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After Belarus, Putin gives another shocker to Xi Jinping. This time in Montenegro

Abhinav Singh by Abhinav Singh
19 September 2020
in Europe
China, Montenegro, Remove term: China ChinaRemove term: Russia RussiaRemove term: European Union European Union
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China has angered its northern neighbor Russia with its expansionist policies and neo-colonial dreams in the Russian Far-east, Central Asia, and the Balkan countries. However, Moscow is no sitting duck and it has launched an all-out offense to weed out the influence of China from its neighboring territories. After Belarus, Vladimir Putin has gained a strategic upper hand in the Balkan country of Montenegro where China was looking all set to claw its tentacles deep inside.

In the recent parliamentary election in Montenegro, the autocratic President Milo Djukanovic, who has been in power for nearly 30 years has been voted out from office after the August 30 elections.

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Replacing him and the Democratic Party of Socialists’ is a pro-Russian and pro-Serbian-led alliance, which has given Moscow an ally not just within NATO, but potentially within the European Union.

Divisions over the role of China in the country and the powerful Serbian Orthodox Church dominated the campaign, which was ultimately won by the Democratic Front. The DF party is the largest opposition party and is inherently right-wing in its inclination.

However, the selection of a Pro-Russia government also spells doom for Xi Jinping and his neo-colonial dreams in the tiny country.

A Highway project in the middle of nowhere connecting the Montenegrin port city of Bar with the Serbian capital of Belgrade was initiated by the Milo Djukanovic government in 2015. His government had described the 165 km (103 miles) highway as the construction of the century and a pathway to the modern world.

However, five years down the line, Montenegro finds itself encroached by Chinese loan sharks and a mountain of debt, threatening to bring the country to the brink of bankruptcy.

The total cost of the initial phase of this project was estimated at 1.3 billion euros, which is equivalent to one-quarter of Montenegro’s total GDP.

In order to cover the costs of this contract, Montenegro took out a loan from the infamous Export-Import Bank of China worth 85 percent of that amount.

Taking out a loan for such a large amount had the expected negative consequences, chief among them causing Montenegro’s GDP-to-debt ratio to reach 80 percent. The Center for Global Development has  Montenegro’s debt problem “enormous” and labeled it as being at serious risk for loan distress and even default.

Doubts about the highway had surfaced after two feasibility studies, conducted in 2006 and 2012, showed it was not economically viable. But the Milo Djukanovic government, heavily inebriated under the stupor of its China love, didn’t bother to pay heed to the reports and gave the green signal to launch the project.

As the highway’s construction moves into the next phase, the Montenegrin government will once again have to sit across the table with CRBC and negotiate the terms.

However, the burden of paying for the next phase of the project in addition to the other half of the first phase which has yet to be paid will only aggravate Montenegro’s debt to China as this highway is almost guaranteed to not provide the economic stimulus that the government claims it will.

The debt-diplomacy policy forms the bedrock of the BRI and China is using it to hash out the assets of the country in lieu of the debts these poor countries owe to China. From Sri Lanka to Laos to Africa—China has a similar blueprint everywhere and TFI has time and again exposed it.

The modus-operandi is fairly simple—enter a country on the pretext of development activities, hand out fishy loans with exorbitant interests rates and when the state fails to repay it, capture the territories, buy off the important senators, and before the public knows, China has encircled the country from all sides.

China wanted to snatch Belarus, a former Soviet country, from Russia’s sphere of influence, and was pumping millions of Dollars into Minsk to take it away from Russia. However, Putin swooped in at the right time and ensure that the country didn’t go out of his hands.

Read: A famous Russian victory in Europe: How Putin outfoxed Xi Jinping in Belarus

The election of a government that aligns with Russia’s vision of the country can be a mutually profitable partnership. It is only Russia that can help Montenegro thwart the menace of the paper-dragon in the region and it’s always a good sign that an autocratic leader that sat in power unopposed for the last 30 years and propagated the venom of socialism has been forced to retire by the masses. Montenegro has ushered into a new dawn and it has the unflinching support of Vladimir Putin now.

Tags: ChinaEuropean UnionMontenegroRussia
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