Sustai nable Tourism Development in the Western Balkans

Yoojung Ahn, Humay Guliyeva, Scott Leo Alida Meghji, Yaninee Nachom, Reiko Okumura

School of International and Public Affairs (SIPA) | Columbia University

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Table of Contents Acknowledgement ...... 1 Glossary ...... 2 Executive Summary ...... 5

Section 1: Introduction Section1.1: Project Rationale ...... 6 Section1.2: Project Objectives ...... 6 Section1.3: International Trade Centre ...... 7 Section1.4: Bridging SME Development and Sustainable Tourism Development ...... 7 Section 2: Theoretical Framework Section2.1: Sustainable Tourism and Development ...... 9 Section2.2: Global Case Studies ...... 14

Section 3: Methodology ...... 21

Section 4: Albania Section 4.1: Geographic, Historical and Political Context ...... 24 Section 4.2: Economic Context ...... 25 Section 4.3: Tourism Sector Overview ...... 26 Section 4.4: Legal Context ...... 29 Section 4.5: Tourism Products ...... 30 Section 4.6: Tourism Services ...... 42 Section 4.7: Regional Tourism Integration ...... 44 Section 5.8: Overall Context Evaluation ...... 45

Section 5: Bosnia and Herzegovina (BiH) Section 5.1: Geographic, Historical and Political Context ...... 46 Section 5.2: Economic Context ...... 48 Section 5.3: Tourism Sector Overview ...... 49 Section 5.4: Legal Context ...... 52 Section 5.5: Tourism Products ...... 52 Section 5.6: Tourism Services ...... 63 Section 5.7: Regional Tourism Integration ...... 66 Section 5.8: Overall Context Evaluation ...... 67

Section 6: Former Yugoslav Republic of Macedonia Section 6.1: Geographic, Historical and Political Context ...... 69 Section 6.2: Economic Context ...... 70 Section 6.3: Tourism Sector Overview ...... 71

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Section 6.4: Legal Context ...... 73 Section 6.5: Tourism Products ...... 74 Section 6.6: Tourism Services ...... 86 Section 6.7: Regional Tourism Integration ...... 89 Section 6.8: Overall Context Evaluation ...... 90

Section 7: Montenegro Section 7.1: Geographic, Historical and Political Context ...... 91 Section 7.2: Economic Context ...... 92 Section 7.3: Tourism Sector Overview ...... 92 Section 7.4: Legal Context ...... 95 Section 7.5: Tourism Products ...... 97 Section 7.6: Tourism Services ...... 108 Section 7.7: Regional Tourism Integration ...... 111 Section 7.8: Overall Context Evaluation ...... 112

Section 8: Serbia Section 8.1: Geographic, Historical and Political Context ...... 113 Section 8.2: Economic Context ...... 115 Section 8.3: Tourism Sector Overview ...... 116 Section 8.4: Legal Context ...... 118 Section 8.5: Tourism Products ...... 119 Section 8.6: Tourism Services ...... 129 Section 8.7: Regional Tourism Integration ...... 132 Section 8.8: Overall Context Evaluation ...... 134

Section 9: Economic Development and Regional Integration in the Western Balkans Section 9.1: Regional Political Framework and Integration ...... 135 Section 9.2: EU Accession ...... 138 Section 9.3: Regional Weaknesses ...... 143

Annex 1: Comparative Table ...... 152 Annex 1: Comparative Table ...... 152 Annex 2: List of Interviewees ...... 160

Annex 3: Bibliography ...... 170

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Acknowledgments The SIPA team extends its gratitude to the numerous individuals and organizations that have supported this study and provided us with valuable resources and knowledge. In particular, we would like to thank Elena Boutrimova, Sabina Timco, and Emmanuel Barreto at the International Trade Centre, as well as Gustavo Olivares, Eugenia McGill, Melissa Giblock, Gordon Bardos, and Radmila Gorup at Columbia University. The ongoing support provided by Columbia University’s School of International and Public Affairs and the Economic and Political Development concentration made this endeavor possible. Our feasibility study could not have moved forward as it did without the depth and contextual richness provided by the diverse set of individuals the team met with during field visits in January and March, 2009. These individuals are, by country: Albania: Lauren Bohtaka, Marissa Bowersox, Luan Dervishej, Eva Dhima, Alma KospiriIna, Ols Lafe, David Milne, Laura Payne, Nevila Popa, Sonia Popa, Ervin Qafmolla, Elenita Roshi, Ina Vesju, and Emiljano Zhuleko. Bosnia and Herzegovina: Daria Antenucci, Viktor Bjelic, Emir Dervisevic, Maja Dosenovic, Nikola Drakovic, Rubeena Esmail‐Arndt, Mirza Ferhatbegovic, Biljana Josic‐Bajic, Milos Komljenovic, Kanao Itoh, Vladimir Milin, Natasa Olenjuk, Erkan Ozcelik, Dunja Pejic, Sanela Smajlovic, Jadranka Stojanovic, and Mladen Sukalo. The Former Yugoslav Republic of Macedonia: Chris Deliso, Arsenije Janevski, Goran Janevksi, Anita Kodzoman, Patrice Koerper, Iva Koreca, Zoran Nikolovski, Nehat Ramadani, Avraham Rosental, Doncho Tanevsky, and all those that took part in the Ohrid International Tourism Fair (January 17‐20, 2009). Montenegro: Ute Dannenmann, Kirsi Hyvaerinen, Milica Begovic Radojevic, and Slavica Vukcevic Serbia: Igor Bandovic, Namanja Ciric, Jasna Cvetkovic, Ana Ilic, Zoran Martinovski, Nebojsa Matijasevic, Ivana Milatovic, Milena Nikitovic, Zoran Novakovic, Ines Novosel, Vladimir Paunovic, Vladimir Pavlova, Goran Radosavljevic, Slobodan Unkovic, Aneta Uskokovic, Tatjana Vanic, Natasa Vujovic, Roslyn Waters‐ Jensen, and Aleksandra Zoric‐Krzic.

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Glossary

ARDA Accredited Regional Development Agency BAHA Balkan Alliance of Hotel Association BER Balkans Eco‐Tourism Route BiH Bosnia and Herzegovina BSPSM Bird Study and Protection Society of Macedonia CARIFORUM Caribbean Forum for African, Caribbean and Pacific States CEDB Council of Europe Development Bank CEFTA Central European Free Trade Agreement CHA Caribbean Hotel Association CRPR Community Reconciliation through Poverty Reduction Project CRSTDP Caribbean Regional Sustainable Tourism Development Programme CTO Caribbean Tourism Organization CTPU CARIFORUM Tourism Programme Unit DEM Ecologists’ Movement of Macedonia DPA Democratic Party of Albania DS Democratic Party EBRD European Bank for Reconstruction and Development EC European Commission ECF European Cyclists’ Federation ECM European Cities Marketing EDEM Enterprise Development and Export Market Services EFCO & HPA European Federation of Camping Site Organizations and Holiday Park Associations EIB European Investment Bank EPA Environmental Protection Agency ETC European Travel Commission EU European Union EUFOR European Union Force EULEX European Union Rule of Law Kosovo Federation Federation of Bosnia and Herzegovina FDI Foreign Direct Investment

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FYR Former Yugoslav Republic GATS General Agreement on Trade and Services GCDO Gjirokastra Conservation and Development Organization GDP Gross Domestic Product GEF Global Environmental Facility GTZ German Technical Cooperation HDZ Croatian Democratic Union of Bosnia and Herzegovina HORES Business Association of Hotels and Restaurants HOTAM Hotel Association of Macedonia IC Investment Compact ICJ International Court of Justice ICTY International Criminal Tribunal for the Former Yugoslavia IDA International Development Association IIT International Institute for Tourism ILO International Labour Organization IMF International Monetary Fund INSTAT National Institute of Statistics IPA Instrument for Pre‐Accession Assistance ITC International Trade Centre IUCN World Conservation Union JICA Japan International Cooperation Agency LDC Least Developed Country MoCYTS Ministry of Culture, Tourism, Youth and Sports MDG Millennium Development Goals NATO North‐Atlantic Treaty Organization NLA National Liberation Army (Albania) NSDI National Strategy for Development and Integration NTA National Tourism Agency/Administration NTOS National Tourism Organization of Serbia OECD Organization for Economic Co‐operation and Development PPCC Prespa Park Coordination Committee PPP Public‐Private Partnership

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RCC Regional Cooperation Council REReP Regional Environmental Reconstruction Programme RS Republika Srpska SAA Stabilization Association Agreement SAP Stabilization and Association Process SDA Party of Democratic Action SFF Sarajevo Film Festival SIPA School of International and Public Affairs SMEs Small and Medium Enterprises SNSD Alliance of Independent Social Democrats STEP Sustainable Tourism – Eliminating Poverty SWOT Strengths, Weaknesses, Opportunities and Threats TWG Trade Working Group UCODEP Unity and Cooperation for Development of Peoples UNCTAD United Nations Conference for Trade and Development UNDP United Nations Development Programme UNEP United Nations Environmental Programme UNESCO United Nations Educational, Scientific and Cultural Organization UNMIK UN Interim Administration Mission in Kosovo UNWTO United Nations World Tourism Organization USAID United States Agency for International Development USD United States Dollar VMRO‐DPMNE Internal Macedonia Revolutionary Organization – Democratic Party for Macedonian National Unity WEF World Economic Forum WTO World Trade Organization

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Executive Summary

The collapse of the Socialist Federal Republic of Yugoslavia in 1991 fractured economic, political, and social ties throughout the Western Balkans. At the same time, the small nation of Albania emerged from decades of political and economic seclusion. Today, the citizens of Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Montenegro, and Serbia continue to work towards rebuilding what was lost during years of war and political upheaval, aiming to better their quality of life and rebuild economic, political, and social ties with their neighbors. Indeed, as each nation works toward European Union integration, albeit at varying speeds, a general understanding of the importance of regional cooperation is gaining clarity.

The International Trade Centre (ITC), a joint agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO), believes that sustainable tourism development in the Western Balkans, if worked upon as a regional effort, can serve as a vehicle for fostering such cooperation. Not merely a niche area of the tourism industry, sustainable tourism is an important and growing sector of the global export market. If planned and implemented properly, sustainable tourism development can benefit local populations both monetarily and culturally, as well as promote environmental conservation.

For this, the ITC has invited the Columbia University School of International and Public Affairs (SIPA) team to conduct an analysis of the tourism sector in each of the target countries to gauge the degree to which such a regional program is feasible. Through in‐depth field and desk research as well as on‐the‐ ground interviews, the team has conducted an evaluation of the opportunities and constraints for tourism development in each country in order to situate the kind of financial and technical assistance the ITC and selected partners can provide in order to implement a regional tourism development program.

Through such research, field visits, and analysis, the team has found that despite the diversity of the target countries in political, economic, and other terms, there are a number of cross‐cutting weaknesses in the area of tourism development that can be addressed by the ITC: poor infrastructure, inadequate provisions for the preservation of cultural and historical sites, lack of proper waste management systems, a dearth of trained and certified tour guides, low levels of sector wide service training, the presence of too few – or too many – lodging facilities, and low capacity for proper market analysis and promotion. In order to address these areas, the team has put forth policy recommendations for the ITC to implement with local stakeholders and regional partners.

Finally, the team has created a brief concept paper – the Balkans Eco‐Tourism Route (BER) – to suggest just one way in which an international agency might address numerous cross‐cutting weaknesses through implementing a single regional tourism program, enhancing not only the economic well‐being of the region, but also fostering cross‐border and region‐wide cooperation and re‐integration.

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Section 1: Introduction

1.1: Project Rationale

The International Trade Centre (ITC), a joint agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO), believes that sustainable tourism development in the Western Balkans, if worked upon as a regional effort, can serve as a vehicle for sustainable human development and economic integration among the nations of Albania, Bosnia and Herzegovina (BiH), the Former Yugoslav Republic of Macedonia (FYR Macedonia), Montenegro, and Serbia. However, the ITC has yet to undertake a thorough analysis of the tourism sector in each of these countries to gauge the degree to which such a regional tourism development program is feasible.

For this, the ITC has invited the Columbia University School of International and Public Affairs (SIPA) team to conduct such an assessment. Through in‐depth field and desk research as well as on‐the‐ground interviews, the team will provide an evaluation of the opportunities and constraints for tourism development in each country in order to situate the kind of financial and technical assistance the ITC and selected partners may provide the region in order to implement a regional tourism development program.

Despite the fact that international agencies, national governments, and private sector actors have noted sustainable tourism as an increasingly worthwhile economic development strategy in the Western Balkan region, much of the dialogue has been focused on the national and local levels, addressing specific sets of local needs. Considering the programmatic goals of the ITC – that, is, helping developing countries and transition economies to reduce poverty and achieve sustainable human development and economic integration – the SIPA team thus works to synthesize and analyze local and regional initiatives to provide the essential body of background information required for the ITC to evaluate the effectiveness a regional sustainable tourism program may have there.

1.2: Project Objectives

The SIPA team aims to evaluate the tourism sector in the five target countries and identify cross‐cutting strengths and weaknesses in this sector that can then be integrated into regional program policy by the ITC and chosen finance and technical partners.

The specific objectives of the SIPA team are:

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a) Evaluation of opportunities for sustainable tourism development in five countries in the Western Balkans: Albania, Bosnia and Herzegovina (BiH), the Former Yugoslav Republic of Macedonia (FYR Macedonia), Montenegro, and Serbia.

b) Evaluation of regional political, economic, and social cooperation efforts currently in place, and how an ITC‐administered regional sustainable tourism program could be situated into such a structural environment.

c) Creation of a brief concept paper outlining what such a regional tourism development program could look like.

1.3: International Trade Centre

The ITC, established in 1964, is a joint agency of UNCTAD and the WTO, and is headquartered in Geneva. ITC works with international and local partners in developing countries to enhance the capacity of small and medium enterprises to work successfully in export markets.1

ITC’s presence in the Western Balkans region has been modest and implemented within the framework of global initiatives, rather than targeted national or regional programs. Understanding the gaps in information and programming in the region, ITC undertook needs assessment missions in 2007 and 2008 in Albania, FYR Macedonia, Montenegro, and Serbia.2 Through such assessments, the tourism sector was identified as a possible area for social and economic development; indeed, some countries in the region, such as Montenegro, already rely on tourism, which accounts for over 20% of the nation’s GDP. Thus, the potential for growth in this sector in the short and medium terms is real. With proper policies in place, such a sector could play an important role in regional integration throughout the Western Balkans. Despite a number of institutional similarities, however, the target countries face numerous similar challenges in a working towards competitiveness in the tourism sector.

1.4: Bridging SME Development and Sustainable Tourism Development

Despite significant obstacles including lack of financing options, poor taxation policies, and the market dominance of large enterprises, the Western Balkans experienced a rapid entry of new small and medium‐sized enterprises (SMEs) in the private sector during the 1990s.3 Market entry rates were particularly high in Albania and FYR Macedonia. After the Dayton Peace Agreement in 1995, an influx of foreign assistance began to ease financial constraints facing SMEs, especially as international aid donors

1 International Trade Centre, “About ITC,” International Trade Centre, http://www.intracen.org/menus/itc.htm. 2 International Trade Centre, Project preparation phase for development of regional programme on tourism development in five Western Balkan countries (i.e. Albania, Bosnia and Herzegovina, FYR Macedonia, Montenegro, and Serbia). YEAR 3 William Bartlett, Europe’s Troubled Region: Economic Development, Institutional Reform and Social Welfare in the Western Balkans (New York: Routledge, 2008), 83. 10

came to view the sector as key for the reconstruction of Western Balkan economies.4 SMEs are critical for the development of sustainable tourism in the Western Balkans, as the tourism products most heavily offered – such as cultural and historical tourism – rely upon small business owners and entrepreneurs. These sectors, contrasted with mass tourism, which must be developed on a large scale due to cost concerns, provide a solid entry point for SMEs. The tourism sector throughout the Western Balkans thus holds promise for those seeking employment in a diverse set of communities and locales. With its expertise in SME development, the ITC is particularly well suited to work on such an endeavor.

4 Ibid., 84. 11

Section 2: Theoretical Framework

2.1: Sustainable Tourism and Development

In recent years the notion that sustainable tourism development can lead to economic and social benefits for large numbers of the world’s people has gained traction among international actors and theorists. The purpose of this section is to review how and why sustainable tourism growth is viewed in such a way. Such an overview entails a discussion of the pervasiveness of tourism, as well as the economic, social, and environmental benefits of sustainable tourism growth. Finally, a short discussion on the limitations of utilizing tourism growth as a vector for greater development goals is discussed.

The Global Tourism Industry

Once a luxury available to few, tourism is now an activity undertaken by hundreds of millions of individuals around the globe.1 The tourism industry is one of the world’s largest economic sectors, comprising just over nine percent of the world’s GNP in 2008.2 While the global economic downturn has severely affected the industry – the World Travel and Tourism Council estimates the sector will contract by 3.6% in 2009 – the long‐term outlook for global tourism remains strong: 4% per annum in real terms over the next ten years, with the sector representing 8.4% of total employment across the world by 2019.3

In order to truly harness the power of tourism growth as a driver for international development, such growth must be sustainable in nature; that is, development in the present cannot impede or detract from the ability of future generations to meet their own needs. The working definition of sustainable tourism provided by the United Nations World Tourism Organization (UNWTO) includes three crucial components: optimal use of environmental resources, respect for social and cultural rights and heritage, and ensuring long‐term economic benefits for host communities.4 As stressed by the United Nations Environment Programme (UNEP) in 2005, “Sustainable tourism is not a discrete or special form of tourism. Rather, all forms of tourism should strive to be more sustainable … Making tourism sustainable is not just about controlling and managing the negative impacts of the industry. Tourism is in a very

1 Frederic Neto (United Nations Department of Economic and Social Affairs), United Nations: A New Approach to Sustainable Tourism Development: Moving Beyond Environmental Protection, (ST/ESA/2003/DP/29), March 2003, (Discussion Paper), http://www.un.org/esa/desa/papers/2003/esa03dp29.pdf, 1. 2 World Travel and Tourism Council, “WTTC Results Show No More Time for Rhetoric,” Tourism, 12 March 2009, http://www.wttc.org/eng/Tourism_News/Press_Releases/Press_Releases_2009/WTTC_Results_Show_No_Time_F or_Rhetoric/index.php. 3 Ibid. 4 United Nations Environment Programme, Making Tourism More Sustainable: A Guide for Policy Makers, 2005, (Joint Publication of UNEP and and World Tourism Organization), http://www.unep.fr/shared/publications/pdf/DTIx0592xPA‐TourismPolicyEN.pdf, 2. 12

special position to benefit local communities, economically and socially, and to raise awareness and support for conservation of the environment.”5

It is crucial to note that the tourism sector provides countless development opportunities for lower and middle‐income countries. Although none of the countries involved in this feasibility study is classified as a Least Developed Country (LDC), the fact that tourism ranked as the 3rd largest LDC export in 2005 illuminates the possibilities inherent in tourism, even for those with minimal financial and technical resources.6

Economic Benefits

It is clear that sustainable tourism development can lead to economic benefits, particularly for unskilled workers who constitute most of the world’s poor, including those living in middle income countries such as those in this study. Indeed, the UN Millennium Development Goals (MDGs) for 2015 are led first and foremost by the objective of eliminating poverty and hunger.7 As pointed out by one tourism development analyst, “One of the most important aspects of international tourism is the fact that, unlike most goods and service exports, the customer typically comes directly to the supplies…The fact that exporting becomes possible anywhere from in a country (i.e. where tourism takes place), including in remote and rural areas which otherwise might have few economic opportunities, is all the more important when tourism’s employment opportunities for women, lower‐skilled workers, and SMEs are considered.”8

The World Economic Forum characterizes this sector as a “visitor economy” comprised of two segments: the direct contributions and indirect contributions of visitors. The former relates to the services provided to tourists such as those noted above. The indirect sector is comprised of the many individuals who contribute goods and services along the extended supply chain that funnels into the tourism sector. Indeed, a third segment might be described as induced economic effects, such as the income derived from the tourism sector (either directly or indirectly) spent through the economy of a particular location.9

The International Labor Organization (ILO) describes this economic structure when it writes, “In the hotel segment of the industry, globally there is an average of one employee for each hotel room. Further, there are three workers indirectly dependent on each person working in hotels, such as travel

5 Ibid. 6 Dale Hancock (World Trade Organization), LDC Poverty Alleviation and the Doha Development Agenda: Is Tourism Being Neglected?, 12 August 2008, (Staff Working Paper), www.mdg‐trade.org/ersd200803_e.pdf, 4. 7 United Nations, “United Nations Millennium Development Goals,” United Nations Millennium Development Goals, http://www.un.org/millenniumgoals/poverty.shtml. 8 Hancock, LDC Poverty Alleviation and the Doha Development Agenda. 9 Alex Kyriakidis et al., Capturing the Visitor Economy: A Framework for Success, ch. 1.5 of The Travel and Tourism Competitiveness Report 2009, (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html, 68. 13

agency staff, guides, taxi and bus drivers, food and beverage suppliers, laundry workers, textile workers, gardeners, shop staff for souvenirs and others, as well as airport employees.”10

A briefing paper by the Overseas Development Institute notes that while hotel accommodations account for a large share of tourist spending in any given location, the proportion of dollars spent on restaurants, shopping, and local transportation that reach poor families can reach 50% when adequate labor laws are in place.11 Such findings illustrate a number of key factors, including the varying degrees to which direct and indirect segments of the tourism sector positively affect the economic development of the host community, as well as the importance of a legal framework that secures the right of workers in the visitor economy to reap the rewards of their work. Such a framework must consist not only of labor laws, but also financial policies which provide small and medium‐enterprises with access to credit, and an efficient bureaucratic process for new business registrations.

With this in mind, the UNWTO launched the Sustainable Tourism – Eliminating Poverty (STEP) Program at the World Summit on Sustainable Tourism in Johannesburg in 2002. Overseen by an umbrella organization, the STEP Foundation, the STEP Program brings together a host of international and local actors to ensure the implementation of policies that enhance the economic well being of poor individuals through tourism development. The policies are guided by a number of “mechanisms” such as the employment of local labor, ensuring proper use of revenues and taxes, and investments in capital projects to improve livelihoods.12 Other multilateral and bilateral funding and implementing agencies (such as USAID and UNDP) have followed suit with development‐minded sustainable tourism programs.

Social Benefits

The social dimensions of tourism make it a quite distinct type of economic transaction for several reasons. On the part of the visitor, this high level of interaction with other people ideally results in an increased understanding of other cultures and an appreciation for the history and conditions of the host location. For the host locale, tourism brings about social development in three distinct ways. First, in locales? featuring cultural tourism, the focus on delivering an authentic experience to travelers means an investment in the locale’?s history and culture. Preservation of tradition for the sake of the visitor can thus bring about investments in museums, enhanced efforts toward architectural preservation, and funding for cultural festivals, all of which may be enjoyed and appreciated by the local population as well.

10 Daine Bolwell and Wolfgang Weinz (International Labour Organization), Reducing Poverty through Tourism, (Geneva: International Labour Office, 2008), (Working Paper WP.266), http://www.ilo.org/public/english/dialogue/sector/papers/tourism/wp266.pdf, 6. 11 Overseas Development Institute, Assessing How Tourism Revenues Reach the Poor, June 2007, www.odi.org.uk/resources/download/46.pdf, 3. 12 United Nations World Tourism Organization, “The 7 Mechanisms,” Sustainable Tourism – Eliminating Poverty Steps, http://www.unwto.org/step/mechanisms/en/ms.php?op=2. 14

In addition, host communities can benefit from tourism of any kind, not simply “cultural tourism,” in two ways. First, infrastructure development for the sake of tourism – such as improvement of road conditions, proper waste removal and disposal, increases in commercial vendors, and so on – can all be utilized by the local population to a certain degree. Second, tax revenues generated by the tourism sector, if properly allocated, can be utilized for local social services such as health, education, and transport.

Finally, as mentioned above, economic benefits can be more easily afforded to otherwise disadvantaged societal groups such as unskilled laborers and women. According to the International Labour Organization (ILO), women comprise 60‐70% of the tourism sector labor force, affording them opportunities in the formal labor sector that might otherwise be unavailable to them.13

Environmental Benefits

Inherent in the notion of sustainable tourism is the understanding that preservation of the ecology and environmental resources present in a given location undergoing tourism development is paramount. When policymakers and stakeholders frame development decisions in this sector with sustainability in mind, they consciously aim to avoid environmental degradation and minimize the environmental impact of their actions. Such thinking has been integrated into the policies of major multilateral institutions and states alike, signifying that tourism sector growth need not result in a trade‐off between growth and environmental protection.

This is particularly true within the ecotourism subsector, defined as "responsible travel to natural areas that conserves the environment and improves the well‐being of local people." 14 The Quebec Declaration on Ecotourism, the outcome of a large‐scale meeting of tourism, environment, and development stakeholders in May 2002, forms the backbone of the concept and application of ecotourism development across the globe. 15 Ecotourism goes one step beyond environmental preservation, actively seeking to enhance the environmental quality of touristic sites through education, financial contributions to conservation, and empowering local populations whose lives are intertwined with their environmental surroundings.

Data suggest that the tourists the Western Balkan countries wish to attract through tourism growth are particularly sensitive to environmental conditions in their travel destinations.16 It is thus imperative that tourism growth is bounded by strict environmental measures which control waste and enhance existing

13 International Labour Organization, Issues Brief: Gender, 20 September 2008, http://www.ilo.org/public/english/dialogue/sector/papers/tourism/gender.pdf. 14 International Ecotourism Society, “What is Ecotourism?” The International Ecotourism Society, http://www.ecotourism.org/site/c.orLQKXPCLmF/b.4835303/k.C64B/What_is_Ecotourism.htm. 15 World Tourism Organization, “The World Ecotourism Summit, May 19‐22, 2002,” World Ecotourism Summit— Quebec 2002, http://www.worldtourism.org/sustainable/IYE/quebec/anglais/declaration.html. 16 United Nations Environment Programme, Making Tourism More Sustainable. 15

natural resources and offerings. In addition, nature tourism and ecotourism are growing at much faster rates than the tourism sector taken as a whole, perhaps as much as three times as fast as the overall global tourism economy.17

Limitations

In the economic realm, a major limitation of tourism industry development are leakages; that is, profits from industry growth that “leak” out of the communities which are meant to provide the basis of such growth. This can occur because of the presence of outside tour operators, outside investors, or the use of non‐local labor. As will be described in greater detail in the regional analysis of this feasibility study, the threats of such leakages, such as the dominating presence of foreign investors and asset owners in Montenegro and the pervasive market presence of international tour operators in FYR Macedonia, are true throughout the Western Balkans.

Another drawback to pegging economic, social, and environmental development to tourism is the high degree to which particular tourism products are seasonal in nature. Thus, onus is upon tourism development policy makers to construct sustainable growth models that address the realities of seasonal offerings. Political crises, natural disasters, and other exogenous factors can also highly alter the stream of travelers visiting a tourism destination.

In addition, it should be underscored that tourism itself can have negative effects on local populations. As noted above, without a legal and policy framework that explicitly aims to guide tourism profits to local communities, and particularly marginalized populations in such communities, tourism sector growth may not lead to enhanced economic prosperity by a majority of individuals working in, or residing in proximity to, such touristic endeavors. At the same time, tourism can have negative social effects on these very populations. These include human trafficking and sex tourism; the exploitation of local populations by land‐owners and tourism site developers; exacerbated tensions along ethnic, religious, sex, and class lines; and loss of livelihood should tourism growth harm livelihoods based on nature or trades crowded out by the tourism sector.18

In addition to the limitations inherent in tourism development itself, shifting policies from unsustainable to sustainable tourism growth can be a challenge, particularly because much of the industry is composed of small and medium sized enterprises (SMEs) working within the jurisdiction of local and national governments. Any policy making infrastructure therefore requires coordination among macro and micro level actors across numerous jurisdictions, from federal ministries of finance, economy, transportation, culture, and health services to small shopkeepers, owners of guest houses, and local bus companies.

17 Martha Honey, Ecotourism and Sustainable Development, (Island Press, 2008), 7. 18 United Nations Department of Public Information, “Tourism Can Help Poorest, But Careful Management Needed to Prevent Harmful Effects, Says Secretary‐General,” 28 November 2005, http://www.un.org/News/Press/docs/2005/sgsm10234.doc.htm. 16

The problem is further compounded by the current global economic contraction; the current crisis comes at a time when the need and desire for more sustainable tourism have increased dramatically. As a result, the need for tourism policy coordination at the regional and global level will be imperative as the sector moves forward.

Therefore, while sustainable tourism development is a vehicle for economic, social and environmental development, particularly for developing countries, limitations do exist; such challenges however, can be overcome through increased dialogue and policy coordination at all levels. Such coordination should ideally include a participatory approach to mapping out tourism growth strategies among all stakeholders, ensuring that the benefits outlined above can be realized.

2.2 Regional Case Studies

With the awareness and understanding of both benefits and limitations of sustainable tourism coming into greater focus and clarity, there are now numerous examples of regional sustainable tourism programs around the globe. Countries and regions have launched projects, at times with consultation or assistance from private sector or external actors, to bring about sustainable tourism development and to preserve biodiversity, create employment opportunities, reduce social and ethnic conflicts, and enhance regional cooperation. This section refers to two examples of regional sustainable tourism, the Caribbean Regional Sustainable Tourism Development Programme (CRSTDP) and the Danube Regional Development Project, and analyzes their impacts on host populations as well as their effectiveness in meeting their respective objectives. Drawing from the two cases, this section ends with lessons learned that are applicable for this regional study.

Caribbean Regional Sustainable Tourism Development Programme (CRSTDP)

The Caribbean is a popular tourist destination among American, Canadian and European travelers either coming directly to the region or passing by as part of their cruise itineraries.19 Begun in 2003, the Caribbean Regional Sustainable Tourism Development Programme (CRSTDP) was launched by the Caribbean Forum for African, Caribbean and Pacific States (CARIFORUM) and funded by the European Commission (EC)’s 8th European Development Fund. The Programme provided various types of technical assistance in order to equip CARIFORUM members (Antigua & Barbuda, Bahamas, Barbados, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and Grenadines, Suriname and Trinidad & Tobago) with necessary resources and knowledge to reach their shared vision of regional sustainable tourism. The Programme was completed in 2008.20

Rationale and Objectives

19 Winfield Griffith, “Caribbean: Performance 2007‐2008,“ OneCaribbean, PowerPoint. October 2008, http://www.onecaribbean.org/content/files/IndustryperfOCT08.pdf. 20 Caribbean Regional Sustainable Tourism Development Programme, Caribbean Regional Sustainable Tourism Development Programme, http://www.caribtdp.org/index.php. 17

Sustainability is the key aspect of this Caribbean program. At the time of its establishment, CARIFORUM expected CRSTDP to both help stimulate economic growth and relieve poverty, especially for small‐ and medium‐sized hotel owners and tour operators, by increasing the region’s competitiveness and sustainability of its tourism sector. Their indicators for success are thus not simply only the number of tourist arrivals and cruise passengers, but also improvement of the quality of the tourism industry21 by developing 20 of its niche oriented products, including bird watching, extreme sports, and weddings and honeymoons.22

Program Implementation

The Programme employed several institutional apparatuses to achieve these objectives. Two months after the agreement with the EC, CARIFORUM signed a Memorandum of Understanding with three of its implementing agencies: the not‐for‐profit Caribbean Hotel Association (CHA), which represents 35 of the region’s National Hotel and Tourism Trade Associations; the Caribbean Tourism Organization (CTO) with members from both public and private sectors; and Pontificia Universidad Catolica Madre y Maestra tasked with organizing internship programs in the Dominican Republic for the rest of the region. Besides this legal aspect, CARIFOFUM also established a three‐person office, the CARIFORUM Tourism Programme Unit (CTPU) in Barbados, to oversee the management of CRSTDP. Within CTPU’s layers, a Tourism Stakeholder Group was tasked to ensure participation from various stakeholders in each of the Programme’s member country. A focal point is assigned for each state, usually within the Ministry of Tourism, who then gathered the country’s respective stakeholders’ views and disseminated such information via e‐mail to other CRSTDP members for further discussions. Another body, the Policy Review Board, comprised of CARIFORUM, CRSTDP, CHA, CTO, the EC and other relevant regional partners, meets twice a year in Barbados.23

Program Impacts and Limitations

Over five years, the Programme set new frameworks and practice strategies for the region. At a macro‐ level, it came up with a regional sustainable development policy that was then adopted at a national level by each member country. It also provided guidelines for the management of environment, health and safety according to the accepted international standards and monitored the enforcement of these frameworks. To ensure private sector’s involvement, the Programme encouraged public‐private partnerships in various sub‐sectors, including the establishment of a Business Development Unit.24 In

21 Ibid. 22 Caribbean Tourism Organization, “Developing a Niche Tourism Market Database for the Caribbean,” OneCaribbean, http://www.onecaribbean.org/goodpractices/niche/default.aspx. 23 Caribbean Regional Sustainable Tourism Development Programme, Caribbean Regional Sustainable Tourism Development Programme. 24 Caribbean Regional Sustainable Tourism Development Programme, “Programme Director’s Note,” CRSTDP 1, no. 12 (March – June 2008), http://www.caribtdp.org/pdf/12%20CRSTDP%20Newsletter%20Mar%20%20Jun%202008.pdf, 4. 18

terms of human resources, the Programme tasked the Caribbean Action for Sustainable Development with training activities, and provided other technical assistance to all of its member countries, particularly on hotel management and IT services. 25 It also conducted research such as on competitiveness and sustainability indicators, and the impacts of climate change on tourism as well as best practice studies of cultural and community tourism. Although the EC funding ended in 2008 along with CRSTDP activities,26 the above achievements have established a new standard that is steering the region closer towards its tourism sustainability goal. Meanwhile, CRSTDP databases and reports continue to serve as a knowledge center for tourism and development actors in and outside the region alike.

Although these outputs can be certainly useful, current literature and CRSTDP reports have yet to identify where the region currently stands on its road to sustainability. There is no clear indication whether the country members have reinforced their practices according to the new health and safety standards or implemented recommendations from various researches and studies. Additionally, data on the Programme’s impacts on the environment or on the improvement of the 20 designated niche tourism markets is not publicly available. The most concrete, practical progress has been seen in area of human resources as CRSTDP granted 362 internships and secured a seven‐month long work and study program at the Tompkins Courtland Community College of State University of New York.27

Other available data include the number of tourist arrivals, identified as a less preferred indicator by CRSTDP but nonetheless referred to extensively by the Caribbean Tourism Organization’s annual reviews. Since the launch of the Programme in 2003, the number of tourist arrivals and cruise passengers has continued to increase, but become less dramatically so during the second half of this decade. From 2002 to 2007, the number of tourist arrivals grew at 19.4% while the number of cruise passengers increased by 20.7%. While the numbers look impressive, the growth has become much slower during these past few years starting in 2005 with a drop of 5.7% in the number of cruise passengers. Likewise, the number of stays (hotels only) barely increased (1.3%) between 2007 and 2008.28 This decline could have a negative impact on those employed in this economic sector. While the global financial crisis might be a factor behind this reduction, evidence suggests the Caribbean might in fact be losing its competitiveness. According to the World Economic Forum (WEF)’s Travel and Tourism Competitiveness ranking (listing only 6 out of 15 CARIFORUM countries), although Barbados holds on to

25 Caribbean Regional Sustainable Tourism Development Programme, Caribbean Regional Sustainable Tourism Development Programme. 26 Caribbean Regional Sustainable Tourism Development Programme, “Programme Director’s Note,” 4. 27 Ibid. 28 Griffith, “Caribbean.” 19

the top 50 (30 out of 133 countries in this 2009 study; 29 in 2008), almost all of the Caribbean countries except for Guyana (102 in 2009; 109 in 2008) slid down the ladder.29

Danube Regional Development Project

The German development agency, German Technical Cooperation (GTZ), under the guidance of Germany’s Federal Ministry for Economic Cooperation and Development, currently implements a tourism development project in four South‐Eastern European countries on the Danube River: Bulgaria, Croatia, Romania and Serbia.30 The project began in 2003,31 and is part of a larger framework of GTZ’s Economic and Employment Promotion Programme to increase activities for the tourism and investment sectors, as well as to address environmental protection in the Danube region. Currently, tourism development is the Programme’s top priority.32

Rationale and Objectives

With its natural beauty, the 2857‐kilometer long Danube River is a great asset for development of tourism industries in the ten countries that it passes through.33 In fact, the 2007 Danube Tourism Commission’s report found that 30% of the world’s river cruise markets are located along this river.34 At the start of the project in 2003, the four South‐Eastern European countries had separately developed and promoted river cruises, bicycle tours, national parks, hiking and wine tours. GTZ then decided to bring all of the four economies under one cross‐border project35 in order to develop small and medium‐ sized enterprises,36 improve human resources especially marketing and promotion skills, increase cooperation among the four South‐Eastern European countries, and assist these states in their European integration processes. Through these mechanisms, GTZ hoped to create an image of the “Blue Danube”37 that would increase job opportunities and economic growth while at the same time preserve the environment. This new image could indeed benefit the region, especially Serbia whose tourism industry is still marred from the prolonged Balkans war of the 1990s.

Project Implementation

29 Jennifer Blanke and Thea Chiesa, The Travel & Tourism Competitiveness Report 2009: Managing in a Time of Turbulence (Geneva: World Economic Forum, 2009), XV, http://www.weforum.org/documents/TTCR09/index.html. 30 GTZ German Technical Cooperation, “About Us,“ The Danube, http://www.donauinfo.org/donau.php?pg=1&lg=en&mn=1. 31 Nebojsa Matijasevic, interview by Yoojung Ahn and Reiko Okumura, 24 March 2009. 32 GTZ German Technical Cooperation, “About Us.“ 33 GTZ German Technical Cooperation, “About The Danube,“ The Danube, http://www.donauinfo.org/donau.php?pg=2&lg=en&ld=sr&mn=2. 34 Balkan Travellers, “Cruise Tourism on the Danube in Serbia, Romania and Bulgaria Takes Off,” Balkan Travellers, 4 March 2008, http://www.balkantravellers.com/en/read/article/418. 35 GTZ German Technical Cooperation, “About Us.“ 36 Matijasevic, interview. 37 GTZ German Technical Cooperation, “About Us.“ 20

GTZ designed four main groups of activities for its Danube tourism project. First, it mapped out the existing tourism products and assisted these countries in developing new ones, including a cycle route that goes along the Danube from Budapest to the Black Sea. Second, GTZ provided advice to those in the accommodation and catering sub‐sectors in order to increase both quantity and quality of these services. Third, it focused on the design and publication of marketing and promotion materials such as the website of the Danube tourism project which includes various tourism offers in these countries,38 maps of the Danube bike trail as well as marketing brochures and information material on nautical tourism.39 Also related to promotion and marketing, GTZ helped advertize this Danube tourism product at international and regional trade fairs and conferences. Fourth, the agency enforced cross‐border economic cooperation through partnership with Chambers of Commerce, 40 national and local governments and those employed in tourism and tourism‐related sectors in these countries.41

Project Impacts and Limitations

Among GTZ’s core‐tourism products (river cruises, bicycle tours and hiking), the Danube Cycling Route is apparently the focus and arguably a more successful activity. This route is linked with the European Cycle Route Network or EuroVelo Route 6,42 and as of 2008, GTZ has published eight different pamphlets for this route alone. Within the same year, GTZ also finished signposting of the track starting from the Hungarian border all the way to Belgrade with tentative plans to complete the part by “Iron Gate,”43 Europe’s largest river gorge situated between Serbia’s National Park Derdap and Romania’s Portile de Fier,44 by 2009.

In fact, due to these achievements, both the numbers of tourist arrivals, infrastructure and subsequent job creation have increased. GTZ reported a tripling in the number of accommodation units in the past five years and identified at least 200,000 German and Austrian cyclists who would be interested in taking the Danube Route.45 At the same time, the number of river cruises has also risen. In 2007 alone, Serbia received a total of 720 dockings in Belgrade, Novi Sad, Viminacium and Dobji Milanovac, amounting to 70,000 cruise passengers. Romania’s figure more than doubled that of its neighbor at 143,292 passengers, while Bulgaria had only 20,000 visitors.46 To host these larger numbers of tourists,

38 Ibid. 39 GTZ German Technical Cooperation, “ITB Berlin: Danube Tourism in South‐Eastern Europe—New Developments,“ GTZ, http://www.gtz.de/en/weltweit/europa‐kaukasus‐zentralasien/22729.htm. 40 GTZ German Technical Cooperation, “About Us.“ 41 Matijasevic, interview. 42 Ibid. 43 Nebojsa Matijasevic, ed., The Danube: Discover the Shores of the Danube in Serbia (Belgrade: Format, 2008), 7. 44 Stefen Krell, ed., The Iron Gate: Where the Danube Created Europe’s Largest Gorge (Belgrade: Format). 45 Matijasevic, interview. 46 Balkan Travellers, “Cruise Tourism on the Danube in Serbia, Romania and Bulgaria Takes Off.” 21

these countries have built and improved their accommodation and food services. Meanwhile, prospects for further investment in these two sub‐sectors continue to show a promising sign.47

Despite growth in the river cruise industry, the Serbian Government has stated it would not let this development harm the river’s biodiversity or affect its people’s livelihood. Specifically, the government expresses its concern that the cruise industry could disturb tourists who come to Serbia for other tourism activities such as bird watching or cycling. Also, it has vowed to protect the locals who live nearby or rely on the Danube for income sources from possible negative impacts stemming from the cruise industry.48 However, the government as well as GTZ has not clearly identified a strategy to do so.

Although this Danube Development Project has certainly boosted tourism industries in the four South‐ Eastern European countries, it is still yet to be seen how the project would benefit each country while simultaneously foster cross‐border integration. While many tourism sub‐sectors, especially accommodation and catering, have benefited from these tourist inflows, others may not experience this same advantage or worse see their market shares eroding. Local tour operators may have to compete with more internationally well‐known players such as the German Launer Reisen, whose cycling tour has been widely advertised by no other than GTZ itself.49 Moreover, while promotion materials for Serbia have been fully developed and easily accessible on GTZ’s website,50 those of the other three countries are still absent.

Implications for the Western Balkans

Despite several weaknesses, the two examples are beneficial for the development of their respective regions. The Caribbean now has harmonized their practices according to international standards and owned a large database of useful information that, once applied, would further develop their tourism sector. At the same time, the Danube region has witnessed increases in infrastructure and job opportunities that then enhance the countries’ economic performance and peoples’ livelihoods. While impacts on the environment are yet to be seen, a lesson learned from these two cases is the importance of proper and well thought out implementation. Mere guidelines and recommendations cannot advance the tourism industry unless a region applies these findings and then monitors and evaluates them on a regular basis. Moreover, implementation ought to be conducted carefully to ensure that benefits do reach the targeted groups and that, in case of a regional tourism strategy, the project does bring the peoples together instead of further divide them.

47 GTZ German Technical Cooperation, “ITB Berlin: Danube Tourism in South‐Eastern Europe—New Developments.“ 48 Borislav Vasic, Sandra Vojnovic and Miro Stefanovic, The Unknown Danube: Guide through Serbia (Novi Sad: Tourist Organization of Vojvodia, 2008), 4. 49 Matijasevic. ed., “The Danube.” 50 Can be accessed at http://www.donau‐info.org. 22

Indeed, the last point is very relevant to this study. While generating benefits, these two examples show that inequality does exist within a regional framework. In the case of CRSTDP, Cuba fares much better than the rest of the region with its 10% growth rate compared to only 2% in the Dominican Republic.51 Likewise, the number of cruise passengers in Romania was more than seven times of that of Bulgaria in 2007. Although common in regional initiatives and organizations, these differences could have negative repercussions among the five Western Balkans states where development over the past few decades have already left bitter memories and tensions among some populations. A regional program to integrate the Balkans thus should be undertaken carefully to minimize this inequality so that such an initiative would successfully foster a stronger tie as it originally intends to.

