PODGORICA (Reuters) - Montenegro holds a run-off presidential election on Sunday in which long-time incumbent Milo Djukanovic faces a strong challenge from a Western-educated economist who has promised a fresh start after a year of political deadlock.
Djukanovic, 61, has dominated Montenegro as president or prime minister for 33 years, since the start of old federal Yugoslavia's disintegration, and opponents have long accused the former communist and his party of running the small Adriatic republic as their fiefdom, allegations they deny.
His rival in Sunday's second-round election is Jakov Milatovic, 37, a former economy minister and the deputy head of the Europe Now movement who advocates closer ties with both the European Union and fellow ex-Yugoslav republic Serbia.
Djukanovic wound up with 35.37% of the vote in the first round of the election on March 19, with Milatovic on 28.92%, necessitating a run-off as neither garnered a 50% majority.
Analysts said the results herald a closely fought run-off.
Djukanovic will be dependent on the traditional support of national minorities, Montenegrins living abroad, pro-Western parties and those who abstained in the first round.
Milatovic counted on backing from the pro-Serb and pro-Russian Democratic Front and its leader Andrija Mandic, who on March 19 secured 19.3%, but also from other smaller parties including the now-ruling URA, a pro-Western group.
Djukanovic has led Montenegro since the collapse of old Yugoslavia, initially as an ally of then-Serbian nationalist strongman Slobodan Milosevic, before parting ways with him and adopting a pro-Western agenda.
Montenegro, whose economy relies on tourism generated by its scenic mountains and seaside, ditched a state union with much larger Serbia in 2006 and declared independence. It joined NATO in 2017 and is now a candidate for European Union membership.
Djukanovic campaigned for continuity. "We want to continue to live as a multi-ethnic, multi-religious, multi-cultural, civic state ... that wants to be a member of the EU," he said.
But analysts said he faced a serious challenge in Sunday's vote after a year of political instability that saw two governments felled by no-confidence votes prompted by perceived mishandling of the COVID pandemic, economic mismanagement and a disputed deal regulating ties with the Serbian Orthodox Church.
A row between lawmakers and Djukanovic over his refusal to name a new prime minister deepened the political paralysis.
FOCUS ON CORRUPTION, LIVING STANDARDS
Opponents accuse Djukanovic and his centre-left Democratic Party of Socialists of corruption, nepotism and links to organised crime in the country of some 620,000 people - accusations Djukanovic and the DPS deny.
"Not only has Djukanovic allowed the elite to accumulate significant wealth..., he has tried to convince ... the poor that they are where they are because they don't deserve better," Zarija Pejovic, an economy lecturer at Mediteran University in the capital Podgorica, told Reuters.
Milatovic, who was economy minister in the government that took power on the back of pro-Serb religious rallies in 2020, co-formed the Europe Now movement in 2022 vowing to curb graft, secure better living standards and boost relations with Serbia.
"I am here to lead Montenegro to success because for too long we have been led by the unsuccessful," Milatovic told a campaign rally.
Vladimir Pavicevic of the Montenegrin Policy Research Society think-tank said Milatovic could attract previous supporters of the DPS - now the largest party in parliament - with his promise of a fresh start.
"An atmosphere has been created ...showing Milatovic is a politician who brings new trends and opportunities ... There's a large number of people who voted for DPS and are now ready to vote for Milatović," Pavicevic told Belgrade daily Danas.
PARLIAMENTARY ELECTION IN JUNE
On March 16 Djukanovic dissolved parliament and scheduled snap elections for June 11.
Although the presidency is largely ceremonial, it holds key powers to nominate prime ministers, dissolve parliament and call elections, and whoever wins the presidential vote will bolster the chances of his party in June.
Montenegro has a legacy of bitter divisions between those who identify as Montenegrins and those who see themselves as Serbs and are opposed to the country's independence.
The country joined NATO after a 2016 coup attempt that the Djukanovic government blamed on Russian agents and Serbian nationalists. Moscow dismissed such accusations as absurd, and Serbia denied involvement.
After the invasion of Ukraine last year, Montenegro signed up to EU sanctions against Russia. The Kremlin has placed Montenegro on its list of unfriendly states.
(Additional reporting by Stevo Vasiljevic in Podgorica; editing by Mark Heinrich)