Croatia 2017 by Diplomacy&Commerce magazine

C R OAT I A 2 0 1 7

Diplomacy&Commerce

THE COUNTRY OF ALL LANDSCAPES AND TRADES

GARI CAPPELLI

LUKA BURILOVIĆ

Croatian Tourism Minister

President of the Croatian Chamber of Commerce

MARKO ČADEŽ President of the Serbian Chamber of Commerce and Industry

ARENA FROM BLOODSPORT TO CULTURE Once the home of bloody Roman gladiator fights, the amphitheatre in Pula, Istria is the only remaining Roman amphitheatre to have four side towers and with all three Roman architectural orders entirely preserved. It is also the 6th largest amphitheatre in existence, together with those in Rome, Verona, El Djem, Nimes, Arles and Pompeii.

BYRONISM LIVES ON The English poet Lord Byron called the old town Dubrovnik The pearl of the Adriatic, and it still holds this name today.

CRAVATA FROM CROATA

The necktie, worn by business people around the world, is from Croatia. The cravat as it was named originated from Croatian soldiers who served as mercenaries for the King of France.

06 MINI SKIRTS On the island of Susak, the women hold the title for having the only national costume that sits above the knee in Europe. Mini skirts are hence invented in Croatia.

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THE MOST BEAUTIFUL DOGS, TOO

You know the film 101 Dalmatians? Well here’s a fun fact about Croatia, that breed of dog is from the region of Dalmatia in Croatia. Originally shepherd dogs, they became almost purely decorative these days.

ISLANDS, ISLAND

Croatia has 1244 islands, isles, islets and reefs for you to sail through. Just 48 of them are inhabited.

CAN’T BE ANY SMALLER

SUNSET TO REMEMBER

Hum, in Istria is the world’s smallest town. It is not the village since it as a town once upon a time, and it retained its name, yet dwindling in size.

Zadar, the seaside town in Dalmatia holds the title of the best sunset in the world, according to Alfred Hitchcock. Quoted as saying ‘Zadar has the most beautiful sunset in the world, more beautiful than the one in Key West, Florida’.

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Seafood Restaurant & Wine Bar CONTACT: Dalmatinska 98, Belgrade 11000 011 3806347 • 064 0036 188

info@tatamatakonoba.com www.tatamatakonoba.com

The spirit, music and taste of Adriatic sea in Belgrade

GARI CAPPELLI Croatian Tourism Minister

INTERVIEW

WE ARE YET TO BREAK RECORDS 6

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Last year, Croatia generated about 9,5 billion EUR in tourism revenue. Apart from now traditional guests from the EU countries, we have been getting more and more tourists from remote parts fo the world which are attracted not only to sun and sea, but also to a growing health, culture, nautical and conference tourist offer

lthough, most tourists that come to Croatia are from Europe, there is an increasing number of tourists from Asia and South America that have visited both the Croatian coast and inland that has a lot to offer too. Tourists from Serbia contributed to the record number of visits last year – says Croatian Tourism Minister, Gari Cappelli, while announcing development plans and investments which aim is for Croatia to generate 15 billion EUR in tourism revenue.

Croatia had a record number of tourists in 2016. Which factors contributed to such a good result? − Year 2016 was fantastic both in the generated revenue and the number of tourists. We had record-breaking 16.3 million tourist visits and 91.5 million overnight stays both in traditional accomodation and nautical charter which is a 10% and 14% hike respectively, or 11 million more tourists than in 2015. Apart from the number of tourists, last year was excellent revenue-wise which is yet another important indicator of the competitiveness and success of the Croa-

Croatia has been recording an increasing number of tourists outside the summer season too. Which additional activities and attractions do you offer to the tourists who come to Croatia off-season? − Extending the tourist season, or having tourist activities all year round, is certainly our goal because that is the only way to survive and boost the competitiveness of our national tourism. The results in this segments are already quite visible, but this is a long-term job. The fact that, from September to December last year, we had up to 30% more foreign guests in Croatia speaks in favour of tourist season becoming longer. This growth is also the result of us developing special kinds of tourism, increasing the quality of our products and promoting tourist destinations that have different tourist events off season too. Inland Croatia plays a great role in this because of its great tourist potential, and offering tourists activities like cultural tours, cycling tours, gastronomic events, visits to protected natural areas and numerous castles, wellness ser-

pecially in inland Croatia which has all the prerequisites and activities to have tourists coming all year round. My priority is developing health tourism, because I witnessed first hand just how powerful and useful is this health tourism for destination development. Before I became a minister, I was a mayor of the town called Mali Lošinj for 11 years which, today, is the synonym for wellness and health tourism, and has the reputation among tourists as „the island of vitality“. We base the importance and potential of this type of tourism on the fact that, according to the World Tourism Organization (UNWTO), this is the fastest growing branch of tourism with a global annual growth of between 15% and 20%. The revenue from health tourism is today around 450 million EUR with a potential to grow to 1 billion EUR, according to some estimates. This information clearly shows just how much potential this segment has. We have adapted our legislation to facilitate the growth of health tourism, and we have been doing some other steps towards boosting and developing this segment. This

SUN AND SEA ARE STILL OUR MAIN TOURISM PRODUCTS, BUT WITH THE DEVELOPMENT OF GASTRONOMIC, HEALTH AND CULTURAL TOURISM, AND BIG EVENTS, WE CAN HAVE TOURISTS ALL YEAR ROUND WHICH IS DEFINITELY OUR GOAL tian tourism. According to the official and currently available data, in the first nine months of last year, we generated 7.9 billion EUR in revenue from foreign tourists, which is an annual hike of 8.3%, while the revenue generated by foreign and domestic tourists combined was around 9.5 billion EUR, during the hole year. Such exceptionally good results are due to the successful cooperation betwen the private and public sector, and continuous investments in tourism. Last year, 670 million EUR was invested in the tourism sector, and 40 or so hotels and other types of accommodation were either open or reconstructed while, this year, we expect the investments to grow to 800 million EUR.

vices etc. We have been focusing on providing more for tourists by having the aformentioned tourist activities all over Croatia, not only the coastline.

How much does Croatia use its potential in terms of health, conference, cultural and nautical tourism, and what will your ministry and the Croatian government do next in this respect? − Croatia has been utilizing its tourist potential well, but there is always room for improvement, and that is something that we are going to work on. In the following period, we are certainly going to focus more on specialty tourist products, i.e. on health, conference, cultural and gastronomic tourism, es-

year, for the first time ever, we have a direct promotion plan for health tourism, and, in cooperation with the Croatian Chamber of Commerce and the Croatian Tourist Board, we are going to launch a special website where we are going to promote the best representatives of health tourism under the slogan „Croatia – Full of Health“. The project entails appearances at specialized fairs and conferences which is a big step forward in developing and promoting health tourism. The projects is supposed to be launched in February. Also, there will be a large-scale health tourism industry conference taking place in Rovinj in March this year, which took place in Vienna last year. There will be a Hosted Buyers workshop at the conference

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with many users of health tourism services and hotel representatives invited. This year we also created a financial framework for promotion of nautical tourism, and developing this segment is certainly one of our priorities. Furthermore, we have presented a conference tourism actional plan, and we are going to open a conference office in the seat of the Croatian Tourist Board which we consider very important.

How many foreign tourists has Croatia managed to attract that are not considered regulars, and don't come from European countries? − I think that we have been very successful at that. In the last few year, Croatia has become a much more appealing destination even among tourists from remote countries who have never been here. Although, most of the tourists in Croatia are from Europe (close to 80%), we have more and more tourists from Asia or South America. In terms of overnight stays, for instance, last year we had an over million tourists from the US (+12%), 880,000 from Russia (+2%), 560,000 from Australia (+43%), 460,000 from South Korea (+20%), 340,000 from Canada (+26%), and 160,000 from China (+22%). Opening of new markets is our absolute priority. Also, we will go on an official visit to China in May where, together with Slovenia, we are going to hold workshops and present our tourist destinations. Also, we are thinking about opening of a Croatian Tourist Board office in Shanghai, together with our chamber of commerce.

The growth in the number of tourist does not correspond to the growth of tourism revenue. What can be done to rectify that in the following period? − Although, tourism revenue does grow slower than the number of tourists, I do believe that with continuing to invest in tourism and exercising the right tourist policy Croatia will manage to real the goal of between 14 and 15 billion EUR in tourism revenue. I base my optimism on the fact that we are going to focus more on expanding tourist offer like having new cycling paths, theme parks, and cultural and gastronomic events all over Croatia because only in this way can a destination become appealing to tourists all year round. There is a lot of room for development in inland Croatia which has a great tourist potential and a lot to offer. Of course, the growing tourist offer should be accompanied by quality services and this where investments in the tourism sector this year will help. This year we also plan to open 50 new hotels, all four- and five-star. Last year we opened 40 new hotels, also luxury. We are going to generate more revenue when these investments follow in-

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vestments in public infrastructure, quality of resturants, shopping facilities and other attractions.