51 Griffith, “Caribbean.” 23

Section 3: Methodology

Literature Review

The research for this project was conducted over a six‐month period, from November 2008 to April 2009. Background and desk research was conducted in New York City and field research was completed over a four‐week period in January and March 2009 in four of the target countries: Albania, Bosnia, FYR Macedonia and Serbia. Due to financial and time constraints, the team was unable to travel to Montenegro; however, tourism literature on Montenegro has been widely disseminated, and telephone interviews with stakeholders in Montenegran tourism development were particularly helpful in evaluating the country. Background research in the target countries covered a wide range of topics including: the ways in which tourism promotes sustainable development and growth; characteristics of the historical, political and economic context of each country and the region as a whole; national laws surrounding the tourism industry in each nation and on a regional and institutional level; and government plans and initiatives for the tourism industry and ongoing tourism projects being implemented by the international community, to name a few.

Field visit #1: January 2009

In January 2009, a fact‐finding mission to Albania and Macedonia was undertaken by three team members. The literature review and background research conducted in the first two months of the project helped prepare the team for the situation on the ground. The team spent the first seven days in Albania, both in the capital city of Tirana and Berat, a popular tourist destination in south‐central Albania. The second half of the trip was spent in Macedonia, both in the capital city of Skopje and the lake resort town of Ohrid. The team met with thirteen stakeholders in Albania and nine stakeholders in Macedonia and was also able to participate in the Ohrid International Tourism Fair. The stakeholders comprised of government officials at the national and local level, international donors, international and local NGOs, local tourist companies and guides, private sector companies investing in tourism, and United States Peace Corps volunteers. The meetings were generally open ended interviews designed to garner information on the historical, political, economic and environmental aspects of each country and furthermore, how tourism played a role in the growth and development in each country. Objectives of the field visit were as follows:

• Meet with government officials and policymakers (at the national and local level) to assess the government’s role and responsibilities in promoting tourism in their country and within the Western Balkans region.

• Speak with international donors who are funding tourism projects in each country and the region to determine the role that the international community plays in strengthening the tourism industry.

24

• Meet with existing foreign and local investment companies to assess the investment climate for tourism in the region and gauge the ease of doing business in the region.

• Consult local tour operators and business leaders to better understand the constraints faced at a local level in generating revenue and interest from tourism in the Western Balkans and areas for future involvement in the industry.

• Visit historical tourist sites in order to witness first‐hand the countries’ offering as well as the challenges that face the tourism sector.

• Access local documents and resources.

SWOT Analyses

As per the guidance and recommendation of the client, the SIPA team worked to organize the information into SWOT (Strengths, Weaknesses, Opportunities and Threats) analyses of the tourism industry in each country. Utilizing this framework during the research and information‐compiling portion of the study, the team then worked to integrate the findings from such SWOT analyses into the synthesized findings of the study’s broader analysis.

Sustainable Tourism Development Feasibility Framework

Although the information gathered by the team was collected and analyzed through a SWOT analysis, the team decided that this was not the most useful way to present the information in this final report. Through numerous meetings and conversations, the team came to understood that not all the information can be easily categorized into a “SWOT box”, nor was it the most illuminating way of delineating the research and findings. Instead, the team has woven such information into a larger narrative on sustainable tourism development, the economic, social and political context of the Western Balkans, and an overview and analysis of how tourism development can be situated into sustainable development in the region.

Field Visit #2: March 2009

In March of 2009, the remaining three members of the team traveled to Bosnia and Herzegovina and Serbia for two weeks to conduct a fact‐finding mission similar to the January trip. The SIPA team used email, telephone, and on the ground contact to meet with individuals working in the public sector, private sector, local NGOs, multilateral as well as bilateral development agencies. Meetings and visits were split between the capitals of Sarajevo and Belgrade, and major administrative cities, such as Banja Luka, as well as sites where tourism has played a large role in the local economies, such as Mostar, Novi Sad and their vicinities.

25

As occurred during the January trip, a number of interviewees referenced previous and ongoing studies in the region. The team returned from the field and located and reviewed these documents which greatly enhanced this study. Furthermore, both field teams have stayed in contact with the individuals they met with in each country who have also continued to provide valuable input to this report.

Final Recommendations and Presentation

The team conducted an in‐depth analysis of the five target countries in order to provide the client with a feasibility study and concept paper on a regional tourism strategy for the region. While the feasibility study provides and analysis of the issues noted above, the concept paper hones in on a vision of specific areas in which the client can work in the short to medium term.

These results and recommendations were presented to the client, as well as SIPA faculty, students and other stakeholders on May 1, 2009 in New York City.

Section 4: Albania

4.1: Geographic, Historical and Political Context

Albania is located in southeastern Europe and borders Montenegro to the north, Kosovo to the northeast, FYR Macedonia to the east, and Greece to the south. The total area of the country is 28,748 square kilometers,1 with a 470 kilometre coastline along the Adriatic and Ionian Seas.2 The current population is roughly 3.2 million people.3 Greeks form the largest national minority, followed by Macedonians and Montenegrins. However, according to European Commission, the lack of reliable data on the size of minorities is a major obstacle to the development of policies to protect them.4 Source: CIA, The World Factbook, 2009. Albanian territory has been populated since prehistoric times. Greeks, Romans, Venetians and Ottomans exerted considerable violence and competed for control of it throughout history. But in 1912, Albania gained its independence after centuries of Ottoman Turkish rule.5 In 1945, communists proclaimed the People’s Republic of Albania after a one‐party election. From

1 Economist Intelligence Unit, “Country Profile 2009: Albania,” Economist Intelligence Unit, http://www.eiu.com, 2. 2 Central Intelligence Agency, “Albania,” The World Factbook, 23 April 2009, https://www.cia.gov/library/publications/the‐world‐factbook/geos/al.html. 3 Economist Intelligence Unit, “Country Profile 2009: Albania,” 9. 4 Economist Intelligence Unit, “Country Profile 2009: Albania,” 10. 26

1945 to 1985, Albania’s communist leader Enver Hoxha allied himself with several leaders including Josip Broz Tito, Joseph Stalin and lastly Mao Zedong. As Chinese‐Albanian relations deteriorated after Mao’s death, Hoxha led Albania into a complete economic, political, military and cultural isolation. His death in 1985 and the fall of communism across much of Eastern Europe in the late 1980s and early 1990s led to the first multiparty elections held in March 1991.6

Today Albania is a parliamentary democracy. The country is governed by a centre‐right coalition led by the Democratic Party of Albania (DPA), led by Prime Minister Sali Berisha.7 On June 12, 2006, Albania signed a Stabilization and Association Agreement (SAA) with the European Union (EU).8 The SAA entered into effect on April 1, 2009.9 On the same day, Albania became an official member of North Atlantic Treaty Organization (NATO).10

4.2: Economic Context

Albania had one of the most rigid systems of central planning among former communist bloc countries. Due to a long legacy of self‐inflicted isolation, the country still remains one of the poorest transition economies outside the Commonwealth of Independent States (former USSR), with a GDP per capita of 4,181 USD.11 This figure is below the GDP per capita of all neighboring countries in this study. However, real GDP grew rapidly by more than 7% in the period between 1993 and 2001, with 1997 being the only exception. The driving factor behind this rapid growth was due to agriculture development and remittances from Albanian emigrants.12

The service sector comprises 60% of GDP, while agriculture and industry each account for 20%. However, the percentage of service industry contributing to GDP is still at a low level compared to other Eastern European countries. While small businesses in construction and manufacturing have recently created many new jobs, agriculture remains the most important employing sector, accounting for almost 60% of the formal employment.13 Unemployment is high at 13% in 2008;14 however, the government has

5 Ibid, 4. 6 Economist Intelligence Unit, “Country Profile 2009: Albania,” 4. 7 Ibid, 5. 8 European Commission, “EU‐Albania Relations,” Enlargement, http://ec.europa.eu/enlargement/potential‐candidate‐countries/albania/eu_albania_relations_en.htm. 9 Ibid. 10 North Atlantic Treaty Organization, “NATO’s relations with Albania,” NATO News, 2 April 2009, http://www.nato.int/issues/nato_albania/index.html. 11 Economist Intelligence Unit, “Country Profile 2009: Albania,” 19. 12 Ibid, 20. 13 Economist Intelligence Unit, “Country Profile 2009: Albania,” 17. 14 Ibid, 20. 27

responded to the challenge with the issuance of the employment and vocational training strategy that outlined plans to reduce its unemployment rate to the EU standards by 2013.15

Foreign direct investment (FDI) has grown in recent years, reaching 5.9% of GDP in 2007. The main area of interest for FDI is communication sector due to the privatization of many companies in this sector.16 Other areas attracting investors include tourism, energy, mining, banking, and infrastructure.17

Despite the economic crisis, real GDP grew at 6% in 2008,18 mostly due to a rapid expansion of bank credits and an increase in public investment. However, Albania exports a great deal to the Euro zone markets such as Italy, Greece and Germany, and this in turn will also affect GDP growth, which is projected to slow to only 2% in 2009 and 3% in 2010. This is largely due to the expected decrease in the remittances by Albanian migrants in the EU countries following the economic crisis.19

4.3: Tourism Sector Overview

During communist rule, the Albanian government heavily controlled foreign tourist activities. As a result, Albania only registered 30,000 visitors per year by the late 1980s.20 Foreign tourists were organized in escorted groups on pre‐arranged itineraries. Tourists pre‐purchased tourist packages and had very limited opportunities to spend money.21

Due to the opening of the country after the collapse of communism, the flow of tourists into Albania has increased. The tourism and travel industry accounted for 4.1% of GDP in 2008, while the entire tourism and travel economy generated 14.7% of GDP.22 Respective figures for employment in the industry and greater economy are 3.3% and 11.9%.23 Export earnings from international visitors and tourism goods are expected to generate almost half of all of the country’s export earnings in 2009.24 Total revenues from tourism were estimated at 805 million Euros in 2006. Currently, approximately 60% of all international visitors to Albania are ethnic Albanians from Kosovo and the FYR Macedonia, as well as

15 European Union, European Commission, Albania 2008 Progress Report, 32. 16 Ibid, 19. 17 Republic of Albania, Council of Ministers, National Strategy for Development and Integration 2007‐2013, March 2008, http://siteresources.worldbank.org/INTPRS1/Resources/Albania‐PRSP(August2008).pdf, 9. 18 Economist Intelligence Unit, “Country Report March 2009: Albania,” Economist Intelligence Unit, http://www.eiu.com, 11. 19 Ibid. 20 Derek Hall, “Foreign tourism under socialism: the Albanian ‘Stalinist’ model,” Annals of Tourism Research 11, no. 4 (1984): 541. 21 Ibid. 22 Jennifer Blanke and Thea Chiesa, ed., “Country Profiles,” Ch. 2.1 of The Travel & Tourism Competitiveness Report 2009 (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html, 116. 23 Ibid. 24 World Travel and Tourism Council, Travel and Tourism Economic Impact 2009: Albania, http://www.wttc.org/bin/pdf/original_pdf_file/albania.pdf, 3. 28

Albanian expatriates from the EU and North America.25 EU countries, account for the bulk of remaining tourist visitors.26

The Ministry of Culture, Tourism, Youth, and Sports (MoCYTS) developed a “Strategy and Action Plan for the Development of the Albanian Tourism based on Cultural and Environmental Tourism” in December 2005, in cooperation with the United Nations Development Programme (UNDP). The plan places emphasis on nature and cultural tourism in the country, and outlines the benefits that can be reaped from such plans for Albania’s neediest citizens; indeed, the plan explicitly outlines that the main objective of any tourism development strategy should be advancing the Millennium Development Goals (MDGs).

Albania presents a unique destination for adventurous tourists keen on discovering hidden attractions. The country has a number of archeological sites and remains from the Greek, Roman, Byzantine, Venetian and Ottoman eras. Albania has sandy beaches along the Adriatic Sea and rocky beaches along the Ionian Sea. It also has spectacular mountains in the North along its border with Kosovo as well as in the South near Lake Ohrid and Lake Prespa. Moreover, the country is well‐known for its rich folklore. All these offerings have a potential to further enhance the country’s tourism industry if well developed and sustained.

However, Albania also faces serious limitations in its tourism prospects. One of the most serious impediments is the lack of infrastructure, a persistent, shared problem in many countries in the Western Balkans.27 In particular, Albania suffers from poor road conditions, wastewater disposal, lack of emergency services, as well as power and electricity shortages.28 Limited funding for the protection and maintenance of zones with environmental and cultural interests, insufficiently trained human resources, widespread corruption, ill‐defined property rights and lack of law enforcement also inhibit, to varying degrees, growth in this sector.29

Albania also suffers from a negative international image. The country’s image outside its borders has been shaped by its long isolation and communism, a dramatic collapse of pyramid schemes followed by widespread rioting during the 1990s, mass illegal migrations to neighboring Italy and Greece, and organized crime networks of human and drug trafficking.30 Albania is working to transform this image by inviting travel writers and journalists on familiarization tours; however, the change in attitudes will

25 Republic of Albania, Council of Ministers, National Strategy for Development and Integration 2007‐2013, 77. 26 United Nations Development Programme, “Annual Tourism Survey Results,” United Nations Development Programme, 24 June 2008, http://www.undp.org.al/index.php?page=detail&id=96, 3. 27 United Nations Development Programme Albania and Ministry of Culture, Tourism, Youth and Sports, Strategy and Action Plan for the Development of Albanian Tourism Sector Based on Cultural and Environmental Tourism, December 2005. 28 Lauren Bohatka, interview by Scott Leo and Alida Meghji, 6 January 2009. 29 Nevila Popa, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 7 January 2009. 30 Matthew Price, “Albania tries image makeover,” BBC News, 18 August 2002, http://news.bbc.co.uk/2/hi/europe/2200797.stm. 29

take some time. Although the national government views tourism one of its major priorities,31 the lack of capacity and expertise for the implementation of tourism development strategy strongly obstructs its role. Also, there is a significant need to streamline government’s actions across ministries between municipalities at the local level. Thus, while the new tourism law strongly underlines the concept of sustainable tourism, there is a very weak coordination between the Ministry of Environment and MoCTYS in policymaking.32

Another obstacle that complicates any analysis of the tourism sector in Albania is its varied statistical record due to multiple institutions undertaking the same activities under conflicting methodologies. For example, the National Institute of Statistics (INSTAT) collects data on visitors based on overnight stays, whereas the Ministry of Interior draws the same data from border crossing points. INSTAT’s data, based on accommodation units, perhaps does resent an accurate picture, as the majority of visitors stay in unlicensed guest‐houses or with families whom they are visiting. The resulting low statistics led the UNWTO’s World Tourism Receipts report to indicate that Albania earned 17,500 USD for every tourist that visited the country in the 2005 holiday season, among the world’s highest.33 Accurate data availability is crucial for future analysis and policymaking in the tourism sector.

The presence of international actors is very high in the Albanian tourism sector, including the United States Agency for International Development (USAID), SNV Netherlands Development Organization, and the German Technical Cooperation, (GTZ), as well as local non‐governmental organizations active in specific regions such as the Gjirokastra Conservation and Development Organization and the Butrint Foundation.

Nearly ten years ago USAID initiated the Albania Enterprise Development and Export Market Services (EDEM) as a cluster development approach to various economic issues. Tourism was one of the targeted sectors, with supported activities such as exposure at international tourism fairs, media familiarization tours in Albania, the “Greetings from Albania” postcard campaign, a free online listing system for hotels, as well as other educational and training programs.34

SNV has focused its efforts on creating awareness and educating local communities about the potential for rural and cultural tourism, emphasizing environmental management to encourage sustainability. SNV

31 Ols Lafe, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 8 January 2009. 32 Nevila Popa. 33Ben Andoni, “Albanian Tourism between Statistics and Reality,” Balkan Investigate Reporting Network, 28 September 2007, http://www.birg.edu.com/en/106/10/5054/. 34United States Agency for International Development, “Enterprise Development and Export Market Services (EDEM),” Activities, 5 September 2007, http://albania.usaid.gov/shfaqart/43/57/Enterprise_Development_and_Export_Market_Services_(EDEM).htm. 30

uses a distinct “bottom‐up” approach by formulating specific strategies catered to the expectations and capabilities in their target communities.35

The Butrint Foundation and the Gjirokastra Conservation and Development Organization are among the few local NGOs that work in heritage management and conservation and own internationally recognized skills. In the past, heritage conservation was always a responsibility of the state and to a certain degree, it is still perceived to be. This condition complicates the role of NGOs in the process; at times, the NGOs are under‐appreciated by the state and municipalities.36

These examples of some of the country’s tourism initiatives show that the importance of tourism in Albania’s future has been recognized by many stakeholders. Whether this will translate into tangible benefits for the local population and sustainable development of the country or not remains to be seen.

4.4: Legal Context

A Cultural Heritage Law was adopted in 2003, and consolidated responsibilities for cultural heritage activities under two main institutions: the Institute for Cultural Monuments under the Ministry of Culture, Tourism, Youth and Sports (MoCTYS), which is responsible for the restoration and maintenance of heritage sites; and the Institute of Archeology under the Albanian Academy of Sciences, which is responsible for archeological excavation.37

The law broadens the definition of heritage by including intangible heritage as well. While heritage sites are authorized to retain up to 90% of their revenues for restoration and maintenance, 38 the consolidation of responsibilities under Regional Directorates will allow a more holistic approach to the overall management of the heritage. The law led to the creation of national committees in order to analyze and approve heritage strategies and regulations. Unfortunately, the law made few provisions to support its implementation, as additional financial resources are required, particularly for strengthening human resource development.39 The law allows international donors to contribute to the restoration of historical sites, but it does not allow them to jointly supervise the ongoing work. The latter may discourage donors from participating in the process.

A new Law on National Tourism was adopted in 2007 with the support of UNDP. The law introduces the principles of sustainable tourism and advocates the use of a participatory approach in developing the

35 David Milne, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 11 January 2009. 36 Elenita Roshi, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 8 January 2009. 37 Katrinka Ebbe, Elenita Roshi and Omer Car, Cultural Heritage and Local Economic Development – Technical Note for Albania, September 2008, 6. 38 Ibid. 39 Ibid. 31

tourism industry,40 with a strong focus on local‐level planning, environmental protection and natural resource management. It also established the National Tourism Agency (NTA), responsible for supporting and facilitating financial resources for organizations involved in the sector. To support such external activities, the NTA will soon establish the National Tourism Development Fund.41

The law is comprehensive in defining rights and responsibilities and represents a holistic approach to tourism development, yet additional structures and regulations are needed to accomplish its implementation. The effective realization of the law will also require significant financial resources and ministerial coordination. However, the MoTCYS is the least funded Albanian ministerial portfolio, with a budget of approximately 1% of Albania’s GDP.42

While the tourism law lays out specific provisions for domestic and foreign investment, a major impediment to investment is lack of clarity over an individual’s legal title to property, a problem further compounded by the attempts to restore land seized by the communists to its former owners.43 Albania’s system of disputed property rights is reflected in its low property rights ranking 126th among 133 countries in the 2009 Travel and Tourism Competitiveness Index administered by the World Economic Forum (WEF).44

However, efforts have been taken to close the legislative gap. According to the National Strategy for Development and Integration (NSDI), land value will be mapped out for the process of restitution and compensation by the Agency of Restitution and Compensation.45 In addition, a complete digital map of the country will be available by the Agency for Legalization, Urbanization and Integration of Illegal Construction Zones and these two agencies will cooperate to make this process more coordinated and achieve the much needed reforms.46

4.5: Tourism Products

Beach 4.5A: Cultural and Historical Tourism

Tourism Products

40 Albania’s Law No. 9734 issued on 14 May 2007 defines this approach as “equitableCulture distribution of advantages and Nature and costs among tourism promoters, municipalities and communes and the generalHistory population in host areas” as well as “information, education, motivation and involvement of the local population in the process of tourism facility development.” 41 Republic of Albania, The Parliament, Law number 9734 “On Tourism,” 14 May 2007. 42 Ibid. 43 Ervin Qafmolla, interview with Humay Guliyeva, Scott Leo and Alida Meghji, 9 January 2009. 44 Blanke and Chiesa, ed., “Country Profiles,” 117. 45 Republic of Albania, Council of Ministers, National Strategy for Development and Integration 2007‐ 2013, 9. 46 Ibid, 9. 32

Albania possesses a myriad of archeological, historical, religious and architectural sites. It has the greatest number of these tourism sites per square kilometer in the world, second only to Italy.47 The complexity of its history, including the recent isolated communist era, provides Albania with a very unique historical tapestry that is worthwhile to develop and promote.

Tirana

Tirana, the largest city in Albania, became the country’s capital city in 1920. In the 1960s, the historical identity of the city faced a critical challenge as the central square of the city, named today after the national hero Gjergj Kastrioti (also known as Skanderbeg), was redesigned. A number of buildings of cultural and historical significance, such as the Autocephalous Albanian Orthodox Cathedral, the Old Bazaar, and the Municipal Center were demolished.48 Indeed, the Tirana of today features very little in the way of architecture built prior to the communist era. After the fall of communism, Tirana experienced the chaotic rise of illegal high‐rise buildings and structures. Since 2000, a vast number of such illegal buildings have been demolished, common spaces reclaimed from illegal construction, and facades of Tirana’s buildings repainted in bright colors.49

Today, Tirana is a vibrant and bright city, with numerous cafes and restaurants, as well as an emerging nightlife. While the city cannot compete with European urban tourism capitals such as Paris, London or Rome, Tirana is still a natural start for a cultural tourism tour of Albania, beginning with the country’s the communist past.

Other Cities

Durres

Durres is the second largest city in Albania, located on the central Albanian coast on the Adriatic Sea. Apart from its famous beaches, Durres is also one of the most ancient Albanian cities, founded as Epidamnos in Illyria in the 7th century BC. The Archeological Museum in Durres houses artifacts from the Greek, Hellenistic, Roman and Byzantine periods.50 One major challenge is that, owing to its long continuous inhabitation throughout history, it has never been systematically excavated and many of the items in the museum were discovered by chance.51

The Durres Amphitheatre is a Roman style building built in the 2nd century AD and is located in the center of the city. The amphitheatre is the largest one in the Balkans, once having a capacity of 15,000 people, about a third of the coliseum in Rome. It is currently under consideration for an inscription as a

47 SNV Netherlands Development Organisation Albania, Strategic Plan 2008‐2009, 16. 48 Anca Pusca, "The aesthetics of change: Exploring post‐Communist spaces," Global Society 22 (3) 2008: 369–386. 49 Ibid. 50 National Agency of Albania, “Archeological Sites,” Welcome to Albania, www.albaniantourism.com. 51 Gillian Gloyer, Albania Bradt Guide (Bradt Travel Guides Ltd, 2008), 82. 33

UNESCO World Heritage Site. There is also a Byzantine forum from the end of the 5th century AD and a Roman bath‐house built in the early 2nd century AD.52

Unfortunately, the beaches near Durres have been vastly built up due to a large influx of Albanians from Macedonia and Kosovo in the summer months; current tourism growth in Durres is thus unsustainable. Many stakeholders in Albania cite Durres (alongside with Saranda) as one example of unsustainable tourism that should serve as a lesson for the rest of the country.53 Mass sun and sand tourism has sidelined Durres’s archeological heritage and has not left much space for alternative cultural tourism development.

Berat

Home to one of Albania’s three UNESCO World Heritage sites, Berat is also one of the oldest cities in Albania. It is known as the “city of one thousand windows,” and its white Ottoman houses climbing up the hillside represent one of the best known images of Albania. The Berat Castle houses several medieval churches, one of which has a collection of the famous local artist Onufri.54

The municipality faces challenges in promoting the city as a tourist destination, however: roads from Tirana and Durres do not facilitate a high level of traffic, while signage is poor and not standardized. There are no signs indicating that a visitor is approaching a UNESCO World Heritage Site, and many buildings built during the Communist era spoil the historic aura of the city.55 The municipality currently has plans to promote an expansion of tourist activities that the city has to offer, including mountain hiking and river rafting in Osum River. Also, the local government is encouraging local residents to offer more bed‐ and‐breakfast accommodations as Berat’s current overnight capacity is only 210 beds.56

Butrint

The ancient city of Butrint is half an hour’s drive from Saranda, opposite the Greek island of Corfu. The Albanian Government established the Butrint National Park in 2000, located on the shores of Lake Butrint, which is on the Ramsar List of Wetlands of International Importance.57 The city of Butrint is on the UNESCO list of World Cultural Heritage Sites.58

52 National Agency of Albania, “Archeological Sites.” 53 Nevila Popa. 54 In Your Pocket, “Berat In Your Pocket,” In Your Pocket, http://www.inyourpocket.com/city/berat.html. 55 Emiljano Zhuleko and Eva Dhima, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 10 January 2009. 56 Zhuleko and Dhima. 57 Ramsar Convention on Wetlands, Ramsar Sites in order of Addition to the Ramsar List of Wetlands of International Importance, http://www.ramsar.org/sitelist_order.pdf. 58 United Nations Educational, Scientific and Cultural Organization, “Butrint,” World Heritage List, http://whc.unesco.org/en/list/570. 34

The city has been occupied since at least the 8th century BC.59 Main monuments around Butrint include the 4th century BC Greek theater with a capacity of 1,500 people, the line of Roman courtyard houses and bath houses, a large Byzantine baptistery with a mosaic pavement dating back to the early 6th century AD as well as kilometers of high walls dating from the Greek, Roman, Byzantine and medieval occupations. The site is surrounded by a picturesque lagoon and the park is preserved well making it possible for the attraction to be a significant historical site.60 Every year roughly 80,000 people visit Butrint, a majority of them on a one‐day trip from the island of Corfu.61

The Butrint Foundation, established by Lord Sainsbury and Lord Rothschild, has been crucial in funding excavation, training young archeologists and promoting preservation efforts in Butrint. However, the Park faces a challenge of extreme pressure confronting the country’s coastal areas.

Gjirokastra

Another UNESCO World Heritage Site, Gjirokastra is a developing centre for cultural and heritage tourism. Known as the “City of Stone”, Gjirokastra is famous for its Ottoman‐style tower houses.62 Many of the best examples of Gjirokastra’s architecture were built in the first three decades of the 19th century and hence are relatively well preserved. Gjirokastra also boasts a castle from the 6th century built on the top of a steep rock. The city is also famous for being a birthplace of two of Albania’s important figures: Enver Hoxha, who ruled the country for 40 years, and writer Ismail Kadare, who is frequently mentioned as a contender for the Nobel Prize for literature. These famous figures could be included in Gjirokastra’s plan to promote tourism, similar to James Joyce tours in Dublin or Shakespeare tours in Stratford‐upon‐Avon.63

On paper, traditional houses in Gjirokastra enjoy quite a strict legal protection. Fifty‐one of them have Category 1 listing, meaning that no external modifications are permitted and over 350 others are listed on Category 2, that is, some modifications are allowed.64 Unfortunately, some of these buildings are at great risk from neglect, abandonment and fire. The Gjirokastra Conservation and Development Organization (GCDO) is actively involved in raising funds and support for the city’s sustainable future.65 Due to the past legacy of active state involvement in country’s cultural affairs, many NGOs, private

59 National Agency of Albania, “Archeological Parks,” Welcome to Albania, www.albaniantourism.com. 60 Malcolm Billings, “Albania’s long lost Roman city,” BBC News, 7 July 2007, http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/6278418.stm 61 Marco Bordoni, Report on Seasonal Visitor Surveys Administered at Cultural and Natural Tourism Sites in Albania Summar 2007. 62 Gjirokastra Conservation and Development Organization, “Gjirokastra,” Girokastra, http://www.gjirokastra.org/home.html. 63 Roshi. 64 Gloyer, Albania Bradt Guide, 194. 65 Gjirokastra Conservation and Development Organization, “Gjirokastra.” 35

businesses as well as general public do not view the preservation of cultural heritage as part of their own responsibility.66

Archeological Parks

Apart from three cities designated as UNESCO World Heritage Sites, Albania also boasts a number of important archeological parks which might be of a special interest to history and archeology students, as well as aficionados of Roman, Byzantine and Ottoman history.

Lezha (Lissus) is an ancient city in Northwestern Albania, which was controlled by Julius Caesar during the wars between Caesar and Pompey. It was a thriving port of the Venetian Republic during the 15th century, when it was called Alessio. The city is best known and loved by Albanians for being the site of League of Lezha (1444) where Skanderbeg united all of Albanian princes in a fight against the Ottoman Empire. Skanderbeg was buried in the Saint Nicholas Cathedral here in Lezha.67

Oricum (Orikos), located along the shore of the Vlora Bay is an ancient Greek city, founded in the 6th or 7th century BC. Due to its natural harbor location, Oricum was used by Roman troops as a base; in fact, Julius Caesar stationed his troops here during the Roman Civil War.68 Various archeological ruins such as a small theatre, traces of wall ruins and street as well as an early Byzantine church of the 13th century AD are present. Oricum also has a long pebbly beach, which is popular among the locals.

Apollonia is close to the modern city of Fier, in southwestern Albania, and was founded as a Greek city in the 6th century BCE. Some of the most interesting monuments worth visiting are Bouleterion (city council), the library, the triumphal arc, the temple of Artemis and the Odeon built in the 2nd century BC and a theatre with a capacity of 10,000 spectators.69 The Famous Via Egnatia, crossing the Roman provinces of Illuricum, Macedonia and Thrace all the way to Constantinople, also passed through Apollonia.

Byllis was the largest city in Southern Illyria. Designated into the Byllis Archeological Park, it is a vast site spreading over 30 hectares on top of a hill. The ancient walls surrounding the city were built in the 4th century BC. Within them there are remnants of Illyrian private houses, Roman public buildings, a theatre and Byzantine basilicas with outstanding mosaics.70

Opportunities and Constraints

66 Roshi. 67 Gloyer, Albania Bradt Guide, 160 68 Ibid, 212 69 National Agency of Albania, “Archeological Parks.” 70 Ibid. 36

Archeological parks present an important tourism product, especially in today’s world where travelers are increasingly looking for unique experiences to enrich their understanding of the world. Albania has an opportunity to create thematic routes, for example “In the footsteps of Julius Caesar”, to attract more visitors, or create a route that would pass through a majority of the abovementioned archeological parks.

The initiative, however, requires a well conceived marketing and promotion approach, as well as a long‐ term government commitment in order to turn these sites into a viable tourist product while ensuring physical conservation. The latter is particularly costly. One major challenge in this subsector is the lack of professional tour guides with language skills to cater to increasingly diverse groups tourists.71

While the list of archeological sites and parks mentioned above is by no means exhaustive, it provides a glimpse into Albania’s history and the depth of its cultural diversity. Albania’s geographical proximity to a large pool of educated and curious European travelers is another strong asset. Due to its long history of isolation, Albania still remains an unexplored and undiscovered destination, and as such has a distinctive allure among nations in the region. According to a survey conducted by UNDP,72 a majority of tourists travelling to Butrint, Gjirokastra, Berat and Theth are pleasantly surprised with the climate, scenic landscapes, interesting architecture and friendly people. In another words, their experience has outweighed their expectations. Therefore, Albania is indeed a must for tourists who are willing to be more flexible in exchange for being among the first to explore a destination.

One aspect particularly honed in upon in Albania’s “Strategy and Action Plan for the Development of the Albanian Tourism Sector Based on Cultural and Environmental Tourism” is that while Albania’s culture, history, geography and archeology are fascinating, they are complicated and not easily accessible even to a well‐educated tourist. Therefore, Albania can fully realize its tourism potential only through understanding and appreciation; in other words, a full “discovery” of Albania. Albania must be sold in international markets as Albania in its complexity and not thematically‐based alone. Hence, under the general idea of “Discovery of Albania”, its historical and archeological legacies from the Illyrian, Roman, Byzantine, Ottoman, Dictatorship and post‐1991 era, may be promoted as a tourism product.

While Albania has physical assets for cultural and historical tourism, there remain a number of significant constraints which impede its development. The most basic problem at times is lack of access to many cultural heritage sites. Since 2008, the MoCTYS has been cooperating with the Ministry of Interior and Transportation to improve roads and access to remote sites and villages. In addition, construction has commenced to build roads connecting major cities.73

71 Roshi. 72 Bordoni, Report on Seasonal Visitor Surveys Administered at Cultural and Natural Tourism Sites in Albania Summer 2007. 73 Lafe, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 9 January 2009. 37

Albania is also plagued by lack of capacity in tourism and hospitality service provision. Although the history behind every site is very rich, there is shortage of qualified tour guides and not much training to fill in the gap. In addition, there is a shortage of qualified managers for cultural sites, and even the MoCTYS suffers from capacity constraints.74 The development of specialized human resources is thus crucial to sustaining cultural tourism, as this is one vital pillar cultural tourism depends on.

Shortage of funding is another obstacle in developing cultural tourism. Restoring ancient objects, saving art from decay and neglect and developing engaging architectural sites require a large amount of funding. Many municipalities do not have this sufficient level of funding or expertise to implement all of these activities. The current level of government coordination between various ministries, as well as central and local branches, remains low.75 There is a dire need for comprehensive approach which would identify certain key cultural/historical tourism spots, as well as develop and implement the action plan.76

All of these obstacles make cultural tours difficult to organize, as it is a hard sell and underdeveloped market niche; hence, the cost per person or small group is very high.77 Developing a successful sector will require substantial levels of investment in infrastructure, marketing, human resources, historic preservation and cultural events.

4.5B Nature and Eco­Tourism

Apart from its cultural and historical treasures, Albania boasts spectacular mountains, waterfalls, lakes, lagoons, and protected wetlands. Named “Budget Destination of the Year” in 2006 by New York Times Travel, and one of the top six destinations for 2008 in National Geographic’s Adventure magazine, Albania plans to promote nature tourism as one of its main tourism products.78 If implemented successfully, nature tourism will not only ensure sustainability benefits of the environment, but also benefit rural communities, particularly the relatively isolated ones in the North of the country.

Mountain Tourism

Albanian Alps

Isolated and remote, Thethi National Park is located 70 kilometer from Shkodra, in the far north of Albania, in the Dinaric Alps. The largest settlement in the area is the village of Thethi, which used to be a domestic tourist resort at the height of communism. Due to the remoteness of the place, its attractive,

74 Luan Dervishej, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 8 January 2009. 75 David Milne, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 11 January 2009. 76 Roshi. 77 Sonia Popa, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 7 January 2009. 78 United Nations Development Programme Albania and Ministry of Culture, Tourism, Youth and Sports, Strategy and Action Plan for the Development of the Albanian Tourism Sector Based on Cultural and Environmental Tourism. 38

traditional features are still maintained.79 The park boasts a waterfall called Cascade of Grunas, as well as a large cave with underground lakes and galleries of stalagmites and stalactites called “Round Holes”.

While the waterfall is ideal for tourists to hiking through unexplored and untouched locations, there are certain challenges. The area around the national park is sparsely populated and there are no mountain rescue helicopters or other emergency services nearby. Mobile phone coverage does not cover the entire National Park; hence, long and unguided tours off the track could be potentially dangerous if any unexpected event occurs.

The Valbona River Valley is a national park of 8000 hectares in the eastern parts of the Albanian Alps. The Valbona River is famous for its dramatic gorges and plunging waterfalls. The valley rises on the slope of Mount Jezerca (2,693 meters), which is the highest mountain in Albania and often a starting point for mountain climbers.80 Valbona also boasts several magnificent traditional villages, among which the notable Dragobia and Rragami.

In the northern mountainous areas of Albania, rural tourism coupled with typical mountain tourism activities such as hiking and trekking could be a very natural combination. Due to their isolation from the rest of the country by natural borders (mountains particularly), and long‐lasting blood feuds during which some entire villages would isolate themselves from the rest of the world, these mountainous villages have retained their traditions and architecture intact.

The Llogara National Park is 40 km away from the city of Vlora and situated on Llogara Mountains between the Adriatic and Ionian seas. The park combines the beauties of a mountain and a seaside climate. It is an ideal location to enjoy aerial sports like parachuting and hand gliding.81

While requirements for infrastructure are minimal82 in adventure tourism (the basic concept of adventure consisting of unconventional recreation with lower demands for comfort), the basic capacity to safely move tourists, telecommunications and emergency services are crucial to guarantee their well‐ being. Shortage of professional mountain guides and well‐developed treks and trails are significant obstacles for development of mountain tourism.

Lake Tourism

Albania is home to Lake Shkodra on the border with Montenegro, Lake Ohrid on the Macedonian border, and Lake Prespa, which it shares with Macedonia and Greece. Albania also has several Wetlands

79 Gloyer, Albania Bradt Guide, 166. 80 Gloyer, Albania Bradt Guide, 135. 81 National Agency of Albania, “National Parks,” Welcome to Albania, http://www.albaniantourism.com/. 82United Nations Development Programme Albania and Ministry of Culture, Tourism, Youth and Sport, Strategy and Action Plan for the Development of the Albanian Tourism Sector based on Cultural and Environmental Tourism. 39

of International Importance, which are included in the Ramsar Convention, an international treaty for conservation and sustainable utilization of wetlands.

Lake Shkodra is the largest lake in the Balkans, situated in the Southeast of the Dinaric Alps in Albania. The rustic villages of Shiroke and Zogaj are worth visiting for their beautiful beaches and caves. The World Bank has given a combined amount of 4.5 million USD of financing to the Governments of Albania and Montenegro for the development of the Albania/Montenegro Lake Shkoder Integrated Ecosystem Management Project. The Project aims to develop and promote the adoption of sustainable approaches to economic development of the lake and its natural resources.83

Although the more famous part of Lake Ohrid lies in neighbouring FYR Macedonia, Pogradeci on the southwestern shore of the lake is well situated for several interesting mountain‐bike routes through very remote mountains along the Macedonian border. If developed, these biking tours, combined with the lake’s swimming pool in the summer, could be another popular attraction.84

Prespa National Park offers an important habitat for a multitude of wild animals and plants, some of which are unique species to the area. The park, which is the first transboundary protected area in the Balkans, covers 27,750 hectares.85 Prespa Lake is home to the world’s largest breeding ground of Dalmatian pelicans86 and could indeed be birdwatchers’ paradise. Hermit Byzantine churches for religious recluses also exist in the Cave of Tren and in the island of Maligrad right on the lake.87

Greece, which designated Prespa in 1974 as a National Forest, is actively promoting the lake as an idyllic location for both eco‐ and cultural tourism. Currently, the governments of Greece, FYR Macedonia, and Albania have agreed to work together to reduce pollution and preserve the biodiversity in the Prespa Lakes through a regional project that manages the environment and integrates common economic, ecological and social goals.88

Ecotourism

Albania is home to several internationally recognized wetland areas which could be ideal for the development of sustainable ecotourism. Among these are Karavasti lagoons and the wetlands at Lake

83 dgMarket, ”Albania/Montengro Lake Shkoder Integrated Ecosystem Management,” dgMarket, http://www.dgmarket.com/eproc/adminShowBuyer.do~buyerId=6349236. 84 Gloyer, Albania Bradt Guide, 122. 85 Convention on Migratory Species, “Inauguration of Lake Prespa National Park in Albania,” Convention on Migratory Species, 5 June 2000, http://www.cms.int/news/PRESS/nwPR2000/press_release_Albania.htm. 86 Gloyer, Albania Bradt Guide, 22. 87 National Agency of Albania, “National Parks.” 88 United Nations Development Programme Albania, Fast Facts: United Nations Development Programme Environmental Portfolio, Official Record, http://intra.undp.org.al/ext/elib/download/?id=838&name=GreenFF%2Epdf. 40

Prespa. Numerous lagoons at the Ionian Sea as well as Lura glacial lakes could attract environmentally conscious tourists as well.

The Karavasti Lagoons to the south of Durres are an internationally recognized wetland area on the Ramsar List of Wetlands of International Importance. The lagoons are designated as a “Strict Nature Reserve” due to several rare bird species and also as a breeding ground of Dalmatican pelican, a rare bird species whose total population in Europe is fewer than 1,500 pairs. Unfortunately, despite its ecotourism potential, the reserve is not adequately patrolled. Hunting still takes place even though it is banned while local villagers often use dynamite to catch fish.

The Adriatic and Ionian Seas meet at the northern tip of the Karaburuni Peninsula. Almost completely undeveloped, Karaburuni is covered with unspoiled pebble beaches and several fascinating sea caves,89 some with impressive stalactites and stalagmites. Also, inscriptions and pictures engraved by passing sailors can be seen on the western shore of Karaburuni, the earliest dating back to the 4th century BC.

Due to Albania’s rapid economic development and lack of enforcement of environmental regulations, eco‐tourism may be a risky enterprise to undertake, as it requires satisfying a very sensitive target group of environmentally conscious tourists. First, the system for certifying an eco‐tourist destination is quite long and detailed.90 At the same time local municipalities’ inability to effectively process domestic and industrial waste, which can be seen from dumped rubbish along the roads in Albania, lowers Albania’s prospects as an eco‐tourist destination. At the same if significant amount of revenues from certain eco‐ tourism projects are invested into maintaining and developing those sites, the initiative could become extremely important for Albania in the future, as it would positively influence both the environment as well as local people.

Beach Tourism

Beach tourism is one of Albania’s most developed tourism products, as beaches can be found along the 470 kilometers of coastline along the Adriatic and Ionian Seas. Albania’s beaches are varied depending on their specific locations: the Adriatic has long, sandy and shallow beaches whereas the Ionian coastline is more secluded with smaller, deeper and rockier beaches.91 Moreover, while the Adriatic beaches are more suitable for families with children, the Ionian beaches attract mostly young and adventurous tourists. Thanks to the country’s isolationist past, the Ionian “Riviera” is not yet developed and boasts unexplored locales. The same, unfortunately, cannot be said for the Adriatic coast as it has been rapidly developed with particularly disastrous consequences from over‐construction in Durres and Saranda.92 The majority of beach tourists are ethnic Albanians from landlocked Kosovo and FYR

89 Gloyer, Albania Bradt Guide, 212. 90 Roshi. 91.National Agency of Albania, ”Coastal Tourism,” Welcome to Albania, http://www.albaniantourism.com/. 92 Nevila Popa. 41

Macedonia as well as Macedonians who prefer the Albanian coasts due to political difficulties they face in getting their visas to Greece.93

While beach tourism is an important source of revenue in the peak season of the summer months, there are serious challenges in turning these beaches into Albania’s distinct tourism product. Beaches of much better quality and at lower prices are available in Turkey and Greece. Indeed, many stakeholders are of the view that the Albanian beaches survive thanks to their close physical location to Kosovo and cultural ties to the Albanian diaspora.94 Moreover, the governments’ failure to keep its promise of providing water and electricity supply to the coastal areas without interruption has upset many hotel owners. Illegal construction and improper waste management at the beaches are also still among the concerns.95 Indeed, local municipalities do not have the capacity and effective system of trash collection.96 All of these conditions make the development of massive beach tourism unsustainable as well as undesirable. However, some actors in the tourism industry believe that the beach tourism could be beneficial, if some of the income from mass tourism is invested into the preservation of regions for eco‐tourism.97

Opportunities

Given its natural endowments, Albania’s potential in developing nature tourism is quite high. Due to its years of isolation, the place remains largely undiscovered and undeveloped. The Albanian Alps have a scenic beauty and the country has a comparative advantage as its cultural heritage sites are close to and often located inside the areas that offer nature tourism as well. The analysis in the Tourism Action Plan conduct jointly by UNDP Albania and the MoCTYS asserts that while ancient ruins of better quality can be found in Greece, Italy and Turkey, it is the close proximity of rich variety of cultural and natural attractions which makes Albania unique.98

Constraints

Many challenges critical to developing cultural tourism also apply to those to nature tourism. Lack of image or negative image of past communism and the Balkan wars do not make Albania an attractive destination for adventure‐seeking tourists. Poor roads, frequent water and electricity shortages, incomplete mobile phone coverage, absence of in‐place emergency services, shortage of equipment

93 Sonia Popa. 94 Nevila Popa. 95 Besar Likmeta, “Albania’s Booming Tourism Faces Cloudy Outlook,” Globalia Magazine, 6 September 2009, http://www.globaliamagazine.com/?id=423. 96 Qafmolla. 97 Claudia Ciobanu, Saving Beaches for Others – and Itself, in Unknown Albania, July 2007, http://www.ips.org/institutional/documents/unknownalbania.pdf, 28. 98 United Nations Development Programme Albania and Ministry of Culture, Tourism, Youth and Sports, Strategy and Action Plan for the Development of the Albanian Tourism Sector based on Cultural and Environmental Tourism. 42

rentals and lack of specialized, reliable tour guides obstruct the development of vibrant nature tourism.99 Lack of developed trails for hikers is also an ongoing issue.

