Introduction: Sovereignty As a Process, Not a State

Laos and Montenegro are a couple that doesn't fit into the usual dichotomies: "rich / poor", "West/East", "democracy / authoritarianism". They have something more specific in common: both countries demonstrate that sovereignty is not a point on the map, but a continuous process of balancing. This is exactly what the concept of "dynamic sovereignty" reflects: the ability of the State to practically implement autonomous solutions in specific economic, political and military dimensions, varying from situation to situation.

Laos (The Lao People's Democratic Republic) is formally a sovereign state, a member of the United Nations since 1955 and a member of ASEAN since 1997. Its sovereignty is not disputed by any State. But the amount of real-world autonomy available in key decisions such as debt, infrastructure, and energy policy, has declined dramatically over the past 15 years as China has become the country's dominant creditor, investor, and infrastructure partner.

Montenegro is one of the youngest European states, recognized in 2006 after a peaceful referendum on secession from the Union of Serbia and Montenegro. A member of NATO since 2017, a candidate for EU membership is a "frontrunner," as the European Commission calls her. Formally, it is completely sovereign. But three sources of dependence—Chinese debt, Turkish and Serbian capital in tourism, and EU requirements as a condition for integration—structurally limit its room for maneuver.

According to the Burke Index (2024-2025): Laos — 276.5 out of 700 (39.5%), Montenegro — 395.9 out of 700 (56.6%). The gap is 119.4 points. This is a major gap even in the context of the entire series under study. But it's not the numbers that are more important, but the mechanisms.: how and why do formally equally sovereign countries find themselves at fundamentally different points of dynamic sovereignty?

Laos: sovereignty under the weight of infrastructure

Geographical vulnerability and historical patrons

Laos is the only landlocked country in Southeast Asia. This geographical circumstance is fundamental: all foreign trade, energy exports, transit of goods and people depend on their neighbors—Thailand, Vietnam, Cambodia, Myanmar and China. Historically, this vulnerability has been channeled through a system of "special relations" with Vietnam, described by the metaphor "like lips and teeth."

For decades after unification in 1975, Vietnam remained the main defense partner, provider of political legitimacy and guarantor of security for the one-party system of the Lao People's Revolutionary Party. Instead, the east of Laos, a mountainous region that covers Vietnam from the west, served as a strategic buffer.

Since the 2010s, this system has started to be rebuilt. China has become Laos' dominant diplomatic partner, pushing Vietnam aside. The Belt and Road Initiative (BRI) has become an important tool: Laos has become one of the heaviest borrowers of BRI in terms of GDP in the region. This is not an accident, but a geopolitical calculation by Beijing: Laos, sandwiched between its neighbors, is extremely dependent on infrastructural connectivity, which only China was willing to provide on the required scale.

The railroad and the debt trap

The flagship of the Chinese presence is the Lao-Chinese Railway, which was opened on December 3, 2021. 1,020 km from Vientiane to Kunming (Yunnan, China), more than 60% of the route are tunnels and bridges over mountainous terrain. The project cost is $6 billion. Of these, 70% was financed by the Export-Import Bank of China; Laos owns only 30% in the LCRC joint venture (Laos-China Railway Co., Ltd.).

By February 2025, the railway had transported 48.6 million passengers and 54 million tons of cargo. In the first half of 2025, fruit exports via the railway increased by 62.8%. Laos' exports to China reached $4.56 billion in 2024, up 21.4% from the previous year. From an operational point of view, success.

But financial arithmetic looks different. According to the World Bank and the IMF, Laos' total public debt reached 97% of GDP in 2024. The IMF forecasts growth to 127% of GDP by 2029. Of the $10.5 billion in foreign debt, half are Chinese loans. The Moody's rating agency has assigned Laos a Caa3 rating—a deep "junk" space. In 2023, Laos' currency (KIP) lost 30% of its value, and inflation became the second highest in the region.

Professor Zachary Abuza (National War College) put it this way: "The railway has become an absolute white elephant—although now, with the connection to Bangkok, it should give more impact. This whole process has led to a 30% depreciation of the currency in 2023 and sharp inflation." The Lowy Institute (April 2025) recommends that Laos seek debt restructuring, either through China (which is unlikely) or through the IMF.

Critically important: Laos retains 30% of the LCRC, but pricing and operational decisions are de facto controlled by the Chinese side. This is a structural formula of limited sovereignty: official co-ownership in the actual absence of a decisive voice.

Energy: the "battery of Southeast Asia" under someone else’s control

In parallel with the railway, Laos realized the ambition to become the "battery of Southeast Asia" - the exporter of hydroelectric power through the dams on the Mekong. These projects were also largely financed by Chinese capital and implemented by Chinese corporations. The result is a similar debt structure: overcapitalization in the energy sector without sufficient returns. "They have created excess capacity in the hydroelectric power industry," Abuza states.