Could you tell us about the biggest investments planned for 2017? − This year, we expect to make 800-mlnEUR worht of investments in tourism, which is 130 million EUR more than last year. Just like in 2016, most of the investments will be made in the private sector, namely in in-

THE EXCEPTIONALLY GOOD RESULTS IN TOURISM ARE DUE TO THE SUCCESSFUL COOPERATION BETWEN THE PRIVATE AND PUBLIC SECTOR, AND CONTINUOUS INVESTMENTS IN TOURISM

creasing the quality of our accommodation, tourist offer, and in construction of new and reconstruction of existing facilities. For now, there is a plan to open 50 hotels, as well as the first conference centre in the Solaris Hotel in Šibenik, several family resorts, new camps, interpretation centres, visitor centres and other. Valamar from Rabac will be the biggest individual investor this year, but investments will be made all over Croatia, including inland.

How many tourists from Serbia did you have, and how good of an indicator that is that the cooperation between our two countries is developing? − Croatia is a popular destination for Serbian tourists, and we consider them our traditional guests. I would like to use this opportunity to thank them for coming here. Last year, there were 140,000 Serbian tourists in Croatia who had 880,000 overnight stays which is an annual growth of 18% in visits, and 26% in overnight stays.

LUKA BURILOVIĆ President of the Croatian Chamber of Commerce

INTERVIEW

CONTEMPORARY CHAMBER FOR NEW ECONOMIC CHALLENGES ll of the future activities of the Croatian Chamber of Commerce (CCC) will be directed towards creating simpler, easier and more competitive business conditions for our members, and providing assistance in creating new values

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he Croatian Chamber of Commerce has been constantly cutting back on its costs while, at the same time, introducing new services for its members. We are talking to the Chamber's President, Luka Burilović about the CCC's plans.

Despite Croatia's anticipated economic growth, you still think that

2017 is going to be a challenging year for the Croatian economy. Why is that so? − Croatian economy is on the road to recovery and still vulnerable. Our GDP still hasn't reached the pre-crisis level, and the same can be said for our industrial production, construction activity, and employment rate. Although, a step forward has been made, companies, the population and

the state are still heavily in debt, and we are not happy with how fast the business environment has been progressing, or with our rank on the Doing Business list. Furthermore, our credit rating is two grades lower than our investment rating. Hence, we need to use this and the years to come to make more significant progress, implement structural reforms, improve our business climate, and reduce indebtness and budget deficit in order to ensure that we are out of the excessive deficit procedure, as established by the EU, and that we have improved the country's credit rating. At the same time, it goes without saying that the situation in which it is vital to secure an economic growth of 3% or more, and implement fiscal consolidation is a great challenge, and that it requires companies to adapt in a sense of boosting their competitiveness, and making their business more international. On top of that, the additional incentives like last year's low oil and raw material prices, the lowest interest rates and borrowing costs ever are not going to be as strong. When the economic growth is insuf-

tensions in the world and terrorist threats, and we can be almost sure that our economy will have to deal with challenges this year too, despite the economic growth.

How much have the business people from both countries managed to maintain and possibly even increase trading volume despite difficult economic conditions? − After the trade between our two countries dropped in 2013, as a result of the Republic of Croatia joining the EU and the decades-long recession, in 2014, the trade between Croatia and Serbia grew by 53.8% relative to 2013. In 2015, it grew by 21.8% compared to 2014. The indicators for the first eight months of 2016, show further growth of 12.8% relative to the same period in 2015. Last year's positive industrial trends in Serbia, and especially in Croatia, herald positive trends in 2017 too.

You recently spoke highly of the programme devised by the new Croatian Prime Minister, saying it was more in

against the production and employment level, and the country's growth, including the structure of this growth.

How much would reducing corporate taxes facilitate investments in the country and abroad, and how interested is Croatia in continuing to invest in Serbia in this context? − Croatia is one of the biggest investors in the Republic of Serbia. According to the data collated by the Croatian National Bank for the period from 1993 to the Q3 of 2016, Croatia invested 737.6 million EUR in Serbia. According to this indicator, Serbia ranked fourth on the list of the countries in which Croatia has invested the most. Further investments will depend on the interest and financial capacity of Croatian companies. I believe that those companies that have been exporting to the Commonwealth of Independent States (CIS), Kazakhstan, Belarus, and members of the CEFTA would be more interested since they could benefit from the duty-free regime, or at least, reduced customs duty when exporting their goods. They cannot use these benefits if

I EXPECT REFORMS, LIKE THE RECENT TAX REFORM, TO FACILITATE DOING BUSINESS IN CROATIA, WHILE EXTERNALLY, I EXPECT THESE REFORMS TO IMPROVE THE COUNTRY'S POLITICAL STANDING, AND ENABLE OPENING OF NEW MARKETS ficient, the problem with the young and educated people emigrating becomes even more pronounced, while companies in certain segments, like tourism, ship building and construction, cannot find enough workers. Additionally, Croatia has a strong foreign trade ties with the European Union so any disturbance in the countries that we trade with the most could reflect badly on the trends in the Croatian economy, especially if the problems that the EU has been dealing with have never been fully resolved. I am primarily referring to the consequences of Brexit, the problems of peripheral countries, the issues in the Italian banking sector, and the possibility of the refugee crisis escalating. Add to this geo-political

line with the economy's needs. What are your expectations from the new government? − In short, I expect the new government to implement whatever has been laid down in its agenda for the period from 2016 to 2020. The agenda states that achieving a stable and permanent economic growth is one of the four fundamental goals. Internally, I expect reforms, like the recent tax reform, to facilitate doing business, and generally create a much better business environment. Externally, I expect Croatia to have a better political position, for its companies to have it easier on existing markets, and for new markets to open up. Once its term expires, the government's results will be judged

they manufacture their products in Croatia. Also, improving political relations could facilitate bigger investments.

Last year, the Chamber reduced its operating costs, and decided to participate in fewer fairs and conferences. On the other hand, you also decided to increase the number of your offices. What results could these changes in the Chamber bring? − One of the Chamber's key development areas is digitalization of its activities through developing an e-business platform which enables us to carry out and deliver all of our services online (the so-called Digital Chamber project), and make our ac-

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tivities more international. In that respect, the Chamber will develop a concept of virtual fairs, and select the most important fairs to participate in a recognizable and appropriate fashion, all in accordance with the interests and wishes of its members. In other words, you could say that we now favour quality over quantity. In terms of increasing the number of our offices, that was implied by the internationalization process because without providing systemic and organized support to our economy, and securing presence on the most important markets for us, there will be no higher export, or bigger competitiveness of the Croatian economy. When devising the Chamber's strategy and our future key development areas and services, we had one goal in mind – adapt our products and services to the real need of our economy, and develop services that will be equally accessible to all our members.

our members, and providing assistance in creating new values. The following are the key development areas that we will focus our new projects, products and services on: information, market (internationalization), education, promotion, finance, and legislation. The Chamber's future activities will be directed towards improving the education system, developing a system of innovation, promoting the transfer of innovation and know-how,

You have adopted the 2017-2022 Development Strategy which entails relying less on membership fees, and more on revenue from European projects. Could you elaborate on your vision of how Chamber's activities should be developed?

better utilization of information and communication technologies, developing support system for companies (funding, finding new markets, education), and transforming innovative ideas into new products and services.

− All of the future activities of the Croatian Chamber of Commerce (CCC) will be directed towards creating simpler, easier and more competitive business conditions for

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LAST YEAR'S POSITIVE INDUSTRIAL TRENDS IN SERBIA, AND ESPECIALLY IN CROATIA, HERALD POSITIVE TRENDS IN 2017 TOO

How does this pro-active attitude reflect on the cooperation with other chambers of commerce, especially the Serbian Chamber of Commerce, in terms of finding new avenues for boost-

ing economic cooperation? − By having such attitude, we are going to create additional space for stronger cooperation with our partner institutions, including the Serbian Chamber of Coomerce. We especially advocate cooperation on projects through which we can additionally improve our cooperation to the benefit of our respective members, and further develop our bilateral relations by participating in the projects of mutual interest, and co-funding some of the costs with the help of the EU funds and programmes.

