- After Sri Lanka, Maldives, now another country seems to be tightening in the clutches of the debt of Chinese dragon.
- Montenegro is proving unable to repay the $1 billion loan taken from China for the Belt and Road
- This loan was taken to build a huge highway but it has been built only for a short distance.
After Sri Lanka, Maldives, now another country seems to be tightening in the clutches of the debt of the Chinese dragon. Montenegro, a small European country, has proved unable to repay the $1 billion loan taken from China for the Belt and Road project. This loan was taken to build a huge highway but it has been built only for a short distance. Even after this, Montenegro has to pay back the entire debt. If Montenegro is not able to repay this debt, then it will go bankrupt and China can occupy its land.
According to Daily Mail, the interesting thing is that China’s state-owned company China Road and Bridge Corporation is engaged in this project and it is building the bridge through laborers called from China. The Chinese company is yet to complete the first section of the 270-mile highway to Belgrade, Serbia. This month itself, Montenegro is to return the first installment of one billion dollars to the state-owned bank of China this month, but so far it is not clear whether Montenegro will be able to repay this loan or not.
China has the right to occupy land inside Montenegro
At present, Montenegro has a debt of twice its total GDP. According to the terms of its agreement with China, if Montenegro is unable to meet the deadline, then China will have the right to occupy land inside Montenegro. Not only this, the former government of Montenegro has also agreed that the dispute regarding this entire agreement will be settled in a Chinese court.
Montenegro’s deputy prime minister Abjovic said in May that the terms of the agreement were absurd. He told Euro News, ‘It’s not normal. This is beyond any logic of national interest. There has been a lot of debate in Europe about this road being built by China. It is being said that China’s influence in Europe is now increasing. In fact, China, through its ambitious Belt and Road project, lured loans to poor countries in Asia and Africa and promised to improve their substandard infrastructure.
Maldive is sweating in repaying Chinese debt
China has huge foreign exchange reserves and with the help of this, it is distributing loans to the world and is taking possession of their lands if they are unable to repay. A great example of this is Sri Lanka. China has taken the Hambantota port of Sri Lanka on a 99-year lease for non-payment of debt. On the other hand, another country is losing sweat in repaying the Chinese debt of Maldives. The same is the case with Djibouti and Mongolia.