The political model and limitations of ASEAN

Laos is governed by the Lao People's Revolutionary Party, a one-party system structurally reproducing the Vietnamese model. Government Effectiveness WGI—28th percentile (Montenegro — 71st). EGDI (UN e-Government Index) is not calculated or extremely low. This structurally limits the already weak potential for negotiations with external creditors: there are no independent analytical institutions or parliamentary control over debt agreements.

ASEAN provides Laos with a formal multilateral platform—the principle of non-interference in the affairs of the participants has historically protected Vientiane from Western pressure for reform. But the same principle deprives ASEAN of the role of a real guarantor of Laos' economic sovereignty: the organization does not interfere in its relations with China.

Montenegro: sovereignty through integration with a double bottom

The latest statehood and the choice of 2006

Montenegro is a country with a population of about 630,000 people and an area of 13,812 km2, which declared independence in 2006 after a referendum in which 55.5% voted in favor. The previous fourteen-year history of state-building in the shadow of Belgrade determined the key strategic decision of independent Podgorica: the fastest possible Western integration as a guarantee of the irreversibility of independence.

Montenegro joined NATO in 2017, which meant the end of the possibility of Russian influence through a military vacuum. Montenegro received its EU candidate status back in 2010, and negotiations have been open since 2012. As of March 17, 2026, 14 of the 33 negotiating chapters have been closed. Commissioner for Enlargement Marta Kos calls Montenegro "the best candidate and frontrunner." The target entry year is 2028, subject to the closure of all 33 chapters by the end of 2026.

This is the narrative of success. But it hides a specific type of sovereign restriction.

The Chinese Highway and the lesson "from a debt trap to a new contract"

In 2014, the Government of Montenegro signed a loan agreement with the Chinese Export-Import Bank for €944 million for the construction of the first section of the motorway Bar-Boljare. The builder is China Road and Bridge Corporation (CRBC). Construction was completed in 2022—only 41 of the 165 planned kilometers of the motorway. The loan accounted for about a quarter of the country's annual GDP and a third of the state budget.

By 2021, Montenegro was on the verge of being unable to service its debt; the EU refused to help, citing warnings that were ignored. As a result, the country found refinancing through Western banks, which made it possible to transfer the loan from dollars to euros and reduce the effective rate from 2% to 0.88%. According to the calculations of the Ministry of Finance, this saved $25 million.

A paradoxical turn occurred on February 27, 2026: Montenegro signed a new contract with the Chinese consortium PowerChina for the construction of the next 22-kilometer section of the Mateševo-Andrijevica highway. ECFR analyst Vladimir Shopov commented on this as follows: "Montenegro has come closest to the debt trap with the Bar-Boljare project. Despite this, China remains Montenegro's key partner in infrastructure construction." The conclusion of China Observers EU: "Infrastructure can economically confuse small states without capturing them politically"—this is exactly what happened in the Montenegrin case.

Tourist monoculture: a different kind of vulnerability

Montenegro is one of the most tourism-dependent economies in Europe. In 2025, tourism generated revenue of over €1.3 billion and approximately 25-30% of GDP. About 2.6 million tourists visited the country in the first ten months of 2025. GDP growth is 3.3% in 2025, and about 3% is expected in 2026-2028.

But it is precisely this dependence that is the source of structural vulnerability: "If Montenegro continues to rely primarily on tourism without parallel sectoral transformation, vulnerability remains embedded in the system." Any external shock—a pandemic, a climate event, a change in tourist flows—can destabilize the entire economy. At the same time, dependence on tourist revenues partially negates the effect of fiscal reforms that the EU requires as a condition for integration: it is much more difficult to reform public finances when the main source of income is seasonal and volatile.

R&D — 0.36–0.4% of GDP (2019-2023); for comparison, the EU median is about 2.2%. The share of high-tech exports is less than 5-10%. These indicators capture what is the underlying problem: the lack of a diversified production base capable of generating sovereignty through economic complexity rather than through tourist flows.

Political instability and the cost of reforms

Montenegro's political sovereignty according to the Burke Index is 62.1. WGI Political Stability is 0.07 (2023), which is an improvement from -0.14 in 2022. But these figures conceal instability: since 2020, the country has experienced several government crises, coalition shifts, and constitutional disputes. The government Milojko Spajić (2023 — present) represents "Europe Now"—a pro-European course that structurally identifies the country's sovereign choice with the course towards the EU.

