Montenegro set to re-elect long-term leader as economic crisis deepens

MONTENEGRO IS poised to re-elect the coalition of long-term leader Milo Djukanovic tomorrow, as the economic crisis takes hold of the former Yugoslav republic and a recent torrent of foreign investment dries up.

Polls suggest Mr Djukanovic’s For a European Montenegro alliance will win more than 50 per cent of votes in the general election, beating a fractious opposition that has failed to dent his popularity with repeated allegations of cronyism, corruption and economic mismanagement.

Mr Djukanovic (47) has ruled Montenegro as president and prime minister for most of the past 20 years, entering office when it was still part of Yugoslavia, continuing during its loose union with Serbia after the federation’s collapse, and in 2006 declaring independence from Belgrade.

Foreign investment has poured into the country in recent years, most of it into property developments along the Adriatic coast, and much of it originating in Russia.

But that flow has become a trickle this year, tourist numbers are expected to be down this summer, and the most optimistic forecasts put economic growth for 2009 at 0 per cent to 2 per cent.

Most troubling for Mr Djukanovic are fears that Montenegro’s main exporter, aluminium maker Kap, could be forced to close after a sharp fall in world prices and demand for the metal, and under the weight of the huge debt bill faced by its owner, Russian tycoon Oleg Deripaska.

Last week, about 2,000 Kap workers protested outside government headquarters over its possible closure, demanding that the country’s leaders save the lossmaking plant, which accounts for about 40 per cent of Montenegro’s entire industrial production.

Opposition politicians have long accused Mr Djukanovic of being too close to rich investors like Mr Deripaska.

Mr Djukanovic denies all accusations of corruption and cronyism, and insists Montenegro is well-placed to weather the downturn and push for EU membership.