Welcome to the coast of Montenegro, a once-fabled destination of the European glitterati that has fallen upon very hard times. With its medieval villages, secluded islands and turquoise water framed by white-sand beaches, this 60-mile stretch of the Adriatic south of Croatia ranks among the most beautiful coasts in the world. But a decade of Balkan wars and economic sanctions have brought Montenegro, the smaller partner of Serbia in the rump Yugoslav federation, to its knees. The republic is a pariah state, and the international tourist trade that once earned tens of millions of dollars in foreign exchange is gone. Hotels are disintegrating. Souvenir shops sell fraying postcards featuring images from 25 years ago. And virtually the only tourists who go near the place are politicians and Serb businessmen and their families who’ve earned some cash smuggling cigarettes or gasoline in Yugoslavia’s thriving black market economy. Last week, Montenegro’s coast suffered yet another blow to its reputation, when Serb opposition leader Vuk Draskovic was gunned down and nearly murdered by unknown assailants while vacationing at his home in Budva–an attack that completed the coast’s evolution from jet-setters’ paradise to Gangland shooting gallery.
The decline of Montenegro’s beachside tourist trade has become a political issue. Two weeks ago, tens of thousands of Montenegrins flocked to the polls in Podgorica, the ramshackle capital, and the coastal town of Herzeg Novi to vote on Montenegro’s future. The election of mayors and municipal councils in a Balkan backwater wouldn’t normally rate a blip on the world’s radar screen, but this vote was fraught with significance. It was the first real political test for President Milo Djukanovic, Montenegro’s charismatic leader and a die-hard opponent of Slobodan Milosevic, since he broke from the Serb leader in 1997. Disturbed by Montenegro’s isolation, Djukanovic has embraced the West, lashed out against the destructive effects of Serb nationalism–and has cautiously begun advocating independence for his tiny republic. But Djukanovic is pursuing a dangerous course–one that risks provoking the Serb leader to declare war or engineer a coup to keep Montenegro from breaking away. The election results were inconclusive. Djukanovic’s party won a solid victory in Podgorica, but lost to the pro-Slobo party in Herzeg Novi. That means that for now at least, an uneasy status quo will remain in place.
The cost of that status quo is readily apparent on the drive down Montenegro’s coast from Dubrovnik. A tattered Yugoslav flag flutters at the border post, where a trio of Montenegrin policemen wave two Western journalists through with minimal formalities. The cops are part of Djukanovic’s beefed up force of 20,000 policemen–one for every thirty Montenegrins–which now stand eyeball with 15,000 heavily armed Yugoslav troops loyal to Milosevic. Over the 60 kilometers from the border to Budva, our car was stopped a half dozen times at police roadblocks, where the papers of our driver and interpreter were examined. “Djukanovic runs a benevolent police state,” the driver, a Serb from Belgrade, said. The police, however, are noticeably ineffective at preventing a contraband trade from flourishing along the coast. Montenegrin and Western diplomats say that Djukanovic for years has winked at the smuggling of cigarettes across the Adriatic to Western Europe, a racket reputedly controlled by the Italian Mafia in league with many top Montenegrin businessmen and politicians.
The contraband trade has also helped keep Montenegro’s beach hotels afloat. At the Communist-style Aleksandar Hotel, crowds of Yugoslav and Bosnian Serb smugglers stroll contentedly beneath a fierce Adriatic sun, enjoying what is unthinkable for most of their countrymen: a week long beach holiday. Before the war the hotel catered mostly to middle class package tourists from Germany. But the Germans stopped coming a decade ago, and now the Aleksandar has become a hot destination for black market petrol dealers, and chocolate and coffee smugglers from both Serbia and the Republic of Srbska, 40 percent of whose economy is now based on the quasi legal contraband trade. A one-week holiday in Budva, breakfast included, costs about 230 Deutsch marks–no small sum in a country decimated by war and sanctions. Like every other business in Montenegro, the Hotel Aleksandar operates on a cash-only basis. (The banking system is dead, and no credit card companies will do business in the republic.)
The affluent Serb clientele also spend their Deutsch marks on the seedy beach front strip that has sprung up in front of the Aleksandar Hotel. Kiosk after wooden kiosk sells local beer and grilled pork hamburgers, liver and bacon and other Serb specialties. The tables are packed with short-haired racketeers known as ‘Dieselasi’, nicknamed for the brand of designer jeans they favor. Decked out in tight bathing suits, gold chains, stolen Rolex watches, and Versace sunglasses, they sit for hours in the sun, ostentatiously making black-market deals with one another on their Nokias. At night, the strip rocks until dawn with a mix of international disco hits and Serbian folk music, much of it sung by the wildly popular Ceca, widow of the paramilitary chief Arkan.
But perhaps the strongest evidence of Montenegro’s decline is Sveti Stefan, a tiny island that rises dramatically a few yards off a curving beach 10 kilometers south of Budva. A 14th-century walled village of stone huts and cobblestone alleyways covers the isle, which is topped by a hilltop Serb Orthodox Church offering sweeping views of the translucent blue Adriatic. In the early 1960s, President Tito paid off the island’s population of several hundred fishermen and their families to leave Sveti Stefan (named after Saint Stephen, the patron saint of Montenegro), and turned the vacant village into a luxury government-owned beach resort. Sveti Stefan had its heyday in the 1970s, when Elizabeth Taylor, Sophia Loren, German Chancellor Helmut Schmidt and other luminaries frolicked in heavily guarded privacy among the island’s bougainvillea-shaded cottages, pools, and artificial waterfalls.
Then came the shelling and looting of nearby Dubrovnik by Montenegrin forces at the beginning of the Yugoslav collapse in 1991, and Sveti Stefan never really bounced back. Today it resembles the aftermath of some neutron-bomb disaster: an impossibly picturesque village so deserted that the only sounds on a summer afternoon are the hinges creaking on the stone cottages’ rusting window frames. “The only ones who come anymore are rich Serbs,” lamented Mirko, the bartender at the deserted cliffside pool. (Here a cottage costs 100 Deutsch marks a night, out of range for all but a handful of Yugoslavs.) Surprised by the presence of a foreign guest and his interpreter, the barman sat down at the table with a glass of lemonade, listening to the crash of the Adriatic against the sea-sculpted boulders below. “Maybe when Milosevic goes the foreigners will come back,” said Mirko, who has worked at Sveti Stefan since 1964. Then he shook his head. “But the damage has been done. I think it will take a generation to recover.”