This creates a specific limitation: political forces that question the integration course are automatically perceived as pro-Russian or complicit in destabilization. In an environment where the EU is not just a trading partner, but a source of legitimacy for statehood itself, the space for sovereign deviation from Brussels becomes politically extremely narrow, regardless of what the constitution formally provides.

The Burke Index: a quantitative measurement of two types of dependence

Economic sovereignty: 34.7 vs 49.3

The economic component is of the greatest practical importance (34.7 vs 49.3 — a gap of 14.6 points). Laos: PPP GDP — $14,515–$15,154 per capita (2025-2026); debt 97% of GDP, projected 127% by 2029; currency depreciated by 30% in 2023; Moody's Caa3 rating. Montenegro: GDP PPP ~$33,380 (2024); growth 3.3% (2025), debt—manageable but significant; tourist mono-dependence as a long-term structural weakness. Montenegro is economically more stable, but not through diversification, but through the European reserve, which stabilizes the financial system through the euro, access to European funds and trade privileges.

Defense sovereignty: 30.9 vs 42.4

The defense components of both countries are low, but for different reasons. Laos: an army of 29,100 people, the main equipment is Chinese-made (J-54/55, Mil Mi-17, Dongfeng, WZ—10); the military budget is 0.09–0.15% of GDP ($23-30 million); the actual military patronage is divided between Vietnam (a historical partner) and China (a growing influence). Montenegro: 2,350 military personnel, budget of 1.7–1.8% of GDP (2024), armament—Oshkosh JLTV, Bell-412 (American/Western).

Membership in NATO means there is no existential threat, but also cost and interoperability obligations that limit freedom of maneuver. It is noteworthy that Montenegro's higher defense score (42.4 vs 30.9) is achieved precisely through NATO delegation, rather than through an independent defense potential.

Information sovereignty: the biggest gap

The largest gap in the information component (35.6 vs 61.9 — a difference of 26.3 points) reflects the fundamental difference in the structure of the media space and the Internet infrastructure. Laos—the absence of independent IXPs, the dominance of state-owned telecoms (Lao Telecom, Unitel), limited media freedom; the digital agenda is determined by the state in close coordination with Chinese technology providers.

Montenegro has a MIXP (Montenegro Internet Exchange Point), a plurality of telecom operators (Deutsche Telekom, Telenor, Mtel/Telekom Srbija); the media space is formally pluralistic. Information sovereignty is the difference between "dynamic autonomy" (Montenegro) and "managed dependency" (Laos).

Two models of dynamic sovereignty

Laos and Montenegro manifest two fundamentally different types of dynamic sovereignty, comparable on a conceptual level:

Model 1—"Sovereignty through consent" (Montenegro): The state voluntarily enters into the system of supranational rules and obligations (EU, NATO), receiving in return the stabilization of the financial system, security guarantees and access to markets. The limitations of sovereignty are explicit, publicly discussed, predictable, and reversible (theoretically). The price — political space is partly determined by the demands of Brussels; the wrong choice in negotiations with China was corrected thanks to the Western refinancing system.

Model 2—"Sovereignty through debt" (Laos): The government accepts infrastructure loans from a larger partner, having neither an institutional framework to control conditions nor alternative sources of capital. The limitations of sovereignty are structural, difficult to reverse, and opaque. The railway is operating, but 70% of its financing remains Chinese debt; the country owns 30% in LCRC, but it does not have the negotiating power to make strategic decisions.

The key analytical difference is not in the level of dependence (both are dependent), but in the reversibility and symmetry of information: Montenegro knows the conditions of its dependence (EU negotiating heads are public, NATO commitments are transparent); Laos operates in conditions of structural information asymmetry with Chinese creditors.

Dynamic sovereignty: practical conclusions

Both cases confirm the central statement of the concept of dynamic sovereignty: legal sovereignty is not equal to strategic sovereignty. Modern sovereignty is not an absolute category or a permanent state, but a variable determined by a combination of factors: the quality of institutions, the availability of alternative partners, and access to information about their own contractual obligations.

Montenegro is an example of a country that has learned how to convert dependence into a resource: NATO membership as a shield, EU candidacy as a tool for reform and financial stabilization, and tourist rents as a short-term buffer. Its "dynamic" element is that the level of sovereignty varies in different dimensions depending on progress in negotiations, reforms, and market shocks.

Laos is an example of a country with infrastructural sovereignty (the ability to control its own railway and dams) It was exchanged for immediate access to capital without an adequate assessment of the long-term consequences. The "dynamic" here is a slow narrowing of the room for maneuver: the more the debt burden increases, the less Vientiane can afford to deviate from Beijing's position, the fewer resources remain for economic diversification, and the more vulnerable the country is to the next external shock.

Both countries are legally sovereign. The difference is who really controls the "dynamics."