BECICI, Montenegro — This country has never seen any thing quite like the Hotel Splendid. For over a half a kilometer this complex of penthouse suites, swimming pools and boutiques stretches along the Adriatic shoreline, providing unparalleled luxury for those who can afford it.
But like many of the Russian-backed investments that have poured into this small country, the complex has earned a less than glamorous reputation.
Three bombs went off on the site during the hotel's construction. The police officer investigating the explosions was killed. When the hotel opened in September, guests were bussed in under the watchful eye of armed security guards.
In the past two to three years, hundreds of Russians have flocked to Montenegro to buy up large stretches of land along the increasingly fashionable Adriatic coast and to build resorts like the Splendid.
Further inland they have bought the majority of shares in the country's industrial sector. The money has helped to fuel a real-estate boom and has provided much-needed cash to ailing factories.
But the influx of Russian capital is prompting many here to question its impact on this small nation of just 650,000 people, which already has a reputation as one of the most corrupt and mafia-ridden states in the Balkans. The concerns spring from the secretive nature of many deals, questions about the origins of their financing and the large sums of money involved - frequently paid in cash.
"The question is, Who knows what is going on?" said Ranko Krivokapic, the speaker of Parliament and the leader of the Social Democrats, one of the two major parties in the coalition government. "Whose funds they are?" he asked. "Who knows."
On the face of it, Montenegro is avowedly pro-Western. Just nine months ago, the republic voted in a referendum to end its union with neighboring Serbia, cracking up all that remained of the former Yugoslavia. The newly independent state has made membership in NATO and the European Union immediate priorities.
Montenegro's new prime minister, Zeljko Sturanovic - who took over in October from Milo Djukanovic, the Balkans' longest-serving leader - says he wants to rid the country of organized crime groups that dominated the country during the breakup of Yugoslavia.
But government and opposition leaders alike now worry that Russian money could put a check on much- needed economic and political changes and hold back Montenegro's aspirations for closer ties with Europe and the United States.
President Vladimir Putin of Russia recently valued the investments here at around $2 billion, roughly equivalent to Montenegro's economic output for one year. But it may be even more: Government officials said many ventures are channeled through companies in third countries.
From Kotor Bay to Tivat, Montenegro's most prized stretch of coast, Russian voices can now be heard at quaysides, beaches and cafés. Real-estate signs are written in Russian and English. Irish and British clients outnumber the Russians, realtors here said, but it is the Russians - many working with Montenegrin business partners - who have bought up the largest and most valuable properties.
"It is interesting that they are able to come here carrying four, five or six million euros in cash, apparently without any form of official control," said Marija Vukovic, a former municipal lawyer in Budva, a pretty coastal town where substantial Russian investments have been made. Vukovic now works as a legal consultant on real-estate deals. "Every day we hear that Montenegro wants to be part of the EU," she added, "but this kind of business is not proof that we are heading the right way."
As the Russian investments grow, Moscow has sought to exert more political influence.
In August, Russia's minister of emergency services, Sergei Shoigu, warned in an interview with a Montenegrin newspaper that relations between the two countries would be damaged if the Montenegrins continued to pursue NATO membership. Later that month Djukanovic met with Putin at the Russian Black Sea resort of Sochi and discussed the possibility of crafting a military-technical agreement.
"What will be the price of our partnership with Russia?" asked Nebojsa Medojevic, an opposition leader. Montenegrins, he said, feel that Russian businesses have little interest in the rule of law being established in what is still a very weak state. "I have nothing against Russians," he continued, "just their prices, the role of their police, illegal funding, state interference in the media and so on."
Historians here point out that Montenegro has played a balancing act between East and West for hundreds of years. For much of the 18th and 19th centuries, Montenegro - which gained independence in 1878 before losing it at the end of World War I - was an ally of the Austro-Hungarian Empire.
In that time the small principality turned to Russia, a fellow nation of Orthodox Christian Slavs, to finance its debt and purchase of weaponry. The royal families of the two countries also intermarried.
Now in the 21st century, after the years of stagnation brought on by war and sanctions in the 1990s, many government officials said Russian investments are the key to economic revival.
"I was surprised when I saw that Nice, Cannes, Monte Carlo were all built with the help of Russian money," said Krivokapic, the Parliament speaker. He said Russian companies were far more willing than Western businesses to invest here because of Montenegro's shifting political status.
Away from the coast, Russians have dominated the purchase of state-owned industries from the government in deals that have attracted criticism from opposition groups.
In 2005, the Russian company Rusal, the world's second largest aluminum producer, became the majority shareholder in Kombinat Aluminum Podgorica, a smelter. The deal included stakes in an affiliated thermoelectric power station, a bauxite mine and a coal mine, which together accounted for about half of Montenegro's export earnings. Rusal was the only company to enter negotiations with the government, which classified the contract as a business secret.
In 2004, Montenegro's main steel mill, Zeljezara Niksic, was sold to Midland Resources, which is Russian- owned but registered in Britain. That contract was also classified as secret. The mill was subsequently taken over by the government, and then sold to a British company.
Concerns about these transactions are based on a perception that Russian investments are inextricably linked with bad business practices, some critics said.
"The Russians are also Slavs like us," said Vukovic, the lawyer in Budva. "It is in their temperament to do illegal things. They are not disciplined like Western Europeans who have been living with capitalism for over 100 years."
Whether or not those views are justified, some government officials said they were eager to curb Russia's commercial influence.
"We are aware of the fact, once again, we are a small economic system that can be dominated and manipulated easier than the bigger ones," said Miodrag Vlahovic, who was Montenegro's foreign minister until resigning this month. "But we believe that with the new investments coming from the Western countries, with one or two strategic players, the situation will be balanced."
But critics of Russian investment said the influence of Russian groups already here will be hard to escape in this still fragile country.
"I wouldn't care that the Russians were coming if we had strong institutions," said Vanja Calavic, the coordinator of an anti-corruption group in Podogrica, the capital. "They will be too powerful to be controlled by the government."
Russia Invades Montenegro!!
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. Well i think it's good for both the Russians and the Montenegrans.
Originally Posted by molonthegreat