More importantly, in wider tourist markets Albania is still known and promoted by its Adriatic and Ionian coastlines and seen as a “sun and sand” destination, albeit of lower quality (both destination‐ and service‐wise) than neighboring Greece or Turkey.100 Whereas Albania does not have a comparative advantage in beach tourism, it has an important advantage in developing mountain trekking, hiking and mountain‐bike riding, should be particularly promoted as part of a long‐term government strategy.101

4.6: Tourism Services

4.6A: Accommodation and Food Services

Until recently, hotels in Albania were mostly centered in main cities such as Tirana, Durres and Saranda. Tirana has three international class hotels, while Durres and Saranda have only one. There is also a scattering of low‐grade accommodations built mainly in the 1960s and 1970s by the state tourism agency, Albtourist, for small groups of politically sympathetic tourists. As of end of 2007, Albania had 221 hotels with a total capacity of 7,791 beds.102

With the increasing flows of tourists and more demand for online booking, hotels can be reserved through Tirana‐based agencies such as Albania Holidays (www.albania‐hotel.com), Albania Travel and Hospitality Service (www.aths.com) and certain other websites. Accommodation is offered throughout the country, with user friendly search listing most popular destinations in various cities and the countryside.

Slowly, the concept of sustainable tourism, at least its economic aspect, has led to an increase in the number of bed‐and‐breakfast‐type guesthouses. This type of private accommodation can be seen in the UNESCO World Cultural Heritage Site of Berat, where every summer many locals rent some of their rooms to visitors. The prices are reasonable, and this guesthouse culture helps to create a sense of intimacy and closeness, essential in small‐scale nature and culture tourism activities.

There are many cafes and high quality restaurants in Tirana. A wide variety of European cuisine, Italian in particular, is served alongside local dishes which are rich in Mediterranean ingredients. In the countryside, where most of the restaurants are family‐run, opening hours are varied depending on their owners, but usually are closed early.103

99 Ibid. 100 Nevila Popa. 101 Sonia Popa. 102 Economist Intelligence Unit, “Country Profile 2009: Albania,” 18. 103 Gloyer, Albania Bradt Guide, 40. 43

Opportunities

There are opportunities for improvement as international donor agencies are trying to fill in this gap with a variety of trainings and workshops. USAID’s Albania Enterprise Development and Export Market (EDEM) Services established an electronic reservations system using Web Reservations International for small‐and‐medium‐sized hotels. It also conducted eight workshops for over thirty‐five tourism‐related businesses and organizations relating to product development, customer service, association development and hotel marketing online.104

Constraints

Undeveloped infrastructure continues to plague Albania’s hospitality services as well. During the communist period, then government and trade unions constructed large rest camps with communal toilets and showers, instead of hotels.105 These facilities are antiquated and cannot satisfy the needs of today’s tourists. The haphazard and illegal construction which took place after the collapse of communism had particularly grave consequences for Durres and Saranda, while also not meeting foreign tourists’ needs. Built mostly from concrete, these hotels lack visual attractiveness.106 Despite this influx of Kosovars who frequent these areas, evidence suggests that revenues gained from their visits are relatively small.

As mentioned above, one of the biggest challenges in the development of quality accommodation remains the lack of clarity surrounding property titles. The case of Club Med, the French‐owned global travel company, is particularly instructive. The company faced protests from 300 villagers after it announced its plans to build a 350‐villa complex at the Kakome Bay. Eventually riot police and security forces had to engage and calm the protesters before the development of the tourist village could start.107

On the other hand, lack of service culture and lack of foreign language skills within the tourism industry, particularly in rural and mountainous areas, inhibit the development of hospitality services. Additionally, the absence of clear standardized procedures for certifying hotels and guides as well as the nepotism prevalent in the times of economic hardship prevent qualified tourism workers from finding good jobs.108

104 United States Agency for International Development Albania, “Enterprise Development and Export Market Services (EDEM).” 105 Ibid. 106 Nevila Popa. 107 Jonathan Brown, “Club Med feels the heat in Albania after resort scheme draws protests,” The Independent, 26 February 2005, http://www.independent.co.uk/travel/news‐and‐advice/club‐med‐feels‐the‐heat‐in‐albania‐after‐resort‐scheme‐ draws‐protests‐484818.html. 108 Roshi. 44

4.6B: Tour Operators and Agencies

Most of the country’s tour operators offer outbound tours; only a few offer services inside the country. Among the latter, the proportion of those offering culture and nature tourism is still small, as the majority of tour operators organize “sun and sand” packages for ethnic Albanians arriving from neighboring countries. “Outdoor Albania” was one of the first tour companies with qualified guides to introduce the combination of culture and hiking tours. There is a slow change in the industry’s mindset towards tailor‐made tours; however, Outdoor Albania still has only two or three competitors.109

Opportunities and Constraints

The offerings of tour operators that combine culture and nature tourism have great prospects of development. However, lack of standardized classes for tour guides as well as an absence of proper licensing makes the development of the quality mark very difficult for tour guides. Also, the lack of enforcement of standards does not give incentives for healthy competition in the industry.

4.7: Regional Tourism Integration

Prespa Lake is a good example of coordination and regional tourism integration between Albania, FYR Macedonia, and Greece. In October 2008, UNDP, in conjunction with the Global Environmental Facility (GEF) held a workshop to mainstream ecosystem management objectives and priorities into productive sector practices and policies related to Lake Prespa. The project is designed to strengthen capacity for conserving biodiversity at national, local and transboundary level at the three countries.110

Prespa Park is the first transboundary Park in the Balkans. Although the first Strategic Action Plan adopted in 2002 emphasizes the added value of tourism planning for the Park, currently there are no trilaterally endorsed tourism strategies or action plans to further this effort. While various actors implement tourism initiatives of differing magnitude, there is no evidence of coordination between them.111 The development and endorsement of tri‐lateral tourism strategy and action plan was identified as one of the main priorities of UNDP – GEF Prespa Park. Nonetheless, the initiative presents an important opportunity for the development of sustainable ecotourism in the region as all countries would benefit from a “win‐win” coordinated approach to water management, agriculture, forest, fisheries and protected area management.

Another notable cross‐border initiative is the Balkan Peace Project, composed of international and local organizations who been working to establish a cross‐border park, which would include the highlands of

109 Laura Payne, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 6 January 2009. 110 United Nations Development Programme‐Global Enviroment Facility, Prespa Trilateral Tourism Development Planning Stakeholder Consultation Workshop, http://www.inflorina.gr/images/site/63/1151_prespatourismworkshopannouncement.pdf, 1. 111 Ibid, 2. 45

Albania, Montenegro and Kosovo. The World Conservation Union (IUCN) defines Parks for Peace as a “trans‐boundary protected area that are formally dedicated to the protection and maintenance of biological diversity, and of natural and associated cultural resources, and to the promotion of peace and co‐operation.” In Albania, the proposed area of Peace Park covers the Albanian Alps, centered on Thethi and Shala valleys112.

Albania and Montenegro are also involved in the Lake Skoder Integrated Ecosystem Management Project, aimed at enhancing sustainable use of the Lake’s Ecosystem by promoting an adoption of sustainable approaches to economic development of the lake and its natural resources. The project, which is partly financed by the World Bank, has a special focus on tourism and fishing, where there is high potential for economically significant and sustainable use.113

4.8: Overall Context Evaluation

Albania possesses numerous possibilities for developing tourism with its vast amount of cultural and historical heritage, as well as its natural resources such as mountains, beaches, and lakes. However, limited infrastructure overall and limited funding for the development of tourism sites as well as the lack of law enforcement all hinder future development prospects. The government, although recognizing tourism as one of its major priorities, is not actively implementing tourism strategies on the ground and still suffers from the lack of coordination between ministries in terms of policies. The Strategy and Action Plan for the Development of the Albanian Tourism based on Cultural and Environmental Tourism developed by MoCYTS and UNDP put an emphasis on sustainable tourism engaging rural and provincial communities. This shows the willingness of the actors in the Albanian tourism sector to further develop sustainable tourism but the prospects for success are yet to be seen.

112 Edward Thatcher, “Balkans Peace Park Project,” Balkans Peace Park Project, http://www.balkanspeacepark.org 113 World Bank, Lake Skoder Integrated Ecosystem Management Project, (Aide‐Memoire of Preparation Mission), http://www.visit‐montenegro.com/downloads/ministryoftourism/15‐WORLD‐BANK‐INFORMACIJA‐RAZVOJ‐SKAD‐ JEZERA/Shkoder%20lake%20project‐World%20bank‐information.pdf, 4. 46

Section 5: Bosnia and Herzegovina (BiH)

5.1: Geographic, Historical and Political Context

The westernmost nation in this regional study is Bosnia and Herzegovina (BiH), which shares its borders with three other former Yugoslav republics: Croatia (North and West), Serbia (East) and Montenegro (Southeast). With an area of 51,200 square kilometers,1 the country stretches over a mountainous region – the Dinaric Alps –in the north to a narrow coastal strip in the south. The world’s largest karst fields also lie along the range of these Dinaric Alps.2 In 2007, the population was estimated at 3.9 million based on the 1991 census of 4.38 million.3 Approximately 48% of the country’s population is Bosniak, 37.1% Serb, 14.3% Croat and 0.6% others (as of 2000)4 with Muslim, Orthodox, Roman Catholic and Jewish faiths all present in the country.5 Similar to its neighbors, languages spoken in the country are Bosnian, Croatian and Serbian.6

BiH’s history is arguably remembered and defined by wars. Almost a Source: CIA, century after it became an independent kingdom in 1377, BiH, like its The World Factbook, 2009. neighbors, eventually fell to the Ottoman Empire in 1463. In 1878, BiH was overthrown by another superpower, the Austro‐Hungarians, who ruled over the area until World War I. In 1918, BiH joined the Kingdom of Serbs, Croats and Slovenes before Hitler’s Germany occupied the region in 1941. Two years later, BiH declared independence and once again became part of the Former Yugoslavia in 1945.7

However, it was the 1992‐1995 war that left BiH with deep scars with which it continues to grapple. In February 1992, with the future of Yugoslavia in question, BiH held a referendum on the track of its political future. While two‐thirds of the country voted for independence, the Bosnian Serb population refused to acknowledge the results, and was determined to stay united with Serbia. Upon the eve of BiH’s new independence on April 6, groups of Bosnian Serbs with military support from the Yugoslav Army launched a massive attack against their fellow compatriots. The war was prolonged and destroyed much of the country’s infrastructure and human resources. By the time the conflict ended in 1995, over

1 Jennifer Blanke and Thea Chiesa, ed., “Country Profiles,” ch. 2.1 of The Travel & Tourism Competitiveness Report 2009 (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html, 142. 2 Tim Clancy, Bosnia, Serbia & Montenegro (Peterborough: Thomas Cook Publishing, 2007), 4‐6. 3 Economist Intelligence Unit, “Country Profile 2008: Bosnia and Herzegovina,” http://www.eiu.com, 11. 4 Intute Executive, “Bosnia and Herzegovina: Population and Demographics,” World Guide, http://www.intute.ac.uk/sciences/worldguide/html/833_people.html. 5 Clancy, Bosnia, Serbia & Montenegro, 4 6 Economist Intelligence Unit, “Country Profile 2008: Bosnia and Herzegovina,” 2. 7 Clancy, Bosnia, Serbia & Montenegro, 10.

47

two million were displaced.8

The Dayton Peace Accords, reached in November 1995 and endorsed by Croatia, BiH, Serbia and Montenegro,9 separated BiH into two main entities: the Serbian Entity, Republika Srpska (RS), and the Federation of BiH (Federation) for the country’s Bosniaks and Croats.10 Overseeing the two entities is the Council of Ministers, the country’s state apparatus,11 although much of the power—legislative and judicial—is concentrated within RS and the Federation.12 Since 1999, the Brcko District has become an autonomous region, thus adding another layer to this already complex system.13 After the nationwide parliamentary elections in 2006, Bosnian Serb, Nikola Spiric, of the Alliance of Independent Social Democrats (SNSD), became Chairman of the Council of Ministers and Prime Minister of BiH. Joining him are Presidents Haris Silajdzik (Bosniak), Nebojsa Radmanovic (Serb) and Zeljko Komsic (Croat) as the country’s three rotating heads of state. At the entity level, the Federation is led by President Borjana Kristo of the Croatian Democratic Union of BiH (HDZ BiH) and Prime Minister Nedzad Brankovic of the Party of Democratic Action (SDA) while SNSD representatives, Rajko Kuzmanovic and Milorad Dodik, assume RS’s presidency and premiership respectively.14

After years of the United States and the North Atlantic Treaty Organization (NATO) leadership in conflict resolution in BiH, the European Union (EU) now overseas much of the peace building activities. Currently, 2,000 of the European Union Force (EUFOR), EU peacekeepers, remain in BiH15 while the European Commission (EC) Delegation to BiH has launched various development programs, including one in the tourism sector.16 Committed to its goal of European integration, BiH also began negotiations for the EU’s Stabilization and Association Agreement (SAA) in November 2005.17 The two partners have

8 Martha Walsh (International Labour Organization), Post‐conflict Bosnia and Herzegovina: Integrating Women's Special Situation and Gender Perspectives in Skills Training and Employment Promotion Programmes, (Geneva: International Labour Office, 1997), http://www.ilo.org/public/english/employment/skills/training/publ/pub12.htm#c1. 9 Clancy, Bosnia, Serbia & Montenegro, 10. 10 Dan Bilefsky, “Tensions Rise in Fragile Bosnia as Country’s Serbs Threaten to Seek Independence,” The New York Times, 27 February 2009, www.lexisnexis.com. 11 International Finance Corporation, Country Partnership Strategy for Bosnia and Herzegovina for the Period FT08‐ FT11, November 12, 2007, (Report No. 41330‐BA), (Joint Publication of IFC, International Bank for Reconstruction and Development, International Development Association and Multilateral Investment Guarantee Agency), http://siteresources.worldbank.org/INTBOSNIAHERZ/Resources/CPS131107.pdf, 1. 12 Economist Intelligence Unit, “Country Profile 2008: Bosnia and Herzegovina,” 3. 13 International Finance Corporation, Country Partnership Strategy for Bosnia and Herzegovina for the Period FT08‐ FT11, 1. 14 Economist Intelligence Unit, “Country Report March 2009: Bosnia and Herzegovina,” Economist Intelligence Unit, http://www.eiu.com, 20‐21. 15 Bilefsky, “Tensions Rise in Fragile Bosnia as Country’s Serbs Threaten to Seek Independence.” 16 Maja Dosenovic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 17 March 2009. 17 International Finance Corporation, Country Partnership Strategy for Bosnia and Herzegovina for the Period FT08‐ FT11, 1. 48

reached all agreements in April 2008 and now are waiting for the official signing of the document.18

5.2: Economic Context

The 1992‐1995 war also left a scar on BiH’s economic performance. Prior to the war, BiH relied heavily on its domestic industry, which constituted over 50% of the GDP and much of the country’s export volume.19 The war, however, destroyed much of that infrastructure and drove traditional trade partners to locate new suppliers.20 The industry has thus found it difficult to regain ground lost during the war, and in 2006, its share of GDP dropped to less than 20%. In contrast, the service sector, especially retail trade, financial intermediation, real estate and public administration, has captured the majority share of GDP, 66% in 2006, with 50% of the country’s workforce employed in this sector.21

Despite these difficult years, political and economic reforms together with a right combination of macroeconomic policies and strong European markets22 have revitalized economic growth. The country was able to maintain an average growth rate of 5% and keep inflation below 5% between 2000 and 2007.23 In fact, in 2007, BiH’s real GDP reached 14.3 billion USD, a 5.5% increase from the previous year, with GDP per capita of 3,639 USD (7,533 USD PPP)24 while real wages rose by as much as 44% since the end of the war. The country shows positive prospects for stable economy with the strong Convertible Mark (currently 2 KM for 1 euro in BiH markets)25 and high exports growth (13% in 2008; mostly of primary commodities especially of steel and aluminum), the highest among that of its neighboring Balkans countries.26 Privatization has also become another focus with RS completing its privatization of large‐scale enterprises in 2007, the year memorable for the record net inflows of Foreign Direct Investment (FDI) of KM 2.88 billion.27

Like the rest of the world, BiH is feeling the impacts of the global financial crisis. The country has tightened its macroeconomic policies, but the global recession will continue to affect its performance.

18 Economist Intelligence Unit, “Country Profile 2008: Bosnia and Herzegovina,” 3. 19 Ibid., 14. 20 Mladen Sukalo, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 19 March 2009. 21 Economist Intelligence Unit, “Country Profile 2008: Bosnia and Herzegovina,” 18. 22 Milan Cuc, “Bosnia and Herzegovina: On the Road to EU Accession,” IMF Survey, December 2008, http://www.imf.org/external/pubs/ft/survey/2008/123108.pdf, 199. 23 International Finance Corporation, Country Partnership Strategy for Bosnia and Herzegovina for the Period FT08‐ FT11, 1. 24 Economist Intelligence Unit, “Country Profile 2008: Bosnia and Herzegovina,” 16‐20. 25 Cuc, “Bosnia and Herzegovina,” 199. 26 World Bank, “Economy,” Bosnia & Herzegovina, http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/BOSNIAHERZEXTN/0,,contentMDK:20629017~ menuPK:362034~pagePK:141137~piPK:141127~theSitePK:362026,00.html#econ. 27 Economist Intelligence Unit, “Country Profile 2008: Bosnia and Herzegovina,” 22. 49

Real GDP will contract by 1% in 2009 from an estimated growth rate of 5% in 2008 and the unemployment rate has climbed risen to 20% with a much higher number of 40% in the rural areas.28

5.3: Tourism Sector Overview

Efforts are needed to develop the tourism sector and alter the negative image the country inherited from the war. This responsibility belongs to political apparatuses within the Federation and RS, with the Ministry of Environment and Tourism overseeing the works of the Federation and the Ministry of Trade and Tourism undertaking similar tasks for RS. Within the Federation, the ministry distributes tasks to each canton, which then passes them onto the respective tourism association.29 Recently, however, some questions have been raised as to whether municipalities should assume such responsibilities. Proponents argue that municipalities are more effective and eager to promote their local tourism sectors than cantons whose mandates are to promote tourism for different municipalities under their umbrellas.30 In contrast, the structure within RS is much simpler but the government has yet to develop a tourism strategy.31

However, neither government commits itself to tourism development. A National Tourism Administration (NTA) exists for BiH, but the board does not play a strategic or facilitating role as most other NTAs do.32 Moreover, besides their collaboration in the production of the nation‐wide TV show “Tourism Plus,” the two entity governments do not typically work together on policy or programming.33 In one example of such an attempt, both governments established the Tourism Association of BiH to promote BiH as a one‐country destination,34 but they fell short in guaranteeing financial assistance for the Association, which has since held onto a status of a non‐profit organization instead of a government agency.35 Moreover, the governments recently decreased the Association’s budget by reducing its membership fees by 50% (the other source of the Association’s income comes from accommodation taxes).36 Indeed, lack of a national strategy for the tourism sector, a result of the governments’ neglect to give the industry a high priority, is widely considered as one of the sector’s main impediments to growth.

Progress in this sector stems more often from projects implemented, at times jointly, by external actors and non‐governmental organizations. For example, the EC provides financial and technical assistance to develop tourism products, competitiveness, and promotional strategies as well as to strengthen the

28 Erkan Ozcelik, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 16 March 2009. 29 Dosenovic, interview. 30 Daria Antenucci, interview by Yaninee Nachom, 23 March 2009. 31 Dosenovic, interview. 32 Muna Bejtovic, Conference in Support of Tourism Development in BiH: Sarajevo 23rd September 2008, (Sarajevo: Arch Design, 2008), 11. 33 Milos Komljenovic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 19 March 2009. 34 Sanela Smajlovic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 16 March 2009. 35 Dosenovic, interview. 36 Smajlovic. 50

country’s institutional framework,37 while the Japan International Cooperation Agency (JICA) has undertaken a development study on eco‐ and sustainable tourism at the invitation of the BiH government.38 Similar to JICA, the German Technical Cooperation (GTZ) also works on eco‐tourism as part of its larger program on youth tourism development.39 Domestic private enterprises, youth organizations and NGOs are likewise active; among some of the most prominent actors include eco‐ tourism operator ‘Green Visions’ and the Accredited Regional Development Agency (ARDA), whose overall goal is to prepare BiH for EU’s accession.40 Although tensions still exist, local communities are usually involved in the planning and implementation of tourism projects and show willingness to cooperate with partners from within and outside their respective entities.

With this increasing attention, especially from non‐governmental bodies, BiH’s tourism industry has enlarged in recent years. In 2008, revenues from the tourism industry amounted to 1.63 billion USD or 10.3% of the GDP, with 95,000 personnel employed in the sector (8.3% of the total workforce).41 Major tourist attractions include well‐known sites such as the old towns in Sarajevo and Mostar (the latter is most famous for its one‐arch Stari Most Bridge, a UNESCO World Heritage Site since 2005)42 as well as the sacred site, Medugorje, where millions pay annual visits to the Virgin Mary.43 At the same time, eco‐ and rural tourism are being developed in order to promote and preserve the country’s untouched nature and create job opportunities to reverse the current rural‐urban immigration trend. Adventure tourism is also found in RS, where the town of Banja Luka will host the World Rafting Championship in May 2009.44

The number of foreign tourist arrivals and overnight stays has continued to grow. In the Federation, the number of arrivals rose from 108,000 in 2000 to 209,000 in 2007, with Croatia ranked as the number one tourist source (38,510) followed by Slovenia (26,939) and Germany (14,604). Likewise, the number of overnight stays doubled from 263,000 in 2000 to 478,000 in 2007, again with Croatia (79,507) and Slovenia (52,075) at the very top. Germany, however, came fourth (33,390) after Poland (36,189) despite the fact that the number of Polish tourist arrivals was only 9,367.45 RS’s statistics also reveal a similar trend. Between 2007 and 2008, the number of tourist arrivals and overnight stays rose from 90,672 to 101,184 and 205,438 to 237,103 respectively.46 Serbia overwhelmingly held the majority share (45,704 for arrivals and 115,577 for stays) followed by Croatia (10,449; 24,251) and Slovenia

37 Dosenovic, interview. 38 Kanao Itoh, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 18 March 2009. 39 Rubeena Esmail‐Arndt, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 16 March 2009. 40 Nikola Dragovic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 19 March 2009. 41 Blanke and Chiesa, ed., “Country Profiles,” 142. 42 United Nations Educational, Scientific and Cultural Organization, “Old Bridge Area of the Old City of Mostar,” World Heritage List, http://whc.unesco.org/en/list/946/. 43 Smajlovic. 44 Dragovic. 45 Federation of Bosnia and Herzegovina, Federal Office of Statistics, Statistički godišnjak/ljetopis 2008 Statistical Yearbook, http://www.fzs.ba/god2008/17.pdf, 217‐19. 46 Republika Srpska, Institute of Statistics, Tourism Statistics Release: December 2007 (Banja Luka: Republika Srpska Institute of Satistics, 2008), http://www.rzs.rs.ba/Saopstenja/turizam/TurizamDecembar07.pdf, 1‐2. 51

(9,092; 18,707) with Italy as the highest source of tourists among those from outside the region (5,461; 11,942).47 The high season falls between June and September with ski resorts open in late December and continue into March.48

Table 5.1: BiH’s 2007 Tourist Arrivals by Country of Origin:

Country Tourist Breakdown

Croatia 18%

Slovenia 13%

Germany 7%

Poland 4.5%

Other 57.5%

Nonetheless, these records, both from the Federation and RS, may carry some errors. This discrepancy is caused by lack of reliable measurement systems49 and underreported numbers of night stays by some private accommodations in order to evade taxes.50 Besides lack of government commitment and statistical inaccuracy, BiH’s tourism industry also faces, among other challenges, lack of trained, experienced sector employees, insufficient and low‐quality transportation systems, lack of financial support, lack of cooperation and exchange of information between key actors, insufficient marketing and promotion, as well as insufficient awareness about the value of the country’s cultural heritage and nature. Nonetheless, the United Nations World Tourism Organization (UNWTO) predicts that BiH will continue to enjoy its world ranking ‐ the third highest tourism growth rate ‐ until 2020.51

5.4: Legal Context

BiH lacks tourism laws at the highest state level and needs a more solid legal framework from both the RS and Federation entities. As of May 2009, the Federation had issued three legal documents: Law on Tourism and Catering Businesses, Law on Tourism Associations and Tourism Promotion in Federation

47 Republika Srpska, Institute of Statistics, Tourism Statistics: December 2008 (Banja Luka: Republika Srpska Institute of Satistics, 2009), http://www.rzs.rs.ba/Saopstenja/turizam/TurizamDecembar08.pdf, 2‐3. 48 Clancy, Bosnia, Serbia & Montenegro, 112. 49 Vladimir Milin, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 16 March 2009. 50 Smajlovic. 51 Foreign Investment Promotion Agency, Invest in Tourism, March 2005, http://www.fipa.gov.ba/FipaFiles/File/Publications/turizam.pdf, 10. 52

BiH, all passed in 1996 and later amended in 2003, as well as the 1996 by‐laws in areas of tourism and catering.52 However, progress on the legal framework in RS is much slower. Currently, the entity is only in the process of selecting a strategy that will later determine its tourism laws and other by‐laws, including those on categorization and standardization of accommodation facilities.53

The current legal framework hinders the development of the tourism industry for many reasons. First, the current scope only concentrates on some areas while it neglects to cover all possible tourism service providers or tourism transactions. Second, it does not provide a clear tourism development strategy at either a national or an entity level. Third, it fails to address the global efforts and support for sustainable development. Finally, with its obsolete and vague languages, the framework neither stimulates private sector involvement nor fosters public‐private partnership.54 The Federation has recently issued a new strategy for tourism development, but the document is still subject to the parliamentary review before it can be officially endorsed.55 It thus has yet to be seen whether and how this new regulation will address the abovementioned gaps.

5.5: Tourism Products Culture BiH offers numerous areas of potential growth in the and History tourism sector, particularly in the areas of cultural and historical tourism, nature and eco‐tourism, as well as wine and youth tourism. Tourism Products 5.5A: Cultural and Historical Tourism Other (e.g. Nature With history dating back millennia, BiH is rich in both Youth tourism) culture and history. Visitors can experience this unique heritage as they walk around many of the country’s old towns and rural villages, visit remnants of the Ottoman and Austro‐Hungarian eras and pay respect to religious sites of Muslim, Orthodox, Catholic and Jewish faiths.

Sarajevo

BiH’s capital city, Sarajevo is located in the center of the country, with the Miljeca River running through it from east to west. The city has stood through many battles and occupations over the centuries but the

52 Government of Federation of Bosnia and Herzegovina, “Federal Ministry of Environment and Tourism,” Government of Federation of Bosnia and Herzegovina, http://www.fbihvlada.gov.ba/english/ministarstva/okolis_turizam.php. 53 Jadranka Stojanovic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 19 March 2009. 54 John Downes, "Tourism Law for BiH Tourism Development," United States Agency for International Development, June 2008, bosnia.usaid.gov/FIRMAandFARMA/FIRMA/BiH%20Tourism%20Law%20Assesment.ppt. 55 Maja Dosenovic, e‐mail message to Yaninee Nachom, 14 April 2009. 53

most recent war destroyed much of its beauty, including the once elegant National Library which still waits further renovation. Nonetheless, Sarajevo has been steadily rebuilding itself since 1995, and is once again one of BiH’s high profile tourist attractions.

Most of the city’s major touristic sites are located within the Old Town of Bascarsija. From the Pigeon Square or the Sebilj Fountain at the edge of the Turkish quarter, visitors can stroll along the town’s cobblestone streets, the most popular being the shopping street Ferhadija, where the country’s religious diversity is evident. Within a few blocks, Bascarsija houses one of the country’s most influential mosques, Gazi Husrev Bey’s, the Katedrala (cathedral) and Sarajevo’s largest Orthodox Church, Saborna Crkva, near the end of the Austro‐Hungarian quarter. Bringing these differences Sarajevo’s Pigeon Square together, the Eternal Flame, located a few steps away from the Orthdox Church, remains lit in memory of those that have fought for BiH’s independence, regardless of their sectarian identities. Another war history site is the Latinska Cuprija or the Princip’s Bridge, where the assassination of Archduke Ferdinand and his wife occurred in 1914, stretches over the Miljeca River at the southern edge of the old town.56 As a national monument, the bridge still stands, but is poorly marked.

Museums, ancient Turkish houses and art galleries can also be found within the old town Sarajevo. Some of the more well‐known places include the National Museum, the National Gallery of BiH, Svrzina House and the Sarajevo Museum 1878‐1918. The latter recounts the history of the city after the Austro‐ Hungarian occupation, the Ottoman imprints on Sarajevo’s culture and lifestyle, and the assassination of Archduke Ferdinand. Although there are short descriptions in both Bosnian and English for most of the objects displayed in this single‐room museum, many of the explanations are merely titles, without context on the use or significance of such objects.

Besides these tourist attractions, Sarajevo also offers visitors several other opportunities to experience the city’s rich culture. The long list of the city’s major international events runs from the artist festival Sarajevan Winter in late February/early March, a month‐long cultural event Bascarsijske Nights in July, a collection of various alternative and contemporary theatres and dance troupes during MESS in October to a jazz festival in November. The most well‐known event is the Sarajevo Film Festival (SFF), which takes place every August. One of Europe’s best, this event started in 1995 as a small, micro‐level activity

56 Clancy, Bosnia, Serbia & Montenegro, 28‐32. 54

by a small group of youths. Since then, the festival has increased in size;57 at its 14th anniversary in 2008, the event showcased as many as 178 films from around the world.58

Other Cities and Towns

Also considered major and potential tourist destinations are Mostar, Blagaj, Pocitelj and Trebinje.

Mostar, located in the south of Herzegovina, is considered to be the country’s most beautiful city.59 Its most famous site, the stone bridge – Stari Most— is one of the country’s two UNESCO World Heritage sites (the other being Mehmed Pasa Sokolovic Bridge in Visegrad, RS; enlisted in 2007)60 and is perched many meters over the Neretva River. Along the cobblestone street leading up to the bridge, visitors also find local stores and art galleries showcasing and selling carvings and paintings of the Mostar’s Stari Most bridge and other symbols of Herzegovina. The mosques around the old town are also open to the public with the Koski Mehmed‐ Pasha Mosque offering not only an excellent example of Ottoman religious architecture, but also the best view of the Stari Most.

Mostar is so small that one day is enough to explore all touristic sites. Besides Stari Most and religious sites, the old town also featuers several Turkish houses, with the Kajtaz House said to be Herzegovina’s best‐preserved Turkish house.61 The town’s lone museum, the Museum of Herzegovina, is open free of charge and owns several collections, including documentary films as it aims to be the Federation’s cultural and literacy center.62 Mostar also has a children’s puppet theatre, Lutkarsko Kazaliste,63 but all of these attractions are open in the summer only. In addition, every July, Mostar hosts a festival to showcase the locals’ talent in drama, music and film industries.64

The city also faces a number of challenges. A local hotel owner recently violated a UNESCO request by adding another story to its 2‐floor building, which already reaches UNESCO’s limit for any building within the area adjacent to the old bridge. Meanwhile, the city government faces difficulties in enacting an effective strategy for waste management in and around the river. Since these two occations have come

57 Clancy, Bosnia, Serbia & Montenegro, 18‐19. 58 Sarajevo Film Festival, Sarajevo Film Festival, http://www.sff.ba/default.aspx?page=\Home\Index&lang=en. 59 Clancy, Bosnia, Serbia & Montenegro, 39. 60 United Nations Educational, Scientific and Cultural Organization, “Mehmed Pasa Sokolovic Bridge In Visegrad,” World Heritage List, http://whc.unesco.org/en/list/1260. 61 Clancy, Bosnia, Serbia & Montenegro, 40. 62 Tourism Association of Federation of Bosnia and Herzegovina, “What to See and Do: Museums and Galleries,” Mostar, 2005, http://www.bhtourism.ba/eng/museumsandgalleries.wbsp?wbf_mjesto=;2;. 63 Clancy, Bosnia, Serbia & Montenegro, 138. 64 Ibid., 18. 55

to its attention, UNESCO has repeatedly pressured the government and the hotel owner to clean the city and renovate the building, but to no avail. UNESCO has since publicly threatened to remove Mostar from its World Heritage List but again this decision has not changed their behaviors.65

Blagaj (Tekija), a short ride from Mostar, has a cultural heritage trail that goes around its small old town. At the bottom of a high cliff beside the Turkish Tekja Dervish House, visitors can walk on a paved‐ trail along the Buna River down to the 17thcentury Velagic complex. From there, there is an easy, self‐ guided, unpaved path to the Herceg Stjepan Fort atop the cliff.66 Since the trail has recently been built and there is no clear indication where the trail begins, many tourists only stop by at the Turkish House, a compact two‐story building with a few displays of traditional Turkish furniture and accessories. Both the United Nations Development Programme (UNDP)67 and JICA have separate tourism projects here.

Unlike its neighbor cities and towns, Trebinje, the country’s southernmost city, is predominantly Serb and was spared by the war. The large new Orthodox Church, which sits upon a hill overlooking the whole city, serves as a major tourist attraction along with the Trvdos Orthodox Monastery. Founded in the 15th century CE, this monastery receives its fame for its vibrant interior and archeological importance as a 5th century tomb and other artifacts are found beneath the monastery floor. The Trebisnjica River that runs through the city adds to the city’s beauty, second only to Mostar.68

Historical Sites

Due to its long history and location at the crossroad of civilizations, BiH has historical sites that can be traced back to the 14th century Ottoman Empire or even earlier.

Since the discovery in 2005, the Visoko Pyramid of Sun at the Visocica hill in the town of Visoko to the North of Sarajevo has increasingly become famous among researchers and the public alike. After many debates over the authenticity, the tests of artifacts found within the Visocica hill, including slabs of hand‐carved platforms, symmetrically dug tunnels and wide stone paths, confirm the area is indeed a site of a manmade pyramid that could be traced back as far as 10,000 years ago.69 Pyramidologists have concluded that the site is evidence of Europe’s oldest civilization.70

Founded in the 14th century, Pocitelj is located on a high rocky slope overlooking the Neretva River. Most noticeable is the town’s 15th century Fort that can be seen from a far distance. Other attractions from the 15th – 17th centuries include religious sites such as the Hajji Alija Mosque and the L‐shaped

65 Antenucci. 66 Clancy, Bosnia, Serbia & Montenegro, 42‐3. 67 Ozcelik. 68 Clancy, Bosnia, Serbia & Montenegro, 100‐1. 69 www.bosnianpyramid.com, Bosnian Pyramid, October 2005, http://www.bosnianpyramid.com/. 70 Tourism Association of Federation of Bosnia and Herzegovina, “Visoko,” BH Tourism, 2005, http://www.bhtourism.ba/eng/visoko.wbsp. 56

Sisman Ibrahim Pasha Medresa, as well as the Gavrankapetanovic House (16th‐17th centuries). Once the residence of the town’s captains, currently the house has been converted and renovated as an artists’ colony.71

Religious Sites

BiH has many religious sites that represent the country’s diverse mix of faiths, a number of which have been previously mentioned. This section highlights Medjugorje because of its uniqueness both in terms of its discovery and the impacts it has on the local and international community alike.

After the claimed revelation of the Virgin Mary by local school children in 1981, the small town of Medjugorje became one of the country’s most visited sites. Since then, Medjugorje is known as the world’s second largest Catholic pilgrimage, although not officially recognized by the Vatican,72 with an estimated two million tourists paying visits to the monument and the town’s church every year.73

Rural Tourism

With years of wars and isolation, globalization has yet to leave a strong impact on the lifestyle of BiH’s rural villagers.74 Using this to their advantage, many agencies including the EC Delegation, the Italian NGO Unity and Cooperation for Development of Peoples (UCODEP), and the City of Banja Luka have looked into the possibility of developing and promoting rural tourism in areas around Sarajevo, the Neretva River valley, and the country’s Northwest respectively. They aim to create jobs for rural residents and generate more opportunities to those who have become unemployed due to job losses in the cities, as well as raise awareness of tourism and the environment. However, it is apparent that rural tourism has not yet established itself as another tourist sub‐sector. Lack of adequate accommodation at the present time further hinders its development.75

Lukomir Medieval Village, the country’s highest village and most well‐known site for rural tourism, faces such issues. The village does have potential for tourism growth due to its proximity to the capital city, its preserved traditional life, and beautiful scenery with its stone‐walled houses and soft wooden‐tiled roofs at the foreground, and high mountain ranges in the background.76 However, much is still needed to be done to develop and promote the village as a tourist destination. The EC Delegation has installed a new sewage system that has successfully reduced environmental concerns and waste but the initiative

71 Selma Imsirovic‐Dzemic, ed., Guide Book through Cultural‐, Historical and Natural Heritage of Herzegovina, (Bemust Sarajevo: Commission to Preserve national Monuments, 2007), 26‐29. 72 Tourism Association of Federation of Bosnia and Herzegovina, “Medjugorje Pilgrimage,” BH Tourism, 2005, http://www.bhtourism.ba/eng/medugorje.wbsp. 73 Smajlovic. 74 Globe Trekker, “Globe Trekker TV Shows: The Balkans,” Globe Trekker TV.com, http://www.pilotguides.com/tv_shows/globe_trekker/shows/europe/balkans.php. 75 Sukalo. 76 Clancy, Bosnia, Serbia & Montenegro, 96‐97. 57

has not effectively increased the number of tourists.77 In addition, Green Visions currently offers a day trip to Lukomir as part of its multiple‐day packages.78

Opportunities

All of the highlighted touristic sites are located close to each other and can be accessed by road, or train in the case of Sarajevo and Mostar. More popular and frequent, a bus ride between Sarajevo and Mostar takes three hours while the distance between Sarajevo, Visoko and Lukomir and that between Mostar, Blagaj, Medugorje and Pocitelj are relatively short, with Trebinje as the only exception.79 In addition, transportation within the cities is not difficult by walking or public transport. Although many of these places do not have clear direction signs in both Bosnian and English languages, as in Mostar, a city map is sufficient for visitors to self‐navigate the highlighted attractions as these cities are quite small, and the locals can converse in English as well as other foreign languages.

The cities have developed souvenir trademarks that reflect BiH’s unique cultural heritage. With centuries of handicraft practicing, souvenirs made from copper, silver or leather‐smith can be found throughout old towns of some touristic sites such as Kazandziluk, the coppersmiths street, in Old Town Sarajevo where visitors can buy coffee (or tea) serving sets.80 In Mostar, souvenirs are mostly paintings or carvings of the Old Bridge or pomegranates, Herzegovina’s symbol. Agencies from different levels have contributed to the promotion and development of these local products, including UNDP, UCODEP and the Citizens’ Association “Old Crafts” of Sarajevo Canton. While these efforts have improved quality and quantity of local products of Herzegovina, venues are still open to diversify the list and create trademarks for the Serbian entity where such a progress is much lacking. Moreover, promotion of local products can assist in the development of rural tourism. Communities with unique local products such as Livno’s Livno cheese, one of the Balkans’ best,81 are more likely to attract potential visitors than some less well‐known places.

Constraints

Tourist attractions within most of the cities and towns, with Sarajevo as an exception, can be seen within one day. More precisely, a tourist can visit Mostar then stop by Blagaj, Pocitelj and Medugorje

77 Tim Clancy, Lessons Learned in Designing and Implementing Small‐Scale Tourism Development Projects in BiH, (Sarajevo: Arch Design, 2008), 26. 78 Green Visions, “Eco‐Tourism: Cultural Heritage Tours/ 7 Day Tour,” GreenVisions BiH, http://www.greenvisions.ba/gv/clanak.php?lang=2&ids=97. 79 Clancy, Lessons Learned in Designing and Implementing Small‐Scale Tourism Development Projects in BiH, 26. 80 Citizens’ Association “Old Crafts” of Sarajevo Canton, Old Crafts of Sarajevo, (Sarajevo, 2007). 81 Svijetlana Sakic and Elena Anziutti, Okusi Hercegovinu: A Guide to the Traditions and Culture of Herzegovina, (Mostar, 2007), 20‐22. 58

combined, in less than half a day. Thus, a large number of tourists come to BiH en route to more popular destinations, mostly the Montenegrin or the Croatian coasts, without having more than a meal or staying a night in BiH. This is in spite of the fact that some locals(?), Mostar especially, offer good‐quality food services and accommodation at a low cost. These tourist sites thus are in need of more activities, attractions or multiple‐day package tours so that tourists would stay longer and spend more money, rather than making BiH a transit tourist destination.

BiH is rich in history, but this fact may not simply translate into the locals’ willingness to transform their past into a tourist attraction. For months, the people of Sarajevo debated whether to recognize Gavrilo Princip, the assassin responsible for the deaths of Archduke Ferdinand and his wife,82 as a hero or a murderer. Only once the city reached a consensus in 2005, could the Sarajevo Museum present the event as a mere fact that led to the First World War. With continued tensions among the locals, it could be difficult to develop a site for historical tourism that would not touch upon the 1992‐1995 war or emphasize ethnic differences in a country still very much divided along sectarian lines.83

5.5B: Nature and Eco‐tourism

Nature Tourism

BiH’s untouched nature is stunningly beautiful and offers year‐round activities. Among the highlights are:

The Sutjeska National Park, at 17,500 hectares near the Montenegrin border, is one of Europe’s largest, oldest and only two existing primeval forests, with trees taller than 50 meters high. The park offers a challenging hike at Bosnia’s highest peak, Mount Maglic, with the Zalengora Mountain for those less experienced hikers. Besides mountains and green hills, the park is also home to a Second World War battlefield84 and the world’s second largest canyon.85

Jahorina and Bjelasnica Mountains, to the Southeast and South of Sarajevo respectively, are said to be among Southeastern Europe’s best skiing spots due to their beautiful and challenging slopes. The war has destroyed much of the infrastructure from the 1984 Olympics sites, with Bjelasnica yet to reestablish itself as an Olympic‐quality skiing resort. The less challenging section, however, is open to the public with three lifts currently in operation. Unlike Bjelasnica, Jahorina has been successfully restored. The resort is currently equipped with twelve lifts and ski trails at various difficulty levels.

