The Montenegrin-Chinese Belt Road Initiative (BRI) loan agreement of 2014 was expected to foster economic growth in Montenegro through the creation of a highway from Bar, Montenegro to Belgrade, Serbia. However, the high costs associated with this project ballooned Montenegro's debt to more than 100% of its GDP in late 2020.
This created not only a precarious economic position for the Balkan country but a risk of key government assets falling into the control of Chinese state-owned companies. The BRI loan agreement stipulates that a default on loan payments would allow Chinese state banks to pursue legal recourse that places the ownership of Montenegrin state-owned assets as recompense.
Although a loan payment default appears unlikely in the near future, several Montenegrin government-owned and government-backed assets could be vulnerable to a transfer of ownership should default ever occur. This analysis will survey what assets could be placed into Chinese control, and of these which are most likely to be targeted by Chinese interests in the event that Montenegro defaults on its loans. This alternative outcomes analysis (or red cell analysis) can serve as a warning function to one of the more aggressive BRI loan cases with a unique asset transfer stipulation in the agreement.
About The Authors
Associate Professor at University of Mississippi Center for Intelligence and Security Studies