How big is the development potenital of the economic cooperation between our two countries? − As neighbouring countries, we have a very diverse trade. We can say that there are no goods and services that our countries haven't exchanged in trade. The trading activities between Croatia and Serbia will grow depending on the price and the quality of offered goods. Also, we should not forget that our markets are opened to the products from all over the world, hence the competition is quite fearce. Bigger cooperation is definitely possible on projects relating to enviromental protection, energy, infrastructure and machine building. However, we need to secure good funding sources for such projects, be it from domestic or foreign sources, and in most cases, secure support from our respective governments.

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MARKO ČADEŽ President of the Serbian Chamber of Commerce and Industry

INTERVIEW

I EXPECT A NEW WAVE OF INVESTMENTS 14

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There is enough room to increase economic cooperation in almost all areas in which Serbia and Croatia cooperate. I am confident that there will be a new wave of good Croatian investments in Serbia and vice versa, as well as joint ventures that will bring new products with which we will appear jointly in the world

erbia and Croatia have achieved substantial progress in commodity trade. However, we have not sufficiently utilised the potential to increase overall economic cooperation, based on the vicinity of the markets and compatibility of the economies, says Marko Čadež, President of the Serbian Chamber of Commerce and Industry.

What are the main characteristics of the commodity trade between Croatia and Serbia? − In the last ten years, total commodity trade between the two countries has been characterised by continuous growth, with the exception of 2009, when it dropped as a consequence of the global economic crisis, which reduced the export performance of the Serbian economy to the Croatian market and the Croatian economy to the Serbian market. Although Croatia has been among Serbia's pre top ten foreign trade partners in the last ten years, and although mutual

How much has the "chokolinda" affair highlighted the fact that there are actually no recognisable brands in commodity trade? − It is the fact that the commodity trade structure of the two countries has not undergone any bigger changes in recent years. The list of export products has been expanded, and the number of companies engaged in business cooperation has increased, there is a growing number of companies from Serbia that sell their goods on the Croatian market. Last year, the Serbian customs authorities recorded 3,049 exporters - 235 more than two years ago. However, observed by sectors, the predominant industries are still the metal industry (basic metals and metal products), the mechanical industry (motor vehicles and trailers), the agricultural – food industry (foodstuffs and beverages) and the chemicals-pharmaceuticals (chemicals and chemical products). Of course, the aim of every economy in the world is to sell as many final products as

If we have a look at Serbian export, last year our major export to Croatia included cathodes and cathode sections, electric power, engine fuel, plastic bottles, polystyrene, mineral and chemical fertilisers, white sugar, women’s bathing costumes, paper and soft drinks. Despite all of that, we cannot say that there are no recognisable brands in our trade. On the list of the ten biggest exporters to the Croatian market, along with RTB Bor, there are the companies Dijamant and Gorenje, whose brands are very much recognisable in the region. The women’s bathing costumes from this year's list of Serbian exports were produced at the Adriana teks factory, which operates under the auspices of the wellknown Calzedonia brand. The list of the top 30 exporters from Serbia to Croatia also includes Benetton, Frikom, Nestle, Adriatic and Soko Štark. Who in Croatia has not heard of "Plazma", "Honey Hearts" ("Medeno srce"), "Choco bananas", "Najlepše želje" and "Galeb" chocolate, "Smoki" and "Grand coffee”, all of

IT IS OF UTMOST IMPORTANCE FOR SERBIA AND SERBIA, CROATIA AND OTHER COUNTRIES IN THE REGION TO IMPLEMENT JOINT INFRASTRUCTURE PROJECTS, TO STRENGTHEN OUR OWN CAPACITIES, AND ATTRACT MORE INVESTORS trade almost doubled from 465 million euros in 2006, to 864.3 million euros in 2015, i.e. 903.8 million euros in 2016, the possibilities for improving mutual trade have not been fully utilised. In addition to the fact that trade between Serbia and Croatia could be higher, it has been rather unbalanced for years, with a constant deficit on the Serbian side. Last year, this multiannual trend was interrupted for the first time, and since April, Serbia has been recording a surplus from month to month, which has reached 30.75 million euros, according to the Statistical Office of the Republic of Serbia. This balance is primarily the result of higher Serbian exports to Croatia for a couple of years consecutively, reaching 467.3 million euros, which was last year's export performance total.

possible, with a higher degree of processing, and to have as many successful and recognisable product and corporate brands as possible beyond the boundaries of their local economies. If we trade more in raw materials and semi-finished goods, and less in final products, that is not only an issue of relations between our two countries, but also a problem of the production and export structures of each of our countries, and not only of Serbia and Croatia, but of all countries in the region. Therefore, it is important to increase the capacities of our industries and streamline them technologically, in order to achieve the highest possible level of processing and finishing in production, and to implement all international standards, in order to achieve higher competitiveness and record a better export performance.

which are produced in Serbia? And, vice versa, who in Serbia has not heard of the Kraš "Bajadera", "Kiki" and "Bronhi" candies, "Vegeta“, "Eva“ sardines, “Ronhill” cigarettes,“ "Faks” detergent - all produced in Croatia. They are not only Serbian or Croatian brands, they are actually regional brands, no matter which factory produces them in Croatia or Serbia, and no matter whose property they are, either domestic or foreign.

In your opinion, in which areas, do the two countries insufficiently take advantage of their potential for better economic exchange? − There is enough room to increase in economic cooperation in almost all areas in which we cooperate the most, as well as in those in which we have only scratched the

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chinery and appliances, electrical machines and apparatus, insurance and pension funds. However, the largest individual investments have been made in the foodstuffs industry and construction, then in the fields of the pharmaceuticals, textiles and automotive industries, transport and the machinery industry. It is certain that further investments can be expected to continue in these sectors. Our companies have an interest in cooperation and, honestly, I am confident that there will be a new wave of good Croatian investments in Serbia and vice versa, as well as joint ventures that will bring new products with which we will appear jointly in the world.

To what extent can close cooperation between the two Chambers contribute to creating a better business climate in both countries and to the creation of new opportunities for cooperation? surface. Although we will need a lot of time and efforts to increase our capacities and mutual trade in order to one day achieve five billion USD, the trade in goods between the two republics in the former joint state which was the value of trade in goods between the two republics in the former joint state. It is now possible to record further growth in agriculture, particularly in the food industry, energy, metalworking, construction, but also in transport, tourism, information technology, the environment, and other sectors. For instance, demand on the Croatian market indicates export opportunities for producers of fresh fruit and vegetables, wine and alcoholic beverages, building material, metal wiring and grids, products of ferrous and non-ferrous metallurgy, the metal and machinery industries, the automotive and pharmaceuticals industries, and not only in trade, but also in terms of trade other forms of business operations. It is true that every single euro generated from exports means a lot to all of us in the region, that our neighbouring countries are our natural export destinations, that it is important to boost our bilateral trade, to increase our trade in goods and eliminate all possible barriers to the free flow of goods and capital. However, the essential issue of small national economies on the territory of the former Yugoslavia, whether they are in the European Union, like Croatia and Slovenia, or in the CEFTA region, like Serbia and other countries, is not how to sell more commodities to each other, or who will record a surplus or deficit of a few dozen million euros, but how to develop higher forms of our cooperation, to network our companies, their references and free capital, to produce jointly and appear on third markets and to strength-

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IT IS POSSIBLE TO RECORD FURTHER GROWTH IN AGRICULTURE, PARTICULARLY IN THE FOOD INDUSTRY, ENERGY, METALWORKING, CONSTRUCTION, BUT ALSO IN TRANSPORT, TOURISM, AND OTHER SECTORS en the export performance of every country individually, and the region as a whole. It is of utmost importance to implement our joint infrastructure projects, to improve the business climate, to strengthen our own capacities, to boost our exports and attract more investors.

What are the areas with the greatest number of Croatian investors and what trends do you expect in the upcoming period? − Today, in Serbia, there are about two hundred companies founded or bought by Croatian capital, which established their representative offices, participated in the process of privatising of Serbian companies and invested in new factories and plants. The structure of Croatian investments in Serbia, in terms of activities, indicates that the largest investments have been recorded in agriculture and the production of food and beverages, then the industry of non-metal and mineral products, retail and wholesale trade, the manufacturing of ma-

−After the occurrences of the 1990s, the Chamber of Commerce and Industry of Serbia and the Croatian Chamber of Economy were the first institutions to restore their ties and thus take a significant step towards the normalisation of relations between the two countries. Today, we have excellent bilateral and everyday communication at all levels. A special quality to the inter-chamber cooperation, including partnership in the Danube and Adriatic-Ionian Transnational Programme, has been added the last two years by our joint work and initiatives within the Chamber Investment Forum, which consists of eight National Chambers of Commerce and Industry of the region – six chambers of commerce and industry of the Western Balkan countries - members of the Berlin Process-and the Chambers of Economy of Croatia and Slovenia, with a total of 350,000 companies. The Croatian Chamber of Economy holds the Presidency of the Chamber Investment Forum (CIF) this year, which is an efficient chamber economic platform. It has grown into the strongest cohesion factor in the region, through the connection of economies, the elimination of barriers for the purpose of more successful business operations, the implementation of projects which are aimed at supporting strengthening of the capacities of our economies and their networking. The focus of our activities will be on the topics envisaged by Croatia’s Presidency Agenda such as the promotion of dual education, the development of entrepreneurship and entrepreneurial learning (in which the Southeast European Centre for Entrepreneurial Learning –SEECEL, with its seat in Zagreb, plays a significant role), and strengthening the region's SME sector.