82 Clancy, Bosnia, Serbia & Montenegro, 10. 83 Milin. 84 Tourism Association of Federation of Bosnia and Herzegovina, “Sutjeska National Park,” BH Tourism, 2005, http://www.bhtourism.ba/eng/sutjeskanp.wbsp. 85 Clancy, Bosnia, Serbia & Montenegro, 94‐95. 59

During the off‐season, both mountains offer great spots for walking, hiking, biking and picnic, although there are few marked trails for the first three activities.86

The size and beauty of the Kravica Waterfall, located only a few hours from Mostar, are striking. As the Trebizat River goes through a section of Ljubuski, it drops down 25 meters along a 100‐meter long limestone rocks to create these magnificent waterfalls. The site is accessible only by car, although the road down to the falls is unpaved, narrow and can be quite dangerous. The area is said to be popular for swimming, picnicking and canoe safari.87

With rivers flowing through the hilly terrain, the Northwest offers several ideal spots for rafting. The Tara River in the Sutjeska Park has a class II/III rafting trail that attracts rafters from both Serbia Kravica Waterfall and Montenegro.88 Every July, the City of Bihac, which is located near the Croatian border, hosts an international rafting event along the country’s claimed most beautiful river, the Una.89 The most well‐known site, however, is on the Vrabas River that runs from Croatia through Banja Luka and continues all the way to Bogojno to the East of Sarajevo. The section around RS’s capital city particularly has several white water sections, pool drops and two canyons, perfect for rafting especially in the summer.90 As the host of the Balkans Rafting Week this year, Banja Luka will hold the 2009 IRF World Rafting Championship between 17 to 24 May.91

Eco‐Tourism

With an increase in eco‐tourism awareness worldwide, local actors, particularly ARDA and tour operator Green Visions, have separately helped in the development of this tourism product. Green Visions currently operates eco‐tourism tours such as mountain biking and green walking/hiking tours around the country.92 ARDA, as an NGO, focuses on both the environmental and economic aspects of sustainable tourism. The agency uses a participatory approach to ensure that the locals are responsible for their specific roles in the planning and implementation of the project, and that they would be able to continue this tourism activity on their own at a later date.93

86 Ibid., 98‐99. 87 Tourism Association of Federation of Bosnia and Herzegovina, “Ljubuski,” BH Tourism, 2005, http://www.bhtourism.ba/eng/whattoseeanddo.wbsp?wbf_mjesto=;23. 88 Clancy, Bosnia, Serbia & Montenegro, 95. 89 Ibid., 18. 90 International Rafting Federation, “World Rafting Championships in Bosnia & Herzegovina – 2009,” International Rafting Federation, http://www.intraftfed.com/competition/WRC2009.html. 91 Milin. 92 Green Visions, “Eco‐Tourism: Our Eco‐Tours,” Green Visions BiH, http://www.greenvisions.ba/gv/clanak.php?lang=2&kat=6. 93 Emir Dervisevic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 19 March 2009. 60

Currently part of ARDA, the NGO Green Tour successfully reached an agreement with the European Cyclists’ Federation (ECF) to connect the country’s Northwest cycling route with that of the European Cycle Route Network or EuroVelo. Supported by ECF, EuroVelo did not initially plan to include BiH in its 12‐route, 60,000 km‐long project. Green Tour however, remarked BiH’s existing cycling routes, thus promoting the sport as a way to enjoy the country’s nature.94 These efforts have subsequently earned the NGO and the country’s tourism industry both a European‐wide recognition and new visitors.

The Hutovo Blato Bird Reserve, Southeastern Europe’s largest bird reserve and among the International Council for Bird Protection’s list of important habitats, houses more than dozens species of indigenous and 240 types of migratory birds. Located in Herzegovina near the country’s only outlet to the sea, the reserve offers a two hour guided boat safari along the wetlands and Lake Deransko for free of charge.95

The Northwest, particularly the area around Banja Luka, also has a potential for photo safaris. This idea was initiated in response to a plan that would turn the green areas around Banja Luka into hunting grounds. While supporters of hunting envisage revenues from foreign visitors particularly the Italians, others raise concerns over difficulties in management and risks to biodiversity. Photo safari then is proposed as an alternative that will allow tourists to enjoy the nature while at the same time help the locals preserve it.96

Opportunities

Unlike cultural and historical tourism that can be quite deserted during the off‐season in winter, nature and eco‐tourism thrive year‐long with a wide range of activities offered. Tourists may undertake hiking at the Sutjeska National Park in the fall, skiing at the Olympic Ski Resorts in the winter, boat safaris in the spring, and rafting in the summer. Moreover, all of these sites are scattered throughout the country. Thus, benefits from growth in this subsector are less likely to be fractured along sectarian lines and hold promise throughout BiH; in other words, they provide another constructive platform for reconciliation. With all of these advantages, BiH’s beautiful and untouched nature is indeed the main strength of the country’s tourism development, a view shared by tourism experts at the international, national and local levels.

Constraints

Transportation system to these attractions is of low‐quality. In fact, the country only owns a short segment of highway on the M17 route heading out of Sarajevo to Zenica. The rest of the country then is covered with narrow two‐lane streets crisscrossing through mountains and rolling hills. A bus ride from Sarajevo to Banja Luka may take up to six hours even though the distance is only approximately 250

94 Denis Kajic, “Travelling the World on Two Wheels,” Travelling Balkans, Associazione Progetto Prijedor and Associazione Tremembe Onlus, http://www.travellingthebalcans.net/?q=eurovelo. 95 Clancy, Bosnia, Serbia & Montenegro, 93. 96 Viktor Bjelic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 19 March 2009. 61

kilometers. Due to this inconvenience, tourists from Sarajevo tend to travel three additional hours to Mostar (approximately 75 kilometers) and its vicinities but rarely cross over to the nature tourism sites in RS.

Adding to this difficulty, inter‐entity buses do not run frequently. The country has many transportation companies, with the most well‐known being Centrotrans,97 but there are only two buses per day linking Sarajevo and Banja Luka. Unfortunately, bus transportation is apparently the best option if one does not have a car. Unlike other parts of Europe, railways are not popular as they only make limited stops along the northern part of the country near the Croatian border and the North‐South corridor from Croatia to Sarajevo down to Mostar.98

Due to the 1992‐1995 war, 1,738 square kilometers of the country still has yet to be demined. Although the figure is relatively modest, demining progress is slow. Moreover, these mine fields are scattered throughout the country, especially in the rural area where BiH’s tourism greatest strength lies.99 In fact, it is generally advised to stay on a paved pathway and not wander alone.100 Tour guides are thus imperative for those interested in nature tourism, but unfortunately this service, especially mountain tour guides, is largely absent.101 Lack of signage, marked paths and tourist information centers at some of these attractions, including the country’s major spot like the Sutjeska National Park,102 are also one of the many areas that need to be addressed.

Pollution has increasingly become a concern of local and international NGOs. In Banja Luka, sewage is dumped directly into the Vrabas River while an alarming amount of trash floats along the river or scatters along the bank. Lack of waste management is a common problem for the whole country, including a major touristic city like Mostar. Moreover, both governments of the Federation and RS plan to build hydroelectric dams103 and hydro plants respectively to feed the energy needs of its Western European counterparts. This willingness to trade environment for quick economic revenues not only diverts efforts for tourism development but also threatens to create air and soil pollution that will make tourism even less appealing.104 As rafting is the main tourist attraction for the city of Banja Luka, plans to continue these energy projects will almost certainly damage potentials for tourism development.

Despite the early success in joining Banja Luka’s cycling trails with those of EuroVelo, more needs to be accomplished to ensure that potential visitors stop to visit BiH and not simply pass through it. Further efforts include development and distribution of comprehensive guide books, brochures or information

97 Clancy, Bosnia, Serbia & Montenegro, 117. 98 Ibid., 26. 99 Mine Actions Canada, “Bosnia and Herzegovina,” Landmine Monitor Report 2008, 21 November 2008, http://www.icbl.org/lm/2008/countries/bih.php#538304158. 100 Gordon Bardos, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 20 January 2009. 101 Clancy, Lessons Learned in Designing and Implementing Small‐Scale Tourism Development Projects in BiH, 6. 102 Clancy, Bosnia, Serbia & Montenegro, 94‐95. 103 Antenucci. 104 Sukalo. 62

databases so that cyclists learn what each place they are riding through has to offer, where they can find accommodation or places to eat, etc. This initiative requires coordination, which is again absent in the country. Many actors in the tourism industry, including local NGOs, tour operators and local communities, tend to compete for visitors rather than cooperate. Visitors thus may stop by at one site without learning about other interesting tourist destinations in nearby villages. This however, can be easily remedied through networking and cooperation.105

5.5C: Other Tourism Products

Southern Herzegovina is also known for its wine tourism. With assistance from the EC Delegation, wine makers in Ljubuski, Citluk, Mostar, Caplijina, Stolac and Trebinje106 have successfully promoted their high quality but affordable products. This project also benefits other SMEs, tour operators, tour guides and other cultural and nature as the published map links the wine route with other of the area’s tourist attractions. Due to the success of this project, the state government is in the process of issuing laws and regulations on wine production while the wine producers association is looking for further financial assistance from the World Bank and the United States Agency for International Development (USAID) to expand their current capacities.107

GTZ has also identified potentials for youth tourism. Due to the country’s untouched nature and healthy environment, GTZ plans to build this tourism product using models from other Western European countries. The agency has established connections with active youth organizations in BiH, particularly Green Visions, in order to extract their expertise in planning and organizing educational activities for youths between ages 12 to 20. The program then would appeal to parents, first at the national then regional level, to send their children for either a summer or a winter holiday. GTZ believes parents would be supportive not only because their children would get to spend their time wisely during the breaks but also because a Former Yugoslavian legacy requires students to spend at least one week in nature. Although some infrastructure, including accommodation, has to be renovated, this would not require much financial assistance. This program would also turn some of the country’s weaknesses into strengths: The country is currently underdeveloped but since the target group is too young to have established high standards for tourism services, supply and demand thus fit perfectly.108

Opportunities

Besides wine and youth tourism, both of which show the promise outlined above, the City Government of Banja Luka is also weighing the idea of a “Green City” program for the northwestern part of the country. In this package, the city will combine the area’s existing strengths, nature and sport tourism,

105 Dervisevic. 106 Kresimir Milicevic and Marin Sivric, With Wine through Time: Herzegovina Wine Route, (Mostar‐Citluk: Solvej d.o.o., 2007). 107 Clancy, Lessons Learned in Designing and Implementing Small‐Scale Tourism Development Projects in BiH, 16. 108 Esmail‐Arndt. 63

with its newly established spa tourism.109 The region’s thermal springs, eight in the city alone,110 will be the main component of this spa product. The city however is concerned with its budget as most of its financial resources depend largely on foreign donors, in particular the EU.111

Constraints

Despite its promise, GTZ’s youth tourism program is not well received. Most of the actors in this industry, with a sole exception of youth organizations, do not regard youth tourism as their priority. Without support from the governments, international organizations, other bilateral agencies or even the private sector, to cover the program’s estimated cost of 400,000 Euros poses as a major difficult that the agency has not anticipated. Meanwhile, GTZ also indicates a need for trained staff to assist its partners on the field with planning and conducting of educational activities.112

5.6: Tourism Services

This section provides an overview of tourism services: accommodation, food services, tour agencies, tour operators and tour guides.

5.6A: Accommodation and Food Services

The quantity and quality of accommodation in BiH differ greatly across the country. Plenty of accommodation with clear rating signs can be found in Sarajevo and Mostar, including the country’s sole five‐star hotel, Hotel Europe (Sarajevo), the chain Holiday Inn (Sarajevo) and youth hostels. Also, most of these facilities can be reserved online on secured websites, either on their own or other internet portals. Fewer numbers of hotels are offered in smaller cities and other tourist attractions, but generally the trend—good quality, inexpensive to moderate prices, staff with foreign language skills—applies to other parts of Herzegovina.113 Accommodation at the Jahorina ski center has also been renovated after the war and equipped with necessary facilities including information center, ski rentals and a medical center.114 In addition, there are twenty‐four campsites available throughout the country, particularly near nature parks and rafting sites.115

A wide range of food services can be found in BiH, especially in popular tourist sites such as Sarajevo and Mostar, and to a lesser extent Banja Luka. Sit‐down restaurants and cafes are scattered throughout the

109 Komljenovic. 110 Dragovic. 111 Komljenovic. 112 Esmail‐Arndt. 113 Clancy, Bosnia, Serbia & Montenegro, 152‐156. 114 Ibid., 98‐99. 115 Tourism Association of Bosnia and Herzegovina, Bosnia and Herzegovina: Campsites, (Sarajevo: Tourism Association of Bosnia and Herzegovina), 26‐27. 64

cities. Although not characterized as friendly, waiters are generally polite and do not rush customers even in small cafes. Family‐run grocery stores and community supermarkets usually do not have ready‐ to‐eat food but offer varieties of other food items including local dairy products, especially milk and yoghurt of various flavors. Food services staff generally has knowledge of foreign languages. Take‐out and delivery food, however, are rare in BiH.

In terms of quality, food services are generally well‐prepared and usually of high‐quality. As part of the culture, farmers are said to carefully raise their free‐range livestock in order to ensure the quality of their organic meat.116 Another of BiH’s unique and well‐known product is its Livno cheese. One of former Yugoslavia’s best, the supply of the cheese hardly meets domestic and international demands from Croatia, Austria, Germany and Switzerland.117

Opportunities

The locals have already established their shares in these economic sectors as many of these accommodations and food service facilities are small to medium‐sized, some instances even family‐run, businesses. Financial and technical assistance to improve and promote their facilities and services would help sustain their businesses. Moreover, if these businesses are to expand, it would create job opportunities for 20% of the country’s population that are unemployed.

Constraints

Actors in the tourism industry differ in their evaluations of accommodation needs. While NGOs and foreign/international development agencies focus on development of accommodation in rural area for rural and eco‐tourism, the governments and some Bosnians prefer more high‐rise buildings and large chain hotels in the cities. These differences reflect their disagreements on the question of tourism development models for the country. NGOs and external actors regard the country’s untouched nature as BiH’s biggest strength and opportunity for tourism development. However, governments in RS and the Federation think of tourism more along the line of mass tourism. Following the latter idea, funding from the private sector then tends to go to constructions of new hotels in the cities rather nature or eco‐tourism projects, areas where the tourism sector is most promising.118

What could be certainly agreed upon is that the country still has much to do to improve its services. On accommodation, even the entity’s capital city Banja Luka does not provide many options for visitors. A 3‐star hotel in Banja Luka can cost twice as much as that in Sarajevo while cheaper private accommodations come with much lower quality. Services in Sarajevo and Mostar are generally better but rooms for improvement still exist. Staff at Hotel Europe provides good services but incomparable

116 Clancy, Bosnia, Serbia & Montenegro, 122. 117 Sakic and Anziutti, Okusi Hercegovinu, 20. 118 Esmail‐Arndt. 65

with 5‐star hotels in other areas of the world. Moreover, statistics on the numbers of accommodations and hotel beds are not available for both entities with the RS’s Ministry of Trade and Tourism only in a process of classifying registered accommodations into their respective categories.119 This slow progress and service inconsistency are reflected in the World Economic Forum (WEF)’s ranking. In 2009, BiH earned rank 70th for hotel facility out of 133 countries in the study. Accommodation is clearly one of the country’s many competitive disadvantages. 120 For food services, smoking is the main issue as restaurants do not have separate smoking sections or ventilation systems to circulate for clean air.

5.6B: Tour Operators and Agencies

Tour agencies in BiH are usually outward looking, focusing on bringing in foreign visitors or arranging trips to foreign countries for BiH nationals. Their capacities also vary; the country’s largest travel agency, Sol Azur, organizes trips in collaboration with partners in other Balkans countries including Croatia and Serbia to destinations such as the Adriatic Sea. A youth‐run organization, Sol Azur mainly targets university students across BiH’s two entities with customers currently numbering over one thousand.121

Tour operators are less numerous. While tour operators for fly‐fishing or rafting are well‐developed, not many companies offer to take visitors on a package tour from one place to another,122 perhaps with the sole exception of Green Visions. Within Sarajevo, there is another tour operator that only operates a tour to the underground tunnel which the people of Sarajevo used as an evacuation site during the 1992‐1995 war.

Qualified tour guides with good knowledge of foreign languages are available but the number is insufficient. In big cities, this service is easily accessible: The main tourist office in Bascarsija offers a walking tour of the old town while Banja Luka likewise has tour guides experienced in historical and cultural, nature and eco‐tourism.123 However, this service is apparently lacking (or at least during the low season) at many other tourist attractions, including museums, popular destinations like Medugorje and even Mostar. Lack of mountain guides poses a particular concern since some nature sites are not easily accessible by road or are not within free‐mine zones. Additionally, both the state and the two entities have neither issued laws nor agreed to set a requirement for certified tour guides124 while some of the current tour guides do not meet the EU or international standards.125

Opportunities

119 Dunja Pejic, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 19 March 2009. 120 Blanke and Chiesa, “Country Profiles,” 143. 121 Mirza Ferhatbegovic, interview by Yaninee Nachom, 23 March 2009. 122 Dervisevic. 123 Bjelic. 124 Clancy, Lessons Learned in Designing and Implementing Small‐Scale Tourism Development Projects in BiH, 6. 125 Dosenovic, interview. 66

Examples of Sol Azur and Green Visions confirm the importance of youth organizations in the development of a country’s tourism industry. These young leaders are very active, willing to cooperate126 even across entities and ethnicities, and have skills necessary for tourism management and promotion, two qualities much needed to steer this economic sector forward. Nonetheless, the number of trained experts is quite limited. While the University of Travnik, and to a lesser extent Banja Luka, offers a popular major on tourism management (either as a major in itself or part of an economics major), some locals are not yet aware of the subject. Moreover, such a university degree does not guarantee a position in the tourism sector or, in some instances, any job at all 127

Constraints

BiH is in need of guide training programs, especially for mountain guides. Although the RS Government’s128 and the EC Delegation have conducted some training, these efforts are inadequate. Attempts to set up standards for tour guide certification are likewise insufficient as the existing courses are community or region‐specific and often offer only either a practical or theoretical approach. Better‐ quality training is thus essential, but at the same time these initiatives should not focus exclusively on existing guides. Given the country’s high unemployment rate, this constraint should be turned into job opportunities both for city and rural residents.129

5.7: Regional Tourism Integration

BiH can certainly benefit from a regional tourism strategy. To achieve this, BiH can build upon its most famous attractions and activities such as the Jahorina Olympic Ski Resort, the upcoming World Rafting Championship as well as the Sarajevo Film Festival. The country could also use this regional opportunity to address national challenges. Depending on where the funding for any regional program might be emphasized, BiH might see improvement in forms of higher‐quality transportation infrastructure, accommodation facilities or human resources but surely these projects would employ the locals and thus create job opportunities for those 20% of the population who are unemployed. At the same time, trainings would enhance the skills of its human resources while legal obligations would pressure the governments to actively commit to the country’s development. These prospects together would generate benefit far beyond the tourism sector alone.

The major constraint that could threaten BiH’s participation in any regional program is the current political situation and existing tensions along the ethnic lines. While evidence from JICA and UNDP projects have shown that different communities have increasingly understood the need to cooperate for further development, legacies of the war still impact people’s attitudes toward their fellow compatriots.

126 Esmail‐Arndt. 127 Ferhatbegovic. 128 Stojanovic. 129 Clancy, Lessons Learned in Designing and Implementing Small‐Scale Tourism Development Projects in BiH, 6. 67

Acts of discrimination vary from difficulties in booking accommodation across entities130 to those with more alarming elements such as school segregation.131 RS’s threats to declare independence, especially after the alleged corruption and fraud charges brought against its prime minister by the State Investigation and Protection Agency, have likewise agitated the country’s instability. In a more recent development, the RS prime minister walked out of a constitutional meeting when his demands for self‐ determination and referendum for independence were neglected.132 Although seen by some as a political tactic, this situation is indicative of ongoing social and political cleavages within BiH.

5.8: Overall Context Evaluation

Despite a long, bitter history of warfare, BiH’s tourism industry has continued to grow at an impressive pace. BiH has an advantage in its rich cultural and historical heritage, a mix of Turkish and European civilizations, while its beautiful and untouched nature is undoubtedly the industry’s greatest strength. Low‐cost, BiH also has a developed wine route and industry whose quality is comparable to that of Croatia’s best. 133 NGOs and youth organizations are also active and creative in their tourism development and promotion strategies and certainly are great assets to the industry.

Among many challenges to tourism development, the governments are regarded as the country’s major impediment. There is no state body to oversee the tourism industry while the entities have yet to officially publish their tourism strategies or revise their obsolete tourism laws. Also absent is the coordination between the two entities despite their promise to create BiH as a one‐country destination. In fact, unwillingness to exchange information, commonly found at all levels across the industry, adds difficulty to the development and promotion of BiH’s tourism. An increase in investment and numbers of trained human resources as well as improvement in the transportation and accommodation infrastructure are also needed to complete the efforts. The country also needs to address the local unawareness of the link between tourism and environment and the current political tensions before these threats manifest themselves.

130 Esmail‐Arndt. 131 Ozcelik. 132 Bilefsky, “Tensions Rise in Fragile Bosnia as Country’s Serbs Threaten to Seek Independence.” 133 Clancy, Bosnia, Serbia & Montenegro, 124. 68

Section 6: Former Yugoslav Republic of Macedonia

6.1: Geographic, Historical, and Political Context

The Former Yugoslav Republic of Macedonia (FYR Macedonia) is a landlocked country and is among the smallest of European nations in geographic terms. Its territory is 25,713 square kilometres. Its population is just over two million individuals, with ethnic Macedonians forming a 64.2% majority.1 This population descends from Slavic tribes that moved into the region by the 8th century CE. Their language – Macedonian – one of the country’s two official languages, is written in the Cyrillic alphabet, and is closely related to Bulgarian.2 Albanians form the second largest ethnic group, comprising 25.2% of the population, and are settled mostly in the Western third of the country. Other ethnic groups include Turks (3.9%), Roma (2.7%), Serbs (1.8%), Bosnians (0.8%), and Vlachs (0.5%). 3 Nearly all ethnic Macedonians belong to the autocephalous Macedonian Orthodox Church. Ethnic Albanians, Turks, Bosnians, and Roma are predominantly Sunni Muslim, and account for about 30% of the population.4

Still emerging from over 500 years of Ottoman Turkish rule in 1913, the Slavic region of greater Macedonia joined the Kingdom of Serbs, Croats, and Slovenes after the conclusion of World War I. The state Source: CIA, The World thus formed was later renamed Yugoslavia in 1929. After World War II, Factbook, 2009. Macedonia became a semi‐autonomous socialist republic of Yugoslavia. With the outbreak of war between Slovenia and Croatia in 1991, Macedonia negotiated the withdrawal of central Yugoslav military forces and voted in a referendum to declare national independence that same year. Owing to UN peacekeepers who diffused tensions between Macedonia’s Slavic and Albanian populations, the republic was the only Yugoslav republic to withdraw from the federation in the 1990s without violence.5

The outbreak of armed conflict in Kosovo in 1998 and the subsequent successes of the Kosovo Liberation Army there emboldened ethnic Albanian guerrilla elements in FYR Macedonia, leading to a brief uprising led by the Albanian National Liberation Army (NLA) which demanded greater political, cultural, and economic rights for Macedonia’s Albanian citizens. Under EU, US, and UN pressure, the FYR

1 Republic of Macedonia, State Statistical Office, Census of Population, Households and Dwellings in the Republic of Macedonia, 2002, (Skopje: The State Statistical Office, 2005), http://www.stat.gov.mk/pdf/kniga_13.pdf, 20. 2 Encyclopædia Britannica, (2009), s.v. “Macedonia,” Encyclopædia Britannica Online, http://www.britannica.com/EBchecked/topic/354223/Macedonia. 3 Republic of Macedonia, State Statistical Office, Census of Population, Households and Dwellings in the Republic of Macedonia, 2002, 34. 4 Economist Intelligence Unit, “Country Profile 2008: Macedonia,” Economist Intelligence Unit, http://www.eiu.com, 17. 5 Ibid., 5. 69

Macedonian government and the NLA signed the Ohrid Peace Agreement in August 2001, which largely placated the demands of the NLA.6

Today FYR Macedonia is a parliamentary democracy, with a President serving as head of state, and a Prime Minister representing the largest party in the nation’s unicameral legislature of 120 members of parliament elected according to proportional representation.7 The current prime minister is Nikola Gruevski of the dominant VMRO–DPMNE (Internal Macedonian Revolutionary Organization – Democratic Party for Macedonian National Unity) party, which holds roughly one‐third of parliament’s seats.8

The European Union has accepted FYR Macedonia as an official candidate for admission to the EU9. In addition, Macedonia’s bid to become a NATO member state was blocked in April 2008 by Greece. Greece continues to refuse to recognize FYR Macedonia as long as it references “Macedonia” in its internationally recognized name, as the historical region of Macedonia encompasses a sizeable portion of northern Greece.10

6.2: Economic Context

FYR Macedonia’s economy faltered greatly after its withdrawal from the Republic of Yugoslavia, but showed 5.7% real GDP growth in 2007.11 Services account for the largest portion of the Macedonian economy (60% of GDP), with industry and agriculture comprising 28% and 13% respectively. Unemployment is pandemic, hovering near 35% for the past five years,12 although the informal sector is sizable with about 33% of jobs in the country belonging to this sector.13 The currency, adopted in 1993, is the Macedonian Denar. Initially run on a semi‐pegged system to the Deutsche Mark, it has been shadowing the Euro at a rate of about Den61: 1 Euro since 2001. While this has anchored Macedonia’s monetary policy and helped bring rampant inflation under control, the dominance of the Euro in recent years has meant that FYR Macedonia cannot offer competitive prices in many sectors.14 Since

6 Ibid., 6. 7 Encyclopædia Britannica, (2009), s.v. “Macedonia.” 8 Economist Intelligence Unit, “Country Profile 2008: Macedonia,” 10. 9 European Commission, The Former Yugoslav Republic of Macedonia – Country Profile, http://ec.europa.eu/enlargement/candidatecountries/the_former_yugoslav_republic_of_macedonia/index_en.ht m. 10 “Macedonia takes Greece to court over NATO,” Forbes, 17 November 2008. 11 Economist Intelligence Unit, “Country Profile 2008: Macedonia,” 24. 12 Ibid., 25. 13 European Union, European Commission, The Former Yugoslav Republic of Macedonia 2008 Progress Report, 5 November 2008, (Working Document No. 2695), http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/the_former_yugoslav_rep ublic_of_macedonia_progress_report_en.pdf, 31. 14 Economist Intelligence Unit, “Country Profile 2008: Macedonia,” 27. 70

independence from Yugoslavia, FYR Macedonia has made grade strides in privatizing small and medium enterprises, with an estimated 95% of such formerly state owned now privately owned and managed.15

The effects of the current global economic downturn remain to be seen. However, early indications are that FYR Macedonia will suffer negative growth this year. The IMF has revised its early prediction of 1% GDP growth down to a decline of 2%, also predicting a decline in the price index and an increase in the current account deficit, already one of Europe’s highest at 14% of GDP.16

6.3: Tourism Sector Overview

Tourism accounted for 2.7% of GDP in 2007, with roughly 230,000 international tourist arrivals in that same year.17 Nationals of Greece, Serbia, and Montenegro form the core of foreign visitors, with Albanians and Bulgarians trailing just behind. Western Europeans and North Americans did not form a sizeable contingent of overall tourism visits. However, public and private sector leaders alike believe that the future of the tourism industry in FYR Macedonia will rely upon the successfully wooing these groups to “discover” the nation.

Natural tourism attractions include Lake Ohrid in the southwest (a UNESCO World Heritage Site), scenic mountains across the country as well as a number of Roman and Ottoman architectural sites and buildings. There is also a nascent wine tourism industry. The Government of Macedonia has taken formal steps forward to bolster the tourism sector, launching a large scale marketing campaign in 2005.18 Indications are that such marketing has been successful, and the number of foreign tourist arrivals in Macedonia has risen in the last several years.19

The nation does, however, face several challenges in attracting foreign tourists. The first is, as referenced above, the Denar and its unofficial peg to the Euro. This means that Macedonia is a relatively pricey destination for the region, especially when compared to other former Yugoslavian republics. Second is the lack of adequate cross‐border transportation infrastructure. Adequate road and rail links exist with Serbia and Greece, but not with Albania and Bulgaria. International flights are received at Skopje and Ohrid, though flight prices remain high, and while the IMF has worked with Macedonia to liberalize its air transport industry,20 air travel to FYR Macedonia remains expensive for foreign visitors. Finally, the sector needs significant upgrades in service quality and a greater capacity for market analysis.

15 Ibid., 28. 16 Sinisa‐Jakov Marusic, “IMF: Macedonia to Fall into Recession,” Balkan Insight, 24 April 2009, http://www.balkaninsight.com/en/main/news/18415/. 17 Jennifer Blanke and Thea Chiesa, ed., “Country Profiles,” ch. 2.1 of The Travel & Tourism Competitiveness Report 2009 (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html, 256. 18 Government of the Republic of Macedonia and Senka Film, Macedonia the Timeless, http://www.macedonia‐ timeless.com. 19 Republic of Macedonia, State Statistical Office, Tourism in the Republic of Macedonia, February 2009, http://www.stat.gov.mk/english/statistiki_eng.asp?ss=14.02&rbs=1. 20 Economist Intelligence Unit, “Country Profile 2008: Macedonia,” 21. 71

In addition to the IMF, UNDP completed a year‐long assessment and recommendation project on the development of a national tourism strategy for Macedonia in March 2008.21 The implementation of the project’s recommendations will form part of the core of Macedonia’s National Tourism Development Strategy 2008 – 2012 which aims to bring together the various stakeholders involved in enhancing and expanding Macedonia’s tourism sector.22 However, the strategy’s review by the Ministry of Economy, which heads public sector efforts in tourism development, has slowed. As of now, the strategy remains in the hands of the Ministry and is not yet ready for public view or implementation.23

Meanwhile, the Ministry of Economy has recently unveiled the creation of public‐private entity, the National Tourism Agency, to work specifically with private sector actors, municipal leaders, and international aid agencies on tourism development.24 It remains to be seen how effective this entity will be, and the extent to which it will work independent of the Ministry of Economy’s tourism unit.

In addition to UNDP, other international agencies such as USAID and SNV continue to work on tourism development as a key tool for economic and social development in FYR Macedonia. The recently completed USAID Macedonian Competitiveness Activity focused on promoting competitiveness across various potentially profitable sectors of Macedonian economy. Within the tourism sector, the emphasis was made on improving the global visibility of FYR Macedonia as a destination, providing training for government officials and tourism workers, improving infrastructure, and connecting various stakeholders through ongoing meetings and dialogue.25 For its part, SNV has dedicated its efforts to foster “pro‐poor tourism” development, focusing on the development of rural tourism and eco‐tourism as avenues for micro‐level economic development throughout the FYR Macedonian countryside.26

It is clear that the national government, along with private sector actors is taking initiative in promoting dialogue on sustainable tourism development and in marketing the country as a safe and intriguing cultural and natural destination. Included in this strategy is the short ad and film by Milcho Manchevski under the slogan of “Macedonia: Timeless.”27

Furthermore, the Ministry of Economy, along with many stakeholders, held its Second Annual International Tourism Conference in Ohrid in January 2009. The gathering highlighted the high level of dialogue surrounding tourism development in the country, yet also underscored the degree to which words are not necessarily translating into action. Indeed, it is apparent that while public, private, and citizen sector leaders have reached a consensus on what needs to be done to spur greater tourism

21 United Nations Development Programme, “Development of National Sustainable Tourism Strategy,” United Nations Development Programme Macedonia, http://www.undp.org.mk/Default.asp?where=projects&project=97. 22 United Nations Development Programme, “National Tourism Stakeholder Forum,” United Nations Development Programme Macedonia, 10 December 2007, http://www.undp.org.mk/Default.asp?where=news&id=395&start=1. 23 Anita Kodzoman, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 14 January 2009. 24 Ibid. 25 Iva Koreca, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 14 January 2009. 26 SNV Netherlands Development Organisation, “Pro‐Poor Sustainable Tourism,” SNV World, http://www.snvworld.org/en/ourwork/Pages/tourism.aspx. 27 Government of the Republic of Macedonia and Senka Film, Macedonia the Timeless. 72

development in FYR Macedonia, bureaucratic processes, lack of funding, and weaknesses in capacity along various stakeholders continue to bog down the process. Public sector officials claim they have the know‐how and simply need financial assistance, while other actors see the government as lacking in expertise and the political will to allocate necessary funding for hereunto planned, but unrealized, programs.

6.4: Legal Context

There are three main tourism laws in FYR Macedonia ‐ Law on Tourism Activity, Law on Catering Activity, and Law on Temporary Tourist Stay ‐ that regulate lodging, food services, and tourism activities.28 These are comprehensive in that they encapsulate regulations on utilizing private residences for touristic activities (such as guest houses), defines what constitutes an official tourist guide, and demonstrates the interconnectedness between lodging and food services and the tourism sector.29 Additional relevant laws, such as those pertaining to labour, are noted in Section 6.6A, page (??).

FYR Macedonia has been a member of the World Trade Organization (WTO) since April 4, 2003, and is thus party to the General Agreement on Trade and Services (GATS) and the commitments to liberalized trade and exports. In line with such commitments, Macedonia has continued gradually to reduce its customs duties.30 Macedonia is also actively participating in the work under Central European Free Trade Agreement, which entered into force in November 2007.31.

As part of the EU accession process, FYR Macedonia is also working to harmonize its legal framework to that of the Union. Importantly, these include environmental laws (detailed in section 6.4B, page 18) as well as liberalization of the export industry. Indeed, the European Union specifically outlined the following priority with regards to its Pre‐Accession activities for FYR Macedonia: “Cross‐border cooperation, managed through component II, will foremost concentrate on creating closer links between border regions, supporting joint environmental protection activities and improving the potentials for tourism. Furthermore, through participation in the European Regional Development Fund transnational and interregional programmes, pre‐ accession assistance is aimed at familiarising future member states with rules and procedures governing the European Territorial Cooperation objective under Structural Funds.”32

6.5: Tourism Products

28 United Nations Development Programme, “Preparation of the National Tourism Development Strategy 2008‐ 2012.” 29 FYR Macedonia Ministry of Economy, Law on Catering and Tourism Activity, (Published in "Official Gazette of the Republic of Macedonia" No. 23/95), http://faq.macedonia.org/economy/business.laws.html. 30 European Union, European Commission, The Former Yugoslav Republic of Macedonia 2008 Progress Report, 71. 31 Ibid. 32 European Union, European Commission, “Commission Decision on a Multi‐annual Indicative Planning Document (MIPD) 2008‐2010 for the former Yugoslav Republic of Macedonia,” 23 February 2009, http://www.delmkd.ec.europa.eu/en/bilateral‐relations/pdf/mipd_macedonia_2008_2010_en.pdf, 16. 73

This section outlines the most distinct products in FYR Macedonia’s tourism sector: cultural and historical sites, as well as natural offerings and eco‐tourism. In addition, the growing wine tourism subsector is evaluated. Culture and 6.5A: Cultural and Historical Tourism History

FYR Macedonia offers an array of cultural and historical sites that Tourism may appeal to a wide variety of tourism interests, ranging Products Other from religious buildings to archaeological sites to villages and (e.g. Nature cities that preserve certain authentic characteristics of Wine tourism) Macedonian or Ottoman architecture and culture.

Skopje

FYR Macedonia’s capital ‐ a city of a half‐million located in the north of the country33 ‐ is divided in half by the Vadar River. To the south lies the predominately ethnic Macedonian section, which suffered greatly during a destructive earthquake in 1963 which decimated 80% of the city center’s classical buildings. To the North of the river lies the Čaršija neighborhood, which features a largely intact Ottoman marketplace. It is inhabited primarily by ethnic Albanians. The two halves of the city are connected by a series of modern bridges, as well as a historic Ottoman Bridge known as the Stone Bridge.

While the city does receive summer tourists, they typically spend but a few hours visiting Čaršija’s winding streets lined with small shops catering both to local and foreign consumers.34 This area likely forms the core of Skopje’s touristic offerings, which include a series of over thirty mosques, museums, and the Bit Pazar market (below), the city’s largest and most lively outdoor market place for fruit, vegetables, clothing, music, and a host of other products.35

The remaining area of the city, including the city’s heart – Macedonia Square (Plostad Makedonia) – offers little in charm by way of architecture of urban planning. Indeed, nearly every building in this area was built after the 1963 earthquake, in modernist and communist styles. The effect is thus utilitarian Bit Pazar Market, Čaršija,

33 Republic of Macedonia, State Statistical Office, Census of Population, Households and Dwellings in the Republic of Macedonia, 2002, 20. 34 Goran Janevksi and Arsenije Janevski, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 13 January 2009. 35 Thammy Evans, Macedonia: The Bradt Travel Guide (Guilford: The Globe Pequote Press, 2007), 128. 74

and somewhat cold rather than historic and endearing.

While the municipal government of Skopje has made efforts to draw in more tourism, the majority of visitors are those on business. The proximity of Skopje to Kosovo (the border is roughly 15 kilometers to the north of the city) has made the capital a hub of political activity. Indeed, SNV estimates that over one‐third of the city’s visitors are diplomatic owing to continuing post‐conflict peace‐building initiatives.36

As noted above, any tourism strategy for Skopje must acknowledge its dearth of existing cultural and historical sites. Instead, the city’s strategy in recent years has been to increase it cultural offerings through music festivals and other gatherings. These include the Skopje Jazz Festival,37 Skopje Film Festival,38 and Skopje Fest.39 The strategy is supported and promoted by various international agencies working on tourism development in the country.40

The Kale – meaning castle in Macedonian and Turkish – overlooks Čaršija and downtown, and houses human settlements from as early as the 3500 BC and a series of wall and watchtowers built in the 11th century and embellished by the Ottoman in the following centuries. Unfortunately Kale suffered great deal of damage during the 1963 earthquake, and today offers only several low lying walls and an excellent view of Skopje’s city center.

Other Cities

Other cities and towns of touristic note are Ohrid, Bitola, and Prilep. Smaller towns and villages also boast many of the offerings of those mentioned below, such as historic architecture, restaurants, and cultural festivals and carnivals.

Ohrid, known as FYR Macedonia’s touristic center, is located in the southwestern extreme of the country, on the shores of Lake Ohrid. Its population of 42,000 makes it the nation’s seventh largest municipality.41 While the natural beauty surrounding the town – soaring mountains and a crystal clear lake – are obvious draws for any tourist, the city boasts a wealth of culturally significant sites and is among the leaders among Macedonian municipalities in installing proper signage, guides for visitors, and properly charging admissions fees to historic sites. It became a UNESCO World Heritage site in 1979,

36 Nehat Ramadani, interview by Humay Guliyeva, Scott Leo and Alida Meghi, 15 January 2009. 37 Skopje Film Festival, http://www.skopjefilmfest.com.mk. 38 NextSense, Skopje Jazz Festival 2008, http://www.skopjejazzfest.com.mk. 39 “FYR Macedonia: Skopje Fest 2009 Artists Announced,” ESC Today, 15 January 2009, http://www.esctoday.com/news/read/12918. 40 Ibid. 41 Republic of Macedonia, State Statistical Office, Census of Population, Households and Dwellings in the Republic of Macedonia, 2002, 20. 75

and is particularly well known for its nearly 800 Byzantine‐style icons located throughout the city’s churches.42

Among significant religious sites in town is the iconic Sveti Jovan Kaneo church, a 13th century Byzantine church set on a cliff overlooking Lake Ohrid. The church features numerous frescoes and is adjacent to an excavation site currently unearthing the remains of an ancient Greek settlement. Other significant religious architectural sites are clustered in Ohrid’s old city, spread across two main hills and a lakeside front. Although a figure of 365 seems exaggerated, it is likely that Ohrid is home to over 200 churches and monasteries.

The city also boasts two major archaeological sites: Tsar Samoil’s fortress, built in the late 10th century, which is well preserved and overlooks Ohrid from a high promontory; and a Roman amphitheater, which is still used today for summer festivals and plays.

Across the older sections of the city, traditional red‐tile roof homes and winding hillside alleys and streets make the city attractive to visitors. Its relatively temperate climate makes walking through the city pleasant throughout much of the year. The city is known to Macedonians as a hub of café and nightlife culture year‐round.

It is also perhaps the only city known by tourists outside of the country. Due to its prominence among Yugoslavians and Western Europeans alike prior to the disintegration of Yugoslavia, overnight bed capacity, restaurant offerings, and level of service are fairly high, especially by FYR Macedonian standards. In addition, the municipality has made clear steps to populate the city with an adequate number of signs, in both Macedonian and English, along streets and near points of interest. Sveti Jovan Kaneo Church, Ohrid Bitola, located in the south‐central portion of FYR Macedonia, similarly boasts a relatively mild climate and preserved old town featuring narrow streets, attractive homes and businesses, and a well‐defined shopping district particularly popular during the summer months. Divided into “European” and “Ottoman” halves by the Dragor River, the city of 80,000 also benefits from its location – just twenty‐five kilometers from the border with Greece. Aside from attractive residences and shops, the city, like many in FYR Macedonia, is home to a number

42 United Nations Educational, Scientific and Cultural Organization, (Cycle 1) Section II Summary, Official Record. 2006, http://whc.unesco.org/en/list/99/documents/ 76

of prominent mosques and churches, including Sveti Dmitri church, which is among the largest cathedrals in the Balkans.43

Bitola’s municipal government has undergone a campaign to increase signage and reap greater benefits of increased tourists, particularly those making trips from nearby Greece. An interesting way in which the city is working to raise its visibility abroad is through the film industry, as the preserved city center evokes a preserved image of “old’ Europe of the 18th and 19th centuries, and thus has attracted European film makers seeking affordable but authentic filming locations.44

As noted below, Bitola is also very close (30 minutes walk)45 to the Roman Heraclea ruins, which include ancient roads, buildings, and a basilica. The city itself is linked to Skopje by train and bus, the latter being the primary means by which both Macedonians and foreign visitors reach the city.

Smaller than both Ohrid and Bitola, Prilep is notable not for any one attraction in particular, but rather its compact and attractive representation of FYR Macedonian architecture, culture, history, and natural surroundings. There are several churches and mosques from the Ottoman period; a green market; an historic clock tower, as well as the Fortress Towers of Marco, ruins of a fortress dating back several millennia, but primarily enforced by the Ottomans in more recent centuries. Unfortunately the site is relatively difficult to get to by public transport, and must be approached by private car, taxi, or by foot. The site also lacks proper signage or admissions/ticketing booths.46

Unique Historical Sites

Significant architectural and cultural sites are of course not limited to the cities introduced above. Indeed, FYR Macedonia boasts numerous points of cultural interest scattered about much of the countryside. Here, areas of interest to cultural/historical tourists fall under three broad categories: archaeological sites, religious sites, and rural tourism.

Ancient Archaeological Sites

FYR Macedonia sits at the crossroads of a number of great powers of the past, from the Ancient Greece to the Romans, Byzantines, and finally the Ottomans. The Romans left the most visible mark on the country today, with major excavations now underway in Ohrid, Prilep, near Bitola, and in and around Skopje.4748

43 Evans, Macedonia, 187. 44 Patrice Koerper, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 16 January 2009. 45 Evans, Macedonia, 187. 46 Ibid., 188. 47 Evans, Macedonia, 31 77

One such site is found in Bansko, where the ruins of Roman baths from the 3rd and 4th centuries CE are well preserved, abutting Ottoman era baths and several spas located at hot spring points.49 In addition, the Via Egnatia, a former Roman roadway which connected Constantinople to Rome via the Balkans and the Adriatic Sea, stretched through southern FYR Macedonia, near today’s Bitola and Ohrid. Almost none of the of the road’s original stones or artifacts remain, though part of the road was laid with cobblestones by the French during World War I near Bitola.50 Although the road does not feature much at present, opportunity to develop the stretch as part of a regional plan with Greece and Albania remains promising provided the tourism sector can provide for increased signage and several points of interest relating to the Roman period. Heraclea Lyncestis, an ancient Greek then Roman and Byzantine city, could be one such stopping point, as it offers a partially excavated city center, amphitheater, and numerous well‐reserved mosaics.51 Stobi, located in the Tikveš wine growing region, features a 2nd century CE amphitheater, a 5th century basilica, and scattered remains of city life that has existed there since the Bronze age.52

However, funding for archaeological research and excavations has been low, and treatment and protection of sites are not of high standards. Major archaeological sites thus remain an untapped resource of an indefinite quantity. Without increased funding for research, the amount of sites which would be of interest to tourists, yet remain buried will not be known precisely.

