ABSTRACT
Until 2012/2013, Russia had the strongest economic footprint in the Adriatic Western Balkan country on the back of the control over Montenegro’s largest company, the Podgorica Aluminum Plant (KAP), and the investment in real estate and tourism. Still, Russia is the single largest direct investor in Montenegro with EUR 1.27 billion in cumulative investments – or 13% of all FDI stock, which constitutes a third of the state’s GDP. Russia has leveraged its economic presence in Montenegro to exploit the country’s persistent governance deficits including weak institutions, an inefficient judicial system, and widespread corruption. However, the country’s accession to NATO and the failed coup attempt in the fall of 2016 have led to the deterioration of economic and political ties with Russia. Political will and the resistance of national elites have repelled the penetration of authoritarian capital in the power generation sector. This chapter presents a detailed picture of Russia’s economic footprint in Montenegro with an added focus on key vulnerable sectors of the economy. The chapter also demonstrates how the economic leverage could be converted into political influence by exploiting governance gaps. The analysis elaborates specific examples within the tourism, mining, real estate, and energy sectors.
