Xinhua Headlines Is Montenegros highway a debt trap or road to success

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2018-10-04

,2018showstheconstructionsiteoftheMoracicabridgeofMontenegrosfirsthighway,about14kmnorthofthecapitalPodgorica.(Xinhua/WangHuijuan)PODGORICA,(Xinhua)--WhennewsbrokethatconstructionofMontenegrosfirsthighwaywouldbeginnearhishouse,VukasinPetrovic,avillagerinJelinDub,about14kmnorthofthecapitalPodgorica,dunder-developedcorneroftheBalkans,untilimpressivepiers,someashighas160meters,,69-year-oldPetrovicoftensitsonabig,woodenchairinfrontofhishousejusttoobservetheprogressofconstruction,andvowshewouldbeoneofthefirsttodriveonthehighway,onceit,itwascriticizeddomesticallyandinternationallyas"emptytalk"andpoliticalmarketing,saidVatroslavBelan,agovernmentadvisor."Nowweareunderadifferentkindofpressurefromourcitizens,tobuildthehighwayassoonaspossible,",supportedwithChineseloansandengineeringexpertiseundertheBeltandRoadInitiative,isthefirstphaseofa180-km-longhighway,,aterrain-challengedcountrythatneve,thehighwayhasdrawntheireoftheWesternmedia,whichhasdubbedtheprojecta"debttrap,"a"sentMontenegrosdebtsoaring."Awidely-citedpolicypaper,bytheWashington-basedCenterforGlobalDevelopment,said"Montenegrosdebtproblemisenormous,"quotingastudy--releasedinFebruary2017--bytheWorldBankthatestimatesthecountryspublicdebt"asashareofGDP(grossdomesticproduct)willclimbto83percentin2018intheabsenceoffiscaladjustment."Yet,,20-yearrepaymentscheduleand6-yeargrace,theMontenegro,,theEuropeanUnion(EU)sstatisticaloffice,seffectivefiscalconsolidationeffortshavesincebeenrecognizedbytheWorldBankandtheInternationalMonetaryFund(IMF)."TheGovernmentlaunchedanambitiousfiscalconsolidationprogramin2017,"theWorldBankobservedinApril2018,addingthat"afterinitialfiscalconsolidationefforts,theoutlookonthecreditratingofB+ofliabilities.",andwillslowlyreachasurplusby2020,"mostofthefiscalmeasureshavealreadybeenimplemented,,thestrategywillconsiderablystrengthenthefiscalposition,,allowinggovernmentdebttofallto53percentofGDPby2020."Ontopofthat,VeselinVukotic,aleadingMontenegrineconomistwhoisnowrectoroftheprivateUniversityofDonjaGorica,said"tyingthehealthoftheeconomyonlytoonequantitativeindicator--publicdebtofGDPisanabsolutebureaucraticapproach."Itisimportanttolookat"thewaytheseborrowedfundsareinvested,"hesaid,andtryashotinthearm,withtheIMFsaying",,drivenbyhighwayconstructionandastrongtourismseason.""Strongeconomicgrowthshouldcontinuein2018,notwithstandingfiscaladjustment...Withhighwayspendingtoremainnear2017levels,privateinvestment--ratherthanpublicinvestment--andconsumptionshoulddrivegrowth,"accordingtotheIMF."Whilegrowthofinvestmentwillslowdownasthehighwayconstructiongetstoitsclosure,itscontributiontogrowthwillremainstrongin2018,",aleadingMontenegrinconstructioncompany,participatingintheconstructiontranslatestoaturnoverofabout200millioneuros().Tobuildthehighway,itnowemploysaround700people,ofwhomabout600arelocalworkers,,a39-yearoldworkerwhowashandlingconcreteironnearthe160-meter-highpiersunderconstruction,,avillagerintheVilacregion,northofPodgorica,saidChineseworkershadalreadymadeapositiveimpactonthecommunity:aregularwaterandelectricitysupply,whichhadnotbeenavailable,werebroughttohisneighborhoodtoaidtheconstructionwork."Wehavetokeepinmindthataninterchangeisnearby,andhopefullyoncetheconstructionhasbeenfinished,itwillimprovethelivesofpeoplearoundhereandtheywillfinallystopmovingoutofthearea,",anunatSaintNicolasChurch,eloanforthehighway,the59-year-oldsaid:"Ifyoungpeoplestarttoworkmoreandhavebetterworkhabits,therewillbenoproblems."BIGPICTURETheMontenegringovernmentbelievesbybuildingthehighwayitisbridgingthegapsbetwespolishedpulchritude,alackofproperroadsisholdingbacktourism,arguablythecountrysbiggesteconomicpotential,aswellasagricultureandotherindustries."Regionaldifferencesineconomicdevelopmentarequiteconsiderable,"saida2013NationalHumanDevelopmentReportbytheUnitedNationsDevelopmentProgram,with"thenorthernregionbeinginthemostdisadvantagedposition.""Thecoastalregion,forinstance,,whileinthenorthernregionalmost33percentoftheactivepopulationwasunemployed,"thereportsaid,addingthatinadequateinfrastructusconnectivitywiththeEU--inthenorththroughSerbiatocentralEurope,andinthesouththroughtheAdriaticseatotheMediterranean--therehave"backdoor"or"trojanhorse"intheBalkanshaveheadlinedstoriesonPoliticoEurope,andtheReutersreportsaidMontenegrocouldgiveBeijing"aportofentryintoEuropefromtheAdriatic.""ThatfearofEuropethatChinawilltakeMontenegro,orEasternEurope,isbasedonthecompleteignoranceofhistory,"Vukotic,theuniversityrector,,directoroftheDepartmentofCentralandEasternEuropeanStudiesundertheInstituteofEuropeanStudiesattheChineseAcademyofSocialSciences,saidthefearisunwarrantedandoverblown,particularlygiventhatMontenegroisalreadypartoftheNorthAtlanticTreatyOrganization(NATO),couldjointheEUasearlyas2025,andthefactthatChinais7,000kmaway."ChineseinvolvementnowlinksMontenegro--literally--closertoEurope,",Liuargued,thehighwayshouldbewelcomedastheregionstandstobenefitfromChinesefundingandbuildingexpertise,thussavingEUresourcesontheBalkans,,thehighwaycarriesitshopefor"thesameroadthatwehavebeenoninourpoliticalagendaforalongtime,"saidBelan,thegovernmentadvisor,"theroadtoEuropeandthecommunityofthemostdevelopedcountries."(Videoeditor:ZhuCong)。