Religious Sites

FYR Macedonia is dotted with hundreds of monasteries and churches located in attractive and sometimes dramatic locations, such as small lake islands and cliffsides. While it is not within the scope of this study to review and evaluate all of them, Sveti Naum church makes for an illusory example of the state of such sites, and the prospects for increased tourism surrounding them.

Sveti Naum Monastery, located at Lake Ohrid’s southern shore adjacent to the border with Albania, was built in the 16th century atop the ruins of the original 10th century church. The original church was built by St. Naum of Ohrid, the disciple of Saints Cyril and Methodius, first missionaries of Christianity among Slavic people53 and inventors of Cyrillic alphabet in order to translate the Bible. Because of that, the church has a special significance not only for Macedonians, but also for Slavic Orthodox Christians overall as a place of pilgrimage. The church also boasts some frescoes as well as iconostasis carved from

48 Balkan Travelers, ”Macedonia: Archeology Excavations of Skopje Fortress Restart,” Balkan Travelers, 11 March 2009, http://www.balkantravellers.com/en/read/article/1081. 49 Evans, Macedonia, 256. 50 Ibid., 29. 51 Encyclopædia Britannica, (2009), s.v. “Bitola,” Encyclopædia Britannica Online, http://www.britannica.com/EBchecked/topic/67218/Bitola. 52 The Macedonian National Tourism Portal, “Stobi,” Exploring Macedonia, http://www.exploringmacedonia.com/?ItemID=1DB490D86D2A554B8D2060DFE4101A75. 53 Open Society Institute, “The Monastery of St. Naum,” Church and Monasteries, http://www.ohrid.org.mk/eng/crkvi/sv_naum.htm. 78

wood in 1711.54 The site’s location adjacent to hot springs and untouched wildlife areas in Galicica National Park make the port a popular tourist site, one which has seen the growth of small hotels over the last decade.

Rural Tourism

Rural tourism offers great promise in FYR Macedonia, as its countryside is dotted with numerous small villages which appeal to tourists from more economically developed areas of Europe interested in daily life on an “authentic” farm. The experience would include hiking, eating organic products and enjoying the surrounding scenery. SNV Macedonia sees rural tourism as one of the important features of Macedonia’s tourism development, essential for the development of regions as well as for the empowerment of the community.55 SNV Macedonia thus conducted a “Stock Taking Workshop on a Rural Tourism Development” on 11 December 2008, bringing together important stakeholders on national and regional level, high representatives of donor community and distinguished university professors from Tourism Faculties.56 The Hotel Association of Macedonia also identified potential rural tourism hotspots as part of its 2007‐2013 Rural and Adventure tourism projects.57

While Macedonia has all the natural and cultural offerings for rural tourism development, significant obstacles are also present. Municipalities which are ultimately in charge of the local development lack vision and capacity and often times do not know how to spend money allocated to them by central government.58 At the same time, large public lands in Macedonia belong to the central government and not a municipal one. Therefore, a municipality with a good investment idea has to convince the national government of its vision and the marketability of its idea. 59 Due to these power structures, municipalities while being in charge on the paper cannot effectively make important decisions.

Opportunities

As noted above, there are opportunities for expansion of this subsector as numerous towns, villages, and historic sites have maintained their original character and are attractive to Western Europeans and others who seek out unique cultural experiences and a glimpse into the heart of the Balkans.

Constraints

54 Ibid. 55 Ramadani. 56 Embassy of the Kingdom of the Netherlands in Skopje, “Stock Taking Workshop on Rural Development,” Embassy of the Kingdom of the Netherlands in Skopje, http://www.nlembassy.org.mk/news_archive/stock_taking. 57 Hotel Association of Macedonia, Community Development Projects, http://www.hotam.org/projects.htm. 58 Ramadani. 59 Ibid. 79

Constraints in this subsector are numerous, but can broadly be categorized under infrastructure, market research and understanding, and lack of training in providing key tourism services.

Regarding infrastructure, it seems clear that the automobile transportation system throughout Macedonia is fairly well developed. Unlike Albania, for instance, Macedonia boasts over 8,600 km of roads, nearly two‐thirds of which are paved.60 Road signage, however, is a key constraint at present time. While roads to monasteries, villages, and other cultural sites, may be paved and all‐weather, signs marking and giving directions to sites are of varying quality and quantity. Local signage is federally funded by fall under the jurisdiction of local municipalities, and is thus not standardized from town to town, much less on a countrywide scale. Understanding this deficiency, SNV is currently (by mid 2009) launching a program to create a manual on European Union standard road signs. The intended audience is the set of municipal leaders concerned with improving visitation numbers to their respective cultural sites.61

As with nearly every tourism sector in the country, lack of education in tourism market analysis and the absence of service training for staff pervade the rural tourism subsector. Macedonians and international agency specialists alike stress that most rural inhabitants are skeptical that tourists would want to stay in their homes or observe their way of life. Even for those who have gone forward with opening guest houses and welcoming tourists to their agricultural lives, the quest to please has led to adaptation of food offerings and a decline in the authenticity of the experience.62

6.5B: Nature and Eco‐tourism

Nature

Macedonia features some of the Balkans’ highest mountain peaks, several ancient lakes, and rolling countryside appealing to visitors in search of unspoiled nature. In addition, there is a small but growing eco‐tourism sector aiming to make tourism an important part of environmental improvements and sustainability projects in several regions of FYR Macedonia.

National Parks

FYR Macedonia is home to three national parks (Pelister, Galičica, and Mavrovo) and one forestry reserve (Jasen). The touristic offering of each is described and evaluated below.

60 United Nations Conference on Trade and Development, Country Profile: Macedonia, TFYR, www.unctad.org/sections/ldc_dir/docs//lldc‐mcd.pdf, 32. 61 Ramadani. 62 Kodzoman. 80

Mavrovo National Park, located in the western‐central edge of the country, is home to the nation’s highest mountain peaks. The highest, Great Korab Mountain, reaches 2,764 meters above mean sea level.63 For decades, this region has been home to ski resorts that were popular with Yugoslavians through the 1980s64 and is still among the country’s leading ski resort center.65

In a promising development for a more year‐round tourism base, a local ski lodge, Zare Lazarevski, in conjunction with the Macedonian Bicycle Federation, has marked and traced three mountain bike tracks. The full length of the tracks is 30 km, the first one is 5.4 km long, the second 9.4 km and the third track is 14.4 km long.66 This holds greater possibility for not only less reliance on the winter season for tourism, but a more expansive eco‐ and nature tourism sector throughout the country.

Unfortunately the ethnic Albanian uprising of 2001 left the nation’s formerly leading ski resort, Popova Sapka, to fall in popularity with ethnic Macedonians owing to the resort’s location adjacent to FYR Macedonia’s Albanian cultural center; its proximity to Kosovo, and the laying of land mines during the conflict.67 The park also features a number of moderately sized lakes suitable for fishing, cliffs suitable for rock climbing, and trails for hiking.68

Pelister National Park, located in southern FYR Macedonia between Lake Prespa and Bitola, is home to diverse and rare flora and fauna, a ski resort, as well as hiking trails and an all‐terrain road. Two of its iconic features are its two mountain lakes, named Pelister's Eyes, both of which are located over 2,000 meters above sea level.69

More description and evaluation of the ski center at Pelister are provided in the Skiing subsection below. Wedged in the park are a number of historical and cultural sites, such as the nearly abandoned Vlach settlement of Maloviste, which has received funding from the European Commission to further its goals of eco and cultural tourism.70

63 The Macedonian National Tourism Portal, “Korab,” Exploring Macedonia, http://www.exploringmacedonia.com/?ItemID=EA8F4CAD848E1D49B948FD9F852C6EA9. 64 Ramadani. 65 Go Macedonia, ”Mavrovo, Macedonia,” GoMacedonia, http://www.gomacedonia.com/mavrovo.shtml. 66 Zare Lazarevski Ski Center, Zare Lazarevski Ski Center, http://www.zarelaz.com/. 67 Evans, Macedonia, 215 68 Ibid. 69 The Macedonian National Tourism Portal, “Pelister National Park National,” Exploring Macedonia, http://www.exploringmacedonia.com/?ItemID=C17BB17C7EAD6745A4D774BD0A561E9F. 70 Evans, Macedonia, 201 81

Galičica National park straddles the area between Lake Ohrid and Lake Prespa, and is home to a wide array of flora and fauna, and as such is viewed as one of Europe’s most important natural preserves.71 Amenities and infrastructure in the park include a dirt road, a rangers hut, and several marked paths.

Because of its proximity to Albania and Greece, the park has also been home to cross‐border initiative touching concerned with nature and eco‐tourism. Already in existence is the Alliance for Lake Cooperation in Ohrid and Prespa, composed of numerous civil society entities in all three countries that are working together to bring about civic engagement on ecological preservation in the region.72

Lakes

Lake Ohrid is the deepest, and nearly the oldest, lake in Europe. Spanning 358 square kilometers in the Southwest corners of FYR Macedonia, it is dotted by villages, monasteries, and ringed by Galičica National Park to the East, and Albania to the West and South. Among its attractions are boating, beaches for sunbathing and swimming, as well as a set of cultural sites directly upon the lake, such as the city of Ohrid and the Sveti Naum Monastery noted above.

Lake Prespa is a large, natural, fresh‐water lake which encompasses border regions of FYR Macedonia, Lake Ohrid Albania, and Greece. Of its 273 square kilometer surface region, 190 square kilometers fall within Macedonian territory. The main city in the region is Respen, population roughly 10,000, which boasts an early 20th century Ottoman palace, an old market, and access to the Lake as well as Pelister National Park.73 In the midst of Lake Prespa is Golem Grad, a small island featuring the ruins of two 14th century churches and an abandoned village.74 Several historic villages ring the lake, including Konjsko, which is a protected heritage site under Macedonian law.75

The region around Lake Prespa holds promise for tourism growth with an environmental focus, and boasts existing regional linkages. Indeed, owing to its bordering the three countries, Albania, FYR

71 Oliver Avramoski and Javanco Sekuloski, Ecotourism Development in Macedonia: The Case Study of the Galicica National Park, www.allcoop.org.mk/Downloads/EcotourismGNP.pdf. 72 Alliance for Lake Cooperation in Ohrid and Prespa, “Peripheral Civic Networking for the Implimentation of Sustainable Development in the Ohrod‐Prespa Regions,” Prespa and Ohrid Sustainability Network, http://allcoop.org.mk/Projects/posnet_en.html. 73 The Macedonian National Tourism Portal, “Resen,” Exploring Macedonia, http://www.exploringmacedonia.com/?ItemID=7D670A5C9473FA4BBD3C4337BB2C8227. 74 Evans, Macedonia. 75 Ibid. 82

Macedonia, and Greece came together in 2000 to form the Prespa Park Coordination Committee (PPCC). The PPCC works with several donors, including UNDP, USAID, and UNESCO, as well as a host of local partners and implementing agencies, to promote sustainable growth in both attention and finances directed toward the region for preservation and economic development. FYR Macedonia’s Prespa vicinity boasts 7,200 beds, a sizeable number for an area that is focused on small, sustainable growth.76 The PPCC itself states: “The promotion of tourism seems to be essential for the economic development of the area and the preservation of its historical, cultural and ecological identity.”77 At the same time, a large‐scale (USD 200,000) three‐year Biodiversity Project, under the auspices of UNDP, will be implemented starting in April 2009. It thus appears that the sustainability of Lake Prespa’s ecology is at the heart of any discussions of tourism development in the region.

Mountains

In addition to the skiing and hiking offerings noted above in each of the country’s national parks, FYR Macedonia also boasts a more general hiking and biking trail system that is undergoing renovation and expansion. Tourism development in this sector is aided by local interest in hiking, as there are over seventy hiking clubs spread throughout the country, divided among interests ranging from alpine hiking to sports hiking to mountain biking and caving. An umbrella organization is the Macedonia Mountaineeing and Sports Federation, which provides information, maps, and guides in English about the clubs and their activities.78 In addition, a system of mountain huts dots some of the highest peaks throughout the national parks and offer backpackers very basic accommodations.79

Eco‐Tourism

A number of foreign actors, particularly SNV, are spearheading efforts to bring about eco‐tourism; that is, not merely the use of national parks for skiing and hiking, but rather tourism that enhances and ensures the sustainability of natural habitats. At present, SNV is focusing on Krusevo, Mavrovo, Berovo, and Pehcevo as sites for the development of eco‐tourism.80

The village of Brajcino is a representative example of the opportunities and challenges of the eco‐ tourism sector. The village’s Pilot Eco‐Tourism Project is funded by the Swiss Agency for Development and Cooperation and steered by The Ecologists' Movement of Macedonia (DEM), the Bird Study and Protection Society of Macedonia (BSPSM), Pro Natura (Friends of the Earth ‐ Switzerland), Pelister National Park. The pilot program aims to link the people and culture of Brajcino with the natural

76 Prespa Park Coordination Committee, “Tourism,” Prespa Park Coordination Committee: Three Countries, Two Lakes, One Future, http://www.prespapark.org/tourism1. 77 Ibid. 78 MKDMOUNT, “Mountaineering Clubs,” MKD‐Mount, http://www.mkdmount.org/planinarski_sportovi/planinarstvo/mountaineering_clubs.html. 79 Evans, Macedonia, 270. 80 Ramadani. 83

offerings of Pellister National Park and nearby Lake Prespa in order to build a sustainable tourism industry there.81 Thus far, the project has worked upon building structured walking tours and small hikes in and around the village; enhancing capacity of local restaurants and private homes open their kitchens to tourists; improved signage to note the village’s historic architecture, and linking the village to nearby mountains and glacial lakes through a systematized hiking trail sing system.82

Opportunities

Due to FYR Macedonia’s low level of economic development during the communist era and the creation of national parks in the country’s most striking and delicate natural areas the nation today has, for the most part, not overdeveloped or tampered greatly with its nature offerings for tourists. As it moves forward, FYR Macedonia is now party to a number of important agreements regarding environmental protection, including those related the EU accession. National laws and regulations include the National Environmental Actions Plans that have been drafted and implemented since 1997.

The most prominent of which is the EU Stabilisation and Association Agreement (SAA), which compels Macedonian officials to work within the confines of EU environmental regulations. A second important agreement is the Stability Pact and Regional Environmental Reconstruction Programme (REReP), a long‐ term regional peace building program, designed in wake of the Kosovo Conflict involving several dozen countries that included environmental provisions.

Constraints

As the United Nations Environment Programme explained in 2001:

The SAA is a vital ‘driving force’ in the field of environmental policy, bringing with it the obligation to approximate Macedonian environmental legislation with EU norms. While the end point of this process, once achieved, will represent a very positive development in Macedonian environmental legislation, the workload involved is enormous. There must be doubts whether it is manageable within the timeframe set out, in spite of the considerable support available from the European Commission through the Phare programme (and its successor instrument, CARDS). At the same time, the approximation process will bring strategic benefits in the field of environmental policy by compelling some institutions to work more closely together than they might otherwise be inclined to do.83

81 Pelister Mountain Conservation Project/Pilot, “Beautiful Brajcino, Powerful Pelister,” Beautiful Brajcino, Powerful Pelister, http://www.brajcino.com.mk/project.html. 82 The Macedonian National Tourism Portal, “Village Brajcino, Pelister National Park,” Exploring Macedonia, http://www.exploringmacedonia.com/?ItemID=4F55F0EA8A8A5441914DC30C15B99C51. 83 United Nations Environment Programme, Strategic Environmental Policy Assessment FYR of Macedonia: A review of environmental priorities for international cooperation, 14 November 2001, 84

This statement remains true today. FYR Macedonia appears poised to correctly implement tourism and other economic growth programs smartly and environmentally friendly. And yet the lack of staffing, domestic expertise, and funding mean that such implementation will be difficult in the near‐term.84 85

6.5C: Other Tourism Products

In addition to cultural and nature tourism, FYR Macedonia boasts a burgeoning wine tourism industry. The leading wine producers in the country are located in the Tikveš region. Indeed, the leading wine producers there is Tikveš, a company whose marketing manager is former Chief of Party of USAID’s Macedonia Competitiveness Activity, a private sector development program that included tourism industry growth as one of its main objectives. With the understanding that wine tourism can enhance both wine sales and the broader economy through tourism, Tikveš has for several years offered wine tasting at professional‐grade winery facilities in Kavadarci, where it has successfully garnered business from Macedonians, Slovenians, and Serbs.86 Other major wine producing companies include Alexandria and T’ga za Jug.

Opportunities

The climate and heritage of wine making in the Tikveš region make the cultivation of wine tasting and wine tourism promising, as the wine producing industry is already set in place. In addition, municipal mayors in the region (Negotino, Kavadarci, Demir Kapija and Rosoman) have come to understand the benefits that such an industry can have on their local economies, and have come together with local wine producers to form the Tikveš Wine Road Foundation. The foundation has garnered support from the EU and the Italian government, which have helped fund the founding of Macedonia’s first wine museum in Negotin.87 Opportunities for growth are promising if the region’s wine producers, tourism agencies, and municipal mayors can attract a growing base of visitors and cultivate an image of central and southern Macedonia as wine tourism hotspot. Such growth can also spur increased number of private guesthouses and the sale of local crafts and other goods, each of which can lift the local economy’s output.

Constraints

http://www.google.com/url?sa=U&start=1&q=http://www.moepp.gov.mk/WBStorage/Files/UNEP%2520‐ %2520SEPA,%2520Eng.pdf&ei=7fz‐SczxIciLtgfX0YCjDQ&usg=AFQjCNGhy0b8jvtU23cefClNfaozSxeJYg, 7. 84 Koerper. 85 Doncho Tanevsky, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 18 January 2009. 86 Koreca. 87 Wine Museum Opens in Negotino, http://www.zels.org.mk/adresar2006/en/pdf/59%2520negotino_eng.pdf&ei=oPz‐ SbyJM8Kltgfx06zFCg&usg=AFQjCNFZZNzjnk7rh1fe5934EvBnoR9EFw, 3. 85

Wine tourism faces several key constraints, however, most notably tied to lack of infrastructure and lack of market confidence on the part of wine producers. Regarding the former, signage and adequate accommodations are two key obstacles that wine tourism promoters are working to overcome. Bureaucratic processes have slowed the ability of wine producers to create their own signage where municipality‐administered roads have lack them. 88 In addition, small‐scale accommodation is insufficient throughout the region. Wine tasters that are wooed to Tikveš thus only spend several hours at a particular winery, and then move onward to other destinations such as Ohrid. Finally, a number of wine producers simply do not believe they have resources or capacity to develop on‐site facilities sufficient to lure tourists to such a degree that they can make good on their investments. Other constraints to the growth of this subsector are identical to other tourism subsectors in Macedonia, namely lack of price competiveness and adequate and inexpensive flight travel through Alexander the Great International Airport.89

6.6: Tourism Services

This section provides an overview of tourism services such as hotel, restaurants, and tour agencies.

6.6A: Accommodation and Food Services

The hotel industry is unevenly distributed and equipped across the country, with a cluster of hotels in Skopje, largely for business and diplomatic travelers, and along or near Lake Ohrid. The two cities offer roughly 100,000 beds.90 The 2009 World Travel & Tourism Competitiveness Report, however, ranked FYR Macedonia’s hotel infrastructure 63rd (out of 133 nations), indicating the need for strengthening in this sector. 91 However, the Hotel Association of Macedonia (HOTAM) is working to promote standardized best practices, strategies, and marketing among FYR Macedonia’s hotel owners. Established in 1992 and restructured in 2004, HOTAM is explicitly focused in raising the standards of the hotel industry in FYR Macedonia in anticipation of the EU accession process: “As the country strives to move toward a market economy and eventual integration into the EU the sustainable development of Macedonian tourism and the promotion of inbound travel from foreign markets has become a primary activity of HOTAM.”92

88 Koreca. 89 Ibid. 90 Zoran Nikolovski, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 13 January 2009. 91 Blanke and Chiesa, ed., “Country Profiles,” 257. 92 Balkan Alliance of Hotel Associations, “The Hotel Association of Macedonia,” Balkan Alliance of Hotel Associations, http://www.balkanalliance.org/macedonia.php. 86

Restaurant offerings are typically traditional Macedonian or Italian cuisine, with few alternatives outside of Skopje and Ohrid. Quality of service remains an issue. For instance, the World Travel & Tourism Competitiveness Report ranked FYR 83rd (out of 133) in terms of “extent of staff training.”93

Opportunities

While there is little in the way of hostels in FYR Macedonia, the number of guesthouses appears to be on the rise, though no exact figures on their number could be found for this study. Guesthouses are particularly popular in Ohrid, where one needs merely to walk down any street in the old city to find signs advertising low‐cost, intimate accommodations in a private home. This segment of the hotel industry shows promise for three reasons: first, the price of accommodation is often low and attractive to outside visitors. Second, the intimate nature of the accommodations is attractive to many Western European visitors, who come to FYR Macedonia hoping to engage in the local culture, including local cuisine. Finally, independent guesthouse owners are now able to utilize the internet to market their accommodations and accept online reservations independently. For the educated and savvy travelers to which FYR Macedonia is an attractive destination, being able to research and book such accommodations online is very important.

As FYR Macedonia works to develop its tourism industry in line with tourists seeking cultural authenticity and natural beauty, the success of such small‐scale accommodations will be key to the industry as a whole.

In addition to more traditional hotels, there are a small but growing number of lodging facilities that include spa and medical treatment. One center of such activity is Otesevo, on the northwest shores of Lake Prespa and within the confines of Galičica National Park, where AquaPura International, a Portuguese company, is investing in the creation of a large spa facility on fifty hectares of land and including a hotel with seventy rooms and suites, fifty villas, a 2,000 square meter spa centre, business centre, a ski centre, and a hunting reservation.94

Constraints

Lack of proper service training in the hotel industry is endemic in FYR Macedonia. Nearly every international agency that has worked on tourism development in the country – USAID, SNV, UNDP – has made service training one of its primary focuses. While it is perhaps premature to judge the ultimate effects of such training in different locations across the country, at present the condition of service is

93 Blanke and Chiesa, ed., “Country Profiles,” 257. See also, Press Online, “Aquapura International Investment Project Promoted in Otesevo,” Press Online, http://www.pressonline.com.mk/default‐ en.asp?ItemID=D1AB31ED79C8374F92277B7DCC0BF69A. 94 Press Online, “Aquapura International Investment Project Promoted in Otesevo,” Press Online, http://www.pressonline.com.mk/default‐en.asp?ItemID=D1AB31ED79C8374F92277B7DCC0BF69A. 87

still described as poor by most industry officials and observers.95 Much of this has to do with the personalized nature of the industry, where family members are employed without respect to their vocational abilities. Much the same is true in the food service industry.

Labor laws also appear to conflict with the aspirations of hotel management staff to peg their employment numbers to seasonal variations. According to Doncho Tanevsky, head of the Balkan Alliance of Hotel Associations (BAHA), FYR Macedonian legal codes prohibit the employment of hospitality workers on a casual basis. This directly impacts hotel and other tourism facilities that operate according to certain tourism seasons and cycles and find themselves forced to employ seasonal workers outside the legal code. In doing so, taxes are not paid to the government and the industry remains too deep in the informal sector.96

Rating standardization is also lacking in the hotel industry due to pressures from both the public and private sectors. Regarding the former, apparently there is a lack of political will to enforce existing legislation to being the process of applying a national standard to hotels throughout FYR Macedonia. There is also a natural reluctance on the part of many hotel owners to resist national rating lest their own informal rating system prove to be inflated.97

6.6B: Tour Operators and Agencies

An increasing number of tour agencies and operators are turning to inbound travel geared toward travelers from Western Europe and beyond. ExploringMacedonia.com, the official National Tourism Portal established in 2005, is a good resource for information on the country, including its cultural and natural offerings, and includes suggested itineraries and accommodations. Importantly, it houses a list of a dozen tourism agencies throughout the country and abroad that facilitate travel to, and within, FYR Macedonia. In addition to the official site, inbound tour operators targeting foreign travelers have also begun their own websites providing clear itinerary and package options in English. Most notable among these are DiscoverMacedonia.com and VisitMacedonia.com. The former provides three sets of ”Walking” tours and “Culture” tours which hone in on specific areas of the country, or an amalgam o the sites together in an extended tour. The presentation of information on the site is thorough and attractive.98 VisitMacedonia, also an inbound tour operator, brings together information on its own cultural and natural tours with those of Italian, German, and Dutch agencies that offer them distinct tours, such as “Monasteries of Macedonia” as well as two and three country tours of each possible combination (Albania‐Macedonia‐Bulgaria, Greece‐Macedonia‐Bulgaria, and so on).99

95 Koreca; Ramadani; and, Chris Deliso, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 13 January 2009. 96 Tanevsky. 97 Ibid. 98 Discover Macedonia, “Walking Tours,” Discover‐macedonia, http://www.discover‐ macedonia.com.mk/tours/walking‐tours/. 99 Visit Macedonia, “About Us,” Visit Macedonia, http://www.visitmacedonia.com.mk/offers.asp?p=54&h=1. 88

Opportunities

Opportunities in the tour agency services sector are quite numerous. In general, it appears that since the dissolution of Yugoslavia, operators have begun to see the importance of inbound travel to FYR Macedonia rather than simple outbound service provision. Nearly all tour operators have developed at least the initial framework for regional tourism, integrating travel to other Balkans counties into their future itineraries.100

Constraints

Financial resources and marketing capacity continue limit smaller inbound operators, particularly those working outside of Skopje and Ohrid. In addition, a number of key regional tour operators are in fact based in Western Europe. It remains to be seen just how much local inbound agencies can reign in the market for such tours when competing with foreign companies with larger resources and more established connections to their clientele.

6.7: Regional Tourism Integration

Opinions within the industry are mixed, but it is clear that private sector actors are leading the way to regional integration among those employed in the tourism industry throughout the Balkans. The Balkan Alliance of Hotels Associations (BAHA) is the largest and arguably most important actor working toward regional integration in FYR Macedonia. Headed by Doncho Tanevsky, a hotel owner in Ohrid, BAHA aims to connect hoteliers across the region (current member countries include Albania, Bosnia & Herzegovina, Bulgaria, FYR Macedonia, Montenegro, Romania, and Serbia), as well as travel agencies and tour operators, to work toward standardizing practices among tourism leaders, to ensure confidence in consumers that BAHA members are trained in tourism industry best practices and to push respective governments to create policies supportive to tourism growth.101

At the same time, however, public sector officials seems less visionary in their approach to cross‐border cooperation. One Ministry of Economy official, for instance, envisions regional tourism integration as likely between Albania, FYR Macedonia, and Bulgaria, but not amongst the former Yugoslav republics, even going so far as to say “there is no chance for a program with Bosnia.”102

6.8: Overall Context Evaluation

100 Goran Janevksi and Arsenije Janevski. 101 Balkan Alliance of Hotel Associations, “The First Official Meeting of the Balkan Alliance of Hotel Associations (BAHA),” Balkan Alliance of Hotel Associations, http://www.balkanalliance.org/novost6.php. 102 Name withheld. 89

Among the more popular destinations in the former Yugoslavia, FYR Macedonia is still working to regain a positive image in the eyes of tourists after the near collapse of the industry from 1991‐2001.103 It has strong historical and natural offerings, as well as promising prospects for wine tourism, but must overcome deficiencies in proper signage, service capacities, market analysis and promotion, and the proper implementation of existing strategies by the government (both national and municipal) and international agencies. At the same time, chronic unemployment and a forecast recession for 2009 may work to retard such efforts.

103 Goran Janevksi and Arsenije Janevski. 90

Section 7: Montenegro

7.1: Geographic, Historical, and Political Context

Situated in the south‐west Balkans, Montenegro is a relatively small and mountainous state bordered by Croatia, Bosnia and Herzegovina, Serbia, Kosovo and Albania, with the Adriatic Sea to its west. Its mountainous terrain has resulted in a diverse climate, with dry summer and mild, rainy winters.

Although Montenegro is currently politically stable, the country has had a tumultuous political history. After World War I, the country became absorbed by the Kingdom of Serbs, Croats and Slovenes, which subsequently became the Kingdom of Yugoslavia in 1929. Source: CIA, The World Factbook, Following the Second World War, it became a constituent republic of 2009. the Social Federal Republic of Yugoslavia which was dissolved in 1992. Despite a referendum and a large majority of pro‐independence Montenegrins, the country voted to remain in the federation with Serbia. During the Bosnia war from 1991‐1995, Montenegro, together with Serbian troops, participated in persecution against Bosnian refugees. However, in 1996 the Federal Republic of Yugoslavia severed ties with Montenegro and Serbia; Montenegro subsequently formed its own economic policy and initially adopted the German Deutsche Mark as its currency, followed by the euro. Montenegro finally ended its union with Serbia and became independent in mid‐2006.1

Following independence, Montenegro signed a Stabilization Association Agreement (SAA) in 2007 and subsequently submitted an application to the European Commission to join the European Union in December 2008.2 Although the country is making favorable progress and strides towards harmonizing its policies with those of other EU nations, the EU is hesitant to further eastward expansion. In particular, Germany and the Netherlands strongly believe that Montenegrin admission will quickly lead to applications by other countries in Western Balkans, which may add pressure to existing tensions surrounding issues of employment and foreign workers in an already tenuous economic and political environment.

The Montenegrin political system is a parliamentary representative democratic republic, whereby the Prime Minister of Montenegro is the head of the government and is appointed by the Parliament.

1 Economist Intelligence Unit, “Country Profile 2008: Montenegro,” Economist Intelligence Unit, http://www.eiu.com, 7. 2 Economist Intelligence Unit, “Economies in Transition; Eastern Europe and the Former Soviet Union,” Economist Intelligence Unit, http://www.eidu.com. 91

Montenegro has a multi‐party system and thus the parties need to work together in cooperation to form coalition governments in order to govern effectively. Parliamentary elections were held in March 2009 with sixteen parties and coalitions participating. The election was called early by the ruling party and main opposition party leaders claim that the outcome could have been different if held at a later date as the impact of the global financial crisis would have been more profound at that time, causing voters to demand change in a difficult period for the country.3

7.2: Economic Context

During the era of former Yugoslav President, Slobadan Milosevic, Montenegro maintained an autonomous economy, separate from the federal economy and from that of Serbia, and ultimately adopted the euro rather than the Yugoslav dinar as its currency. Montenegro also collected customs tariffs and maintained its own budget, paving the way for the dissolution of the union between Montenegro and Serbia in 2006.

Although Montenegro has adopted the Euro as its currency, it only began the formal accession process to join the European Union in December 2007. This, together with membership to international institutions such as the World Trade Organization (WTO) and the International Monetary Fund (IMF), remains a high priority for the Montenegrin government.

Montenegro’s economy is booming as real GDP grew by 8% in 2006, 7% in 2007, and 6.5% in 2008, driven predominantly by tourism, retail and financial services.4 Foreign direct investment (FDI) inflows into the country have also sharply increased in recent years; Montenegro is among the top three countries in Europe in FDI per capita.5 Despite the high level of growth, the global financial crisis is likely to have a significant negative impact across all sectors. In fact, it is estimated that the country will experience no real GDP growth in 2009. For tourism in particular, the global recession threatens to reduce international travel, which is an important source of revenue for Montenegro.

7.3: Tourism Sector Overview

Montenegro’s tourism sector is quite developed and remains the highest development priority of all industries in Montenegro. According to the World Economic Forum’s Tourism Competitiveness report of 2008, tourism in Montenegro is estimated to have accounted for 24.6% of the country’s GDP and is also responsible for almost 21% of total employment.6

3 “Montenegro Party Claims Poll Win,” BBC News, 29 March 2009, http://news.bbc.co.uk/2/hi/europe/7970805.stm. 4 Economist Intelligence Unit, “Country Profile 2008: Montenegro,” 16. 5 Ibid., 7. 6 Jennifer Blanke and Thea Chiesa, ed., “Country Profiles,” ch. 2.1 of The Travel & Tourism Competitiveness Report 2009 (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html, 278. 92

The Government of Montenegro has also played a vital role in developing the tourism industry. During the 1980s, the country was a popular tourist destination for Yugoslavs and foreigners alike, particularly given its picturesque coast and developed beach front. With that in mind, the government initially attempted to promote only beach tourism and to develop projects along the coastal line. The first master plan undertaken by an international consultant shortly after independence focused solely on beach tourism and was geared towards attracting German investors.7 During the development and implementation of this first master plan, additional non‐tourism related investment entered the country; however, these initiatives were inherently unsustainable, neither protecting the environment nor the natural and human resources. The government quickly set to work creating a more participatory and holistic second master plan, one that accounts for the sustainable use of natural resources, the involvement of both the public and private sectors and the diversification of various tourism products.8

As a result of the government’s implementation of tourism growth strategies, the sector is set to experience a 5.6% growth from 2009‐20189 and tourism employment is projected to grow 2.7% over the next ten years.10 Montenegro also witnessed a 3.5% increase in registered tourists from 2007 to 2008 with a 6% increase in the number of overnight stays by tourists.11 In 2008, the origin of tourists was as follows:

Table 7.1: Montenegro’s 2008 Tourist Arrivals by Country of Origin

Country Tourist Breakdown

EU 21%

7 Slavica Vukcevic, interview by Alida Meghji, 24 February 2009. 8 Government of Montenegro, Montenegro Tourism Master Plan, (Podgorica, 2008). 9 Jennifer Blanke and Thea Chiesa, ed., “Country Profiles,” ch. 2.1 of The Travel & Tourism Competitiveness Report 2009 (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html, 278. 10 Ibid. 11 Government of Montenegro, Ministry of Tourism and Environmental Protection, Brief on the work of the Ministry in the Department for Environmental Protection, (Podogrica), 58. 93

Former USSR 12%

Serbia 37%

Former Yugoslavia (not Slovenia) 12%

Other 19%

Source: Government of Montenegro, Ministry of Tourism and Environmental Protection, Brief on the work of the Ministry in the Department for Environmental Protection, (Podogrica), 78.

The Montenegrin government recognizes however, that the country’s position is weak and that despite a 15% increase in tourism revenue in 2008, it will further deteriorate given the global financial crisis.12 In addition to that however, the country lacks the necessary financial resources, adequate human resources and a branded commercial product, all of which can severely hamper the country’s ability to remain a competitive, high‐quality tourist destination in the future.13

Despite recent strides in tourism development, there are additional structural problems that all stakeholders need to consider in order to make Montenegro a world‐class tourist destination. The first problem that needs to be overcome is infrastructure. Developing reliable and convenient transportation is concurrent with planning tourist facilities and resources. There are currently two international airports in Montenegro, located in Podgorica and Tivat; while these airports meet sufficient aviation requirements, from a tourism perspective, more is needed to overcome shortcomings. This can include anything from modernizing airport terminals to expanding airport capacity. A second important infrastructure problem is wastewater and solid waste disposal. The impression of the scenic beauty and natural resources on tourists is often impaired by the lack of city sanitary conditions. This is partially a result of the excess of waste caused by tourists in high season imposed upon the country’s inadequate and uncontrolled waste management system. Few towns in Montenegro have initiated adequate waste disposal and recycling programs.14

Despite these weaknesses, the international community has recognized the potential for the industry and has subsequently poured a significant amount of aid earmarked for tourism development into the country. In particular, a number of large international agencies such as USAID, UNDP, GTZ and SNV have joined together with the government, as well as local partners and entrepreneurs, to provide expertise in developing the sector. For example, the World Bank initiated the “Sustainable Tourism Development

12 Ibid., 41. 13 Government of Montenegro, Montenegro Tourism Master Plan. 14 Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020, (Podgorica, 2008), 28. 94

Project” in June 2007. The purpose of the project is to assist Montenegro in devising and implementing an integrated coastal zone management approach to alleviate coastal degradation and foster environmentally sound tourism development. This will be accomplished through institutional capacity building to protect against uncontrolled construction and development along the coastal areas, and making initial investments into priority projects, such as the first phase of the regional water supply system for the coastal areas, to foster development of high‐quality tourism.15 USAID is also funding projects to help fuel local economic growth and help develop coastal and environmental activities; these basic infrastructure activities are necessary in order to promote a stable tourist economy.

Despite copious aid flowing into Montenegro, some local agencies are becoming frustrated by the lack of tangible progress being made. For example, there have been a plethora of trainings and workshops held for small and medium sized enterprises and yet no programs have been initiated to implement the findings and results of said workshops. As a result, local entrepreneurs have slowly stopped attending these trainings.16 In addition, the country needs to continue to mold itself into a unique tourist destination, one that is able to compete with its local Mediterranean competitors.17

7.4: Legal Context

Montenegro has made great strides in 2008 in terms of environmental protection and tourism. Rather than having two separate ministries dedicated to tourism and environmental protection, legislators have come together to form one joint ministry, the Ministry of Tourism and Environmental Protection.18 The fact that the two ministries have been combined into one indicates that the government is committed to protecting the environment while promoting tourism, particularly environmental tourism. The ministry is further sub‐divided into three departments, one department of which is dedicated solely to environmental protection.

At the end of 2008, the government adopted the National Environmental Policy for Montenegro, which included an increase of financial allocations for the environment to 1.5% of GDP. The document defined key directions that the ministry plans to take over the next five years towards environment‐related activities, as well as activities integrated into all government ministries, including waste management, water supply, conservation and protection of the environment and climate change.19 On waste management, the government adopted a national plan for the year 2008 to 2010 that enforced the permits system for waste disposal and recovery operations as well as launched a pilot project on waste

15 World Bank, Sustainable Development Tourism Project (Montenegro), http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=2 28424&Projectid=P093461. 16 Vukcevic. 17 Ute Dannenmann, interview by Alida Meghji, 18 February 2009. 18 Government of Montenegro, Ministry of Tourism and Environmental Protection, Brief on the work of the Ministry in the Department for Environmental Protection, 8. 19 Ibid., 12. 95

separation.20 The framework for such legislative directives is the harmonization policy with the European Union. Areas of harmonization with the EU include: the Law on Environment, the Law on Strategic Environmental Impact Assessment and the Law on Environmental Impact Assessment.21 These laws establish the institutional framework as well as the legal and strategic mechanisms concerning the environment in Montenegro and lay the foundation for sound environmental protection across all institutional levels. In terms of tourism however, the government also adopted the Law on Protection of Nature in 2008 and the Law on National Parks.22 Based on the plethora of legislation adopted by the government in the last two years, the country is well on its way to not only preserving its natural resources, but to making it a high‐quality tourist destination.

In addition, Montenegro has developed and passed a comprehensive tourism law for performing tourism trade and hospitality services. The law includes provisions for various tourism products including health tourism, agro‐tourism and youth tourism, thereby demonstrating the government’s commitment to developing the industry. The law also explicates penalties for failure to comply with the law. The intention of such a comprehensive document was twofold: to regulate the tourism and hospitality industry as well as to create a stable picture of Montenegro’s tourism sector.23 Although difficult to gauge the laws’ success in such a short time frame, the law is attractive to domestic and foreign investors alike.

7.5: Tourism Products

This section delineates the tourism products that are distinctive to Montenegro’s tourism sector: beach tourism, nature tourism (including skiing and mountain tourism), and cultural and historical tourism.

7.5A: Beach Tourism

As noted above, beach tourism forms the traditional arm of Montenegro’s tourism sector. Montenegro’s warm summer climate coupled with sandy beaches and sea, make Montenegrin beaches an ideal summer get‐away for European tourists. Developing Montenegro’s beaches have been a government priority since the 1980s when the first tourism master plan was originally developed. The coast has become heavily developed with hotels and

20 European Union, European Commission, Montenegro 2008 Progress Report, 5 November 2008, (Working Document No. 2696), http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/montenegro_progress_rep ort_en.pdf, 38. 21 Government of Montenegro, Ministry of Tourism and Environmental Protection, Brief on the work of the Ministry in the Department for Environmental Protection, 16. 22 Ibid., 18. 23 Government of Montenegro, Republic of Montenegro Tourism Law, (Podgorica), 49. 96

restaurants growing at an accelerated pace. The two main regions for beach tourism are the sandy beaches of Ulcinj in the south and the rocky coast of Budva in the southwestern part of the country. Despite the rapid pace of development, eighteen of Montenegro’s beaches have met the prestigious Blue Flag environmental standards.24 The eco‐label is awarded to high environmental standards and excellent safety and sanitary conditions.25 The flag is judged based on four criteria: water quality, environmental education and public awareness, environmental management and safety and services.26

• Ulcinj Sandy • Velika Plaza Beaches • Valdanos

• Budva

Rocky • Tivat Coastline • Sutomore

Ulcinj

Ulcinj is the southernmost city along the Montenegrin coast and has a sandy coastline over thirty kilometers long. The coastline is home to the longest sandy beach on the Adriatic Sea27 with a number of smaller beaches, catering to the needs of every beach tourist. During the main tourist season, from May to September, Ulcinj plays host to approximately 60,000 tourists; during the peak months, this number climbs to over 80,000.28

The city and surrounding areas have been virtually untouched by industrial pollution29. Factories and warehouses have been noticeably absent from the southern coast; as a result, the majority of the population relies upon the tourism industry as their primary source of income. This involves renting their homes out as guesthouses, selling souvenirs, and working in restaurants, particularly during the peak season. During a successful tourist season, workers gross sufficient income to last them through the winter months and subsequently commence preparations for the upcoming summer season. In

24 Government of Montenegro, Ministry of Tourism and Environmental Protection, Brief on the work of the Ministry in the Department for Environmental Protection, 70. 25 Keep Sweden Tidy Foundation, “The Blue Flag Environmental Award,” Keep Sweden Tidy, http://www.keepswedentidy.org/sa/node.asp?node=448. 26 “Blue Flag on Display at Eighteen Beaches,” Daily Press‐Vijesti, 4 July 2008, http://www.newsmontenegro.com. 27 Big Beach spans thirteen kilometres along the Adriatic Sea. 28 Nikola Nikolaidis, “Ulcinj’s Summer 2008 Season Led by Major Resorts,” TravelUlcinj.com, 18 September 2008, http://www.ulcinjtoday.com/ulcinj‐news.html. 29 Ibid. 97

2008, however, Ulcinj recorded a drastic decrease in the number of tourists during the summer months. By the end of July of 2008, only 20,000 tourists had visited the southern coast and hotels and restaurants experienced a 40% decline in revenue. During that time however, the largest hotel resort in Ulcinj, Hotel Mediteran, was filled to capacity from mid‐May through to mid‐October with tourists arriving mostly from Eastern and Western Europe.30 The resort was able to provide excellent service, a wide variety of entertainment options thus catering to needs, and affordable prices. Smaller guesthouses are unable to provide such amenities, which are slowly becoming the need and desire of tourists arriving in Ulcinj. There is a demand for higher quality hotels and resorts coupled with diverse options for daytime activities, such as golf, tennis and horseback riding, and night‐time entertainment such as clubs and bars.31 Source: www.visit‐montenegro.com Another constraint hindering tourism development in Ulcinj is the lack of tourist information centers and signage around the city. It is difficult to travel throughout Ulcinj and surrounding areas as many people do not speak English and other foreign languages.32 33

Budva

While Ulcinj and the southern coast of Montenegro are beach resort destinations which cater to a specialized group of tourists, the rocky coast of Budva is able to attract a different niche of tourists, such as younger travelers on a budget, also looking for a beach vacation. The Budva coast is located in southwest Montenegro, along the Adriatic Sea, yet slightly north of Ulcinj. The coastline is 34 twenty‐one kilometers long with seventeen different beaches. In the past, approximately 50% of overnight stays registered in the country have been in Budva; however, in the last two decades, private lodgings and accommodations have been built, yet have not been maintained.35 Whereas Budva has an accommodation capacity of only 21,000 beds, at least 60,000 are currently available, thus overstretching the limits of the beach and its surrounding infrastructure.36

30 Ibid. 31 Ibid. 32 Montenegro adopted its own official language in 2007. The language is similar to the Serbian language and is recognizable in neighboring countries such as Albania, BiH, Croatia and Serbia. 33 Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020. 34 Visit‐Montenegro.com, “Budva,” Visit‐Montenegro, http://www.visit‐montenegro.com/cities‐budva.htm. 35 Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020, 68. 36 Ibid. 98

Budva appeals to tourists with a lower budget than those traveling to Ulcinj. While the town does have a number of large and small hotels, it also provides smaller guest houses and camp grounds for tourists looking to engage in various activities.

