China gave false hopes and now wants its money back

The construction of a motorway could cost Montenegro dearly. China gave false hopes and now wants its money back. And the EU has a problem. Milo Djukanovic has been the most influential personality in his native Montenegro for decades. He has served as Prime Minister several times and is currently President of the State for the second time. His big dream is apparently to leave his small country in the Western Balkans a motorway that runs from the Adriatic coast across the country to the Serbian border, around 170 kilometers long. The plan may backfire. Instead of a free journey towards prosperity, Montenegro threatens to lose part of its economic sovereignty. The People's Republic of China, which finances part of the controversial construction and now wants to collect its debts, could benefit. The problem: the construction is going to be more expensive than planned, and it is far from finished. From July, Montenegro still has to pay back. Djukanovic has long been voted out of office as prime minister. The new government of the poorly populated country, something as big as Schleswig-Holstein with only 622,000 inhabitants, has to spoon up the soup. Hoped-for toll revenues and higher economic performance through accelerated logistics are a long way off. Not even the tourism industry on the coast benefits in Corona times. Montenegro therefore fears that it will not be able to meet its payment obligations and that it will have to make painful concessions to the Chinese as a contractual penalty. For example Sri Lanka, which has to leave large parts of its port Hambantota to the People's Republic for at least 99 years for a leasing fee because it was unable to service its debts sufficiently. Many details of lending have remained hidden. Not entirely by chance. When China lends money abroad to finance infrastructure projects there, details are mostly kept secret. Otherwise no money will flow. Chinese state-owned companies carry out the projects, often with construction workers from China. Scientists from the US Research Center for Development Finance, Aiddata, in Washington, examined 100 such Chinese contracts with 24 states and compared them with loan agreements of other creditor states. The projects are always financed with not so cheap loans from Chinese state banks. The secrecy clauses that China demands from money recipients are not common.