Montenegro will be under significant strain in the coming years due to a large debt coming from loans from China for the Bar-Boljare highway project, suggests the analysis titled “Montenegro’s Exposure to China’s Influence” prepared by the Center for Democratic Transition, CDT, with support of the Washington-based Center for International Private Enterprise, CIPE.
The reports also says that the loan, taken out from China’s EXIM bank to fund construction of the first highway section, has already significantly increased the state debt.
“Under the burden of such a high public debt, Montenegro is finding it increasingly difficult to obtain funds on the financial market and is already borrowing at less favorable interest rates than the neighboring countries,” the analysis says.
The CDT also points out that the continuous transition process of the society threatens the autonomy of the state, i.e. its institutions, if it predominantly depends on the economic or political influence of foreign countries.
According to them, Montenegro has to bring in efficient financial policies in order to prevent malignant foreign policy impact.
Documentation
The CDT notes that the new government should first publish complete documentation concerning the highway project if it wishes to tackle the afore-mentioned issues. They also add that the Parliament has to know about every detail of the project funding, which is being carried out based on intergovernmental agreements and in defiance of national regulations on public procurement.
“The public should know about the potential problem the Government had created by accepting the utterly unfavorable and humiliating provisions of the agreement on competencies of the Chinese court in case of a dispute,” head of the CDT, Ms Milica Kovačević, told.
Foreign capital
Head of the CDT also points out that any entry of foreign capital into key industries must be assessed from the perspective of national security and economic development. According to her, Montenegro needs to establish an effective mechanism for verifying investments.