MARIJA RADULOVIĆ President of the Croatian Business Club

INTERVIEW

WE SHOULD COOPERATE MORE 18

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Economic cooperation between Serbia and Croatia is growing despite occasional politican tensions, and there is still room for it to grow even more. At the same time, and considering the satisfaction of the Croatian investors in Serbia, we can expect more of them to invest in Serbia

ccording to the data collated by the Croatian National Bank, in the period from 1993 to 2017, Croatia invested a total of 704 million EUR which is 16% of the total Croatian investments abroad in the observed period. Judging by the interest shown so far, it would be logical for such trend to continue, says Marija Radulović, President of the Croatian Business Club. The following economic branches are the most appealing to investors – food industry, agriculture, textile industry, construction, machine building, and automotive industry, with Croatian companies having already invested in all of them. Mrs. Radulović does point out that there is a trade imbalance on the Serbian side, which should be rectified by increasing Serbian investments in Croatia. „Both countries should strive towards increasing the volume of economic cooperation in both directions“, Mrs. Radulović advises. The Croatian Business Club (CBC)

Despite political tensions, the economic cooperation between Serbia and Croatia grew last year. What was the reason for this trend that has been going on for a few years now? − The number of Croatian companies operating in Serbia has exceeded 200, which is an obvious sign that the investment climate in Serbia is favourable. Although not all of these companies have become members of the Croatian Business Club as yet, we have been trying to establish and continue good cooperation with the Serbian state institutions with the view of creating better conditions for the cooperation between interested companies from both countries, and in both directions. The interest shown by companies is mainly based on economic reasons which are obviously present, but we should not forget the fact that, until recently, we all lived in the same country, and that the ex-Yugoslav citizens still have positive emotions towards each other that cannot be jeopard-

Although, the trading between the two countries has been growing, it is still dominated by raw materials and semi-finished products. There are very few renowned brands in this trade. How can we change this situation for the better? − Investors are mostly guided by economic interests and investment incentives when deciding in which branch to invest. In terms of famous brands, we should bear in mind that the consumers in Serbia have been traditionally partial to certain products from the time of our common country. According to a recent survey, the most requested Croatian products are exactly those from the time of Yugoslavia, as well as Serbian products like cooking oils, coffee and confectionary that are now owned by Croatian companies. We should bear in mind that these companies invest a lot in advertising so it is only natural that they have more market success. Something that we still need to work on is the reciprocity when it comes to the number o f

OUR MAIN INTENTION IN 2017 IS TO GET AS MANY CROATIAN COMPANIES OPERATING IN SERBIA TO BECOME CLUB MEMBERS, AS WELL AS TO HAVE SERBIAN COMPANIES SEARCHING FOR QUALITY CONTACTS TO JOIN US gathers Croatian companies operating in Serbia, but also Serbian companies, and has been constantly engaged in boosting the economic cooperation between the two countries. This year, the Club's goal is to involve as many Croatian companies operating in Serbia as possible in its activities, as well as as many Serbian companies interested in cooperating with the partners from Croatia. To that end, the Club plans to hold presentations in local chambers of commerce in Serbia, and establish communication with local companies in Serbia. This is just one of the CBC's rather ambitious plans which we have discussed with Mrs. Radulović. The Club has also been successfully cooperating with the Slovenian, German and Austrian business clubs, and hopes for this cooperation to expand.

ized by political tensions. The value of the trade between Serbia and Croatia today amounts to just under 1 billion US dollars, with Serbia recording a deficit. At the time when the two countries were a part of one country, this vallue stood at around 5 billion dollars. We do hope that we are going to reach this amount at a certain point, and that that will be one of the future goals of our economic cooperation. Both countries are considered the leading economies in the region, so there is both the individual, and common (regional) interest to further boost the economic cooperation between the two countries. I believe that, in the future, this will be the task for the relevant state institutions, particularly the respective chambers of commerce.

Serbian companies operating in Croatia. Economists attribute this imbalance to different investment climates, but we should not forget that politics does sometimes interefere with decision making. Both countries should be striving towards boosting their economic cooperation in both directions.

How would you rate the overall investment trends, and do you think that Croatia will remain one of the top investors in Serbia, according to the information that you are privvy to? − According to the data collated by the Croatian National Bank, in the period from 1993 to 2017, Croatia invested a total of 704 million EUR which is 16% of the total Croatian investments abroad in the observed

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period. Judging by the interest shown so far and the number of Croatian companies operating in Serbia already, it would be logical to assume that they are happy with the business conditions here, and that such trend would continue.

Which economic branchs in Serbia are the most appealing to Croatian investors? − Based on the size of investments made since the year 2000 until now, Croatian companies are most interested in food industry, agriculture, textile industry, construction, machine building, automotive industry, pharmaceutical industry and retail.

You were appointed president of the CBC in January last year. How many women executives are there in Croatian companies, and what would you say was your personal contribution to the Club's activities as its president so far? − Both Croatian and Serbian companies are members fo the Croatian Business Club. We welcome companies from other countries too that are willing to cooperate with us. Although, the Club advocates all types of equality, the Club members are legal entities (companies) that independently choose their representives. The current composition of the Club members is such that women and men are almost equally repre-

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sented, probably by pure chance. Although, the main thing is that we are all satisfied, and willing to deal with the issues at hand. The equal representation of men and women is important in any business environment, not only to fulfill the principles of gender equality, but also to have different, mutual compatible energies around, and to achieve results faster.

What are CBC's goals for 2017? − Our main intention is to get as many Croatian companies operating in Serbia to become Club members, as well as to have

THE VALUE OF THE TRADE BETWEEN SERBIA AND CROATIA TODAY AMOUNTS TO JUST UNDER 1 BILLION US DOLLARS, WHILE AT THE TIME WHEN THE TWO COUNTRIES WERE IN YUGOSLAVI, IT WAS FIVE TIMES HIGHER. WE DO HOPE THAT WE WILL REACH THIS AMOUNT IN THE FUTURE

Serbian companies searching for quality contacts to join us. To that end, the Club plans to hold presentations in local chambers of commerce in Serbia, and establish communication with local companies in Serbia. We also plan to have regional round table discussions about the topics that are important to both countries, in terms of economic cooperation. Furthermore, we intend to expand the cooperation with other business clubs. So far, we have been cooperating with the Slovenian, German, and Austrian business clubs, and we hope to continue in that direction.

The Croatian Business Club has recently presented its new website and its Linkedln and Facebook pages. How important are social networks for establishing business contacts? − New technologies have given us additional opportunities to establish new contacts. Some would argue that „serious business people don't use social networks“, but we should not forget that good reputation is far reaching, and maybe one of the employees, friends or relatives will be able to provide a good business contact. On the other hand, serious business people have grasped the opportunities provided by social networks, and I do believe that they can find important information there. Anyhow, investing in social networks is not expensive, and the benefits definitely outweigh investments.

Chairman of Executive Board of Milenijum Insurance Company

CORP ORAT E

LJUBIŠA VELJKOVIĆ

We Grew

FASTER THAN THE MARKET The Milenijum Insurance Company recorded growth in 2016 which was faster than the overall growth of the entire insurance market. The company has great expectations in terms of continuing to have a stable growth thanks to the new owner and its diversified portfolio

e are talking to the Chairman of Executive Board of Milenijum Insurance, Ljubiša Veljković about the latest market trends and the plans of this exceptionally successful insurance company.

You are one of the top insurance companies in Serbia. Which factors have contributed to such success? — Milenijum Insurance is one of the market leaders in terms of technical profitability in 2016, growth of premium, and technical reserves. We are especially proud of the fact that we are also the leaders in prompt and efficient processing of insurance claims and disbursement of damages which is very important for an insurance company. The trust that our clients have in us has been constantly growing, and we are always trying to have their best interests at the very centre of our operations.

