With Gulf links growing, it’s plain sailing to prosperity for Montenegro

Most of Porto Montenegro’s berths are Arab-owned, with the majority of yacht-owners hailing from the GCC region. Inset: Riana Group CEO Romy Hawatt. (Porto Montenegro)
Updated 08 November 2017
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With Gulf links growing, it’s plain sailing to prosperity for Montenegro

SVETI STEFAN, Montenegro: When an immaculately presented PR assistant points to a pristine wooden boat bobbing in the distance, I realize this isn’t going to be a standard interview.
“That is Romy’s boat,” she says, adjusting her designer sunglasses under the late-summer sun. “He’ll meet you aboard in five minutes.”
Romy Hawatt’s boat — “Riana” — is named after his wife and takes center stage in the glorious foreground view from the third Global Citizen Forum (GCF), staged on the islet of Sveti Stefan, Montenegro.
As it turns out, the well-connected Hawatt doesn’t just own a boat. The affable Lebanese-Australian businessman also owns an air charter business and has considerable financial interests in the former Yugoslav state. It is his very own helicopter that can be heard whirring in the skies, shuttling megastars and Montenegrin aficionados such as actor Robert De Niro and US rapper Akon, to and from the global think-tank event.
There are probably many occasions when I wished I had taken the time to indulge in a pedicure — but being asked to remove my shoes on an impromptu visit to a millionaire’s yacht probably tops the list. “We love Riana and like to keep her pristine,” the captain of this 42-meter wooden beauty says with a sheepish affection as I step on to her polished floors.
Burly Croatian Ljubisa Bogdanovic — or “Lubi” for short — has captained Riana for four seasons. “This is 220 tons of wooden boat. She costs twice as much to maintain as a non-wood boat but she’s worth it,” he says with a smile.
While I wrestle with a choice of welcome fruit juices and cooling towels, Hawatt emerges from the boat’s depths. “Welcome,” he says. “Please take a seat.”
Hawatt, who is CEO of Dubai-headquartered Riana Group, says that life didn’t always look this way. The first time Hawatt visited Montenegro, he was a young and wide-eyed backpacker. “I came from very humble beginnings, but I’ve always been fascinated by this place. I was amazed by how beautiful it is and ever since then I’ve kept my eye on it,” he says.
By 2013, Hawatt says he realized that things were “starting to happen” in the country and the businessman flew in to snap up his first $5 million apartment. It was a prescient decision. In the few years since Montenegro gained independence, the tiny nation has set itself on a solid growth path.
The country defied its Russia links to join the ranks of NATO in June this year and is a candidate EU nation. Montenegro’s economy will grow 4 percent this year and around 3.5 percent in 2018 owing to strong activity in the tourism, infrastructure and construction sectors, the central bank Vice-Governor Nikola Fabris said in September this year.
Montenegro has also recently strengthened its links with the Arab world. Last year, the nation’s most luxurious marina, Porto Montenegro, was acquired in full by the Dubai government. The state-owned airline flydubai has also announced twice-weekly flights to the Montenegrin capital city of Podgorica from Nov. 1, 2017. In recent years, Hawatt says he has helped to bolster the nation’s growth strategy in recent years by setting up global private-jet services to the region and investing in numerous Montenegrin hotels.
The Riana founder also set up the nation’s first pilot-training center with the aim of increasing connections within the country and formed the Discover Montenegro destination-management agency, which offers yacht and helicopter charters and country tours, as well as real estate support for those looking to purchase a property.
