Post by radovic on Mar 30, 2009 11:50:04 GMT -5
It seems 20% of the GDP could evaborate in a few months.
I remember in 2005 Djukanovic was talking about how KAP is more profitable then African aluminum projects.
This reminds me of how Djukanovic has played the last few elections.
Before 2006 he strangely announced the Munk investment days before the referendum.
Back in 1999 he made some off shore oil drilling deal with Ramco that never materialzied but before the election there was talk of Montenegro being a "Kuwait on the Adriatic."
Or the damns Italians will build.
This time it's different. Previous [porject never materialized but they weren't of such a nature that it hurt economic growth. KAP failure has a potential to hurt GDP and gto ruin the Bar Port -- which is kept busy by KAP exports.
www.ft.com/cms/s/0/29c5a33a-1b38-11de-8aa3-0000779fd2ac.html?nclick_check=1
Uncertainty clouds Montenegro
By Neil MacDonald in Belgrade
Published: March 28 2009 02:00 | Last updated: March 28 2009 02:00
When Montenegrins go to the polls tomorrow no one doubts the ruling coalition under Milo Djukanovic, the prime minister who achieved independence in 2006, will win again.
Yet a cloud hangs over the early parliamentary elections, which Mr Djukanovic called before people could feel the full impact of global recession on the Balkan state of just 650,000 people.
Concern is centring on the country's largest industrial company, Aluminium Plant Podgorica, KAP, which accounts for nearly half of goods exports and 20 per cent of gross domestic product. Officials this week starting admitting that the company has no viable future beyond a few more months.
Oleg Deripaska, the Russian metals billionaire who bought the outdated industry shortly before independence, has refused the government's offer of a €20m ($26.6m, £18.6m) liquidity loan to stave off creditors, said Igor Luksic, finance minister.
The government proposed taking Mr Deripaska's shares back and trying to run KAP without him. The lossmaking smelter and bauxite mine employs 4,000 workers, while aluminium exports keep the railway and port of Bar busy.
"In the mid to long run, we understand that the aluminium industry will lose its relevance, with energy and further tourism development," Mr Luksic told the FT. "But for the time being, it is still relevant."
But KAP would still face low world metal prices and expensive electricity, officials admit.
"They were clever enough to [call] their elections early . . . and then come out with the bad news" about KAP, said Vladimir Gligorov, a Balkan specialist at the Vienna Institute for International Economic Studies. "How bad? We'll find out."
Mr Deripaska's takeover of the newly privatised KAP three years ago signalled economic confidence in the smallest ex-Yugoslav republic - a helpful boost before Mr Djukanovic's peaceful referendum to split from Serbia. But arguments over the price of electricity, which Montenegro had to import to supply the smelter adequately, soon poisoned the partnership.
Mr Djukanovic has led the smallest ex-Yugoslav republic - alternating as president and prime minister - for nearly two decades, apart from briefly stepping out of office after independence.
Opposition leaders accuse his government of selling a "virtual reality" of new foreign investments, in contrast to the floundering banking sector, lost tourism revenues and the looming KAP shutdown. But as economic fears grow, many voters would prefer the devil they know - or "Certainty" as Mr Djukanovic's campaign slogan puts it.
Opinion polls point to a landslide re-election, with his Democratic Party of Socialists, in coalition with other centre-left allies and ethnic minority parties, set to capture more than 50 per cent of votes cast. Two former Serb loyalist parties are battling for second place at 12-16 per cent each. The anti-corruption Group for Changes has plummeted to 6 per cent, according to the most reliable polls.
I remember in 2005 Djukanovic was talking about how KAP is more profitable then African aluminum projects.
This reminds me of how Djukanovic has played the last few elections.
Before 2006 he strangely announced the Munk investment days before the referendum.
Back in 1999 he made some off shore oil drilling deal with Ramco that never materialzied but before the election there was talk of Montenegro being a "Kuwait on the Adriatic."
Or the damns Italians will build.
This time it's different. Previous [porject never materialized but they weren't of such a nature that it hurt economic growth. KAP failure has a potential to hurt GDP and gto ruin the Bar Port -- which is kept busy by KAP exports.
www.ft.com/cms/s/0/29c5a33a-1b38-11de-8aa3-0000779fd2ac.html?nclick_check=1
Uncertainty clouds Montenegro
By Neil MacDonald in Belgrade
Published: March 28 2009 02:00 | Last updated: March 28 2009 02:00
When Montenegrins go to the polls tomorrow no one doubts the ruling coalition under Milo Djukanovic, the prime minister who achieved independence in 2006, will win again.
Yet a cloud hangs over the early parliamentary elections, which Mr Djukanovic called before people could feel the full impact of global recession on the Balkan state of just 650,000 people.
Concern is centring on the country's largest industrial company, Aluminium Plant Podgorica, KAP, which accounts for nearly half of goods exports and 20 per cent of gross domestic product. Officials this week starting admitting that the company has no viable future beyond a few more months.
Oleg Deripaska, the Russian metals billionaire who bought the outdated industry shortly before independence, has refused the government's offer of a €20m ($26.6m, £18.6m) liquidity loan to stave off creditors, said Igor Luksic, finance minister.
The government proposed taking Mr Deripaska's shares back and trying to run KAP without him. The lossmaking smelter and bauxite mine employs 4,000 workers, while aluminium exports keep the railway and port of Bar busy.
"In the mid to long run, we understand that the aluminium industry will lose its relevance, with energy and further tourism development," Mr Luksic told the FT. "But for the time being, it is still relevant."
But KAP would still face low world metal prices and expensive electricity, officials admit.
"They were clever enough to [call] their elections early . . . and then come out with the bad news" about KAP, said Vladimir Gligorov, a Balkan specialist at the Vienna Institute for International Economic Studies. "How bad? We'll find out."
Mr Deripaska's takeover of the newly privatised KAP three years ago signalled economic confidence in the smallest ex-Yugoslav republic - a helpful boost before Mr Djukanovic's peaceful referendum to split from Serbia. But arguments over the price of electricity, which Montenegro had to import to supply the smelter adequately, soon poisoned the partnership.
Mr Djukanovic has led the smallest ex-Yugoslav republic - alternating as president and prime minister - for nearly two decades, apart from briefly stepping out of office after independence.
Opposition leaders accuse his government of selling a "virtual reality" of new foreign investments, in contrast to the floundering banking sector, lost tourism revenues and the looming KAP shutdown. But as economic fears grow, many voters would prefer the devil they know - or "Certainty" as Mr Djukanovic's campaign slogan puts it.
Opinion polls point to a landslide re-election, with his Democratic Party of Socialists, in coalition with other centre-left allies and ethnic minority parties, set to capture more than 50 per cent of votes cast. Two former Serb loyalist parties are battling for second place at 12-16 per cent each. The anti-corruption Group for Changes has plummeted to 6 per cent, according to the most reliable polls.