How can you boost your operations on the market that is pretty static and not growing quickly? — Bearing in mind that the growth of non-life insurance premium was in single digits, and that Milenijum Insurance recorded growth in 2016 which was faster than the overall growth of the entire insurance market, we have great expectations that our company will continue to develop on the so-called free markets by selling innovative insurance products for individuals and SMEs, and by expanding our range with new products.

Early this year, CROATIA OSIGURANJE DD became the sole owner of Milenijum

Insurance's equity capital. What do you expect from the new owner? — The new Insurance Law, adopted in 2014, abolished the stipulation that ownership structure of insurance companies has to have at least one share owned by domicile persons as shareholders. Let me clarify this for you. You can see that Croatia Osiguranje DD has been the majority shareholder in our company since 2003 with a 99.78% share, and that, once the relevant regulation

We are especially proud of the fact that we are the leaders in prompt and efficient processing of insurance claims and disbursement of damages which is very important for an insurance company

changed, the company was given an opportunity to become the sole owner. Because Adris Group from Rovinj is the owner of Croatia Osiguranje, we are now also owned by the group. We have great expectations from our new owner, which is at the very top in its segment when it comes to the way they do business, organization, training and recruitment of staff, and we expect them to support us in all of our operational segments,

help us to increase our market share and profitability in all segments, and to develop and diversify our product range.

Which of your company's products do you think appeal the most to individuals and companies? — Last year, we launched a new product on the market called household insurance which uses the nominal purchasing value as its basis which, in turn, is quite a novelty on this market. Its additional value lies in the fact that it does resemble property insurance, or rather the so-called all risk insurance policy with all the limits and sublimits. Once the new conditions and tariffs had been adopted, we also improved our casco vehicle insurance which now covers a variety of situations, and our prices are optimal compared to the competition's. We are preparing to develop and implement products for small and medium enterprises that will be launched in the Q1 of 2017, as well as an entire range of non-life insurance products that we haven't had so far.

How did your insurance company manage to keep up with the fact that more policy holders are now online and use social networks? — In order to keep up with the latest trends emerging from fast-paced lifestyle, our company now sells insurance policies online too. You can visit www.webshop. milenijum-osiguranje.rs at any time and purchase a travel insurance policy, or a road assistance policy. We are preparing online casco car insurance and household insurance policies too.

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ACTIVITIES OF THE CROATIAN BUSINESS CLUB AND ITS MEMBERS

NEW BUSINESS TIES CREATED

Zagreb

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Last year was very diverse for the members of the Croatian Business Club (CBC) – new management was appointed, ties with other chambers of commerce were solidified and broadened, cooperation with new partners was established, and the CBC members accomplished numerous successes

Visit to the municipality of Beočin – prior to the Serbia in the Rythm of Europe festival

n April 2016, the Croatian Business Club got new management with Marija Radulović from Millennium Insurance Company appointed president, and the proprietor of the PRE-PRINT d.o.o. Company from Novi Sad and President of the Union of Vojvodinian Employers, Stanko Krstin appointed vice president. In the same month, the CBC organized its first speed business meeting with the CBC members participating. The meeting was set up in cooperation with the Association of Businesswomen of Serbia and the Slovenian Business Club. A total of 42 company representatives from three regional countries participated in the meeting. President of the CBC, Marija Radulovic said that, after the success of the meeting, she hoped that more Club members would get involved in joint activities that the CBC would organize with the Slovenian Business Club and the Association of Businesswomen of Serbia. In April, the Belgrade hotel Courtyard by

Mariott presented itself to the CBC members. The hotel played host to the gathering of the members of the Croatian Business Club which had the opportunity to find out more about the hotel which is also the new member of the CBC. In May, at the Belgrade Technology Fair, Serbian and Croatian business people met at the stand of the Croatian Chamber of Commerce to exchange the experiences

NUMEROUS BILATERAL CONTACTS AND FAIRS HAVE BEEN USED TO SOLIDIFY THE EXISTING AND CREATE NEW BUSINESS CONTACTS BETWEEN CROATIAN AND SERBIAN COMPANIES

from their cooperation so far, and discuss opportunities for its improvement. The key topics of the meeting between the Serbian Chamber of Commerce, the Valjevo Chamber of Commerce, the Goša Institute, the Belgrade Fair, the Croatian Chamber of Commerce – the Pula County Chamber, the exhibitors at the fair, and the representatives of the Croatian Embassy in Belgrade were boosting trade and innovative cooperation formats. The Croatian Agricultural Minister, Professor Davor Romić, PhD, attended the official opening of the 83rd International Agricultural Fair in Novi Sad on 14th May, 2016, and the 2nd Regional Agribusiness Conference titled „Across the fields to Europe“. Croatian companies Entrada, Eurokonzalting from Pula, HITTNER from Bjelovar, LIM Samobor, Mega Metal Nedelišće, Petrokemija Kutina, and the Croatian Chamber of Trades and Crafts all exhibited at the Fair. In June, the Croatian Ambassador to

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Croatia, Gordan Markotić and a delegation of Croatian businessmen, together with the representatives of the Croatian Business Club visted the municipality of Beočin where they met with the municipality's president, Mr. Mitar Milinković and business people from Beočin. Children music festival „Serbia in the Rhythm of Europe“, the cooperation between the SMEs from the two countries, and an opportunity to jointly apply for the funds from the EU's IPARD fund were the reasons for the meeting. On 21st June, on the occasion of the Croatian Statehood Day and the Croatian Army Day, a reception was held at the Crowne Plaza Hotel in Belgrade with over 900 guests including political, business, military, religious, scientific, cultural and public figures, and the representatives of the official institutions and associations of the Croatian national minority in Serbia in attendance. The reception was also attended by the Serbian Interior Minister, Nebojša Stefanović and the Defence Minister, Zoran Đorđević together with their associates, the representatives of the various ministries, the state secretaries and the diplomatic corps. After summer recess, in September, the representatives of 13 countries, including the Republic of Croatia as representated by the Croatian Business Club, signed an agreement on establishment of the Council of Mixed

The Croatian Business Club meeting at the Tata Mata restaurant, and a farewell reception in honour of the Club's honorary member Mrs. Svetlana Božinović who retired

The New Year’s reception at the residence of the Croatian Ambassador to Serbia, H.E. Gordan Markotić

Representatives of Končar company visiting Energoprojekt

The Croatian Business Club meeting at the Mariott Hotel in Belgrade

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THE REPRESENTATIVES OF 13 COUNTRIES, INCLUDING THE REPUBLIC OF CROATIA AS REPRESENTATED BY THE CROATIAN BUSINESS CLUB, SIGNED AN AGREEMENT ON ESTABLISHMENT OF THE COUNCIL OF MIXED CHAMBERF OF COMMERCE WITH THE SERBIAN CHAMBER OF COMMERCE Chamberf of Commerce with the Serbian Chamber of Commerce (SCC). The SCC President, Marko Čadež and the CBC President, Mrs. Marija Radulović signed an agreement on behalf of their respective organizations. In early autumn, the Croatian Business Club had a small reception to mark the end of Svetlana Božinović's term in the office and her retirement. Mrs. Božinović is the Club's honorary member. In November, the Croatian Business Club officially presented its website and Linkedln and Facebook profiles. The Club's members

were encouraged to publish information about their companies, business results, new projects and contracts, and interesting developments in their companies on the CBC's social network pages. In late November, the representaives of the Croatian Business Club were the guests of the French-Serbian Business Chamber and attended the gathering titled „The Effects of Digitalization on Labour Market: Challenges and Opportunities for Women“. The end of 2016 was celebrated at the residence of the Croatian Ambassador to Serbia, Gordan Markotić. The Embassy hosted a cocktail party for its guest with Mr.