While Budva is an attractive destination, particularly for travelers on a budget, there are a number of constraints that deter its development as a sustainable tourist destination. First, water and sanitation infrastructure in the area is poor and cannot cope with the influx of tourists during the peak season. As tourism development in the area has expanded exponentially, the construction of adequate infrastructure has not followed suit. In the summer of 2008, tourists arriving in Budva, both in communal accommodations and private lodgings faced water shortages.37 The city faced additional problems with the power supply system, which subsequently left water distribution facilities without the means to provide the population with an adequate supply of water. Both local officials and the national government have addressed these weaknesses in tourism plans, including the Montenegro Tourism Development Strategy 2020, yet fears persist that the situation will not improve in the short term.

Therefore, while Budva has the potential to re‐engineer itself as an ideal tourist destination, the above mentioned weaknesses are hindering its growth. In order to grow, the area needs to capitalize upon its potential to develop into a quality beach town with a wide array of tourist activities and attractions.

7.5B: Nature and Eco‐Tourism

Montenegro’s scenic landscape, including its high rugged mountains and expansive countryside, create ideal conditions for the development of nature tourism.

Skiing

37 Visit‐Montenegro.com, “No Tap Water Before Sunset,” Visit‐Montenegro News, 22 July 2008, http://www.visitmontenegro.com/article‐mne‐6605.htm. 99

With its mountainous terrain and natural scenic beauty, Montenegro provides an ideal environment to promote skiing as a tourism product. Currently there are several winter resorts for both downhill and cross‐country skiing, with the most popular being in Kolasin and Zabljak, alongside the picturesque mountains of Bjelasica and Durmitor. In order for mountain tourism to be successful in Montenegro, it must be a sustainable activity; in particular, legislation and activities must be initiated in order to protect the environment, both on a local level, through waste management and water supply programs, as well as on a national level, such as the prevention of climate change and global warming. As detailed above, the Government of Montenegro is committed to environmental protection, particularly as it greatly benefits nature tourism. In effect, tourism has the ability to be a mechanism for conservation and protection.

The development of skiing as a tourism product has been an opportunity identified by the Government of Montenegro and has been approved in their Strategic Framework. The country already has a number of winter resorts established which currently cater mostly to local and regional tourists.

However, there are a number of constraints facing the country in developing its market for skiing. First, the market for skiing is highly competitive. In the European Union, current popular ski destinations for tourists from around the world include the France, Germany, Austria and Switzerland as well as Slovakia, Romania and Bulgaria as a budget level ski destinations.38 In order for to Montenegro to compete with these already established ski resorts, significant investment is required. As a starting point, Montenegro must establish new and modern ski resorts as well as upgrade their existing facilities. The town of Bansko in Bulgaria for example, has already invested more than thirty million Euros into establishing high‐quality ski resorts.39 In addition, ski development cannot take place without first ensuring that there is sufficient water supply to make snow. Water shortages, however, already exist in the Zablajak‐ Durmitor region; homes around Zablajak’s popular glacier lake, Crno Jezero, already face severe water shortages in the summertime when the level of tourism is high.40 Further negative environmental effects of increased ski tourism in the mountainous regions include: global warming, pollution and the degradation of bio‐diversity on the mountains as a result of increased machinery.41 Therefore, it is recommended that Montenegro continue to promote ski tourism on a local and regional level but not make substantive investment into further development. For example, the existing Savin Kuk lift in Durmitor National Park can continue to operate as its current facilities and trails can accommodate current tourism demand with room for likely growth in the future. Any additional large investments will be unsustainable and unprofitable for the country overall.

38 Oliver Bennett, “Program for Development of Mountain Tourism in Montenegro,” Emerging Markets Group,” PowerPoint, 7. 39 Bennett, “Program for Development of Mountain Tourism in Montenegro,” 8 40 Martha Honey, Arthur DeJong and Auden Schendler, Implementing Sustainable Winter & Summer Tourism in Northern & Central Montenegro: An Assessment of Current Strategies and Next Steps, (Submitted to Rockefeller Brothers Fund and UNDP), 27 November 2005, 7. 41 Bennett, “Program for Development of Mountain Tourism in Montenegro,” 9. 100

Aside from skiing, other forms of winter mountain tourism that are not detrimental to the environmental can and should be promoted. For example, cross‐country skiing, snow shoeing tobogganing, sledding and snowmobiling can be developed and promoted without building additional infrastructure that will harm the natural landscapes of Montenegro. Furthermore, they can be developed without the substantial investment that would be required for ski tourism.

National Parks

Montenegro is home to four national parks (Durmitor, Biogradska Gora, Lovcen and Skardarsko Lake). The touristic offering and potential of each is described below, as well as some of the constraints inherent in each.

Durmitor National Park was created in 1952 and includes Durmitor Mountain, the center of Montenegrin mountain tourism.42 The mountain reaches an elevation of 2,522 meters and covers an area of approximately 400 square kilometers.43 In 1980, the park was selected as a UNESCO World Heritage Site and has since attracted thousands of tourists for winter tourist activities such as skiing and sledding as well as Source: www.visit‐montenegro.com summer activities, including hiking and biking.

Plans proposed by the International Institute for Tourism (IIT) to improve and expand ski tourism in the Park include developing a ski resort and constructing new infrastructure to support such increased capacity of ski tourists. However, such plans would inevitably involve significant tree removal and destruction of the wilderness, thereby endangering the national park’s identification as a UNESCO World Heritage Site. Furthermore, the Zabljak‐Durmitor region is between 1400 and 1800 meters in elevation; although this is adequate for skiing, the park has been identified as a mid‐elevation ski zone and may be negatively affected by climate change.44

Although Durmitor National Park and the Montenegrin tourism strategy overall is working to promote year‐long sustainable tourism, these ongoing developments, particularly to develop winter tourist activities, must not interfere or hinder summer tourist activities or the environment in which they are undertaken.

Biogradska National Park is the smallest of the four national parks in Montenegro, spanning 5400 acres.45 The park is located in the center of the country, in the mountainous region of Bjelasica

42 United Nations Educational, Scientific and Cultural Organization, “Durmitor National Park,” World Heritage List, http://whc.unesco.org/en/list/100. 43 Ibid. 44 Honey, DeJong and Schendler, Implementing Sustainable Winter & Summer Tourism in Northern & Central Montenegro, 24. 101

surrounded by mountains, glaciers and one low land lake, Lake Biograd.46 Although Biogradska Gora is the smallest of the four national parks in Montenegro, it is well known for its diversity of flora and fauna. There are twenty‐six different habitats of plants, with 220 different types of plants, 150 species of birds and ten species of mammals living in the park together with eighty‐six kinds of trees.47 The park was officially designated a National Park in 1952 and since then has become an attractive location for scientific research. The local and national government work to preserve its untouched beauty, particularly the forest reserve (with trees dating back to over 500 years) and large glacier lake in the center of the forest. Furthermore, Biogradska Gora abounds in cultural and historical heritage and importance, including national monuments and archaeological sites. Although the government’s tourism plans include developing a more year‐round tourism base, any development which threatens to harm or destroy the biodiversity of Biogradska Gora will be prohibited. It will therefore be difficult to develop winter tourism in this particular national park. Source: www.travelandleisure.com Lovcen National Park is located in the southwest part of Montenegro, in the rocky region of the Dinara Alps, bordered by the coastal region of Budva and the western part of the town of Cetinje.48 The park is 6220 acres and surrounded by the slopes of Mountain Lovcen.49 Similar to Biogradska National Park, flora and fauna play an important role in the biodiversity of the park. However, the park is more well‐known for the mausoleum of the Montenegrin ruler and poet, Petar II Petrovic Njegos. In 1845, a church was built on the peak of Mount Lovcen by Montenegrin Prince‐bishop Petar II Petrovic Njegos, in honor of his uncle, Petar I Petrovic Njegos. Petar II left instructions in his will before his death in 1851 that he be buried in the church, from where all of Serbia could see him. The mausoleum stands at the top of 461 stairs and was officially opened to the public in 1974.50

Skardarsko Lake (also known as Lake Skadar) and its surrounding areas were officially declared a National Park in 1968.51 The majority of the lake is in Montenegro; however, approximately one‐third is in neighboring Albania.52 Similar to the other national parks and surrounding lakes, Skadarsko Lake is

45 Visit‐Montenegro.com, “National Parks – Biogradska Gora,” Visit‐Montenegro, http://visit‐ montenegro.com/tourism‐np‐biogradskagora.htm. 46 Ibid. 47 Ibid. 48 Visit‐Montenegro.com, “National Parks – Lake of Scadar,” Visit‐Montenegro, http://www.visit‐ montenegro.com/tourism‐np‐skadarskolake.htm. 49 Ibid. 50 Ibid. 51 Discover‐montenegro.com, “The Skadar Lake,” Discover Montenegro, http://discover‐ montenegro.com/skadarsko‐jezero.htm. 52 Ibid. 102

home to abundant species of flora, fauna, fish and mammals. In fact, the Ramsar Convention on Wetlands included the lake on its list of wetlands of international importance.53

Aside from the habitats of fish and mammals however, Scadarsko Lake is also well‐known for its farming and fishing village and cultural and historical monuments. The lake is surrounded by eighteen historical monuments dating back to the 11th century AD.54 (See 7.5C: Cultural and Historical Tourism for more information).

Hiking and Biking

It is thus apparent that Montenegro is well‐suited and developed for hiking and cycling activities. The national parks are naturally the ideal destination for such activities. Recognizing this potential, the Montenegrin Ministry of Tourism and Environment undertook a number of activities to create conditions for the development of hiking and mountain biking trails. The government implemented the national project “Hiking and Biking” in July of 2008 which sought to create a national network of hiking and biking trails, over 6000 kilometers in length. 55 Furthermore, the project will include the development of appropriate signage for tourists along these routes and detailed promotional maps and brochures will also be developed and approved.56

The government is clearly committed to developing sustainable tourism in and around the national parks for hiking and biking activities. With that in mind however, there is a danger of unsustainable accommodation being constructed in order to accommodate the influx of tourists.

While the Montenegrin national parks are well‐suited for hiking, biking and scenic summer travels, there has been less focus in the past on developing year round tourist activities

Eco‐Tourism

Montenegro’s natural beauty and high biodiversity offer the tourism industry a new potential product, to promote ecotourism. However, the majority of summer tourists make their way to the coast, rather than the mountainous regions of the country. However, competition between neighboring countries in region for summer beach tourists has increased and thus Montenegro needs to develop distinct new

53 Ibid. 54 Government of Montenegro, Strategic Action Plan for Skadar Lake, (Podgorica), 6. 55 Government of Montenegro, Ministry of Tourism and Environmental Protection, Brief on the work of the Ministry in the Department for Environmental Protection, 67. 56 Ibid. 103

tourism products in order position itself above the competition. As ecotourism is a recent trend amongst nature tourists, there is no specific region that has been designated as a market leader.57

The government, together with international and local agencies, have made attempts to shift their strategic focus on tourism towards nature and adventure.58 In particular, Durmitor National Park and the Durmitor region have the potential to significantly contribute to tourism development in Montenegro. An eco‐tourism strategy for the Durmitor region has been developed in cooperation with UNDP in order to not only promote hiking and biking within the national park but to conserve the environment and improve the well‐being of the local people.59 Such ecotourism programs minimize the negative aspects of conventional tourism on the environment and protect the culture and integrity of the surrounding population.

The Durmitor region has a number of ideal natural assets including mountain ranges, massive canyons and pristine natural surroundings. As mentioned above, Durmitor National Park is not only a nationally protected site, but was named a UNESCO World Heritage site in 1980. The park currently offers a number of summer activities, such as hiking, biking, rafting, Source: Oliver Bennett, “Program for mountaineering, bird watching and orienteering, to name a Development of Mountain Tourism in 60 Montenegro,” few. In addition however, the Durmitor region is also able to provide offerings to ecotourists which will provide them with a distinct advantage over neighboring countries.

First, Durmitor region is able to offer eco‐tourists the opportunity to stay in local, traditional accommodations. 61 Eco‐tourists are seeking ecologically friendly accommodations which are sustainable and respect the local culture and people. While current accommodations are traditional in form, new eco‐ tourist friendly hotels can also be designed which are ecologically friendly and rely upon natural energy sources, for example.

Despite its competitive advantage, the development of eco‐tourism in the Durmitor region faces a number of challenges which must be overcome in order for it to gain a competitive advantage. At the

57 Sustainable Tourism Consulting Team, Eco Destination Durmitor: A Strategy for Sustainable Tourism Development in the Durmitor National Park Region, (Submitted to the Ministry of Tourism, Republic of Montenegro and UNDP), 10 July 2006, 32. 58 Garret Tankosic Kelly (United Nations Development Programme), 9th Meeting of the Conference of Parties for the Convention on Biodiversity, Biodiversity Protection in Montenegro – a catalyst for sustainable and inclusive economic growth, Official Record, 27 May 2008, http://www.undp.org.me/home/archive/bonn/GTK%20COP9%20Speech%20Bonn%2027%20May%2008%20ENG.p df, 1. 59 Sustainable Tourism Consulting Team, Eco Destination Durmitor, 5. 60 Sustainable Tourism Consulting Team, Eco Destination Durmitor, 16 61 Sustainable Tourism Consulting Team, Eco Destination Durmitor, 43. 104

moment, tourists visiting the Durmitor region stay only for a short while, one to two days. There is no adequate tourist infrastructure in place, particularly organized tours to facilitate large numbers of tourists arriving in the region.62 It was found that 50% of eco‐tourists prefer trips lasting eight to fourteen days.63 Eco‐tourism activities, complete with experienced guides and tourism information, are not readily available, thus hampering the tourist potential of the area. There is a clear opportunity for entrepreneurs to develop specialized tours in the region and capitalize upon the offerings detailed above. For example, eco‐villages can be developed which take advantage of the already‐established local accommodation while developing traditional activities for tourists.64

7.5C: Cultural and Historical Tourism

In addition to beach and nature tourism, the country has the potential to promote its culture and history, particularly in the town of Cetinje, which is at the base of the Lovcen mountains and the areas around Lake Skadar. Montenegro’s culture has been shaped by a number of influences over the years, including Orthodox, Slavic, Central European, Islamic and Adriatic cultures.65

Culture • Cetinje

and • Lake Skadar history • Lovcen

Although Podgorica is the capital city of Montenegro, Cetinje was the old capital, or the former royal capital city, and thus has significant cultural and historic importance. Cetinje was founded in the 15th century after the Turks forced Ivan Crnojevic, the ruler of Zeta, to move his capital to the base of Mount Lovcen.66 Subsequently, Ivan built his court and a monastery, and Cetinje rapidly progressed as the new capital under his rule.67 The capital however, was attacked a number of times over the next two centuries and the monastery and court were destroyed and rebuilt. It was only at the end of the 17th century, under the Petrovic dynasty, did Cetinje begin to flourish again; rapid urbanization commenced

62 Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020, 73. 63 Sustainable Tourism Consulting Team, Eco Destination Durmitor, 33. 64 An eco‐village is a socially, economically, and ecologically sustainable rural community, where the tourist has an opportunity to become partake in the daily life and traditional activities of local people as part of a cultural experience. 65 Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020, 71. 66 The territory of Zeta is present‐day Montenegro. 67 Montenet, “History of Montenegro – Crnojevic Rule,” Montenegro—CRNA GORA, http://www.montenet.com/history/crnoje.htm. 105

with the construction of churches, libraries and theaters. Today Cetinje boasts a number of cultural attractions including: the Cetinje monastery, Vlaska church, a number of museums including the National Museum of Montenegro, the oldest library in Montenegro, the Archives of Montenegro and the Royal National Theater, to name a few.68

Cetinje is only thirty kilometers away from two main cities: the capital city of Podgorica and the popular beach town of Budva. While most of Montenegro’s road infrastructure is quite poor, these cities are linked by major highways. In addition, Cetinje is also linked to the town of Kotor through a secondary road; however, the government has plans to link the two towns together via a modern cable car.69

Despite decades of communist rule and conflict in Montenegro, Cetinje’s rich art tradition has been preserved, particularly through the Faculty of Fine Arts. As a result of USAID and IRD assistance, the faculty has been training students on souvenir craftsmanship in order to create cultural and artistic souvenirs that can then be sold in historical cities, and specifically in Cetinje.70 It is difficult to find and purchase souvenirs, especially high quality souvenirs; thus, the continued investment into the Faculty of Fine Arts will be beneficial to promoting cultural tourism and will also provide valuable employment opportunities to a number of individuals along the supply chain.

However, despite its cultural and historical significance, Cetinje was neglected as a tourist destination until well after World War II. In fact, the town was developed as an industrial center with footwear and clothing factories. Although more than 100,000 tourists visit Cetinje each year, there is no local strategy for tourism development and no professional product is being promoted to bring tourists to the area.71 While private initiatives are starting to be developed to take advantage of the potential, they are not always professional or sustainable.72

Furthermore, hardly any acceptable accommodation is available in Cetinje to house mass tourism.73 There is only one large Source: www.discover‐montenegro.com hotel, Grand Hotel, in Cetinje, which holds four hundred beds; however, if Cetinje’s cultural and

68 Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020, 71. 69 Ibid. 70 United States Agency for International Development, “Revitalization of Montenegro’s Cultural Tradition,” United States Agency for International Development Montenegro, http://serbiamontenegro.usaid.gov/code/navigate.php?Id=249. 71 British Council, “Perspectives of Cultural Tourism in Old Royal Capital Cetinje,” British Council Montenegro, http://www.britishcouncil.org/montenegro‐art‐cultural‐tourism.htm. 72 Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020, 71. 73 Ibid. 106

historical tourism is developed, adequate accommodation should be follow as well. A common fear however, is that as the culture and history of Cetinje are developed, illegal building will take place as well, threatening the formal economic development of the historic town.74

Lake Skadar and its surrounding areas is the second important historical region in Montenegro that has high tourism potential. As mentioned above, the lake is surrounded by a number of historical monuments, including monasteries, churches and settlements dating back to the 11th century AD.75 There are a number of islands in the lake upon which fortifications have been constructed, which date back to the many wars fought between the Turks and the Montenegrins.76 For example, the island of Grmozur holds a political prison built by King Nicola, which is now known as the Alcatraz of Montenegro.77 There are also a number of archaeological sites from the prehistoric, antic and early centuries located around the lake, which unfortunately have not been adequately explored or preserved.78

Although there is incredible historical significance to this area, the government acknowledges that the ecology and history of the region has not been preserved.79 As a result, they have developed the “Strategic Action Plan for Skadar Lake” which delineates a number of goals and objectives for preservation and tourism promotion.80 With regards to historical and cultural tourism development, not only do such monuments need to be preserved, but tourist information, such as signage, pamphlets, guides and other promotional material also need to be developed.

7.6 Tourism Services

7.6A: Accommodations and Food Services

As detailed above, initiatives by the government, private sector, civil society and the international community have successfully attractive tourists (both domestic and foreign) to Montenegro in recent years. In particular, foreign tourists entering the country increased by 3.61% and the number of nights stayed jumped drastically by 7.21%.81 One particularly successful initiative was the Montenegrin government’s categorization of hospitality industry facilities. By December 2008, three hundred hotels

74 Ibid. 75 Government of Montenegro, Strategic Action Plan for Skadar Lake, 6. 76 Visit‐Montenegro.com, “Cultural‐historical heritage of the Skadar/Scadar/Scutari lake region,” Visit‐ Montenegro, http://www.visit‐montenegro.com/skadar‐lake‐ch.htm. 77 Ibid. 78 Ibid. 79 Government of Montenegro, Strategic Action Plan for Skadar Lake, 6. 80 Ibid., 28. 81 Government of Montenegro, Ministry of Tourism and Environmental Protection, Brief on the work of the Ministry in the Department for Environmental Protection, 58. 107

had been categorized and thirty‐three categorized as new hotels, with two hotels rated as 5‐star hotels, nineteen rated 4‐star hotels and the remaining twelve were rated 3‐star hotels.82

Four years ago, the Ministry of Tourism and Environmental Protection, in cooperation with the Tax Administration, authorities in the coastal areas and local municipalities, initiated a “Register Your Accommodation” campaign in order to regulate private accommodation and provide tourists with more accurate information regarding hotel accommodation. The results of the campaign have been three‐ fold: first, tourists are able to make informed decisions about rental accommodation and stay in facilities which have been sanctioned by the Ministry. Second, tax revenue generated from the residential tax collected through this program is further invested in tourism‐related initiatives. In 2008 alone, 60,000 beds were registered and 6,210 permits were issued, representing a 17.88% growth compared to the previous year.83 Finally, failure to register accommodation has provided an inaccurate picture of official statistics of visitor arrivals and overnight stays. Accurate records of tourism accommodation will improve transparency and allow the government and investment community to more accurately plan for increased and improved infrastructure in the future.

In addition to focusing on hotel and lodging quality, the government also has placed limits on total accommodation capacity throughout the country, particularly along the beach front. This information is displayed below:

Table7. 2: Number and Type of Hotels by Region

2008 2020

Coast Central Mountain Total % Coast Central Mountain Total % Region region beds share region region beds share

Hotel 34,000 2,150 2,300 40,000 100,000 10,000 15,000 125,000 beds

Category % % % # % % % #

5 stars 2.5 0 0 900 2.25 15 25 10 19,000 15.2

4 stars 17.10 12.8 26.3 7,400 18.5 35 35 35 43,750 35

3 stars 17.20 14.1 22.4 7,450 18.63 35 25 35 42,750 34.2

82 Ibid. 83 Ibid., 66. 108

2 stars 55.8 1 41.1 21,550 53.88 10 10 15 17,250 13.8

1 star 7.4 0 10.2 2,700 6.75 5 5 5 2,250 1.8

Source: Montenegro Ministry of Tourism and Environment, Montenegro Tourism Development Strategy to 2020, (Podgorica, 2008), 86.

Not only has the government taken action to ameliorate hotel facilities, but private hotel owners in Zabljak have formed a number of associations, including the Hotel and Restaurant Association and the Small Hotels Association in Montenegro. 84 These associations have been supported by the international community, such as USAID, to improve its marketing and public relations and to work in cooperation to improve the quality and standard of hotels in Montenegro through collective action and government lobbying and advocacy efforts.

Despite government actions to improve hotel facilities and services, the quality of hotel service falls far behind that of its competitors in other countries, particularly Greece and Italy. There is a large need to fill the human resources gap and to improve the capacity of hotel and restaurant workers, particularly in the coastal regions.85 While the international community has attempted to step in and fill this void through numerous trainings and workshops followed by quick impact one year programs, long‐term and medium sized programs have yet to be implemented, leading to frustration by entrepreneurs and business owners.86 As a result, small and medium enterprise owners have slowly stopped sending their employees to such trainings. There is no incentive for them to attend if there is no long‐term potential gain for the industry overall.

7.6B: Tour Operators and Agencies

The Montenegrin tourism sector has grown at a rapid pace since independence in 2006; as a result, there are numerous tour operators and agencies, tour guides and online portals available for tourists to consult.

Tour Operators and Agencies

A number of tour operators and agencies have been established over the years to help international tourists enjoy their travels throughout Montenegro. Furthermore, tour operators have established tourism networks in other countries, such as the United Kingdom and Russia, to bring tourists to Montenegro. For example, the Center for Sustainable Tourism Initiatives, also operates out of the

84 Honey, DeJong and Schendler, Implementing Sustainable Winter & Summer Tourism in Northern & Central Montenegro, 12. 85 Vukcevic. 86 Ibid. 109

Regent Hotel in London to promote tourism in Montenegro and bring tourists from the UK to Montenegro.87

Online Tourist Portals

In particular, there are two main online tourist portals that are well developed and frequented by tourists worldwide: “Visit Montenegro” (available at www.visit‐montenegro.com) and “Tourism Montenegro” (available at www.tourism‐montenegro.com). These online information hubs provide up‐ to‐the‐minute information and news regarding travel and tourism in the country. Furthermore, they provide tourists with the ability to reserve accommodations and private tours, and provide information and assistance for all encompassing services such as obtaining visas and renting vehicles.

Tour Guides

As Montenegro is at an advanced stage in the development of its tourism industry, there are tour guides available to most historical and cultural sites, including the national parks, museums, galleries etc. Furthermore, the tourism law states that any tour agencies which organize tours that exceed fifteen travelers must provide a tour guide, who is an experienced professional in the industry.88 By law, tour guides must have a high school diploma, know one foreign language and pass a three‐day training course, provided by the Ministry of Tourism.89 Due to the socialist system, formal hospitality business training has not yet been introduced into the university system.90

However, while the government is trying to formalize the tour guide process, properly trained guides are not readily available in areas where tourism has not yet been developed. In Lake Skadar, for example, professionally trained tour guides are not yet present at most historical and cultural sites; thus independent travelers are at a disadvantage when traveling through such regions.

7.7: Regional Tourism Integration

Montenegro has the potential to be a popular Mediterranean destination. The government and international community are committed to the development of tourism products and services. With that in mind, however, there are a number of areas where Montenegro can work in cooperation with its neighbors in the region to improve its products and services.

The first area of improvement is in infrastructure: traveling within and outside of the country is extremely difficult, given poor road conditions and the underdevelopment of the aviation industry.

87 Vukcevic. 88 Government of Montenegro, Republic of Montenegro Tourism Law, 8. 89 Visit‐Montenegro.com, “Training for Guides,” Visit‐Montenegro News, 8 June 2006, http://www.visitmontenegro.com/article198.htm. 90 Vukcevic. 110

Regionally, countries can work together to attract foreign investment to improve such infrastructure, thereby improving tourism potential.

The second area of improvement is in the development of year‐round tourism products. Montenegro is struggling to create sustainable winter activities for tourists and can learn from its neighbors who have already established such winter products. In particular, tour operators and agencies can work together to develop packaged winter tours, thereby introducing international tourists to Montenegro’s new winter products. The cooperation can be reciprocated in the summer months when Montenegro can assist its neighbors in developing and promoting summer tourist activities and tour packages.

A final opportunity for regional cooperation involves the improvement of hotel and restaurant services. While Montenegro is committed to developing high quality hotel and restaurant facilities, the level of service provided is lacking in comparison to its Mediterranean competitors. Hotel business and vocational training followed by specific programs and projects designed to implement these new skills are essential for the development of Montenegro’s tourism services. This problem is apparent not only in Montenegro but in the other target countries and provides an ideal opportunity for regional cooperation.

7.8: Overall Context Evaluation

Despite the above mentioned areas of regional cooperation for Montenegro and its neighboring Western Balkans countries, Montenegro is at an advanced stage in its development of the tourism industry. The government is committed to making year‐round tourism development its top priority and is thus working to promote its nature and eco‐tourism as well as cultural and historical heritage. In December of 2008, the Montenegro Ministry of Tourism and Environment developed a Tourism Development Strategy to 2020. The document identifies eight key tourism products for development as well action plans to capitalize on the country’s strengths and take advantage of its opportunities. The strategy also includes an action plan and key actors for funding and implementing expansionary activities until 2020.

111

Section 8: Serbia

8.1: Geographic, Historical and Political Context

The Republic of Serbia is located in the heart of the Western Balkans covering 88,361 square kilometers and contains two autonomous provinces: Vojvodina and Kosovo‐Metohija. 1 Northern Serbia, the region of Vojvodina, is flat, while its central and southern areas are comprised of hills and mountains. Out of its numerous mountains, fifteen of them reach the height of over 2,000 meters, the highest one being Djeravica, part of the Prokletija range. As of January 2008, there were 7,365,507 people living in Serbia;2 according to the latest census from 2002, 82.86% of its then 7.50‐million population were Serbs, 3.91% Hungarians, 1.82% Bosniaks, 1.08% Yugoslavs, 0.92% Montenegrins, 0.82% Albanians, and the rest are other ethnic Source: CIA, The World Factbook, 2009. minorities.3 Most of the population, 6.37 million, belongs to the Christian Orthodox faith, followed by Catholicism at 0.41 million and Islam at 0.24 million.4 The Serbian dinar, under a floating regime, is the country’s official currency.5

Serbia’s history began in the 7th century. Following several occupations by then major powers, Serbia regained its independence in 1165 and became the Kingdom of Serbia in 1346. Serbia was able to fight off the Ottoman army in 1389 but the kingdom inevitably fell to the mighty Turks seventy years later. In 1815, Serbia was able to negotiate for partial autonomy and was later recognized as a principality of the Ottoman Empire under the Russian protection. It was not until 1918 however that Serbia, along with its two neighbours, joined together under the umbrella of the Kingdom of Serbs, Croats and Slovenes. The Kingdom was under an occupation again, this time by the Axis during the Second World War. In 1962, Serbia became part of the Federal Socialist Republic of Yugoslavia that would finally fall apart following the rise of Slobodan Milosevic in 1989. As Slovenia, Croatia and BiH on their ways to independence, the

1 National Tourism Organization of Serbia, “General Info,” About Serbia, http://www.serbia.travel/cms/item/info/en/General_Info.html. 2 Statistical Office of the Republic of Serbia, “Latest Indicators,” Statistical Office of the Republic of Serbia, 1 January 2008, http://webrzs.stat.gov.rs/axd/en/index.php. 3 Statistical Office of the Republic of Serbia, 2002 Census of Population, Households and Dwellings: National or Ethnic Affiliation, (Belgrade, 2003), http://webrzs.stat.gov.rs/axd/en/Zip/CensusBook1.pdf, 14. 4 Statistical Office of the Republic of Serbia, 2002 Census of Population, Households and Dwellings: Religion, Mother Tongue and National or Ethnic Affiliation by Age and Sex, (Belgrade, 2003), http://webrzs.stat.gov.rs/axd/en/Zip/CensusBook3.pdf, 12. 5 Governor’s Office of National Bank of Serbia, “National Bank is not Defending a Planned or Psychological Exchange Rate Level,” National Bank of Serbia, http://www.nbs.rs/internet/english/scripts/showContent.html?id=2916&konverzija=yes. 112

Serbs resorted to violence to keep the Federation together, an instrument that ultimately led to bloodshed and further the ethnic division. The 1995 Dayton Peace Accords eventually put an end to this conflict.6

However, the peace accords could not stop the disintegration of the Federation. After the dissolution of the former Yugoslavia in 1992, Serbia and Montenegro were still united under the Federal Republic of Yugoslavia7 and later the Union of Serbia and Montenegro in 20038 before the latter broke away and gained independence in 2006. Today, Serbia is a multiparty democratic republic with elected President Boris Tadic of the Democratic Party (DS) as head of state and Prime Minister Mirko Cvetkovic, also of the DS, as head of government.9 In April 2008, Serbia signed the Stabilisation and Association Agreement (SAA) with the European Union (EU); the country is still considered a potential candidate pending on the EU Council’s evaluation of Serbia’s cooperation with the International Criminal Tribunal for the Former Yugoslavia (ICTY).10

It is important to understand the situation in Kosovo in order to appreciate Serbia. Kosovo is a landlocked region with an area of approximately 10,908 square kilometres, and a population of around two million inhabitants, the majority being ethnic Albanians (92% of the total population). The country borders Serbia to the north and east, Macedonia to the south, Albania to the west, and Montenegro to the northwest.11 Kosovo declared independence under the name the Republic of Kosovo on February 17, 2008,12 although Serbia, with the support of Russia, called the declaration illegal and continued to regard Kosovo as the Autonomous Province of Kosovo and Metohija under the auspices of the UN Interim Administration Mission in Kosovo (UNMIK).13 In October 2008, the UN General Assembly, upon Serbia’s request, submitted the question of the legality of Kosovo’s independence to the International Court of Justice (ICJ).14 Meanwhile, Russia’s objections postponed the withdrawal of the UN mission,

6 Tim Clancy, Bosnia, Serbia & Montenegro (Peterborough: Thomas Cook Publishing, 2007), 10‐12. 7 Ramet Pavlakovic, Serbia since 1989, (Seattle: University of Washington Press, 2005), 55‐56. 8 Ibid., 80‐84. 9 The Economist, “Country Briefings: Serbia,” Economist.com, 20 September 2008, http://www.economist.com/COUNTRIES/Serbia/index.cfm. 10 European Commission, “Serbia – EU‐Serbia Relations,” Enlargement, http://ec.europa.eu/enlargement/potential‐candidate‐countries/serbia/eu_serbia_relations_en.htm. 11 Republic of Kosova, “Kosovo,” Republic of Kosovo, Government, http://www.rks‐gov.net/en‐ US/Republika/Kosova/Pages/default.aspx. 12 Republic of Kosovo, Assembly, “Kosovo Declaration of Independence,” The Assembly of Kosovo, 17 February 2008, http://www.assembly‐kosova.org/?krye=news&newsid=1635&lang=en. 13 United Nations Interim Administration Mission in Kosovo, “About UNMIK,” UNMIK Online, http://www.unmikonline.org/intro.htm; UNMIK was established following the NATO air strikes that began in March 1999 under the UN Security Council resolution 1244 (1999). 14 International Court of Justice, The General Assembly of the United Nations requests an advisory opinion from the Court on the unilateral declaration of independence of Kosovo, 10 October 2008, (No.2008/34), (Press Release Unofficial), www.icj‐cij.org/docket/files/141/14797.pdf. 113

which was expected to transfer its powers of oversight to the EU. Finally, the EU deployed its mission, the European Union Rule of Law Kosovo (EULEX)15 in December 2008.16

Retaining Kosovo and EU integration are Serbia’s two main priorities; however, the Serbian government continues its policy of undermining Kosovo’s statehood by supporting the Serb communities in the Kosovo area.17 Due to these complications surrounding the question of Kosovo’s independence, this report presents its findings of Kosovo together with that of Serbia.

8.2: Economic Context

Serbia lagged behind economically compared to its Central European neighbours under Slobodan Milosevic’s regime in the 1990s due to unfriendly relations with the West and poor economic reform. Because many Central European countries went through a rapid reform process as new EU members in the 1990s and 2000s, Serbia needed to work quickly to make up for lost time. Following Slobodan Milosevic’s ousting in 2000, prices stabilized, trade liberalization commenced, privatization began to take place, fiscal reforms were implemented, and the banking and financial systems were slowly reformed.18

Despite the political setbacks, annual real GDP growth averaged more than 6% from 2003‐07.19 Over the past five years, domestic demand has been the main driver of growth, through strong expansion of fixed investment and private consumption. Serbia depends on imported materials, components, and machinery and equipment to sustain output. Its 2007 GDP growth rate was 7.5% with real GDP of 72 billion USD or 9,730 USD PPP per capita.20 In 2007, 65% of Serbia’s GDP came from the service sector21 with 8% of its labor force directly employed in the tourism industry.22 Between 2003 and 2007, FDI constituted approximately 8.5% of Serbia’s GDP.23 Serbia’s strong FDI track record is substantiated by internationally recognized awards for local Greenfield investors. In the past three years, Greenfield projects in Serbia were awarded by the Organization for Economic Cooperation and Development (OECD) as the largest Greenfield investment in southeast Europe.24

15 European Union Rule of Law Mission Kosovo, “EULEX Report to the UN,” EULEX Kosovo, http://www.eulex‐ kosovo.eu/?id=8&n=81. 16 International Crisis Group, “Kosovo’s Independence,” International Crisis Group, February 2009, http://www.crisisgroup.org/home/index.cfm?id=3225&l=1#reports. 17 ibid. 18 Economic Intelligence Unit, “County Profile 2008: Serbia,” Economist Intelligence Unit, http://www.eiu.com, 20. 19 Ibid. 20 Economist Intelligence Unit, “Serbia‐Selected Series from 1980 to 2030,” Economist Intelligence Unit, http://www.eiu.com. 21 Economic Intelligence Unit, “County Profile 2008: Serbia,” 17. 22 International Trade Centre, Serbia. 23 The Economist, “Country Briefings: Serbia.” 24 Serbia Investment and Export Promotion Agency, Investing in Serbia Handbook, 10. 114

In light of the recent financial crisis, the forecast of the economic situation in Serbia is expected to have a contraction of real GDP growth of 2% and average inflation of 9.6% for 2009.25 However, by 2010, the country is expected to experience a 0.5% increase in GDP growth and inflation will decrease to 6.4%.26

8.3: Tourism Sector Overview

Serbia’s tourism has recently regained its foothold after years of economic isolation, international sanctions and political instability. To revive the industry, the government has targeted the capital city of Belgrade, Vojvodina region, and western and eastern Serbia as the four focal points for tourism development.27 It also works jointly with the private sector to promote Serbia as a new conference and convention‐hub. The country has also received technical assistance from the EU during the drafting of its National Tourism Strategy.28

The tourism industry also benefits from its well‐developed transportation system: 37,937 kilometres of paved roads, 3,800 km of railway, and three international airports,29 as well as diverse tourist attractions, including its beautiful natural landscape (mountains, lakes, rivers for hunting and fishing), historical and cultural sites, ethno‐tourism, spa tourism and city tourism.30 Nonetheless, the number of foreign visitors has only slightly increased from 2,129,128 in 2001 to 2,306,558 in 2007 with the figure declining below two million from 2003 to 2005, with majority of these visitors arriving from Montenegro and Bosnia and Herzegovina (BiH).31

Table 8.1: Serbia’s 2008 (Jan‐Nov) Tourist Arrivals by Country of Origin

25 Economist Intelligence Unit, “Country Report April 2009: Serbia,” Economist Intelligence Unit, http://www.eiu.com, 10. 26 Ibid. 27 Government of the Republic of Serbia, National Sustainable Development Strategy, 2008, http://www.odrzivi‐ razvoj.sr.gov.yu/assets/download/Sustainable%20Development%20Strategy%20of%20the%20Republic%20of%20S erbia.pdf, 108. 28 International Trade Centre. 29 National Tourism Organization of Serbia, “Cities,” Serbia, http://www.serbia.travel/cms/item/gradhome/en.html. 30 National Tourism Organization of Serbia, “Traveling to Serbia,” Serbia, http://www.serbia.travel/cms/item/info/en/Traveling_to_Serbia.html. 31 Statistical Office of the Republic of Serbia, “Tourism: Arrivals and Overnight Stays of Tourists, by Areas,” Statistical Office of the Republic of Serbia, http://webrzs.stat.gov.rs/axd/en/drugastrana.php?Sifra=0008&izbor=odel&tab=1101; this represents an 8% increase from 2001 to 2007. 115

Country Tourist Breakdown

EU 38%

Montenegro 14%

Slovenia and Croatia 13%

Bosnia and Herzegovina 10%

Other 10%

Source: Statistical Office of the Republic of Serbia, “Tourism in the Republic of Serbia –Novemeber 2008,” 3.

In addition, the government has expressed its commitment to sustainable development through laws and regulations which protect Serbia’s natural environment. Currently, 5% of the country is preserved for natural protection and an additional 5% is expected to be included under the Landscape Management Plan by 2010.32 Despite these early efforts, there have been concerns over the problems of waste and pollution and its impact on biodiversity. The 2008 National Sustainable Development Strategy identifies lack of infrastructure for waste management, lack of strict enforcement and regulations, and lack of effective strategies to manage natural resources as the main causes of environmental degradation. Another major challenge for tourism development is lack of high‐quality hotels as on average the hotels are forty‐two years old, with few renovations and of only two or three star quality.33

The Tourism Master Plan of Serbia was introduced in 2008. These plans focus on developing tourism in the following areas: 34

ƒ Stara Planina Mountain ƒ Golija Mountain ƒ Lake Palic ƒ Zlatibor‐Zlatar Mountain ƒ Upper and Lower Danube Valley ƒ Roads of Roman Emperors Felix ƒ Vlasina Mountain Romuliana ƒ Soko Banja Spa ƒ Tara Mountains ƒ Stig Kucajske Mountains Beljanica

32 International Trade Centre. 33 Government of the Republic of Serbia, National Sustainable Development Strategy, 108‐109. 34 Republic of Serbia, Tourism Master Plan of Serbia, http://www.merr.gov.rs/dokumenti/?lang=cir. 116

The diversified strategies in the plan enable tourism development according to the needs and opportunities of the different regions and tourism products; however, the plan is at a preliminary stage of development and no actual projects have been implemented at this point.35

The government plays an overarching role in almost all sectors, including tourism. Many private actors in the tourism industry, including tour operators and agencies, are also supported by the government and show strong loyalty to the tourism policies of the government.36 In addition, many international actors, such as GTZ and USAID, also actively participate in the development of tourism in Serbia. GTZ, for example, focuses on tourism development for the Danube region, whereas USAID is promoting economic growth by increasing the competitiveness of Serbian private enterprises. The USAID Competitiveness Project is a four‐year $14.7 million initiative that works with Serbian Small and Medium‐Sized Enterprises (SMEs) in leading sectors in order to increase sales, exports, investment and jobs37. Within the tourism sector, USAID is hoping implement projects to promote the sales and marketing of tourism products, conduct market research and foster contacts between companies and the government, and support an introduction of new technology and equipment.38 While USAID and other international actors participate in activities to foster tourism as part of the greater economic development agenda, none of their projects focus on tourism specifically; the government dominates the tourism industry and heavily influences tourism actors, making it difficult for an outside organization to implement projects independently.39 Although there is strong cooperation amongst the actors in the tourism industry, it is facilitated through the government‐run National Tourism Organization of Serbia (NTOS); actors need to work with the NTO in order for their projects or initiatives to be implemented.40

8.4: Legal Context

The main body of the government that is responsible for tourism is the National Tourism Organization of Serbia. The NTOS was founded in 1994 by the Government of Serbia and is under the auspices of the Ministry for Trade, Tourism, and Services according to the Law on Tourism. Adopted in May 2005, the new Law on Tourism is in compliance with EU regulations in this field. The tourism law provides various investment incentives for the tourism industry. Within the law, the government has established a tourism development fund and a program for managing and supporting tourism development.41 In 2008, the government added another piece of legislation concerning the use of subsidies for rural tourism development.42 The government’s effort to further develops the tourism industry and attempts to

35 Aneta Uskokovic, interview by Yoojung Ahn and Reiko Okumura, 24 March 2009. 36 Nemanja Ciric, interview by Yoojung Ahn and Reiko Okumura, 23 March 2009. 37 United States Agency for International Development ‐ Serbia, Fueling Local Economic Growth. 38 Ibid. 39 Roslyn Waters‐Jensen, interview by Yoojung Ahn and Reiko Okumura, 24 March 2009. 40 Uskokovic. 41 Ibid. 42 European Union, European Commission, Serbia 2008 Progress Report, 5 November 2008, (Working Document No. 2698), 117

encourage and strengthen foreign investments in Serbia are also evidence in the establishment of a strategy for tourism development through year 2015.43

The laws on land and construction in Serbia, was an important step for Serbia, as the country has experienced difficulties in identifying property owners for sites that need to be privatized, such as thermal springs or historical sites. The ownership of urban land is governed by the Law on Planning and Construction and this law defines land into two categories: public land and other land. Public land is designated for important infrastructure purposes, while other land is divided into urban building land, which is under the ownership of the national government. Belgrade is the only authority allowed to issue a lease on the land. In this case, the urban building land in Belgrade can be acquired by the Right to Use or by the Lease of Land for up to ninety‐nine years. Right of Use is an option when an existing building is present on the land, while the Leasing of Land exists if no buildings are present on the land.44 As most of the properties are owned by the government, it is difficult to acquire land to develop tourism attractions by an external organization.