The CEO, who currently calls Dubai home, says: “Montenegro is the next best thing, or it’s the next new place, I should say. It’s an undiscovered treasure. It has an open government with very open policies in terms of investment expropriation; you can send money in and out freely. Montenegro is also working on an investment for citizenship program (CIP), which is part of why they are hosting the Global Citizenship Forum (GCF) here. In part, the event is pointed to raising awareness toward that.”
Hawatt says he expects it will be “five or six months” before the prime minister of Montenegro ratifies what that nation’s CIP terms will look like.
Speaking at the opening of the GCF event, Pavle Radulovic — Montenegro’s minister of sustainable development and tourism — made no secret of his desire to whip up foreign investment and foster international inclusion. Radulovic told the audience of several hundred businesspeople, diplomats and academics:
“We support the idea of CIP and globalization. This is why we wanted to become a member of NATO and the EU. I’m optimistic that more people in Montenegro want to have better living standards, Western standards. This is what gives me faith in our citizenship program.”
Despite the country’s enthusiasm to offer citizenship to foreigners, Hawatt dismisses the notion that Montenegro is simply joining a growing band of countries that offer “passports for sale.”
He says: “Montenegro is not following suit with a lot of the other European countries, it’s positioning itself as a premium product. It’s not like you can buy a cheap apartment and just get citizenship.
“It’s part of an overall investment program which feeds into the bigger strategy for the country — it’s a kind of a bolt-on. By bolting on this citizenship program to a bigger strategy, it becomes a well-rounded proposition.
“The country has a lot of infrastructure opportunities and hotel opportunities. There are simply not enough hotel rooms in this country, and there is also agricultural and technology opportunities. All these sectors are begging to be invested in because of the country’s location.”
The CEO says he has seen a massive increase in GCC interest in Montenegro. “Abu Dhabi is an early mover and government agencies and private companies are showing a lot of interest,” he said.
He pointed to Porto Montenegro, which has already attracted considerable international investment. Danilo Kalezic, senior marketing manager at Porto Montenegro, says the Arab market is “very interested” in Montenegro.
“We are happy to have seen an increase over the last couple of years.” Kalezic adds: “Ever since our government regained its independence a decade ago, it has been working hard to re-establish Montenegro as a high-end holiday destination strategically positioned in central Europe, yet offering some of the most dramatic landscapes and beautiful coastline.”
The marketing manager says Porto Montenegro is one of the Mediterranean’s top superyacht marinas, conceived to cater mainly to superyachts. “We are a homeport, offering 450 berths out of which 130 are fit for super and giga-yachts. Given the amount of superyachts owned in the Middle East, we are the perfect fit for them.”
According to Kalezic, most of Porto Montenegro’s berths are Arab-owned, with the majority of yacht-owners hailing from the GCC region.
Kalezic says Porto Montenegro also offers various investment opportunities, such as real estate, holiday homes and yachting tourism.
“We pride ourselves on the variety of buyers investing in Porto Montenegro and can really say that our clients come from all over the globe,” he explains. “Our most common markets are Western and Eastern Europe and the Middle East, but we are happy to see a growing interest from the US and Far East as well.”
Like Hawatt, Kalezic says he has fallen for Montenegro’s charms.
“This is an unspoilt and beautiful destination with warm, hospitable people and high-end services in the center of Europe. What more could you ask for?”
And, as for the majestic Riana, she’s soon set to rest in the local dry docks to be restored to seafaring glory for next year’s season upon the balmy Med seas.