Markotić wishing everyone present and the members of the CBC a happy and successful new year. The Club members also recorded very important business success in 2016. Twelve Croatian wineries had a lot of success at the second annual tasting of Croatian wines at the Belgrade hotel Crowne Plaza. Over 200 wine experts, mostly wine distributers, merchants, caterers and journalists, had an opportunity to taste the best wines from the following wineries - Zlatan Otok, Vina Matošević, Vina Belje, Iločki Podrumi, Veralda, PP Orahovica, Erdutski Vinogradi, Kronos, Feravino, Kutjevo, Dingač

Speed business meeting organized together with the Slovenian Business Club and the Association of Businesswomen of Serbia

Millennium Insurance Company presents online sale of its policies

Signing of an agreement on establishment of the Council of Mixed Chambers of Commerce with the Serbian Chamber of Commerce

Skaramuča, and the Kolar Wine Cellar. With the aim of advancing the existing business cooperation, the representatives of the seven companies from the Končar Group visited the Belgrade company Energoprojekt Holding. At the meeting, the two sides talked about the current level of cooperation and ongoing projects, as well as the opportunities for boosting the cooperation. The representatives of the Serbian mine and public enterprise for underground coal exploitation, Resavica visited the Končar Group on 9th September because the mine has been using the Končar equipment for years. Considering that Resavica plans to reconstruction of the Strmosten substation, they wanted to see the new Končar equipment and discuss the possibility of Končar also getting involved in the next public bidding for the acquisition of the needed equipment. The IN2 Company has been selected to create hospital software for the new hospital called Bona Dea in Azerbaijan, which is considered one of the best hospitals in the

THE CROATIAN BUSINESS CLUB HAS CEMENTED ITS TIES WITH THE SLOVENIAN, AUSTRIAN AND GERMAN BUSINESS CLUBS Caspian and Caucasus region. Along with the Spanish company, Tich Consulting, which had been chosen as the project partner, IN2 won this contract thanks to its years of experience in development and implementation of healthcare solutions. The project, that will be implemented in the Azeri hospital which has 200 beds and spans 40,000 square metres, is the first of its kind for the IN2 Group n Azerbaijan. The Millennium Insurance Company has also announced the beginning of the sale of their travel health insurance and road assistance insurance via their webshop. The Podravka Company had once again confirmed its dedication to excellence in HR management by receiving the Employer Partner certificate last year, for the second consecutive time. Podravka has been focusing on developing talent inside the company through a programme called „Recipe for Excellence“. After celebrating a decade of successful operations last year, the Abrakadabra Agency has changed its name to Komunikacijski Laboratorij, and adopted a new visual identity to marke the new era of their operations.

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ECONOMIC COOPERATION

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POSITIVE TRENDS DESPITE CHALLENGES Despite political tension between the two countries, the trade between Serbia and Croatia has been slightly growing. If this growth continues, we can soon expect to reach a new level of trade, amounting to 1 billion EUR

he trade between Serbia and Croatia has been continuously growing and, from 465 million EUR, which is how much it was worth in 2006, it almost doubled to 846.3 million EUR in 2015 (a 14.2% growth relative to 2014). If this trend continues, we can soon expect to reach a new level of trade, amounting to 1 billion EUR. In 2015, Croatia ranked 10th on the list of the biggest foreign trade partners of Serbia (the same position as in 2014), and 8th on the list of the biggest export partners of Serbia (9th place in 2014). Also in 2015, Serbian export to Croatia reached a record 400 million EUR (399.5 million EUR, to be exact) which is almost a one third higher than in 2012 (+29%). In the same year, and relative to 2014, export grew by 15.9%, while Serbia’s import from Croatia went up by 12.7%, and it amounted to 464.6 million EUR. Up until 2016, Serbia had been recording deficit in trading with Croatia. In 2015, it amounted to 65.1 million, and was slightly lower compared to 2014. The export to import ratio was 86% that year. For the first time in 2016, in April to be exact, Serbia recorded a surplus in trading with Croatia which, during the first eleven

IN THE LAST TWELVE YEARS, SERBIA AND CROATIA CONCLUDED CLOSE TO 20 DIFFERENT AGREEMENTS AND PROTOCOLS COVERING THE MOST IMPORTANT ASPECTS OF COOPERATION months of 2016, amounted to 27.6 million EUR. In the same period, the trade between the two countries amounted to 821.08 million EUR, which is a 4.8% hike. Serbia’s export to Croatia amounted to 424.3 million, which is a 16.1% hike relative to the same period last year. Import from Croatia fell by 5.1%, and, in the observed period, stood at 396.7 million EUR. The surplus amounted to 27.6 million EUR, and the export to import ratio was 106.9%. Such results were achieved despite the frequent political tension between the two countries. In the last twelve years, Serbia and Croatia concluded close to 20 different

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agreements and protocols covering the most important aspects of cooperation, from normalization of bilateral relations to free trade. When Croatia became a full-fledged member of the EU on 1st July, 2013, the country left the CEFTA, as well as all other bilateral and multilateral trade agreements that were not in accordance with the EU’s joint economic policy. By doing so, Croatia started to adhere to all the regulation and rules that the EU has for its members. Trading between Serbia and Croatia is now regulated by the Stabilization and Association Agreement (SAA) from 1st September, 2013. The SAA enables Serbia to have unlimited customs-free access to the EU market for almost all of its agricultural and food products, excluding sugar, wine, trout and beef. Serbia can export most of its products to the Croatian market under more favourable conditions than those stipulated in the CEFTA which stipulated trading quotas for the majority of the most important export products. In the first eleven months of 2016, Serbia exported the following products to Croatia the most (the figures are expressed in million EUR): cathodes and sections of cathodes 36.9 (+35.4%); edible sunflower oil 13.6 (+47.6%); electricity 11 (+16.7%); 9.6 petrol (-48.3%); white sugar 6.9 (+241.5%); polyethylene, of the relative density of less than 0.946 (+43%); gallons, bottles, flasks and the like 5.9 (-7.6%); raw sunflower oil, not for consumption, 5.8 (+ 69%); polyethylene of relative density from 0.94 to 5.2 (+ 60.2%); mineral or chemical fertilizers 4.9 (+ 132.4%); and women's swimwear 4.8 (-20%). In the first eleven months of 2016, Serbia imported the following products from Croatia the most (the figures are expressed in million EUR): cars with diesel engines 24.5 (+29.9%); light oils that do not contain biodiesel 16.1 (+367.5 %); seat parts 14.9 (+ 4.8%); Portland cement 12.1 (no change);

THE FIRST SERBIAN INVESTMENT IN CROATIA WAS THE ACQUISITION OF THE EURO FOOD MARKET CONFECTIONARY COMPANY FROM SISAK BY SWISSLION FROM TAKOVO urea 9.8 (-10%); washing and cleaning agents 8.2 (+ 3.7%); other food products 6.5 (-7.4%), testliner (recycled liner board) 5.8 (+ 8.3%), and other products. In the observed period, Serbia also imported 78.6 million EUR worth of unclassified products (according to the customs tariff book). In 2015, Serbia mostly exported the following products to Croatia - refined copper,

petrol, electricity, edible sunflower oil, gasoline, and women's swimwear. According to the data collated by the National Bank of Serbia (NBS), in the period from 2005 to 2013, Croatian investments in Serbia (in cash), amounted to 351.5 million EUR which puts Croatia in the 12th place on the list of the biggest net cash investors in Serbia. In 2014, Croatian net FDIs in Serbia were negative, while in 2015, Croatia ranked 11th on the list of the biggest foreign investors in Serbia with net FDIs amounting to 58.68 million EUR. According to the Croatian Chamber of Commerce, in the period from 1993 to 2015, Croatian companies invested approximately 704 million EUR in Serbia. The same records also show that there are close to 200 Croatian companies operating in Serbia, which contribute 10% to Croatian exports worldwide. The structure of Croatian investments in Serbia, per economic segments, shows that most investments were made in agriculture, hunting and related services (46.54%), production of non-metallic and mineral products (19.41%), food and beverages (18.13%), wholesale and retail trade (3.62%), manufacture of machinery and equipment (2.24%), production of electrical machines and devices (2.07%), insurance policies and pension funds (2.03%), and manufacture of office machinery and computers (1.62%). There are close to 10 Serbian companies operating in Croatia at the moment. The first Serbian investment in Croatia was the acquisition of the Euro Food Market confectionary company from Sisak by Swisslion from Takovo in 2009 for 20 million EUR. In 2015, the proprietor of the meat processing company Matijević bought two agricultural cooperatives with 1,500 hectares of arable land in Croatia for 15 million EUR.