The government has also take steps towards protecting the environment. In 2004, the government established the Environmental Protection Agency (EPA) as an institution within the Ministry for Science and Environment, which is governed by the Law on Environmental Protection, the Law on Environmental Impact Assessment and the Law on Strategic Environmental Impact Assessment.45 These laws regulate the environmental impacts of various projects, including tourism projects and tourism development.46

8.5: Tourism Products

This section outlines the products endemic to Serbia’s tourism sector: city tourism, which also comprises cultural and historical tourism, as well as nature and eco‐tourism. In addition, the Danube region tourism strategy is evaluated as one of the Serbia’s strengths for developing tourism.

8.5A: City, Cultural and Historical Tourism

City Tourism

City http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/serbia_progress_report_e n.pdf, 40. 43 Uskokovic. 44 Serbia Investment and Export Promotion Agency, Tourism Industry in Serbia, (2005), Tourism www.siepa.gov.rs/attach/Tourism_Industry_in_Serbia.pdf, 10. Products 45 European Agency for Reconstruction, National Environmental Strategy of theCulture Republic of Serbia, 17 June 2005, (Draft Submitted for Inter‐Ministerial Consultation with Ministry for Science andand Environment), Nature http://www.rec.org/REC/Programs/REREP/LawDrafting/status/Serbia_and_MontenegroHistory /English/Serbia/Planning% 20documents/Strategies/NEAP,%20National%20strategy/NEAP%20draft.pdf, 1‐20. 46 Ibid. 118

City tourism in Serbia is the tourism product with the most distinctive and strategic importance for the country. The cities in Serbia are proudly presented as those comparable to other large Western European cities and the tourism strategy of the country is focused on developing the two main cities, Belgrade and Novi Sad, into a possible destination for tourists who want to enjoy a vibrant city life filled with diverse cultural attractions.

Belgrade

Belgrade is the largest city in the Western Balkans and thus has a diverse cultural and historical significance for the region. The confluence of the two big rivers, the Sava and the Danube, makes the city an important crossroad for the region.47 Considering the geographical advantage of Serbia with the Danube River, Belgrade has a great potential to be developed as the biggest hub city among the Balkan countries for conventional/business tourism, city tourism or a transit tourism destination.

Today, Belgrade is a convention hub and attracts many visitors for business conferences. Most tour operators that provide incoming tourists with tourism products target business visitors and this number is expected to grow in the coming years.48 From July 1st to 12th, 2009, the 26th Jubilee Summer Universiade, a world sporting competition, will be held in Belgrade. There will be more than 9,000 athletes from 170 countries competing in fifteen different sporting events. Universiade in Belgrade will be the largest sports event in 2009 and an excellent opportunity for the host country to demonstrate its traditional hospitality and Belgrade’s reputation as a city of sports, a city which has organized more than 200 large international events over the last fifty years.49 This event is expected to attract a large number of visitors in and out of the country and also draw media attention to the city.

The majority of tourists come from Austria and Germany, with their numbers having increased over the last three years. Another group of tourists from the United States, the United Kingdom, Australia and other English‐speaking countries, also come to the city for the cruises along the Danube River. There are approximately seventy boats arriving in the city with about 130 people on board during peak season. Many of these tourists are expatriates from Western Europe or the United States, bringing their families and friends to the region.50

The city is part of the European Cities Marketing (ECM), a coalition of city tourist organizations and convention bureaus, founded in order to exchange information and build a network to improve tourism and to further promote Europe as a single destination.51 Belgrade was chosen as the “city break”

47 Tourist Organization of Belgrade, The Official Tourist Guide. 48 Jasna Cvetkovic, interview by Yoojung Ahn and Reiko Okumura, 24 March 2009. 49 Tourist Organization of Belgrade, The Official Tourist Guide. 50 Ivana Milatovic, interview by Yoojung Ahn and Reiko Okumura, 23 March 2009. 51 European Cities Marketing, “Our Ways to Success,” European Cities Marketing, http://www.europeancitiesmarketing.com/listing.asp?cat=10&id=31. 119

destination for 200852. The concept of a “city break”, or a short weekend trip to another city, is very popular amongst Europeans. Belgrade has been facilitating such trips by sponsoring some of the low‐ cost airlines that bring tourists into the country for the city break, many of which arrive from Norway.53 Moreover, increasing in numbers are tourists from Asia who stop by Belgrade as part of their Balkan Eastern Europe tours.54 In addition, travelers en‐route to Croatia from Western Europe take a few days to visit Belgrade along their way. While transit tourism has potential to attract a large number of tourists, it risks losing tourists choosing Belgrade as their final destination.

Some of the most interesting attractions in the city that have potential to attract tourists from overseas, include the historical fortress site Kalemedgan, the traditional Bohemian quarter Skardarlija, and the lively nightlife that appeals to the youth, from around the country and the region.

The Kalemegdan Fortress is the oldest fortress in Europe and the most popular tourist attraction in Belgrade.55 It lies atop a hill above the confluence of the Sava and the Danube that the Turks called Flićirbajir (“Hill for contemplation”). Kalemegdan is also a Turkish name, which means a fortress (town) field, an actual area between the fortress and city center of Belgrade. In 1867, following the edict issued by the Turkish sultan, the town keys were handed over to Prince Mihailo of Kalemegdan and the town of Belgrade was surrendered to the Serbs. At the end of the 19th century, this area became a big park with a promenade and picnic areas.56 From the walls of the fortress, the striking view of the two intersecting rivers attracts foreign visitors and serves as the locals’ popular recreational spot. There are opportunities to buy traditional handcrafts in front of the entrance to the fortress and the area is well maintained by city management.

Skadarlija is a old Behemian quarter formed in the 19th century with numerous restaurants and galleries. It used to be a gathering point of the most famous people of Belgrade’s cultural life. The old cobblestone street that runs through this quarter, called the Skadarska Street dates from 1872. Among the residents of Skadarlija were famous writers, actors, painters and journalists and nowadays it still remains as one of the most traditional corners of the city with quaint restaurants and cafés and cobblestone streets leading to the famous Sebilj Fountain. The restaurants in this quarter mainly target tourists with menus in many different languages. There are also a number of galleries in this area but they have not

52 Milatovic. 53 Ibid. 54 Nemanja Ciric, interview by Yoojung Ahn and Reiko Okumura, 23 March 2009. 55 Ibid. 56 Milatovic. 120

promoted enough and thus lack visitors. However, the area is one of the most traditional parts of the city that has potential to be developed further into a tourists’ favorite.

The nightlife in Belgrade is also worth mentioning. The first thing that evidently strikes people that come to visit Belgrade is that the city is vibrant all throughout the night, which is the reason that it attracts visitors from the neighboring countries. The ambient pedestrian street of Knez Mihajlova and the Republic Square are filled with people walking around late into the night. Enjoying the nightlife is extremely popular among the Belgrade citizens and outsiders alike. This offer carries numerous opportunities for Belgrade, the only metropolis in the region, in that it has an ongoing, energetic cultural trend and can act as a magnet for young people all over the Western Balkans region and possibly also from the Western Europe in the future.57

Novi Sad

The second largest city in Serbia, Novi Sad, is located northwest of Belgrade, a two hour train ride away, on the left bank of the river Danube. Tourist arrivals in 2008 amounted to 100,209, including 55,738 domestic tourists and 44,471 foreign travelers. However, if one takes into account the average duration of stay in Novi Sad, the total tourist nights amounted to 185,235 in 2008.58

The most important tourist attraction in Novi Sad is the Petrovaradin fortress. Historical evidence related to the existence of Petrovaradin dates back to the Roman times. Petrovaradin was under the Turkish rule for more than 160 years until 1687 when it was taken over by the Austrian army. On June 12th, 1849, the Hungarian army bombarded Novi Sad from the Fortress and the city was almost completely destroyed. Nonetheless, Petrovaradin began to take the form of a city sooner than Novi Sad. Its sewage system leading from the Fortress up to the Danube was completed in 1725 while the first sewage system in the city of Novi Sad was only completed in 1880. Likewise, telegraph services were available in Petrovaradin in 1853, whereas Novi Sad only caught up four years later, in 1857. To this day, the fortress and the clock tower on it is the symbol of the people of Novi Sad and is also gaining its importance because of the annual music festival held inside this fortress, called the EXIT festival.

Novi Sad is a unique destination for young people mainly due to the famous EXIT music festival. People gather here every summer to enjoy the music. This festival brings tourists each summer from the Balkans region as well as Western Europe, to enjoy the music. The EXIT festival commenced in 2000, as an act of rebellion against the regime of Slobodan Milošević, which had isolated Serbia for many years.

57 Ciric. 58 Tourist Information Centre of Novi Sad, Novi Sad Tourist Statistics Year 2008; the average duration of stay is 1.9 days total, 1.6 days for a domestic tourist and 2.2 days for a foreign tourist. 121

That summer, thousands of young people from Novi Sad gathered in the campus park by the Danube River where concerts, parties and art performances took place. There were also discussions and debates where people were able to express their opposition to the imposed nationalism, xenophobia, censorship and repression. The 100‐day event concluded with a grand finale called the 'Get out to Vote' party, which was held one day before the elections that saw the downfall of Milošević.59 Following the success and excitement of the festival, the team behind EXIT decided to continue with the festival so that that it would one day have true regional importance. By 2007, the EXIT festival had grown into a huge success with 190,000 visitors, 30% of which were foreigners. Performers included world‐class actors and musicians such as Snoop Dogg, Lauryn Hill, The Prodigy, The Beastie Boys, CSS, Basement Jaxx, Robert Plant, Groove Armada, LTJ Bukem and Pendulum. This year, EXIT was awarded the prestigious UK Festival Award for the best festival in Europe for 2007, as voted for by festival‐goers from all over the world.60 As a result of the growing attention by music lovers worldwide about EXIT, there is huge potential to further attract tourists to Novi Sad to during the summer, not only during the festival itself but also before and after, to enjoy the city and the surrounding areas.

Historical Tourism

The interlocking of Western and Eastern European culture is a very specific attraction for Serbia and has emerged from the distinctive position of Serbia’s land.61 From the city center of Belgrade and Novi Sad, to the valleys of the central Sumadija region, to the banks of the Danube, Serbia offers a unique cultural travel experience in Central and Eastern Europe. Especially notable are cultural remnants of the Roman era at Trail of the Roman Emperors, the hideaways of past Emperors, and the exquisite Romanesque‐ Byzantine monasteries on one of the three cultural trails promoted by NTOS.62

Serbia’s Danube River valley was once the far eastern corner of the Roman Empire. In the 3rd century B.C., the Empire was expanding its territory to present day Serbia, along the turbulent shores of the Danube.63 The Roman soldiers faced hostile barbarian tribes at every corner as they secured the territory, erecting formidable fortresses along the way. Increasing stability attracted merchants and craftsman and soon the settlements across the previously marginalized Upper Moesia and Lower Pannonia provinces flourished into some of the Empire’s most thriving culture and commercial centers.64 The ancient Roman province of Illyricum produced sixteen emperors (research on the birth place of the seventeenth Emperor is in process in Serbia) who dramatically shaped the history and

59 EXIT, “Exit History,” EXIT Festival, 16 April 2007, http://eng.exitfest.org/index.php?option=com_content&task=view&id=553&Itemid=197. 60 EXIT, “Past Festivals,” EXIT Festival, http://eng.exitfest.org/index.php?option=com_content&task=blogcategory&id=72&Itemid=316. 61 Slovenia Tourist Board and National Tourism Organization of Serbia, Transromanica – The Romanesque Routes of European Heritage, (2008), 3. 62 National Tourism Organization of Serbia, Serbia‐ Culture Trails, (2008). 63 Ibid. 64 Ibid. 122

culture of present day Serbia.65 Among the many historical sites, Felix Romuliana was designated by UNESCO as a World Heritage Site.66

Transromanica: The Romanesque Routes of European Heritage is a legacy of the Romanesque influence that has spread to present day Serbia from Italy via the Adriatic region.67 The fusion of Romanesque and Byzantine elements in the Serbian medieval art is best captured in the spectacular monasteries across Serbia’s mountainous central and southern regions.68 The Transromanica route in Serbia is part of the broader European cultural and tourist route, which features Romanesque era monuments across Germany, Austria, Italy, France, Spain and Slovenia.69

The Danube River valley’s critical geographic position marked a strategic point for armies of the Roman and Ottoman Empires to erect a series of fortresses on the Danube.70 In Serbia, there are seven major fortresses along the Danube, including Kalemegdan Fortress in Belgrade and Petrovaradin Fortress in Novi Sad, which attracts tourists, including many who are part of the Danube River Cruise tours.71 NTOS offers various package tours, from one‐day excursion to ten‐day tours, so that tourists can visit the many fortresses by a Danube River cruise or by bus.

Village Tourism

Untouched nature and clear rivers are also attractive features of Serbia. The marginalized rural villages are now a fashionable tourist destination. Over twenty local tourism organizations are working with the NTOS to facilitate rural village tourism, which offers tourists local organic food, traditional cultural experiences, farm stays, all of which taking advantage of Serbia’s cultural diversity and rich natural resources.72

Near Novi Sad, there are eight village sites offering farm stays or traditional Serbian home stays and ethno‐tourism. Each of them attracts tourists with their authentic appearance and their offerings of different types of activities, such as traditional cooking class, photo‐safari, horseback riding, hunting and hiking.73

Serbia is also promoting camping sites targeting domestic and foreign travelers. There are thirteen well‐ organized major camping sites across the country.74 Serbia is also a member country of The European

65 Uskokovic. 66 National Tourism Organization of Serbia, The Roman Emperors’ Cultural Itinerary in Serbia. 67 Ibid. 68 National Tourism Organization of Serbia, Serbia‐ Culture Trails. 69 TRANSROMANICA e.V., Transromanica, http://www.transromanica.com/. 70 National Tourism Organization of Serbia, Serbia‐ Culture Trails. 71 Ibid. 72 National Tourism Organization of Serbia, The Villages of Serbia, (2008), 1. 73 Tourist Information Centre of Novi Sad, Salas Farms & Ethno Festivals, (2008). 74 National Tourism Organization of Serbia, Camping+Caravanning – Camping on the road of untouched nature. 123

Federation of Camping Site Organizations and Holiday Park Associations (EFCO&HPA),75 the European representative body of the camping and caravanning industry including caravans, tents, motor homes, chalets and all forms of self‐catering accommodation in a park setting,76 and participates in the exchange of information and making efforts for improving its standards to meet the EU level.

Opportunities

City tourism in Serbia has the biggest potential of all tourism products because of the advantages Belgrade and Novi Sad can provide in experiencing city life. The distinguished nature of Belgrade as the biggest metropolitan area in the region carries a competitive advantage compared to other countries in the region focusing on adventure tourism or rural tourism. The unique history and strategic location of the city by the converging rivers attract many investors to the region to develop hotels, galleries and other tourism‐related facilities.77 Belgrade also has many international events each year and acts as a convention tourism destination. Serbia has potential for good niche tourism targeting young people, which can be extremely advantageous for Serbia if it develops the capacity in these areas, instead of a mass tourism destination.78 However, the city also has potential to attract a large number of tourists at peak seasons. The festivals that are held in the cities such as the EXIT festival can attract tourists during the festival season and, along that line, the conventions and international events that take place in Belgrade will bring mass tourists worldwide.

Plenty of historical heritage sites provide Serbia a great opportunity to develop as one of the world's major cultural tourist destination. Combined with other tourism products, such as the Danube River Cruise and village/rural tourism, cultural tourism will generate a synergistic effect in increasing the number of tourists across the country. Serbia is promoting and working together with other European countries through the European cultural and tourist route program, which could bring potential tourists to Serbia, including those that were originally attracted to other cultural sites along the route. Through this regional cooperation program, Serbia will be able to have opportunity to learn from other European countries on how to preserve and facilitate historical sites to meet tourist demands and comply with EU standards.

The idea of village tourism is indeed a valuable concept to sustainable development of a rural area. While tourists for city tourism generally stay a few nights in Serbia, village tourism will be able to offer tourists a longer‐term stay. Combined with city tourism as a package, village tourism also creates wider options for potential tourists and this combination might be a distinct and unique opportunity for tourism in Serbia among the Balkan states. Also, producing local signature agricultural products, i.e.

75 The European Federation of Campingsite Organizations and Holiday Pak Associations, The European Federation of Campingsite Organizations and Holiday Pak Associations, http://www.campingeurope.com/default.asp. 76 National Tourism Organization of Serbia, Camping+Caravanning. 77 Ines Novosel, interview by Yoojung Ahn and Reiko Okumura, 25 March 2009. 78 Nebojsa Matijasevic, interview by Yoojung Ahn and Reiko Okumura, 24 March 2009. 124

wine, cheese, and traditional food for souvenirs will be an opportunity for income generation for the people in the village.

Constraints

Weak infrastructure is the main hindrance to the development of tourism in Serbia. The weak transportation system, including roads and railways, are the main obstacle in getting people from one city to another, or to village, historical, and cultural tourism sites. In addition, the lack of budget airlines is also a constraint.

Although the country’s greatest potential, Serbia also faces several difficulties in its development and promotion of city tourism. Lack of affordable accommodation is the primary obstacle. Particularly during large conventions, hotel accommodations in Belgrade cannot handle tourist demand.79 Despite the promotion efforts by the government, there is also concern that the poor of the country from years of war is hindering the industry.80 In addition, different levels of cooperation by the stakeholders make it difficult to implement projects and the level of knowledge amongst tourism actors varies. Cooperation is fairly well organized and involves many of the actors but the overarching role of the government in all tourism related projects and activities, makes it harder for actual cooperation to flourish into the implementation stage.

Since Serbia is mainly focusing on city tourism and convention tourism, the preservation and facilitation of the cultural historical sites are forestalled. Preservation of many heritages costs a large amount of money and takes time, and in fact, it will be difficult to develop them in the next few years. Historical and cultural tourism thus should rather be considered as a long‐term process.

Communication could be another problem for village tourism, as people in rural villages generally do not speak English and other foreign languages and require training in order to host guests from abroad. It is a bit risky to open villages for foreign tourists unless locals are adequately trained, as the first impression is crucial in determining a guest’s second visit. At the same time, waste management needs to be improved to preserve natural resources which are prone to pollution and degradation.

8.5B: Nature and Eco‐tourism

The natural splendor of rivers and mountains certainly adds to the potential of Serbia in promoting eco‐ tourism and nature‐based tourism. However, the country is specifically interested in promoting city tourism, as approximately 60% of tourists come to Serbia to enjoy the city life in Belgrade.81 This is

79 Cvetkovic. 80 Milena Nikitovic, interview by Yoojung Ahn and Reiko Okumura, 25 March 2009. 81 Milatovic. 125

primarily the focus of the NTOS’ promotion activities; however, it does not compromise development of Serbia’s natural resources, which have been identified as possibilities for future tourism development.

Spa Tourism

Serbia’s landscape is rich and diverse including natural mineral and thermal springs, which have been an important part of Serbia’s history and recreational activities dating back to the Roman and Medieval times. Today, spas have been built around the country’s subterranean natural assets and many are located in landscaped gardens further add to the enjoyment and relaxation. The quality of Serbia’s water is a key asset for the development of spas. Coming from depths of 273 meters, the rejuvenating mineral waters contain no micro‐organisms, have reduced levels of oxygen and contain a high level of carbon dioxide and dissoluble minerals which make the waters of Serbia so highly regarded for their healing properties. Some of Serbia’s springs are the hottest to be found anywhere in Europe culminating in stunning geysers which shoot jets of hot water at around 76 degrees Fahrenheit up to the height of 45 meters.82 These spas have been mainly used for medical purposes for a long time and visited by domestic users rather than international visitors.

Danube Cycling Route

One of the most popular cycling routes in Europe, the Danube Cycle Route, which used to run only through Germany, Austria and Hungary, now continues up to the Black Sea. By the end of 2009, the detailed map for the Danube Cycle Route from Budapest to the Black Sea, over Croatia, Serbia, Bulgaria and Romania will be available. This map will make it possible for travelers to explore the still unknown and natural Danube regions and experience the natural beauty. This map will also include accommodation facilities and restaurants as well as some of the most important monuments, like the fortresses, like the Petrovaradin or bridges all marked on the map. Also included in this map will be information about the nautical tourism along the cycle route such as harbors and marinas.83 The signposting of the Danube cycle route in Serbia has also been completed accordingly to the standards of the European Cyclists Federation (ECF) at the length of 550 km, which is more that 85% of the entire route in Serbia. There are many different suggested routes along the Danube including ones that pass through many fortresses, ethnic villages, natural parks and lakes.84

Opportunities

82 National Tourism Organization of Serbia, Spas for All Four Seasons, 2007. 83 Matijasevic. 84 National Tourism Organization of Serbia, Discover the Danube in Serbia, 2008. 126

The government believes that many foreign investors are potentially interested in developing the natural thermal spring sites into spa resorts that are equipped with modern facilities and amenities. These resorts will be attractive to people who are looking for an eco‐friendly way of relaxing and can also bring development of the surrounding areas of these spa resorts. However, the privatization process can only start after all the identification of ownership is completed and any kinds of issues related to that ownership are resolved.85 Since thermal springs in Serbia have unique healing properties, spa tourism has great potential to attract people for longer stays not only from the region but also from other Western European countries, specifically those who are interested in healing and improving their health at a lower cost, compared to their domestic spas. The Danube Cycle Route also has potential, especially because GTZ is partnered up with the National Tourism Organization of Serbia to work on developing and improving the cycle routes. GTZ could be a useful partner because of its know‐how and experience in the cycle routes, and will be able to transfer their knowledge in this area to others. Furthermore, because many Europeans love to travel by bicycle due to its eco‐friendliness and opportunities for direct contact with the culture and nature, the cycle routes will continue to attract more visitors that cycle along the Danube.86

Constraints

The main problem with the spas at this stage is that they are not privatized and in order to privatize them, they need to be identified in terms of their ownership and maintenance. This is especially a difficult process because many of these spas were owned directly by the government during the Yugoslav times, and now land ownership is unclear. Locating and identifying the owners, needs to be done before finding potential investors.87 As for the Danube Cycle Routes, the main obstacle lies in the fact that the bicycle routes need continuous maintenance and participatory activities by the locals, which is not currently sufficient due to the government using a top‐down approach rather than a bottom‐up approach.88 Also, although Serbia is working in cooperation with its regional neighbors, they are also constantly competing with the other South‐East European countries in the Danube industry; therefore, Serbia must find a competitive advantage in the products and services it can offer, compared to those of the other Danube countries.

8.6: Tourism Services

This section provides an overview of tourism services in Serbia including hotels, restaurants, and tour agencies and operators as well as tour guides.

8.6A: Accommodation and Food Services

85 Novosel. 86 Matijasevic. 87 Zoran Novakovic, interview by Yoojung Ahn and Reiko Okumura, 25 March 2009. 88 Matijasevic. 127

Serbia suffers from lack of accommodation across the country with a capacity of only 38,000 beds available in hotels.89 The Serbian government has recognized this problem and allowed for increased privatization and investment in the hotel industry. Consequently, there are a number of foreign‐owned five‐star hotels in Belgrade, largely for business travelers, in Novi Belgrade. As a result of the under‐ capacity, lack of knowledge and untrained workers, the quality of accommodation is poor, considering its relatively high price.90 However, there are many hostels and apartment rentals available, a popular choice for youth travelers due to their lower prices and lower quality of service.

As the largest cosmopolitan city in the region, Belgrade offers a variety of food services depending on tourists’ needs. A number of different kinds of restaurants serving anything from traditional Serbian cuisine, to Western dishes to Asian food, can be found in the center of Belgrade, thereby satisfying a wide variety of palates. Like other European countries, cafes have been established on every corner and people can sit outside, along the pedestrian area, while enjoying their coffee or meals.

Novi Sad, and in particular, the city center area, boasts a number of different restaurants as well. There is a nice restaurant with a view of the river and a café in the Petrovaradin Fortress that succeeds in capturing both tourists and locals as well during the weekend. “Silicon Valley” is one of the most popular streets in Belgrade, attracting mainly young people for dinner and drinks late into the night. Generally, restaurants and shops are open until late night so that people can stroll and enjoy the city as a “nightlife” destination.

Opportunities

As the city of Belgrade focuses on “City Break tourism” and “Convention tourism”, the Serbian government also focuses on attracting foreign investments, mainly in the hotel industry91. Companies from Western European countries, such as Austria, Germany and Greece as well as those from the US are very interested in investing in five‐star hotels in Serbia.92

The governmental framework and national regulations on tourism are quite well established; however, regulations involving the hotel and restaurant industry, such as standardization, need to be updated.93 As EU accession is a top priority for the Serbian government, these regulations must be revised to meet EU standards.94

The number of private and public schools specializing in tourism and hospitality is growing due to the

89 National Tourism Organization of Serbia, “Useful Facts,” Serbia, http://www.serbia.travel/cms/item/info/en/Useful_facts.html. 90 Cvetkovic. 91 Novosel. 92 Uskokovic. 93 Cvetkovic. 94 Ciric. 128

expansion of tourism facilities in Serbia. There are currently fourteen high schools and ten universities that have specific courses in tourism and hospitality. For instance, a private university called Singidunum University offers Bachelor’s, Master’s and PhD‐level courses in Tourism and Hospitality Management, with students from all over the Western Balkans as well as countries outside the region. As communication skills are crucial for hotel staff Singidunum University, in cooperation with the British Council, also offers intensive multi‐language training as part of their core courses. In 2007, the university conducted a training program where 2,000 government officials received information and training on tourism services.95

Many Danube River cruise tourists stop by or stay overnight in Novi Sad. As Novi Sad is in the multicultural Vojvodina region, with four official languages, nine spoken languages and twenty‐eight ethnicities, the variety of restaurants is a big appeal for tourists.96 The EXIT music festival brings a large number of young people from all over the world; this has inevitably created an opportunity for the locals to realize how to meet tourist demands in good food services.

Constraints

Lack of proper service training in the hotel industry is a negative legacy of socialism in Serbia. Most workers are connected to the state government with negative legacy of socialism era. Workers did not have opportunity to be trained about hospitality and services, therefore the problem still lies in the low level of know‐how and service skills, pandemic problems spread from governmental officials to local operators.97 Even more serious is that those who are highly educated and well‐trained tend to get jobs outside of Serbia instead of working in Serbia, otherwise known as the brain drain.98 For the Serbian people, tourism is still considered luxurious and only 10% of the population can afford to travel abroad99. Therefore, people still do not understand or appreciate quality service.100

Standardization is another problem for the hotel industry. While there is the national standard for categorizing hotels, it is not aligned with those of the EU and other international standards. The Business Association of Hotels and Restaurants (HORES) is the authorized representative in the operation of the Social‐Economic Committee of the Serbian Government and is in charge of the regulation regarding improvement of standards and categorization, in order to improve the quality of the catering and tourist services; however, visible accomplishment has yet to be seen.101

95 Slobodan Unkovic, interview by Yoojung Ahn and Reiko Okumura, 24 March 2009. 96 Titana Vanic, interview by Yoojung Ahn and Reiko Okumura, 27 March 2009. 97 Matijasevic. 98 Vladimir Paunovic, interview by Yoojung Ahn and Reiko Okumura, 27 March 2009. 99 Igor Bandovic, interview by Yoojung Ahn and Reiko Okumura, 25 March 2009. 100 Ibid. 101 Balkan Alliance of Hotel Associations, “Business Association of Hotels and Restaurants‐“HORES,” Balkan Alliance of Hotels Associations, http://www.balkanalliance.org/srbia.php. 129

There are quality standards for restaurants but the rating system is outdated102. As a result, older, unhygienic and under‐equipped restaurants have a higher rating while newer and more modern restaurants are rated lower. There is also no legislation banning smoking or at least mandating separate facilities for smokers and nonsmokers. This current condition has created a negative image food services industry amongst tourists.

8.6B: Tour Operators and Agencies

As tourism is one of the top three prioritized industries in Serbia, the number of tour agencies and operators providing inbound tours are steadily increasing.103 Networking among travel agencies is well‐established and mostly organized by the NTOS. NTOS has received a great deal of support from USAID, who helped them create their website in 2006. The site provides information for tourists, including a list of accommodations and tour operators as well as over 100 sub regional and city‐level official tourism organizations.104

In addition, the government is committed to establishing a trained cadre of tour guides, and has thus created stringent regulations for tour guide certification. To become a tour guide, candidates have to pass preliminary tests that will then provide them admission to a one‐year training course in order to obtain a national license as a tour guide. In 2005, there were 507 applicants and almost 3,000 candidates in 2008. Tour guides sign up for assignments in tour agencies, government municipalities and agencies and private companies or tour guides can search for opportunities online. The Associations of Tourist Guides in Belgrade and in Serbia are public‐controlled bodies providing information to tour guides and supporting networking opportunities amongst this group.105 For example, Serbia Tourist Guide.com 106 is a private initiative, created by New Media marketing agency, offering tourist information and facilitating networking among those who want to exchange information on tourism in Serbia.

Opportunities

One of the biggest obstacles for the tourism industry in Serbia is the negative image of the war in the 1990s. However, public relations campaigns in Western European countries appear to have been successful in increasing the number of inbound tourists.107 At the same time, tour operators are working to bring back business travelers, who together account for approximately 70% of inbound tourists to Belgrade,108 109 by providing various tours in Serbia as well as planning for their leisure

102 Cvetkovic. 103 Ibid. 104 National Tourism Organization of Serbia, Serbia, http://www.serbia.travel/. 105 Ibid. 106 Can be accessed at http://www.serbiatouristguide.com/. 107 Uskokovic. 108 Serbia Investment and Export Promotion Agency, Tourism Industry in Serbia, 10. 130

destination. Belgrade is no longer the capital city of the Former Yugoslavia but it is still the business, administrative and cultural center of the region and a unique destination for enjoying nightlife among people from the Balkans. Tour operators have developed options to meet this wide variety of tourists’ demands. Moreover, Serbia will also benefit from its current service‐related educational programs. As high‐level education and trainings for the tourism sector are readily available and quite popular, a potential well‐trained workforce is an asset for Serbia.

Constraints

Lack of private‐public cooperation is a significant problem in Serbia, raising the need for a mechanism to bridge state and private interests. It is very difficult to run private tourism‐related businesses unless entrepreneurs are personally connected to government officials.110 As the government spends most of its budget on promotional activities, their marketing at times exaggerates the reality on the ground.111 In fact, a gap exists between the government’s advertisement of a beautiful Serbia, while in reality the country’s insufficient infrastructure and services overshadow this beauty.

8.7: Regional Tourism Integration

Given the geographical location of Serbia, the Danube River is one of the most importance resources and Serbia is actively promoting strong cooperative ties with the other Danube countries. Founded to seek cooperation among the Danube countries, the Danube Tourist Commission112 was formed almost forty years ago as a tourism marketing association outside the realm of the different economic and political systems of eight Danube countries: Germany, Austria, Slovakia, Hungary, Croatia, Romania and Serbia.113 Serbia’s Ministry of Economy and Regional Development is acting as one of the head offices of the Commission and NTOS is a member of its marketing committee. One of the activities of the Danube Tourist Commission is the creation of a uniform corporate identity symbolized by the distinctive blue Danube wave logo that is used in the production of brochures and media work.114

In 1994, the Danube River Protection Convention was signed by thirteen Contracting Parties to encourage cooperation of their water management systems.115 To enter it into force, the International Commission for the Protection of the Danube River was established in 1998 and now represents a

109 Cvetkovic. 110 Bandovic. 111 Vanic. 112 Danube Tourist Commission, “Tourist Commission,” The Danube‐The River’s Lure, http://www.danube‐ river.org/site/content/view/14/30/lang,en/. 113 The Republic of Moldova is participating as an observer. 114 Danube Tourist Commission, “Tourist Commission.” 115 Currently there are fifteen Contracting Parties: Austria, BiH, Bulgaria, Croatia, the Czech Republic, Germany, Hungary, Moldova, Montenegro, Romania, Slovakia, Slovenia, Serbia, Ukraine and the European Union. 131

common platform for the sustainable use and development of Danube resources.116 The regional cooperation on the Danube provides an opportunity to motivate Serbia to make efforts to meet International and EU standards on water and sanitation management.

As mentioned above, European Cities Marketing (ECM)117 is the leading network of city tourist offices and convention bureaus in more than 134 cities across thirty‐two European countries, founded in order to share expertise, cooperate at an operational level and foster business opportunities. Belgrade and Novi Sad are members of ECM and actively participate in its activities such as training and education, communication and public relations programs.118

Serbia is also a board member of the European Travel Commission (ETC).119 The mission of ETC is to promote Europe as a tourist destination in the global market. To this end, ETC produces market intelligence studies, handbooks on methodologies and best practices, and facilitates the exchange of European tourism statistics on its database. Exchange of information is one area that Serbia benefits from being the member of ETC.

As in the examples given above, Serbia is increasingly emphasizing regional cooperation with Western European countries and the Danube countries, rather than working on the cooperation among the Balkan countries. Nonetheless, Serbia will benefit if it participates in a joint regional program on tourism development. Serbia could certainly benefit from a joint effort to manage waste and pollution, one of the common concerns among many of the five western Balkan countries. It can also learn from the good and bad practices of its neighbors. For example, as Serbia is planning to increase its investments in hotel infrastructure, it should look at Montenegro in order to put in place a stricter regulation to prevent an uncontrolled spread of building development.

Section 8.8: Overall Context Evaluation

The tourism industry in Serbia is still in an early phase of development. Serbia is recovering from the negative image of the war in the 1990s and seeking to promote Serbia as a unique tourist destination, especially as the government recognizes the significant impact of the tourism industry on the economy. However, political instability in Serbia remains one of the biggest obstacles for the development of sustainable tourism. The government is working closely with other EU member countries on tourism and this cooperation is expected to encourage Serbia to develop its standards to meet the EU levels in order for the country to accelerate its EU accession.

116 International Commission for the Protection of the Danube River, “About Us,” International Commission for the Protection of the Danube River, http://www.icpdr.org/icpdr‐pages/about_us.htm. 117 European Cities Marketing, European Cities Marketing, http://www.europeancitiesmarketing.com/default.asp. 118 Vanic. 119 Uskokovic. 132

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Section 9: Economic Development and Regional Integration in the Western Balkans

9.1: Regional Political Framework and Integration

The dissolution of the Socialist Federal Republic of Yugoslavia in 1991 dealt a striking blow to economic, political, and social ties throughout the Western Balkans. Bosnia, Croatia, and Serbia were plunged into war, while locations spared from violence, such as FYR Macedonia, lost critical trade partners for much of the 1990s. Bosnia’s export economy essentially collapsed.1 At the same time, Albania transitioned from a closed communist system to a parliamentary democracy in 1992, eager to enhance ties with the rest of Europe at a time of war and reconstruction in the Balkans. Though sectarian tensions still linger in BiH and in Kosovo, it is clear to outsiders and local residents alike that the quest to bolster economic growth and further the goal of reconciliation will require greater linkages among the region’s politicians and citizens. Indeed, the nations one might assume to be most averse to averse to regional integration indicated otherwise in a recent large‐scale Gallup‐administered poll: the loudest call for tighter relations among neighbors came from Serbia and BiH (62% and 61%), as well as FYR Macedonia at 57% of respondents.2

Despite such desires, Albania, BiH, FYR Macedonia, Montenegro, and Serbia today differ in their political and economic institutions and policies. As one scholar of the region explains, “The countries of the Western Balkans…emerged from a very similar set of institutional conditions, while at the same time having very different levels of economic development. Their initial [post‐independence] comprised a highly decentralized economy based upon a unique system of workers’ self‐management, while Albania presented a contrast in initial conditions with its extremely centralized communist system. Initial conditions therefore differed along several dimensions.”3 In other words, harmonizing policy on a regional level may not be as simple as falling back on the former communist era, but rather a complicated set of tasks that will require coordination among numerous actors both inside and outside of the Western Balkans. These differences have been compounded by varying policies regarding the formal and informal sectors, the latter becoming crucial components of overall economic activity in areas of conflict such as BiH and Kosovo as well as Serbia, which suffered from sanctions under the Milosevic regime.

While it does seems apparent that segments of the population in each of this study’s five countries prefer further integration Western Europe4 (and hence the European Union, which is discussed below), there have been a number of important regional and multilateral initiatives in the last fifteen years. Many of these groups and policies are outgrowths of EU, World Bank, and WTO programs, including

1 William Bartlett, Europe’s Troubled Region: Economic Development, Institutional Reform, and Social Welfare in the Western Balkans, (New York: Routeledge, 2008), 132. 2 Balkan Monitor, 2008 Analytical Report, Balkan Monitor: Insights and Perceptions: Voices of the Balkans, http://www.balkan‐monitor.eu/files/BalkanMonitor‐2008_Analytical_Report.pdf, 55. 3 Bartlett, Europe’s Troubled Region, 2. 4 Gordon Bardos, interview by Yoojung Ahn, Yaninee Nachom and Reiko Okumura, 20 January 2009. 134

peace‐building initiatives in BiH from 1995 onwards, and in Kosovo and FYR from 2000 and 2001 onwards.

Perhaps the most critical regional initiative began with the Stability Pact for Southeastern Europe, initiated in 1998 by the European Union as a pro‐active peace‐building, conflict prevention, and regional integrating entity that included much of the Western Balkans as well as Bulgaria, Romania, and Moldova. 5 With “working tables” concerned variously with democracy building, economic development, and security, the ongoing consultation among Stability Pact members led to the Trade Working Group (TWG) which fostered numerous free‐trade agreements on a bi‐lateral level amongst most of the Western Balkan nations. By the end of 2004, nearly three‐dozen such treaties had been signed, lowering import and export barriers to near zero and essentially creating a free trade zone among the Balkans nations as well as other neighbors such as Romania.6 In 2005, efforts to bring the agreements under an umbrella pact led to negotiations to bring the Western Balkans countries into the Central European Free Trade Agreement (CEFTA), which was completed by the end of 2006. The results have thus far been mixed, with Serbia and Croatia increasing their exports greatly and other Western Balkans countries lagging behind. At the very least, however, the regional trade infrastructure is in place for further expansion of trade across within the region among the Western Balkans countries.

In addition to trade amongst themselves, the nations have also negotiated agreements with the European Union, which granted Autonomous Trade Preferences to each Western Balkan nation in 2000. Indeed, the EU market is the region’s key export market.7 In addition, three nations in the region, FYR Macedonia, Montenegro, and Serbia became official candidates for EU membership in December 2005 and October 2007, and November 2007, respectively.8 All five countries in this study have completed Stabilisation and Association Agreements with the EU,9 meaning that regardless of application and candidacy status, all nations are working (at varying paces) towards structural reforms necessary for future EU membership. Such memberships would necessarily supersede the free trade agreements and trade relationships in place now and described above.

In addition to regional and continental initiatives, Albania, and FYR Macedonia became members of the WTO in 2000 and 2003,10 respectively, drawing the two countries into not only more liberalized trade policies, but more specific obligations in the global free‐market economy under the GATS platform, which directly impacts labor and export practices related to the tourism sector.

5 Stability Pact for South Eastern Europe, “About the Stability Pact,” Stability Pact for South Eastern Europe, http://www.stabilitypact.org/about/default.asp. 6 Bartlett, Europe’s Troubled Region, 136. 7 Ibid., 134. 8 European Bank for Reconstruction and Development, “FYR Macedonia Strategy Overview,” European Bank for Reconstruction and Development, http://www.ebrd.com/about/strategy/country/mace/index.htm. 9 FYR Macedonia faces the obstacle of its tumultuous relationship with Greece, which has moved to block FYR Macedonia’s moves to join the EU. 10 World Trade Organization, “Members and Observers,” World Trade Organization, http://www.wto.org/english/theWTO_e/whatis_e/tif_e/org6_e.htm. 135

Foreign Financial and Technical Assistance

In addition, a number of key actors work with the Western Balkan nations in providing financial and technical assistance, as well as a platform for regional policy harmonization. These include the European Investment Bank (EIB), whose activities have been focused almost exclusively on transport infrastructure development; the European Bank for Reconstruction and Development (EBRD), which works with local banks and stresses capacity building at a local level; the Council of Europe Development Bank (CEDB), works on a smaller scale; the OECD, which created the Investment Compact (IC) which worked in private sector development within the Stabilization Pact, with a focus on SME development; as well as loans, grants, and technical assistance from various bilateral agencies within individual EU countries. Such financial flows are large; indeed, the EBRD alone invested 2.9 billion Euros in the Western Balkans from 1991‐2004.11

This is all in addition to the European Agency for Reconstruction, which was initially founded as the Task Force for the Reconstruction of Kosovo, until it was replaced in 2000 by the European Agency for Reconstruction under the auspices of the EU, itself completed in 2008. By 2005 had dedicated 2.6 billion Euros in funding to Montenegro, Macedonia, Serbia, and Kosovo.12

In addition, the United Nations and its various agencies have made a regional presence in the Western Balkans. Particularly important have been UNHCR in BiH, Kosovo, and FYR Macedonia, as well as UNDP in each of the 5 feasibility report countries.

Moving Forward

In February 2008 the Regional Cooperation Council (RCC) succeeded the Stability Pact. With a secretariat based in Sarajevo, the RCC works six priority areas: economic and social development, energy and infrastructure, justice and home affairs, security cooperation, building human capital, and parliamentary cooperation as an overarching theme”13 Such an entity will be crucial to economic and political integration generally, and regional sustainable tourism development more specifically, in the coming years.

Importantly, regional initiatives have come about not simply in the trade sector, but also in functional areas such as transportation (The Trade and Transport Facilitation in Southeast Europe Program), energy (the South East European Energy Community), and law enforcement (Southeast European Cooperative Initiative). This is a welcome sign that regional cooperation on other economic sectors, sustainable tourism included, can indeed become part of the regional policy agenda.

11 Bartlett, 174. 12 Ibid., 175 13 Regional Cooperation Council, “Overview,” Regional Cooperation Council, http://www.rcc.int/index.php?action=page&id=2&link_id=6. 136

What is needed are further grass roots and bottom‐up regional initiatives. It is apparent that leaders in the tourism industry throughout the Western Balkans understand the need for regional cooperation. Such cooperation will continue to be tested by poor economic climate of today, as well as varying local opinions on the region’s future. It is critical to underscore that while each of the five countries in this feasibility is classified as middle‐income countries, the economic well being of large segments of the region’s populations is somewhat precarious. For instance, 66% of Serbian and Albanians, as well as 63%of Macedonians and 60% of Bosnians believe that their current family income is not sufficient to provide for their basic needs.14 Indeed, the level of dissatisfaction with the economic situation among residents of BiH is nearly 90%, and residents throughout the region have greater trust in religious institutions than government bodies and multilateral institutions, with exception of Kosovo and Albania, who trust in NATO the most.15

Fostering regional integration thus involves not only a patchwork of multilateral institutions, ethnicities, religions, economies, and political systems, but also varying perceptions and expectations for the future on the local level. Any sustainable tourism development program carried out in the future must incorporate a sound understanding of these factors into program policy and implementation.

9.2: EU Accession

The five target Western Balkans states have each expressed their interested in joining the European Union (EU). In response, the EU regards these nations’ commitments to European integration as a promising step toward regional peace and stability.16 In fact, one of the EU membership conditions for the Western Balkan countries is to strengthen their regional cooperation as well as assist the International Criminal Tribunal for the Former Yugoslavia (ICTY).17 In building relationships and policies geared towards EU membership, the Western Balkans nations are undertaking certain fundamental policy changes in order to harmonize their legislation in areas of economy, trade, labor, environment, and other areas relevant to the tourism sector.

