PM DJUKANOVIC, "NEW" GOVERNMENT CONFIRMED

UNCLAS SECTION 01 OF 03 PODGORICA 000143

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL MW
SUBJECT: PM DJUKANOVIC, "NEW" GOVERNMENT CONFIRMED

REF: PODGORICA 139

PODGORICA 00000143 001.2 OF 003



1. (SBU) SUMMARY: More than ten weeks after elections,
Parliament has formally elected Milo Djukanovic as Prime
Minister. This will be Djukanovic's sixth term as PM. As
expected, his new "government of continuity" contains many
holdovers, although there will be several new ministries and
ministers. Former Serbia-Montenegro State Union president
Svetozar Marovic has returned to government as DPM for Political
Affairs (reftel). Djukanovic's program, presented to Parliament
before the vote, contains few surprises: it continues the
previous government's focus on coping with the global economic
crisis and on pursuing membership in NATO and the EU. He stated
that further rule of law reforms are essential, as are "better
results" in fighting corruption and organized crime. END
SUMMARY.



Djukanovic Elected For Sixth Term

--------------




2. (U) Late on June 10, Parliament elected Democratic Party of
Socialists (DPS) leader Milo Djukanovic as Prime Minister by a
vote of 48 to 22. Three Albanian MPs abstained, and a number of
mainly opposition deputies were absent. The outcome of the vote
was never in doubt, as the DPS and its coalition partners -- the
Social Democratic Party (SDP),Bosniak Party (BS),and Croat
Civic Initiative (HGI) control 48 of Parliament's 81 seats; the
Democratic Union of Albanians (DUA),which has returned a
Minister to the GoM, also has one MP. Djukanovic becomes PM for
the sixth time; he also served one term as President.



New Cabinet: Many Familiar Faces, A Few Changes

-------------- ---




3. (SBU) Djukanovic, who presented his Cabinet to Parliament on
June 9, had promised voters that the new GoM would be a
"government of continuity." Indeed, most ministers (including
FM Rocen and MoD Vucinic) are returning. There will be few
personnel and organizational changes, with the exception of the
following:



--DPS Vice President (and former Serbia-Montenegro State Union
President) Svetozar Marovic will leave his lucrative business in
Budva to become Deputy PM for Political Affairs. He will join
DPM for "International Economic Cooperation, Structural Reforms,
and Improvement of the Business Environment" (and Djukanovic
favorite) Igor Luksic and DPM for Economic and Financial Policy
Vujica Lazovic (from the SDP) at the DPM rank;

--Gordana Djurovic will lose her DPM title, but returns as
Minister of the newly created Ministry for European Integration.
(Note: Djurovic is the only woman in the Cabinet);

--The Ministry for Economic Development will be split into the
Ministry of Economic Development, to be headed by newcomer
Branko Vujovic (previous director of the GoM Agency for Economic
Restructuring and Foreign Investment),and the new Ministry of
Urban Planning, headed by Branimar Gvozdenovic (previous
Minister for Economic Development);

--The Ministry Health, Labor, and Social Welfare will be split
into the Ministry of Health, headed by previous Minister Miodrag
Radunovic, and the new Ministry of Labor, headed by Suad
Numanovic (Minister without Portfolio in the previous GoM);

--Rafet Husovic (president of the Bosniak Party) and Slavoljub
Stijepovic (previously DPS Deputy Parliament Speaker) will be
Ministers without Portfolio;

--DUA leader Ferhat Dinosa will replace party-mate Fuad Nimani
as Minister for the Protection of Human and Minority Rights; and

--SDP Vice President (and former MP) Ivan Brajovic will replace
Jusuf Kalamperovic (also from the SDP) as Minister of Interior.



New Program: Crisis Fighting and Euro-Atlantic Integration

-------------- --------------


PODGORICA 00000143 002.2 OF 003





4. (U) On June 9, Djukanovic also presented his new government's
program, focused largely on coping with the effects of the
global economic crisis. He noted that his previous government
had already taken action, for example, spending on
infrastructure development projects (with the biggest to be the
Bar-Bojare highway),assisting the unemployed, reducing business
barriers, and cutting the budget deficit. He also promised to
complete the privatization of Montenegro's remaining state
companies within the new government's four-year term, and said
he would strengthen Montenegro's legal system and "expand
economic freedom." Djukanovic also noted that tourism and
energy sector development remained priorities. He vowed to
improve Montenegro's urban planning, environmental protection,
and system for reporting statistics.