FOR THE FIRST TIME IN 2016, IN APRIL TO BE EXACT, SERBIA RECORDED A SURPLUS IN TRADING WITH CROATIA WHICH, DURING THE FIRST ELEVEN MONTHS OF 2016, AMOUNTED TO 27.6 MILLION EUR 28

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EUROPEAN AND WORLD CENTERS Croatia Airlines, the Croatian flag carrier, is a mid-sized European airline in constant growth. In its more than twenty-five year existence, it has connected Croatian cities to major centres throughout Europe and the world

roatia Airlines’ fleet consists of 12 aircraft: 6 Airbus A319/320 and 6 Dash 8 – Q400 aircraft. Special attention is paid to the maintenance of aircraft, one of Croatia Airlines’ most important business segments, which for passengers, is an additional guarantee of safety. The utmost attention is paid to ensuring passenger satisfaction and confidence, which is why the company has been continuously working on improving and developing the quality of its service - both in the air and on land. On all Croatia Airline flights, passengers are offered food and beverages free of charge, which may vary depending on the class of travel, flight length and the time of day. CROATIA 2017

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With Croatia Airlines in the

ECONOMY

AS DIVERSE AS THE SHAPE OF THE COUNTRY

Art Pavilion - Trg Kralja Tomislava

Croatia, the youngest member of the European Union, and probably its last prior to any considerable enlargement of the Club, has one of the most interesting geographical positions in the world and, hence, an equally diverse and interesting economy

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here was a joke that Croatia is shaped like a croissant, and some misinformed people in the West even tried to convince me that the two words were connected. Alas, no. Croissant is simply “crescent” in French, while “Croatia” instead gave us the word “Cravat”, as a fashion accessory. But this uniquely croissant-shaped country has its own economy which is actually typical for any maritime superpower with vast inland regions. One of the peculiarities of Croatia is that, just like in the cases of Slovakia and Bulgaria, it has a totally off-centre capital. Zagreb lies very close to the Western border with Slovenia and is one of the region’s most Western-influenced cities and, of course, the most industrialised and Mitteleuropean of them all. It reflects every aspect of Croatian economic traditions and is now one of the leaders of the country’s tertiary sector. Old factory workers, just like in Vienna and elsewhere, have somehow faded away, and the flashy Zagreb is now a showcase for the new Croatian economy, which is, as you can surely guess, service-based. It has developed so much

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that the tertiary sector currently accounts for 70% of the country’s total GDP. It is interesting that the country is sharply divided into several regions. The coastal region is basically tourism-orientated, with such pearls as Dubrovnik attracting thousands of visitors hungry for an air of the Renaissance and a bit of Game of Thrones. Following the country’s War of Independence, which lasted from 1991 to 1995 and hit the economy badly, everything else was pretty positive, considering that – with the exception of the partially depopulated or war-torn areas – the country flourished, with annual growth of 4-5%. Unfortunately, as in the case of all other non-robust, service-based economies worldwide, the crisis period from 2008 onwards has been devastating. We know for a fact that only Azerbaijan, which produces oil and gas, and Poland and Germany, which have huge industrial capacities, made it through this period without sustaining too much damage. All the rest were smacked at the core of their economy, and the Croatian economy was hit badly by the financial crisis, which, together with the slow progress of

economic reforms, resulted in six years of recession and a cumulative GDP decline of 12,5%. Croatia formally emerged from recession with three annual quarters of continuous GDP growth in Q4 2014 (0.3%), Q1 2015 (0.5%) and Q2 2015 (1.2%). This is due to the amazing capacities of the country’s tourism sector, as well as instability on other markets that have been badly hit by Islamic terrorism, and the sobering fact that in the late ‘90s and early ‘00s countries like Turkey, Egypt, UAE and Portugal swiped many millions of tourists who would otherwise have belonged to Croatia and other more traditional destinations for seafarers. Croatia improved its offer and, with its amazing 1,244 islands (which, with the exceptions of distant archipelago nations like Indonesia or the Philippines, make it the nation with the most islands anywhere in the wider region!), the money and visitors poured in once again. The industrial sector, with exports of over €1 billion annually, is not surprisingly dominated by shipbuilding. The country’s long coastline boasts many shipyards, with shipbuilding accounting for over 10% of exported goods. In many aspects, the economy of Croatia resembles those of Greece and Spain - in some positive aspects, like wonderful nature and millions of tourists, but also in terms of the notorious Southern disease – unemployment. The average annual unemployment rate in 2014 was 17.3%, while Croatia currently has the third highest unemployment rate in the European Union, after Greece (26.5%) and Spain (24%). If you are wondering where Bulgaria and Romania appear in this picture, it is clear that many Romanian and Bulgarians, just like many Poles, for instance, left the

country, thus reducing the number of registered unemployed. Croats, somehow, tend to stay. The human potential of Croatia is enormous, and its educated workforce represents the capital for recovery. The food processing and chemicals industries also account for significant portions of industrial output and exports. The industrial sector represents 27% of Croatia’s total economic output, while agriculture represents 6%. The industrial sector also accounts for 25% of Croatia's GDP, with agriculture, forestry and fishing accounting for the remaining 5%.

LIKE EVERY COUNTRY THAT IS SO DIVERSE, IT WILL HAVE TO OVERCOME REGIONAL DISPARITIES AND DIVERSIFY ITS ECONOMY Tourism is traditionally a major source of Croatia’s income, particularly during the summer months, but also more recently during the winter months as well, due to an increase in the popularity of winter sports like skiing. With over 14 million tourists annually, tourism generates revenue in exceeding €8 billion. Croatia is ranked among the top 20 most popular tourist destinations in the world, and was voted the world’s top tourism destination in 2005 by Lonely Planet. But you don't need Lonely Planet to tell you that. You can see it clearly with your own eyes. From the castles of the northwest

and the Inmusic Festival, to seaside resorts and a wealth of historic towns dotted along the coast, Croatia will have no worries in a world where coastal summertime tourism, and even short-stay city breaks, are becoming increasingly popular, forming part of the new culture of the 21st century. Unfortunately, as with all tourism superpowers, the people tend to become overly reliant on tourism and neglect some other aspects of the economy, which remain underdeveloped. The weak spot is the same as in Serbia – small towns, former industrial centres, are slowly fading away, with ex-agricultural giants dying out or being sold. Slavonia has been hit particularly hard by this, though similar trends are evident everywhere in Europe. Trade plays a major role in Croatia’s economic output. Croatia’s exports in 2007 were valued at US$12.84 billion (24.7 billion including service exports). According to Healy Consultants, trade in Croatia is bolstered by its low trade-weighted average tariff of just 1.2%. Thanks to the country’s excellent geographical position, which sits it at the crossroads of virtually all main roads, both maritime and overland, it is a hub in almost every aspect of transport and trade. All of this serves to ensure that there is a lot of optimism regarding Croatia’s future. Like every country that is so diverse, it will have to overcome regional disparities and diversify its economy, but with all of these beauties, such a favourable position and such handy and wise people, it will do that for sure. And, bearing in mind the traditional Eastern European, Slavic, Mediterranean and Mitteleuropean mentalities, it will do so while remaining a great place to live… or visit. It will not lose its soul; we can be sure of that.

OLD FACTORY WORKERS, JUST LIKE IN VIENNA AND ELSEWHERE, HAVE SOMEHOW FADED AWAY, AND THE FLASHY ZAGREB IS NOW A SHOWCASE FOR THE NEW CROATIAN ECONOMY, WHICH IS, AS YOU CAN SURELY GUESS, SERVICE-BASED CROATIA 2017

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SPIRIT OF CROATIA

ALL DIFFERENT, ALL FOR ONE Many regions, one spirit

Not many of the world’s countries have emerged as a merger between two eponymous countries from the Early Middle Ages, but Croatia did

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t least that’s what we were told: there was Pannonian Croatia (of Sava Croatia), and Maritime Croatia – with two distinctive types of Croats. One of them from the flatlands, and the other more inclined to live under the burning hot sun, growing olives and sailing around. Sometimes they say the local football and basketball derbies Dinamo (ex-Građanski)-Hajduk and Cibona-Split (oh, the former had just one other name, not-so-successful Lokomotiva, while the latter managed to win everything under the name Jugoplastika, but we remember it under names like Pop84, Croatia Osiguranje or Slobodna Dalmacija, according to the current sponsor) epitomises the differences between Zagrebians and Dalmatians. Nevertheless, Croatia has a strong sense of national unity and a strong collective national feeling. It could be said that Croatian self-awareness arose from the basic differences and contrasts with the neighbouring nations: Bosniaks were Muslims who shared pretty much the same language, while Serbs and Montenegrins were predominantly Orthodox, while that which marked