EU Application Process

At the Copenhagen Summit in June 1993, the Council of the European Union (the Council) officially invited numerous Central and Eastern European nations to join its organization, specifying three membership criteria for such nations:18 first, candidate countries must have stable political institutions

14 Balkan Monitor, 2008 Analytical Report, Balkan Monitor, 18. 15 Ibid., 6. 16 European Union, European Commission, Western Balkans: Enhancing the European Perspective, 5 March 2008, (Document No.127 Final), http://ec.europa.eu/enlargement/pdf/balkans_communication/western_balkans_communication_050308_en.pdf , 2. 17 Ibid., 3. 18 Pascal Fontaine, Europe in 12 Lessons (Brussels: European Commission, 2004), 12. 137

to ensure democracy, rule of law, human rights as well as minority rights; second, candidate countries must have established a market economy equipped with necessary measures to stay competitive amidst economic pressure in the EU markets; and finally, countries must adopt the 26,000 pieces of EU law—or the so‐called acquis communautaire—to complete a political, economic and monetary union with the EU.19

The Western Balkans’ relations with the EU are defined by the Stabilization and Association Process (SAP). Initiated in 2000, the SAP differs from the EU’s 1993 accession process in that it places additional emphasis on regional cooperation throughout the Western Balkans. At a 2003 Summit, the EU reiterated its commitment to enlargement by promising trade relations and preferences for the region, financial assistance through the Instrument for Pre‐Accession Assistance (IPA) for the period between 2007 and 2013, and a signing of the Stabilization and Association Agreement (SAA).20

Country Status

The five target countries are at different stages on their path toward EU integration. While others are still potential candidates, FYR Macedonia became a candidate country after its SAA was officially endorsed in December 2005. Since February 2008, FYR Macedonia has further received pre‐accession assistance from the Council under the Accession Partnership, including priority assessments for reforms.21 Among the other four countries, Albania is at the most advanced stage, as its SAA, signed in 2006, entered into effect on April 1, 2009.22 Montenegro was the third country in the region to sign the SAA and the Interim Agreement on trade and trade‐related issues in October 2007,23 followed by Serbia in April 200824 and Bosnia and Herzegovina (BiH) in June 2008.25 Serbia’s possibility to enter the EU

19 Ibid. 20 European Union, “Glossary: Stabiliasation and Association Process,” Europa, http://europa.eu/scadplus/glossary/stabilisation_association_process_en.htm. 21 European Union, European Commission, The Former Yugoslav Republic of Macedonia 2008 Progress Report, 5 November 2008, (Working Document No.2695), http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/the_former_yugoslav_rep ublic_of_macedonia_progress_report_en.pdf, 5. 22 European Commission, “EU‐Albania relations,” Enlargement, http://ec.europa.eu/enlargement/potentialcandidate‐countries/albania/eu_albania_relations_en.htm. 23 European Union, European Commission, Montenegro 2008 Progress Report, 5 November 2008, (Working Document No.2696), http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/montenegro_progress_rep ort_en.pdf, 5. 24 European Union, European Commission, Serbia 2008 Progress Report, 5 November 2008, (Working Document No.2698), http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/serbia_progress_report_e n.pdf, 5. 25 European Union, European Commission, Bosnia and Herzegovina 2008 Progress Report, 5 November 2008, (Working Document No.2693), http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/bosnia_herzegovina_progr ess_report_en.pdf, 4. 138

depends upon the Council’s evaluation of the country’s cooperation with the ICTY,26 while BiH’s progress has been hindered by lack of coordination between its two ethno‐political entities.27

Current Progress

Despite the above differences, the Western Balkans states continue to struggle in their efforts to reform constitutional provisions and electoral processes to meet the EU requirements. Amendments and strict enforcement are needed in many areas,28 including provisions ensuring full public participation in political processes regardless of religious or sectarian affiliates.29 FYR Macedonia once again leads the progress as the outcome of its April 5 elections proved to the EU its commitment to democratic principles and European integration.30

Progress on economic reforms is also checkered. While BiH’s complex bureaucracy adds a high and unattractive opportunity cost to business registration,31 Serbia and Albania have established new mechanisms to facilitate the process which can be completed within five32 and one days respectively. Albania also adopted the European Charter for Small Enterprises in June 2008.33 Despite these regulations and institutions, in practice SMEs still face difficulties ranging from low access to financial resources due to high interest rates and strict lending criteria at FYR Macedonia’s commercial banks;34 insufficient mechanisms to ensure contract enforcement, property rights protection and transparency within Albania’s judiciary system;35 and the complete absence of a company law at BiH’s state‐level.36 At a more advanced stage are Montenegro and Serbia. Montenegro adopted a national strategy for the development of SMEs for 2007 to 2010, and has also begun initiatives to eliminate barriers to entrepreneurship and enterprise development. Both Montenegro37 and Serbia also have separate comprehensive electronic databases on business entities and entrepreneurs; Serbia has also fostered a

26 European Union, European Commission, Serbia 2008 Progress Report, 5. 27 European Union, European Commission, Bosnia and Herzegovina 2008 Progress Report, 5. 28 European Union, European Commission, Albania 2008 Progress Report, 5 November 2008, (Working Document No.2692), http://ec.europa.eu/enlargement/pdf/press_corner/keydocuments/reports_nov_2008/albania_progress_report_e n.pdf, 9; ibid. , Montenegro 2008 Progress Report, 6; ibid., Serbia 2008 Progress Report, 6‐7. 29 European Union, European Commission, Bosnia and Herzegovina 2008 Progress Report, 7. 30 Joanna Sopinska, “EU/FYROM: EU Welcomes Successful Elections, Says Further Reforms Needed,” Europolitics, 8 April 2009, www.lexisnexis.com. 31 European Union, European Commission, Bosnia and Herzegovina 2008 Progress Report, 35. 32 European Union, European Commission, Serbia 2008 Progress Report, 32. 33 European Union, European Commission, Albania 2008 Progress Report, 35. 34 European Union, European Commission, The Former Yugoslav Republic of Macedonia 2008 Progress Report, 53. 35 European Union, European Commission, Albania 2008 Progress Report, 36. 36 European Union, European Commission, Bosnia and Herzegovina 2008 Progress Report, 35. 37 European Union, European Commission, Montenegro 2008 Progress Report, 36. 139

strong relationship with SMEs through its SME Council. Indeed, the EC’s 2008 Progress Report on Serbia considers the country as having met its SAA requirements on SMEs development.38

There is less progress regarding regulations on foreign investment. In an effort to foster outside investment, FYR Macedonia currently allows foreign investors to register their businesses directly at the Central Registry without having to first make a foreign declaration with the Ministry of Economy.39 Nonetheless, FYR Macedonia’s National Bank has made some progress on movement of capital with the signing of a memorandum of cooperation on banking supervision with its Serbian counterpart. With an increase in foreign investment activities, Serbia’s Law of Foreign Exchange Operations 40 and Montenegro’s legislation on foreign current and capital operations also specify free and restricted areas for non‐resident investors with Montenegrin national parks on the latter list. In fact, Montenegro’s negotiations with the WTO have helped advanced much of the country’s progress, including the implementation of a 2008 law on employment of foreigners that includes provisions on cross‐border service suppliers, intra‐corporate transfers, business visitors, and contractual service suppliers.41

Implications for Regional Sustainable Tourism Development

While there are no specific provisions in EU law that address tourism, many elements of acquis communautaire will likely influence tourism, including ease of transportation, improved investment climate, and the environment.42

The European Council has stressed the importance of regional integration and cooperation, particularly between the Western Balkans countries, in order to promote reconciliation after decades of conflict. As a result, the European Commission has encouraged visa liberalization in order to facilitate ease of travel between the Western Balkans and EU member states.43 Steps have already been taken to ameliorate conditions for applying and obtaining visas to the EU; however, visa‐free travel will encourage new opportunities for travel and business cooperation with European partners.

A second, albeit negative effect of the EU accession process, is the ease of capital and labor mobility. Porous borders and the ability for individuals to travel and work could potentially lead to increased migration across the EU. In the long‐run, this will vary depending upon demand for migrants and employment opportunities; however, in the short‐run, skilled and educated workers may leave the

38 European Union, European Commission, Serbia 2008 Progress Report, 40. 39 European Union, European Commission, The Former Yugoslav Republic of Macedonia 2008 Progress Report, 32. 40 European Union, European Commission, Serbia 2008 Progress Report, 33. 41 European Union, European Commission, Montenegro 2008 Progress Report, 28‐30. 42 Derek Hall, Melanie Smith and Barbara Marciszewska, ed., Tourism in the New Europe: The Challenges and Opportunities of EU Enlargement, (Wallingford: CABI Pub., 2006), 13. 43 European Union, European Commission, Western Balkans: Enhancing the European Perspective, 5 March 2008, (Document No.127 Final), http://ec.europa.eu/enlargement/pdf/balkans_communication/western_balkans_communication_050308_en.pdf , 8. 140

Western Balkans for more prosperous opportunities in the EU‐8 countries, rather than staying to assist in promoting tourism development.44

The level of foreign investment in the Western Balkans has been particularly low over the last five years, particularly given the negative image of the region due to war and political instability. As the target countries continue to stabilize and implement reforms necessary for EU accession, increased foreign investment is a distinct possibility. Tourism and real estate investment opportunities, in particular, are attractive potential investments in the region. Investors have recognized the historical and cultural tourism potential in the area and have already begun to capitalize on well‐developed tourist areas as well, such as the beaches of Montenegro. As the tourism demand grows, the Western Balkans countries will slowly open up to international foreign investment, made easier as a result of economic reforms mandated by the EU as a condition for accession. Such investment, however, must be properly regulated in order to ensure long‐term, local ownership over tourist sites of key important.

As discussed above, EU law does not directly address tourism; however, accession countries are bound by legislation to protect natural and cultural heritage.45 In addition, some environmentalists would argue that the EU accession process has been an opportunity for NGOs and civil society organizations to influence development policy decisions, particularly concerning environmental issues.46

One illustrative case on EU integration and tourism development is provided by Romania, where the government pledged to revive the tourism industry in 2000 and developed plans to build a theme park near the medieval town of Sighisoara (a UNESCO World Heritage Site) in Transylvania.47 The theme park would bring employment opportunities and thus was welcomed by the local population; however, plans to construct the 120‐hectre park also entailed destroying three‐fourths of a 400‐year old oak forest.48 Protestors sought support from outside Romania, notably in Germany and Britain, who also wanted to preserve Romania’s environmental and cultural heritage. Pressure began to mount from UNESCO, the European Parliament’s Culture Committee, and the international media to end construction.49 In the midst of its EU accession process, the government of Romania grew increasingly concerned about Romania’s image and how the controversy would impede the process. In the end, the

44 Frigyes Ferdinand Heinz and Melanie Ward‐Warmedinger (European Central Bank), “Cross‐Border Labour Mobility within an Enlarged EU,” Occasional Paper Series No. 52 (October 2006), http://www.ecb.int/pub/pdf/scpops/ecbocp52.pdf, 4. 45 Hall, Smith and Marciszewska, ed., Tourism in the New Europe, 307. 46 Cristina Parau (United Nations Development Programme), “Environmental NGOs and EU Accession Conditionality,” Development and Transition, September 2008, (Joint Publication of UNDP and the London School of Economic and Political Science), http://www.developmentandtransition.net/index.cfm?module=ActiveWeb&page=WebPage&DocumentID=677. 47 Ibid. 48 Ibid. 49 Ibid. 141

government decided against building the theme park as the potential costs of delaying or terminating the accession process far outweighed the economic benefits of the tourist destination in Romania.50

9.3 Regional Strengths and Weaknesses

Despite the individual strengths of each country, the five target countries face a number of common weaknesses, which threatens the development of the tourism industry at both the national and regional levels. These weaknesses, bifurcated into tourism products and services, are described below, together with recommendations for the ITC and future partner institutions.

On Tourism Products

A) Infrastructure

Ongoing Problem:

All countries in this feasibility study suffer, to varying degrees, from a weak transportation system, including poor development of roads and railways, both in country and cross border, low airport capacity, and lack of inter and intra‐country bus routes for tourists to major attractions. While physical infrastructure has improved in the recent years, particularly in FYR Macedonia and Montenegro, it is still underdeveloped by European standards. In Albania, for example, improving access to major cultural heritage sites commenced only in 2008 when the Ministry of Culture, Tourism, Youth and Sports began cooperating with the Ministry of Transportation, for road improvement.51

In addition, road signage is also a key constraint at the present time. There is not only a lack of road signs along major highways and secondary roads, but also in the immediate vicinity of key tourist sites. In FYR Macedonia, for example, local signage is federally funded and falls under the jurisdiction of local municipalities, and thus is not standardized from one area to another, let alone on a country‐wide scale.

Table 9.1: Relevant Travel and Tourism Report Rankings

Relevant Travel and Tourism Report Rankings (133 Countries in Total)

Quality of Roads Quality of ground transport network

Albania 114 123

50 Ibid. 51 Ols Lafe, interview with Humay Guliyeva, Scott Leo and Alida Meghji, 9 January 2009. 142

Bosnia 130 96

Macedonia 83 77

Montenegro 119 91

Serbia 115 93

Source: Jennifer Blanke and Thea Chiesa, ed., “Country Profiles,” Ch. 2.1 of The Travel & Tourism Competitiveness Report 2009 (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html.

Recommendations:

While the ITC’s mandate is not necessarily to work upon infrastructure upgrades, it goes without saying that trade cannot take place without sound physical infrastructure in place. The time it takes to deliver export goods, for example, is significantly increased with poor road and railway infrastructure, a problem faced by many of the target countries. For example, a bus ride from Sarajevo to Banja Luka, the second largest city in BiH, takes six hours, even though the distance is only 250 kilometres.52 Although past programs developed and implemented by the ITC have involved working with SMEs, the team recognizes that infrastructure is an area where the ITC can initiate Public Private Partnerships (PPPs) with organizations with an increased specialization in infrastructure development, including the World Bank, which has already worked in infrastructure development throughout the Western Balkans.53

While a number of cross‐border highway construction efforts are underway, national governments have prioritized road and railway development within their own countries. National construction efforts are generally initiated by the Ministry of Transportation and funded through government revenue, whereas regional initiatives generally require external funding from private investment companies or international donors.

Understanding the deficiency in road signage, SNV in FYR Macedonia is set to launch a program by mid 2009 to create a manual on European Union standard road signs. The manual is intended for municipal leaders hoping to ameliorate visitation numbers to their own local cultural and historical sites.54 In this regard, the ITC can work with SNV to promote and distribute the manual on a regional level and ensure that government leaders are adhering to a set of common standards.

B) Waste Management

52 Tim Clancy, Bosnia, Serbia & Montenegro (Peterborough: Thomas Cook Publishing, 2007), 26. 53 World Bank, Albania: Secondary and Local Roads Project, 2008‐2012, http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=301412&menuPK= 301443&Projectid=P107833 54 Nehat Ramadani, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 15 January 2009. 143

Ongoing Problem:

While the target countries recognize that lack of appropriate waste disposal and waste management impede sustainable tourism development, few countries have taken active steps to resolve the problem. FYR Macedonia, for instance, is ranked 119 and 118 for stringency and enforcement of environmental regulations by the WED World Travel and Tourism Competitiveness Report.55 The problem can be divided into two distinct but related issues: waste management infrastructure and littering.

The former is more closely tied to physical infrastructure for proper sewage and draining systems for liquid waste, as well as proper disposal infrastructure for solid waste. Bringing about improvements in this area require coordination along national and municipal leaders, as well as the multiple donor sources outlined in Section 9.1. An illustrative example is the Second Solid Waste Management Project for Bosnia and Herzegovina, which includes provisions for technical, on‐site assistance for participating municipalities, as well as integrating recycling and waste reduction strategies into local policy making. Financing is provided by the World Bank, the International Bank For Reconstruction and Development, and the International Development Association (IDA) in the form of loans borrowed by the overriding governing structure of BiH.56

Littering is another distinct problem throughout the Western Balkans. While infrastructure such as properly placed and sufficiently numbered trash receptacles are important, the problem of littering is also one of public education and perceptions. As noted in the preceding sections, tourism stakeholders in the Western Balkans countries have identified litter by the local population, as well as visitors from within the region, as a major challenge, particularly when working to lure Western European visitors who are highly sensitive to sighting trash in rivers and on beaches.

Recommendations:

As the ITC has expressed interest in partnering with other international development agencies, the strategy for waste management infrastructure enhancement in the Western Balkans would almost certainly entail working jointly with the World Bank and various regional financers discussed in section 9.1, including the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the Council of Europe Development Bank (CEDB).

Regarding littering and waste prevention, the ITC should integrate education and awareness programs into any training and capacity building workshops provided for a broad range of tourism stakeholders. In

55 Jennifer Blanke and Thea Chiesa, ed., “Country Profiles,” ch. 2.1 of The Travel & Tourism Competitiveness Report 2009 (Geneva: World Economic Forum, 2009), http://www.weforum.org/documents/TTCR09/index.html, 257. 56 World Bank, “Second Solid Waste Management Project, World Bank,” World Bank, 25 November 2008, http://web.worldbank.org/external/projects/main?Projectid=P107998&Type=Overview&theSitePK=40941&pageP K=64283627&menuPK=64282134&piPK=64290415. 144

addition, and dependent on funding and resources, the ITC can partner with local municipalities to provide ongoing waste management awareness campaigns in public fora.

C) Preservation of Cultural Sites

Ongoing Problem:

A problem inherent in utilizing cultural sites (cities, villages, religious sites, and archaeological sites) as tourism products is that without effective policymaking and implementation, the integrity of such sites can be compromised. Degradation of cultural sites can occur in physical form, such as wear on archaeological sites from increased foot traffic and visitor contact, or in the social realm. For example, a village promoted as being indicative of authentic indigenous culture may undergo rapid social change during a sudden rise in the number of foreign tourists and the change in commercial development, employment, and social relations brought about by this increase.

Recommendations:

Recommendations in this area can be divided into the physical and the social/cultural.

If not already in line with global standards of the UNESCO World Heritage Convention, which outlines the demarcation and preservation of culturally significant sites,57 locations identified by the ITC for assistance must harmonize their preservation infrastructure with global norms. Other important measures include effectively capturing and utilizing revenues generated from such sites. This includes effective visitor management which entails ensuring visitors to distinct sites are counted and charged a ticketing fee, as well as measured provisions by local officials to utilize such revenues for the preservation of the site and the betterment of the local community. With proper guidelines in place for the physical preservation of sites, such as well‐marked bilingual signs outlining rules for visitors, revenues generated can help ensure financing for ongoing preservation.

The cultural realm presents more of a challenge for policy makers and program implementers. UNWTO and UNEP provide sound but general recommendations on this issue, including development of programming and festivals based on local heritage, showcasing and incorporating local culture into the experience of visitors to tourism sites and locations, training and capacity building for local leaders and business owners to understand the cultural implications of their development strategies, as well as

57 United Nations Educational, Scientific and Cultural Organization, “UNESCO World Heritage Convention,” United Nations Educational, Scientific and Cultural Organization, November 1972, http://whc.unesco.org/en/conventiontext/. 145

setting policies that work against lessening the value of culturally significant items through souvenir sales.58

As culture‐based tourism is among the most important tourism products offered by the Western Balkans nations, the ITC should integrate an understanding of the above‐mentioned measures into any strategy for a regional program. Specifically, such measures can be integrated into training workshops for selected individuals, including municipal leaders, small business owners, hotel and guest house owners, and those employed directly at specific historical sites such as castles, museums, and archaeological ruins.

On Tourism Services

D) Quality and Quantity of Accommodation

Ongoing Problem:

Upon examination of the level of accommodation in each of the target countries, the team discovered that each country faced their own unique set of issues. In Montenegro, for example, illegal building and construction is rampant, particularly in the coastal area of Budva, where accommodation has significantly increased capacity, thereby putting a strain on the natural resources. In Serbia however, accommodation in Belgrade cannot meet tourist demands during peak season.59 Hotels are in high demand, with the country only able to provide 38,000 hotel beds.60 As a result, accommodation is unaffordable for budget travelers.

In addition, the quality of lodging available for tourists is also generally quite low throughout the region. Urban areas, for example, must cater to a variety of tourists, from business travelers to families to travelers on a budget. Consequently, cities must be able to provide a large range of accommodations, from five‐star hotels complete with amenities, to low budget hostels and private guest houses in order to meet the varied demand. In Albania, for example, large rest camps for workers were constructed during the communist period. Such antiquated facilities have not been upgraded and hence may not satisfy the current demands of foreign tourists. Where new lodging has been built – primarily along Albania’s coast near Duress –basic hotels, made of concrete directly on the beach and lacking aesthetics,

58 United Nations Environment Programme, Making Tourism More Sustainable: A Guide for Policy Makers, 2005, (Joint Publication of UNEP and and World Tourism Organization), http://www.unep.fr/shared/publications/pdf/DTIx0592xPA‐TourismPolicyEN.pdf, 2. 59 Jasna Cvetkovic, interview by Yoojung Ahn and Reiko Okumura, 24 March 2009. 60 National Tourism Organization of Serbia, “Useful Facts,” Serbia, http://www.serbia.travel/cms/item/info/en/Useful_facts.html. 146

do not suggest a sustainable model for accommodation expansion across the country, let alone the region.

Recommendations:

Rather than form partnerships with companies willing to invest in hotel construction, the ITC can work to improve the investment climate in the Western Balkans. Serbia is trying to position itself as a destination for business travelers and conferences and yet suffers from lack of accommodation during peak convention periods. Copious investment opportunities in Serbia should exist; however, there are significant barriers to doing business in the country and the region as a whole. The ITC can thereby play a vital role in working with the government on a macro level to improve the investment climate and encourage international investment in the hotel industry.

Albania has already taken the first step to improving the quality and quantity of hotel accommodations; the new tourism law regulates the designing and building of accommodation units, whether they are large hotels or budget hostels. Plans for construction of accommodation units must be granted government certification through such a law; this allows the government to adequately supply accommodation to meet the demands of the tourists. In addition, provided enforcement and penalties are properly implemented, such laws as this one would reduce illegal building, a problem faced by Montenegro, in particular.

E) Tour Guides

Ongoing problem:

Despite tourism development being a top priority in many of the target countries, key cultural and historical sites lack a sufficient number of professional tour guides, particularly during off‐season. In Bosnia, where tour guides are available, strong language skills, necessary for communicating with foreign tourists, are lacking. In addition, both the state and the two entitles have yet to issue laws or agree upon a set of requirements for certifying tour guides.61 Where attempts already exist, certificates are only community or region specific.62

Recommendations:

Serbia stands out as a country with mechanisms and processes in place to train and certify tour guides. In order to become a tour guide, a candidate has to first pass preliminary examinations that will deem

61 Tim Clancy, Lessons Learned in Designing and Implementing Small‐Scale Tourism Development Projects in BiH, (Sarajevo: Arch Design, 2008), 6. 62 Ibid. 147

them eligible for a one‐year training to course and a national license as a tour guide. In 2005, there were 507 applicants; the number significantly increased to almost 3,000 applicants in 2008.

The ITC can consequently work with Serbia to standardize a tour guide manual (in line with EU standards) to be distributed amongst the other target countries in the Western Balkans. In addition, the ITC can work to provide trainings and certificates across the region, thereby improving the quality of tour guides and tours provided in the target countries. Finally, the ITC can work with tour agencies and operators to provide employment opportunities for newly trained tour guides. In Montenegro, organized tours with more than fifteen individuals require a trained and licensed tour guide; however, the quality of these guides is questionable. Linking professional tour guides with tour operators will inevitably improve the quality and reputation of the enterprise and augment the tourism sector overall. From a value chain perspective, it will also provide long‐term employment to a number of individuals now certified as tour guides, making the endeavor profitable and sustainable in the long run. While some international organizations are providing or supporting training programs, this assistance is generally sporadic and not conducted on a nation‐wide level, yet alone throughout the region.

F) Lack of Education and Training for Tourism Services

Ongoing problem:

Not only is there a lack of training for tour guides, but there is a significant dearth of education and training across all tourism services, including in hotels, restaurants, retailers and tour operators, to name a few. The first problem encountered is that of language skills. Service employees in competing countries, such as Italy, Greece and Turkey, are generally proficient in a second language and can thus cater to the needs of international tourists; however, this is not the case throughout much of the Western Balkans, and the lack of language skills is consequently impeding the region’s ability to attract tourists.

Many of the target countries have the ability to develop and promote rural tourism; however, the absence of service training for staff pervades the rural tourism subsector. In FYR Macedonia, promotion is difficult as local agriculturalists and small enterprise owners are skeptical that rural tourism is profitable and in demand. While the region boasts a hospitable culture, the desire to please tourists has resulted in a decline in an authentic rural experience.63 Furthermore, nepotism is quite pervasive across the region; in the hotel and restaurant industries, family members are often employed in family businesses without respect to their vocational abilities, leading to a decline in quality service for tourists.

Finally, entrepreneurs and managers also lack sufficient management and business skills required to operate successfully in the industry. This includes accounting skills, bookkeeping and market analysis training, to name a few.

63 Anita Kodzoman, interview by Humay Guliyeva, Scott Leo and Alida Meghji, 14 January 2009. 148

Recommendations:

Almost every international agency that has implemented or supported programs on sustainable tourism development in the region has made service training a key component; however, the condition of service is still described as poor by many tourist, industry officials, and observers. In Montenegro, managers have stopped sending their employees to training workshops as there is no incentive after the training to implement their new knowledge and skills. Follow up sessions or long‐term programs are rare; however, quick impact programs are numerous and often ineffective. Therefore, programs must provide follow up training, technical assistance and support in order to garner support from entrepreneurs and managers.

Instead, the ITC can develop long term training programs integrated into formal education systems. In Serbia for example, there are fourteen high schools and ten universities that have specific courses specializing in tourism and hospitality. Singidunum University offers Bachelors, Masters and PhD level programs in tourism and hospitality management. Furthermore, with the support of the ITC, Serbia is in a position to act as a leader in training and educating other tourism actors throughout the region. Similar to the team’s recommendation for tour guides, the ITC can develop a standardized training manual that conforms to EU and international standards.64

G) Marketing and Promotion of Tourism Products

Ongoing problem:

Despite the breadth and depth of cultural and historical tourism in each of the target countries, marketing and promotional materials are generally unavailable at tourist sites. These can include pamphlets, brochures, and signage. For example, signage at Serbian tourist sites, including in the capital city of Belgrade, are predominantly written in the Cyrillic alphabet, making it difficult for tourists from outside the region to properly navigate themselves from one site to another.

A second ongoing problem faced by many of the countries is the lack of branding. The negative image of violence throughout the Balkans, whether it be the 1990‐1995 or the Kosovo conflict of the late 1990s, has destroyed any efforts made to improve the reputation and positive impression of the region. While national governments are taking initiatives to market their countries as safe destinations, further efforts are needed to promote specific tourist products for niche travelers.

Recommendations:

64 The Code of Guiding Practice, World Federation of Tourist Guide Associations, http://wftga.org/page.asp?id=16 149

The ITC can work with SMEs including tour agencies and local retailers, as well as with government authorities overseeing cultural and historical sites, to develop and distribute appropriate tourism promotional materials.

In Albania, UNDP implemented an “Image of Albania” project aimed at closing the information gap about the country on a regional and international level. The key objectives were to work together with the Albanian government and international media to ameliorate the quality and quantity of disseminated information in order to create positive associations of the country. Similar initiatives have been implemented in other target countries; however, there has been no such coordination at the regional level. The ITC can play a direct role in improving such coordination at the regional level and promoting a positive image of the Western Balkans in Europe and overseas.

150

Annex 1

Regional Comparative Table

TOURISM PRODUCTS

Nature/Mountain Culture/History Beach Other

Albania Strengths Strengths Strengths

• Hiking and biking • Three UNESCO World Heritage • 450 km of Adriatic and • Albanian Alps Sites Ionian beach • Mountains • Rich archaeological heritage • Ability to attract • Cultural heritage sites in natural different niche of

beauty settings tourists: long, sandy, beaches and secluded,

Weaknesses deep and rocky beaches Weaknesses • No trails developed Weaknesses • Lack of professional tour guides (particularly in the • Lack of financial and • mountains) administrative capacity for Unsustainable construction in beach • Lack of emergency services preservation and interesting areas (Durres, and mobile phone coverage presentation of country's cultural Saranda) • Electricity and water heritage • No proper waste shortages • Access is difficult due to managment system • Environmentally infrastructure problems • oriented towards unsustainable activities in • Shortage of qualified tour guides Albanian families from national parks (logging, and qualified site managers Macedonia and hunting) • Shortage of quality Kosovo, hence lack of • No skiing infrastructure accommodation at cultural sites high quality facilities • No trails developed for "real" tourists

151

BiH Strengths Strengths Strengths

• Untouched nature • Old Towns (Sarajevo, Mostar) • Youth tourism • River for rafting • Religious sites (Ottoman • Active youth groups • Skiing developed mosques, Medugorje) • Former Yugoslavian • Photo safari • Rural/Village Tourism legacy requires • Ecotourism • Rooms for historical tourism students to spend at • Cycling trails but not on the 92‐95 war or least one week in ethnic differences nature

• Sarajevo Film Festival and film industry Weaknesses • Proximity of these sites; good public transportation Weaknesses • Land mines • Souvenir productions, local • Low accessibility production ‐‐ > rural tourism‐‐> • Tourism industry • Environmental damage local production actors (with exception • Maps; easy to go around of youth

• Plenty of accommodation organizations) do not view youth tourism as priority Weaknesses

• Not many activities to do ‐ tourists don't stay overnight • Ethnic tensions • Lack of exhibits in museums, Turkish houses • Lack of trained guides • Lack of signage except for Mostar

152

FYR Macedonia Strengths Strengths Strengths Strengths

• Mountains • Historic architecture in cities • Some small beaches • Wine industry is well • Skiing developed and villages for public use along established. Relatively • Hiking • Hundreds of preserved Lake Ohrid simple facility religious sites upgrades, signage, and • Lakes • Ecotourism potential • Ancient Roman and Greek sites marketing to lead to • Room for growth in rural fast growth in wine

tourism Weaknesses tourism

Weaknesses • Lake access is restricted by natural Weaknesses • Low level of service Weaknesses offerings (often rocky), • Lack of guides private land use, and • Lack of guides preservation efforts • Lack of market

• Lack of proper signage that bar swimming understanding • Lack of service • Lack of resources and • Lack of market understanding capacity to upgrade for some site, particularly rural facilities (wineries) for villages and farms tours

Montenegro Strengths: Strengths Strengths:

• Skiing developed • Cultural heritage has not been • Sandy beaches • Mountains demolished due to war • Developed coastline • Hiking • Museums and galleries • Beaches and activities • Development of cultural available for different Weaknesses villages groups of tourists • Maps and guided tours Weaknesses • Not developed in winter available activities • Cultural strategy for Cetinje • Lack of guides available • Water shortages • Competition high for winter • Have tourism office available during peak periods 153

activities with other with 700 people employed • Electricity shortages neighboring countries • Religious sites protected by during peak periods (outside Western Balkans) government • Overstretched • National museums infrastructure destroying natural Weaknesses landscape • Limited number of information • Lack of signage in points and signage beach areas • Few tour guides available but • Lack of entertainment because tourists do not stay options longer than a few hours • Few high quality • Job loss in cultural center led to resorts available low development and commitment • Few accommodations available in Cetinje Serbia Strengths Strengths Strengths • Biggest city in the • River (convergence of rivers • The Roman emperors trails Balkans region especially Danube – boat • Fortresses • Vibrant city life cruises) • The Transromanica route • Promotion efforts by • Spas (thermal springs) (Cooperation with other EU the government are • Bicycle routes countries) focused on city tourism • Attracts visitors from Weaknesses the whole region Weaknesses • Has good cooperation • Inadequate marketing and with other European promotion efforts • cities Underdeveloped as more • Lack of transportation focus has been on city tourism • Weaknesses • Spas need privatization • Still very premature compared to Western European cities • Too much focus on Belgrade 154

TOURISM SERVICES

Accommodation and Food Services Tour Operators and Agencies Other

Albania Strengths Strengths

• Excellent restaurant and cafe culture • Outdoor Albania is organizing in Tirana culture and nature hikes for • Online booking is more widespread adventure tourists through various websites • Slowly the awareness on importance of alternative tourism

is increasing

Weaknesses

• Old, unattractive rest camps from Weaknesses Soviet times • Lack of accommodation in the rural, • Most are outbound tour remote areas companies sending Albanians • Poor language skills in the abroad countryside • Inbound companies are mostly • Lack of service culture in hotel focused on selling sun and sand personnel tourism, rather than culture and nature tourism

Bosnia and Herzegovina Strengths Strengths

• Plenty of accommodation options in • Active youth groups (operators Herzegovina; and agencies, esp. in eco‐ and 155

• Good level of service nature tourism); networks with • Affordable prices other youth partners within and • Online‐booking at secured sites outside the country • Rating signs in front of hotels Weaknesses • Good language skills (English, German) • Few tourism management courses • Friendly service in restaurants, cafes at the university level • Mostly sit‐downs • No tourism law on tour guides • Plenty of small grocery stores and • Lack of qualified guide trainings, small‐scale supermarkets esp. for mountain guides Weaknesses • Lack of standardized guide certification • Few accommodation options in RS • Lack of guides with with lower quality services EU/International certification • Unfriendly in supermarkets and in RS in general • Culture of smoking with no ventilation FYR Macedonia Strengths Strengths

• Existing lodging infrastructure is • Tourism development in some adequate in number in many areas, municipalities has led to the particularly near Ohrid and former presence of adequate guides in ski areas locations such as Ohrid • Burgeoning guest house industry in • Tourism Law includes provisions some areas, such as Ohrid for tour guide certification • Food services are adequate, though absence of international cuisine Weaknesses options outside of Skopje

• Not apparent that Tourism Law is Weaknesses being adhered to and properly implemented • Quality of lodging is varied • Service quality varies in both lodging 156

and food services industries

Montenegro Strengths Strengths

• Tourism plan to 2020 to expand • Tourism developed in capacity of accommodation Montenegro – thus many tour • Register accommodation campaign agencies and operators and online in place to inform tourists about portals rated hotels and guest houses • Strong contacts in Western • Government heavily involved in Europe to promote tourism hotel industry • Tourism law has provisions for • Small association of hotel owners tour guides (within country and regional)

developed to collaborate and advocate Weaknesses

• Trained tour guides not available Weaknesses in areas where tourism is not yet developed • Low quality of services compared to • Tourism training not yet Mediterranean competitors introduced into formal education • Many trainings provided by donors system have not been followed by program incentives • Frustration of hotel owners • Low level of English and foreign languages

157

Serbia Strengths Strengths Strengths

• Accommodation: centralized/easily • Tour guide: well‐organized • Education: Advanced level accessible information ; online‐ exam/training/national certificate education on tourism booking site; system; easy access through (Master/PhD in university.) • Food Services: various types of Tourist Info center or directly by • Training of tourism actors is restaurants; open till late night and Internet done on a regular basis by safe; • Tour Operators: universities Cooperation/support by government Weaknesses Weaknesses

• Accommodation: Low quality of • No cooperation between public services; rating (1‐5 stars) standard Weaknesses and private sector. is far different from International/EU one; relatively expensive price setting; • Linked too much with the Food Services: Smoking; low level of government (not autonomous) English and foreign languages;

158

Annex 2

List of Interviews

Albania

Name Organization Title E‐mail Phone

Ina Vesju AlbInvest Inspector of Lead [email protected] +355 68 601 49 94 Generation Unit

Nevila Popa Enterprise Former Program [email protected] +355 69 207 76 35 Development and Officer Export Market Services (EDEM) Project, USAID

Luan GTZ Tourism and Local [email protected] +355 69 206 64 30 Dervishej Economic Development Coordinator

Elenita Gjirokastra Executive Manager [email protected] +355 69 208 06 49 Roshi Conservation and Development Organization

Ervin Mjaft! Movement Director of Media [email protected] +355 68 205 94 89 Qafmolla Department

Ols Lafe Ministry of Director of Cultural [email protected] + 355 68 201 61 60 Tourism, Culture, Heritage Youth, and Sports

159

Emiljano Municipality of Director of Strategy [email protected] +355 69 242 52 63 Zhuleku Berat and Projects

Eva Dhima Municipality of [email protected] +355 69 405 08 71 Berat

Sonia Popa National Tourist Senior Trainer [email protected] +355 68 401 48 61 Guide Association

Laura Payne Outdoor Albania Manager [email protected] + 355 69 408 88 46

Marissa PeaceCorps United States Peace [email protected] +355 69 329 48 46 Bowersox Corps Volunteer om

David Milne SNV Regional Senior [email protected] + 355 69 205 35 93 Advisor, Sustainable Tourism

Lauren United Nations Tourism Programme [email protected] +355 69 202 02 76 Bohatka Development Manager Programme (UNDP)

Alma United States Micro‐Enterprise [email protected] + 355 68 403 01 85 Kospiri Agency for Development International Specialist Development (USAID)

160

Bosnia and Herzegovina

Name Organization Title E‐mail Phone

Nikola Accredited [email protected] +387 51 433 720 Dragovic Regional Development Agency (ARDA) of NW BiH

Mr. Emir Accredited Project Manager [email protected] +387 33 433 720 Dervisevic Regional Development Agency (ARDA) of NW BiH

Biljana City of Banja Mayor’s Cabinet [email protected] +387 65 88 03 64 Josic‐Bajic Luka Coordinator for International Cooperation

Milos City of Banja Economy Sector Head milos_komljenovic@banjaluka. +387 51 24 44 22 Komljenovic Luka rs.ba

Maja Delegation of Project Officer [email protected] +387 33 254 700 Dosenovic European Commission Project Officer

to Bosnia and Herzegovina

Rubeena GTZ Project Manager rubeena.esmail‐[email protected] +387 33 443 992 Esmail‐ Arndt

161

Kanao Itoh Japanese Consultant Contractor [email protected] +81 3 5363 2741 International Cooperation Agency

Natasa Museum of Curator Olenjuk the Republic of Sprska

Viktor Bjelic Regional Tour Guide in Banja +387 65 444 454 Environmenta Luka l Center

Jadranka Republika Assistant Minister for [email protected] +387 51 338 764 Stojanovic Srpska’s Tourism Ministry of Trade and Tourism

Dunja Pejic Republika Head of Hotel and [email protected] +387 51 338 738 Srpska’s Restaurant Industry Ministry of Section Trade and Tourism

Mirza Sol Azur Travel Agent [email protected] +387 61 360 183 Ferhatbego Travel Agency vic

Sanela Tourism [email protected] +387 33 232 928 Smajlovic Association of BiH

162

Stevo Tourism [email protected] +387 51 214 383 Kelecevic Organization of Banja Luka (ToB)

Erkan UNDP Bosnia Project Manager of [email protected] +387 33 56 37 43 Ozcelik and Community Herzegovina Reconciliation through Poverty Reduction Project (CRPR)

Daria Unity and Coordinator, Sarajevo [email protected] +387 56 58 07 93 Antenucci Cooperation Office for Development of Peoples (UCODEP)

Vladimir United States Development [email protected] +387 33 702 300 Milin Agency for Specialist International Development (USAID)

FYR Macedonia

Name Organization Title E‐mail Phone

Chris Deliso BalkAnalysis Travel Writer [email protected] + 389 70 890 899

163

Doncho Balkan Founder and President [email protected] +389 70 249 247 Tanevsky Alliance of Hotel Associations (BAHA)

Abraham International Director General Abraham.rosenthal@ih‐ra.com +41 (0) 22 734 Rosental Hotel and 80 41 Restaurant Association

Goran Kompas Tour Founder and Manager [email protected] +389 23 115 587 Janevksi Company and Arsenije Janevski

Zoran Ministry of Head of Tourism [email protected] +389 70 222 582 Nikolovski Economy Department .mk

Patrice Peace Corps United States Peace [email protected] +389 71 960 003 Koerper Corps Volunteer

Nehat SNV Senior Tourism Advisor [email protected] +389 23 217 322 Ramadani

Anita United Head of Environment [email protected] +389 23 249 560 Kodzoman Nations Unit Development Programme (UNDP)

164

Iva Orceva United States Former Chief of Party, [email protected] + 389 23 175 966 Agency for USAID Macedonia International Competitiveness Development Activity (MCA) (USAID)

Montenegro

Name Organization Title E‐mail Phone

Slavica Center for Executive Director [email protected] +382 69 338 062 Vukcevic Sustainable Tourism Initiatives

Ute GTZ Team Leader [email protected] +382 81 665 Dannenman 875/73/77 n

Kirsi National CIM Senior Advisor kirsi.hyvaerinen@montenegro. +382 20 235 156 Hyvaerinen Tourism travel Organization of Montenegro

Milica United Team Leader, Economy [email protected] +382 20 231 251 Begovic Nations and Environment Radojevic Development Programme

165

Serbia

Name Organization Title E‐mail Phone

Radmila Columbia Senior Lecturer in [email protected] +1 212 854 56 27 Gorup University Croatian/Serbian/Bosn ian

Vladimir Consulate Consul consulategeneralserbia@verizo +1 212 596 42 41 Pavlov General of the n.net Republic of Serbia, New York

Jasna Eurojet Tour Product Manager [email protected] +381 11 313 36 Cvetkovic Operator 92

Igor European Programme Manager [email protected] +381 11 303 36 Bandovic Fund for the 62 Balkans

Nebojsa GTZ Project Manager for [email protected] +381 11 323 53 Matijasevic Economic and 06 Employment Promotion Program

Nemanja Guide Direct Tour Guide [email protected] +381 64 187 Ciric 88 11

166

Zoran International Country Officer [email protected] +381 11 302 37 Martinovski Finance 63 Corporation

Milena International Belgrade [email protected] +381 11 302 37 Nikitovic Finance Representative Office 63 Corporation

Aneta National Adviser [email protected] +381 11 313 97 Uskokovic Tourism 92 Organization of Serbia

Vladimir New Media Managing Director [email protected] +381 62 401 971 Paunovic d.o.o

Zoran Serbian Senior Advisor [email protected] +381 11 330 09 Novakovic Chamber of 71 Commerce

Goran Serbia Marketing and [email protected]. +381 63 397 663 Radosavljev Investment Research Advisors rs, (Goran ic, Ines and Export [email protected], Radosavljevic) Novosel Promotion [email protected] and Natasa Agency Vujovic (SIEPA) +381 63 397 621 (Ines Novosel) Marketing and Research +381 63 397 Advisors 836(Natasa Vujovic)

167

Professor Singidunum President of the [email protected] +381 11 309 32 Slobodan University Faculty of Tourism and 93 Unkovic Hospitality Management

Tatjana Tourist Vanic Information Center of Novi Sad

Ivana Tourist Marketing Department [email protected] +381 11 306 14 Milatovic Organization Manager 06 of Belgrade

Roslyn United States Director of Program rowaters‐[email protected] +381 11 306 47 Waters‐ Agency for Strategy and 79 Jensen International Coordination Office Development (USAID) Serbia

Ana Ilic United States Senior Industry Advisor [email protected] +381 06 322 02 Agency for 26 International Development (USAID) Serbia

Aleksandra United States Senior Enterprise [email protected] +381 11 306 48 Zoric‐Krzic Agency for Development Advisor 16 International (Enterprise Development Development Office) (USAID) Serbia

168

Western Balkans

Name Organization Title E‐mail Phone

Gordon Harriman Assistant Director [email protected] +1 212 854 46 23 Bardos Institute, Russian, Eurasian, and Eastern European Studies at Columbia University

169

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