5. (U) Djukanovic stressed that the new GoM's strategic goals
remain unchanged, particularly its desire for membership in the
EU and NATO. He said that EU and NATO integration were
compatible processes which would encourage Montenegro's economic
and political development, and expressed the hope that public
support for NATO could be raised. Djukanovic also promised that
Montenegro would continue to contribute to regional stability.
Djukanovic also emphasized the importance of institutional
development for Montenegrin democracy and rule of law. He
emphasized that further rule of law reforms were essential, as
were "better results" in fighting corruption and organized
crime.



Parliament Q&A

--------------




6. (U) Opposition MPs followed the presentation with criticism
of the new GoM's program as "superficial" and "more like a
political pamphlet" than a serious plan for governing the
country. According to one MP, "the only continuity about this
government is broken promises." NOVA leader Andrija Mandic
accused Djukanovic and the DPS of being "anti-Serb," and other
parliamentarians (such as opposition leaders Srdjan Milic and
Nebojsa Medojevic) questioned the PM's commitment to combating
corruption and his ties to business elites.




7. (U) In his three-hour rebuttal on June 10, Djukanovic
defended the previous GoM's record, which he said had increased
prosperity and stability. He said that his business connections
dated from his time out of government, but added that, "it is
logical that those businessmen have government as a partner."
Responding to criticism of his role in the GoM's December 2008
bailout of Prva Banka, whose largest shareholder is the PM's
brother (the PM himself also owns a small stake),Djukanovic
said the GoM needed to help the bank's "10,000 depositors." He
also stressed that Serbs enjoy full rights under Montenegrin
law, and defended Kosovo recognition, saying that it had not
harmed Serbia's interests and had contributed to regional
stability.



Deputy Speakers Elected Despite Opposition Boycott

-------------- --------------




8. (SBU) In other developments on June 9, Parliament elected DPS
member (and former PM) Zeljo Sturanovic and SDP VP Rifat
Rastoder as Deputy Speakers. According to parliamentary
regulations, the opposition also was supposed to get a Deputy
Speaker position, but they refused to propose a candidate after
the coalition declined their demand for four parliamentary
committee chair positions. The coalition had offered two
chairs, of human rights and budget and economic policy. (Note:
DPS sources had originally insisted that SDP would not get a
Deputy Speaker slot - in fact, arguments within the coalition
over the positions delayed the initial session of Parliament in
late April - but conceded in the end. DPS Political Director
Predrag Sekulic told us recently that, "They (the SDP) always
get what they want and more in the end.")



Comment

PODGORICA 00000143 003.2 OF 003



--------------




9. (SBU) The new GoM's confirmation was long overdue, coming
more than ten weeks after the March 29 parliamentary election
and almost five weeks after President Vujanovic nominated
Djukanovic as PM. Internal DPS politicking between Marovic on
one side and Djukanovic and Luksic on the other was reportedly
was a major cause for the delay (reftel). An initial look at
the new Cabinet suggests that Marovic not only failed to upstage
Luksic, but failed to bring his allies into key economic
ministries (as some observers had predicted). Gvozdenovic, who
reportedly clashed in the past with Marovic over commercial
development in the coastal town of Budva, is the new Minister of
Urban Planning, and Vujovic, a strong Djukanovic loyalist, will
head the Ministry for Economic Development. And for fans of
Montenegrin Kremlinology, the press made much of the fact that
PM Djukanovic mentioned Luksic's name first when announcing his
new Cabinet. Moreover, Marovic himself did not attend the
session.




10. (SBU) Apart from this intrigue, the new GoM represents a
continuation of essentially the same people and policies.
However, the return of Marovic highlights the continued
co-mingling of Montenegro's business and political elites, an
issue that must be addressed as Montenegro pursues NATO and EU
membership. It does not help Montenegro's image that Vujovic,
though subsequently acquitted, was indicted on charges of
improperly overseeing the privatization of Montenegro's former
state oil company.
MOORE