want our town to live for and off tourism, all year round, not only during July and August.

By late July, Ulcinj will have its own virtual presentation, available on all online platforms. The town’s tourism offer will now be presented in a modern way. The virtual presentation will have 100 entries, starting with the most attractive natural, historical, cultural and tourist sites of Ulcinj.

By going on a relaxed virtual tour, tourists will be able to experience everything that makes Ulcinj so recognizable and attractive.

Ulcinj has stunning natural attractions, and its 25-century-long history has created some permanent values. While vacationing in Ulcinj, you can get anything you want at very fair prices.

You can visit Šasko Lake, the Bojana River, Medjurječki Canyon, old towns such as Ulcinj and Šas (Svač), the biggest olive grove in the Adriatic, the spacious and fertile hinterland known for the production of organic foods, excellent cuisine and the best service in Montenegro.

Five sites that you must visit when in Ulcinj First and foremost, there is the uniquely beautiful, 12km long Velika Plaža, the fascinating Ada Bojana, a place that is the beginning and the end of everything, Šas - the biggest dormant town on the Adriatic coast which, according to the legend, had 365 churches, the cove of peace, the olive trees in Valdanos and, of course , the Old Town of Ulcinj, which is a witness of our survival where you can experience the 25-century-old history.

Ulcinj Tourist Board · Bulevar Majke Tereze bb (the Idea Market building) Ulcinj Tel: +382 30 412 333 · Fax:+382 30 412 335 · info@ulcinj.travel · www.ulcinj.travel MONTENEGRO 2019

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T OU R I SM

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THE PLACE THAT WILL NOT LEAVE YOU INDIFFERENT

In the morning, you can wake up on the beautiful coast, have lunch on the banks of Skadar Lake, and enjoy the evening walks in the Montenegrin mountains

elcome to Montenegro, a fascinating Balkan country bursting with beautiful scenery, amazing culture and the warmest of welcomes!

The nation’s tourism boffins are constantly crowing about Montenegro’s ‘wild beauty’, and quite rightly too.

However, you’re not going to see much of it if you spend all of your time lazing about on crowded beaches. Luckily,

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there are plenty of active pursuits to get you back to nature – and then back to the beach for a cooling dip. Here it doesn't matter if you’re crossing borders or hiking along mountain trails, either way, you'll be immersed in the heart of a new Europe whilst treated to spectacular views over Montenegro’s famed Black Mountains. Bursting at the seams with majestic mountains, breathtaking beaches and larger-than-life locals, the

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THE NATION’S TOURISM BOFFINS ARE CONSTANTLY CROWING ABOUT MONTENEGRO’S ‘WILD BEAUTY’

minuscule Montenegro proves once and for all that good things do indeed come in small packages.

A WARM WELCOME And though the country is rightfully revelling in the spotlight, the people remain as they've always been: candid, convivial and charming. Whether you're chasing highland hospitality or coastal comradery, expect gregarious greetings.

It's not even 300km from tip to toe, but Montenegro's coastline crams in some of Europe’s most spectacular seaside scenery. Mountains jut sharply from crystal-clear waters in such a way that the word 'looming' is unavoidable. Ancient walled towns cling to the rocks and dip their feet in the water like they're the ones on holiday. In summer, the whole scene is bathed in the scent of wild herbs, conifers and Mediterranean blossoms. When

the beaches fill up with Eastern European sun-seekers, intrepid travellers can easily sidestep the hordes by getting off the beaten track in the rugged mountains of Durmitor and Prokletije, the primaeval forest of Biogradska Gora, or in the many towns and villages where ordinary Montenegrins go about their daily lives. Hike, horse ride, mountain bike or kayak yourself to somewhere obscure and chances are you'll have it all to yourself.

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LIVING ON THE EDGE Ever since the Roman Empire split in two 1,600 years ago, Montenegro has sat on the borderline between east and west.

The richness of its cultural history can be seen in the mosaic floors of Roman villas, flamboyantly painted Orthodox monasteries, ornate Catholic churches, elegant minarets of mosques, and the sturdy fortresses built by the numerous powers that have fought over these lands. Then there's the legacy of 50 years as a nonaligned communist state, independent of both the Eastern Bloc and the West.

For those with even a passing interest in European history, it's a fascinating place.

Enjoy the visits to three national parks, two crystal clear rivers, UNESCO-protected bay, breathtaking mountains and lakes – all of that and much more in one of the smallest countries in Europe. A scenic drive from the capital will take you across the national park of Skadar Lake, along the coastline, passing by the iconic Sveti Stefan island to Kotor – one of the very few areas on Earth protected by UNESCO both for the stunning scenery and cultural heritage. You don’t want to miss the chance to see the view from the ancient fortress and also to visit Perast islands – one of them is man-made so that a beautiful church could be built on it. If you want a bit more adrenaline, speedboat trips, paragliding and hiking can be arranged too.

After a few days of enjoying Kotor and its surroundings, the next day is packed with history lessons about the greatest Montenegrin ever and a monastery that was the first line of defence of Montenegro for five centuries and still stands

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ENJOY THE VISITS TO THREE NATIONAL PARKS, TWO CRYSTAL CLEAR RIVERS, UNESCO-PROTECTED BAY, BREATHTAKING MOUNTAINS AND LAKES tall. This is, of course, combined with amazing views along the way, though you’re going through ”only” one national park. A unique honey farm experience follows, and if you have a sweet tooth, you’re in the right place. Afterwards, you’re transferred to 1700 meters for a shepherd’s style dinner and accommodation in an eco-village which, needless to say, has a postcard view wherever you look – including the sky.

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Next, you’ll be travelling along the stunning Tara canyon visiting another beautiful monastery and the amazing Tara Bridge. For the brave ones, there is a zip line to goes to the other side, though just walking on this incredible engineering feat is amazing enough. The next stop - the Black Lake - is the highlight of the day. The name says it’s black, but depending on the weather, it changes colours, ever so beautifully. You can have an easy stroll around it or hike up the mountain to see it from a bird’s perspective on the way to another lake.

The last days you will spend in an ethno-village, on the bank of yet another canyon, enjoying delicious food, engaging in outdoor activities such as white water rafting, lake cruises, horse riding and hiking, or simply resting with a good book – not too many places are better than Rudinice. The following day we guarantee you’ll be sad you’re leaving, but we’ll be happy to welcome you again.

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