Bitcoin craze hits Iran as US sanctions squeeze weak economy

Updated 18 July 2019
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Bitcoin craze hits Iran as US sanctions squeeze weak economy

  • Some Iranian officials worry that “mining” is abusing the subsidized electricity
  • Iranian Bitcoin miners are purchasing more affordable Chinese ready-made computers

TEHRAN: Iranians feeling the squeeze from US sanctions targeting the Islamic Republic’s ailing economy are increasingly turning to such digital currencies as Bitcoin to make money, prompting alarm in and out of the country.
In Iran, some government officials worry that the energy-hungry process of “mining” Bitcoin is abusing Iran’s system of subsidized electricity; in the United States, some observers have warned that cryptocurrencies could be used to bypass the Trump administration’s sanctions targeting Iran over its unraveling nuclear deal with world powers.
The Bitcoin craze has made the front pages of Iranian newspapers and been discussed by some of the country’s top ayatollahs, and there have been televised police raids on hidden computer farms set up to bring in money by “mining” the currency.
Like other digital currencies, Bitcoin is an alternative to money printed by sovereign governments around the world. Unlike those bills, however, cryptocurrencies are not controlled by a central bank. Bitcoin and other digital currencies like it trade globally in highly speculative markets without any backing from a physical entity.
As a result, computers around the world “mine” the data, meaning they use highly complex algorithms to verify transactions. The verified transactions, called blocks, are then added to a public record, known as the blockchain. Any time “miners” add a new block to the blockchain, they are rewarded with a payment in bitcoins.
To work, the expensive specialized computers require a lot of electricity to power their processors and to keep them cool. In Iran, “miners” have an edge because electricity is cheap thanks to longtime government subsidies. “Miners” also buy cheaper Chinese ready-made computers to do the work.
But the constant raids and authorities’ conflicting statements on the issue have Bitcoin “miners” in Iran incredibly leery of being identified. Those contacted by The Associated Press refused to speak about their work or to say how much they earn from their “mining.”
But they acknowledge they do this to make some money at a time when Iran’s currency, the rial, tumbled from 32,000 rials to $1 at the time of the 2015 nuclear deal, to around 120,000 rials to $1 now.
“It is clear that here has turned into a heaven for ‘miners,’” Mohammad Javad Azari Jahromi, Iran’s minister for information and communications technology, recently told AP in an interview. “The business of ‘mining’ is not forbidden in law but the government and the Central Bank have ordered the Customs Bureau to ban the import of (mining machines) until new regulations are introduced.”
Ali Bakhshi, the head of the Iran Electrical Industry Syndicate, said earlier this month that the country’s Energy Ministry likely would boost costs for Bitcoin “miners” to 7 cents for each kilowatt of electricity they consume, a massive increase from the current half-cent but still almost half the cost of electricity in the United States, according to the semi-official Fars news agency.
Still, there are concerns, especially among Iran’s religious leaders, that people might try to circumvent paying extra for the electricity as well as using digital currency to hide or move money illicitly.
Tabnak, a hard-line news website associated with a former commander of the country’s paramilitary Revolutionary Guard, quoted three ayatollahs describing Bitcoin as either problematic or “haram,” meaning forbidden. Islam prescribes strict rules about finance.
But Jahromi said clerics became more receptive to the idea after his staff briefed them that Bitcoin had a value in the real world, which is required under Islamic finance. Islamic finance also prohibits gambling, the payment of interest and misleading others.
“Some of our top clerics have issued fatwas that say Bitcoin is money without a reserve, that it is rejected by Islamic and cybercurrencies are haram,” Jahromi said. “When we explain to them this is not a currency but an asset, they change their mind.”
Iran has tried to keep its economic situation in check by controlling foreign currency rates and cutting down on those moving their money from the rial to other currencies, including Bitcoin. Last year, the semi-official Mehr news agency quoted Mohammad Reza Pour-Ebrahimi, the head of the Iranian parliament’s economic commission, as suggesting that about $2.5 billion left Iran through digital currency purchases. He did not elaborate and authorities have not discussed it since.
The US, meanwhile, has been keeping a close watch on Iranians holding bitcoins. In November, a federal grand jury in Newark, New Jersey, accused two Iranian men of hacking and holding hostage computer systems of over 200 American entities to extort them for Bitcoin, including the cities of Newark and Atlanta.
“As Iran becomes increasingly isolated and desperate for access to US dollars, it is vital that virtual currency exchanges, peer-to-peer exchangers and other providers of digital currency services harden their networks against these illicit schemes,” said Sigal Mandelker, Treasury’s undersecretary for terrorism and financial intelligence.
Not so, said Jahromi.
“Cybercurrencies are effective in bypassing sanctions when it comes to small transactions, but we do not see any special impact in them as far as mega-transactions are concerned,” he said. “We cannot use them to go around international monetary mechanisms.”