Learning Curve - opinion

Montenegro almost had to beg Brussels to help cover its portion of the costs of what has often been described as one of the most expensive international infrastructural projects in the world – the Belt and Road Initiative.

Apart from resulting in a very substantial increase in the small Balkan country's public debt, this project poses the risk of imposing China as an exclusive player in shaping Montenegro’s economic future, since it has become almost fully dependent on Beijing. Not to mention that the door is now wide open for China to fully exercise its political influence.

The answer from the EU was that they would not pay Montenegro’s debt to China, amounting to close to $1 billion, thus rejecting the southeast European country’s almost desperate pleas for assistance.

 

Why did this happen to a small country that took the most important steps out of all the Balkan candidate countries to fulfill the EU's criteria for joining?

One may clearly see that the EU's central authorities discriminate against its own member states. It is enough to look more deeply into the migrant crisis and more recently the crisis posed by the COVID-19 outbreak, as well as all the problems associated with the COVAX Program and the related so-called European solidarity.

The key answer to this question lies in understanding where and how the EU bureaucrats draw their knowledge from and how they deploy this knowledge in the process of policy decision-making.  Maybe the most important question lies in understanding what kind of knowledge they see as crucial and what the background for their future actions is.

 

Montenegro’s new government obviously needs to understand that the EU decision-making process is only partially motivated by the ideas once used to create what we refer to as “key European shared values,” if at all. 

In doing so, the tiny Balkan country may follow an example set by the State of Israel.

AS ISRAEL did back in 1984, the new Montenegro’s government needs to learn from its failures. To put it bluntly, they need to understand the different layers of the EU bureaucracy that exist today at global, supranational and national levels, and to act accordingly. Just as Israel at the time proved capable of ratcheting up its public sector spending, Montenegro needs to demonstrate a clear cut with constant state interference in the economy and a strong commitment towards economic governance at all levels.

 

Secondly, before addressing any official request to Brussels, they needed to build a bulletproof case, which could respond to all potential important concerns of the Brussels technocrats. In doing so they would need to deploy the assistance of international experts who have already successfully worked on similar issues in the region.

This again draws parallels with what Israel did when it decided to welcome brilliant immigrants from all over the world. Around 60% of the new arrivals were university-educated compared to 30% or 40% of the local population. This would allow the government to practice mainstream economics, which is exactly what Montenegro desperately needs at the moment.

In addition, the capacity to create an environment attractive to young university graduates may also be an important signal to the Brussels bureaucracy to see a different perspective for the economic and political outlook for Montenegro. It is important to note that young graduates do not necessarily need to be Montenegrin nationals; nor was Stanley Fischer in Israel.

This leads to one final piece of the economic puzzle for Montenegro, the one needed to create a “new culture.” Thanks to this new culture, primarily brought in by the well-educated population, Israel was well-positioned to develop hi-tech industry. Combined with its citizens’ ability to overcome adversity, this proved to be an outstanding example of a hi-tech incubator in an increasingly inhospitable region.

This does not necessitate an outstanding investment, but rather calls for a change in the government’s economic paradigm. In return, it attracts investment – and, more importantly, investors. 

Finally, thanks to its position as the major non-NATO ally and probably the single most important ally of the United States, Israel benefits from large-scale US financial, military and diplomatic support. There is one important thing for Montenegro’s government to note here.

Today, the US support for Israel is not merely motivated by objective security needs or a strong moral commitment, but primarily by its own perceived strategic geopolitical interests. The capacity to recognize those interests and to play along may help in achieving Montenegro’s foreign policy goals. One thing is certain – this will make the bureaucrats in Brussels think twice before acting.