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The Sinjska alka competition

the Croatian spirit was its strong bond with Catholicism. In the case of dominant empires that were Catholic, like Italy (Venice), Hungary and Austria, the sharp difference for Croats was that they are Slavic and had their own language. With the Slovenians? Well, a long story, but just like throughout Scandinavia, the Slavic world, and in the Romance South, between Spaniards and Portuguese, or Castillian and Catalan, there is always the narcissism of small differences that lead to quarrels, while during tough times people team up to build something greater. In the case of Croatian culture, like its landscape in general, we have a few different types of people. And, as is the case with all people sharply segmented by mentality, it is used to comic effect. Perhaps the best example is the magnificent localisation of Sponge Bob Squarepants: the main character is a benevolent “Purger”, the slang name for a Zagrebian, a person who wants authority and order, and is so good-natured and naïve that he doesn’t even see how much he endures. The character Patrick represents a stereotypical person from the Zagorje hinterland,

combining a Kajkavian accent and literary speech, with humorous light-heartedness and naïvety that wins you over. The Zagorec are among the common stereotypes used in Croatian humour, conservative and naïve, though somewhat cunning in a lighthearted way, like the Welsh in the UK. And then there is the cartoon’s character Squirrel Sandy, originally a Texan, but here a Dalmatian, once again a Southerner, with a cheerful and irritable mentality. The funniest characters, once again, coming from the Dalmatian countryside, like Plankton and his computer wife, who are prone to verbal outbursts, loud and direct speech, and self-mocking humour. This “Triune” mentality (Pannonian/ Habsburg, Dalmatian/Mediterranean and Dinaric/Highlander) actually has deep roots in the historical divisions of Croatia, at the time when it was called (prior to 1918), the Triune Kingdom of Croatia, Slavonia and Dalmatia. When you add some “new territories” acquired after 1945, like Rijeka and Istria, which are the most cosmopolitan, you get a mixture that is perfect both for humour and literature, travelling and gastronomy. Croatians are very proud of their (almost) unique coat-of-arms, with the famous “šahovnica”, or chequers board. I say “almost” because it is not really unique – there are a few examples of its use, though by far the most prominent example is its use by the Kingdom of Croatia, and later the Unified Croatia. Croatian football shirts were declared the most appealing in the world, and this pattern with five red and white squares is perfectly suited for the design of many things. It is geometrically perfect and visually striking. The fact that the Croatian flag resembles the Dutch one is partly coincidental and partly deliberate, since it was modelled on Russian and French flags, with purely Croatian colours: red and white, from the arms of the Kingdom of Croatia, and blue and white from the arms

Croatian football team

of the Kingdom of Slavonia, while light blue also came from the Dalmatian arms. The Croatian spirit is both Balkan and Mitteleuropean, both Mediterranean and Frontier. Like the Poles, they were exposed

CROATIAN FOOTBALL SHIRTS WERE DECLARED THE MOST APPEALING IN THE WORLD, AND THIS PATTERN WITH FIVE RED AND WHITE SQUARES IS PERFECTLY SUITED FOR THE DESIGN OF MANY THINGS. IT IS GEOMETRICALLY PERFECT AND VISUALLY STRIKING to the outer borders of the Empire, hence the Military Krajina, soldiering mentality and freedom fighting. And, yet, when you walk down the peaceful, European streets

of Zagreb, you can easily understand that Orson Welles could use Zagreb as a stage for his “Trial” by Franz Kafka, thus replacing the original Prague. They have pretty much the same air and mentality. And the laziness of the Dalmatian coast, under the fierce Southern Sun, combined with the fast-paced charming speech of Dalmatians and their emotional accentuation, is yet another addition to the nice fusion of elements that are not so frequently found in many nations and cultures. Adding the minorities, like Orthodox Serbs, coastal Italians and the Pannonian mixture of Hungarians, Czechs, Ukrainians, Rusyns, Slovaks and the remaining Germans, all have shaped the culture and spirit of Croatia. Almost a millennium together with Hungary and Austria, a few centuries under the rule of Turkey and Venice, and almost a century with the South Slavs in different common states, brought many features from Vienna and Constantinople, Budapest and Belgrade, Venice and Prague, to add to the mentality of Croats, who now live in one of the most vibrant places to be in Europe, the Old Lady who sometimes lacks livelihood and life. But that certainly isn’t lacking in Croatia.

THERE IS ALWAYS THE NARCISSISM OF SMALL DIFFERENCES THAT LEAD TO QUARRELS, WHILE DURING TOUGH TIMES PEOPLE TEAM UP TO BUILD SOMETHING GREATER CROATIA 2017

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CULTURE

COUNTRY OF FOUR EUROPES

Crossroads of influences & rich tradition

St Euphemia church, Rovinj

roatia is, like few others, at the very crossroads. Not any old crossroads, but “the” crossroads. As famous Croatian singer Darko Rundek once said, “Life on the frontier is dangerous and tough...” And being a border nation of any religion requires a lot of self-examination to determine who exactly you are. And there are many other nations that experience this constant contemplation of self-identity, like the Serbs, of course, and the Poles, the Irish, the Ukrainians, the Lithuanians... All of them, naturally, have strong national feelings, perhaps stronger than“other” not-so-frontier nations.

EX PLURIBUS UNUM Sometimes we think we know all about nations and national feelings, but sometimes it’s also easy to miss the point. The Croatian language has three very diverse dialects: Shtokavian, Chakavian and Kajkavian, as well as three ways to pronounce “yat” - ikavian, ijekavian and ekavian, they historically used three alphabets and comprised followers of four religions. The three alpha-

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bets are, of course, Glagolitic script, to a lesser extent Cyrillic (there was a lot of fuss about Cyrillic letters in Široki Brijeg, in Bosnia, but yes, they are legit) and Latin script. The fourth religion was neo-Gnostic Bogomilism, which is now extinct. And in all of this assorted history, strength is required

DEFINING WHAT IT MEANT TO BE CROATIAN HAD TO WAIT UNTIL THE 19TH CENTURY, WHEN THE CROATIAN NATIONAL MOVEMENT EMERGED. IRONICALLY, DUE TO SOME POLITICAL CIRCUMSTANCES, IT WAS DUBBED ILLYRIAN, NOT CROATIAN

to admit your own differences, and it became obvious that the Croats value their heritage when officials signs appeared on some walls in Dalmatia using the Latin script and – Glagolitic. Just like in Hungary, an increasing number of inscriptions are appearing in the Old Hungarian script. However, the culture of Croatia is rooted in its long history: the Croatian people have inhabited this area for fourteen centuries. Because of its geographic position, Croatia represents a blend of four different cultural spheres. It has been a crossroads for influences of Western culture and those coming from the east – ever since the division of the Western Roman Empire and the Byzantine Empire – as well as reflecting the culture of Mitteleuropa and the Mediterranean. The Hungarians never had that problem (as their language is so unique that it binds them together), but the Serbs and Germans, well, they did. They had to define what it meant to be Croatian, and that happened in the 19th century, when the Croatian national movement emerged. Ironically, due to some political circumstances, it was dubbed Illyrian.

Traditional Croatian culture is, hence, characterised by exceptional diversity. Ecological conditions and the influences of cultures with which Croats have come into contact throughout history (Mediterranean, Central European, Ancient Balkan, Oriental etc.) have resulted in the development of three specific regional cultures: Pannonian, Dinaric and Adriatic. The Pannonian cultural zone has been characterised by the growing of grain, flax and hemp, and breeding larger domestic animals (horses, cattle). The people lived in single-storey houses made of wood or mud and wattle (in the west), or of compacted clay or unfired bricks (in the east), with straw roofs. The mentality is similar to that of the neighbouring flatland people, especially Hungarians and Vojvodina Serbs. The reel dances, white loose-fitting trousers and tambura music, became inalienably associated with Pannonian Croats, while Slavonian bećarac, a form of witty and sometimes juicily humorous songs became famous. The cities and villages in Slavonia have a prevailing classical Austro-Hungarian feeling, while multi-ethnicity is omnipresent. In the Dinaric cultural zone (highland Croatia and the Dalmatian hinterland), sheep and goat breeding was traditionally dominant, and here people tend to be rougher and speak louder. Just like highlanders everywhere. They have given us heroic figures like the Uskoks, the freedom-fighters and the Border Guards, and warriors took the place of farmers in the minds of people when we talk about “successful men”. In the Adriatic cultural zone, the population has traditionally been engaged in fishing and cultivating olives, vines, figs and almonds, as well as rearing sheep and goats. Mediterranean Croatia reminds us of Spain or Italy, of course, and even the influence of the Italian language is considerable, particularly Venetian.

ARCHITECTURE, ART AND IDENTITY Perhaps the first significant Croatian contribution, and arguably the most important one, is Old Croatian style. It was back in the 7th century when the Croats, along with other Slavs and Avars, came from the north of Europe to these areas. Croats were very open to Roman art and culture, but above all to Christianity. The first churches were built as royal sanctuaries, and the strongest influences of Roman art were in Dalmatia, where urbanisation was densest, and there

IN THE CASE OF CROATIA, MANY DIFFERENT INFLUENCES AND FOREIGN EMPIRES HAVE MADE THE CROATS EXTREMELY CULTURALLY DIVERSE are a large number of monuments. Over time, this impact was lessened through certain simplifications. The largest and most complicated central-based church is the church of St. Donat in Zadar. For these times, with its size and beauty, it could only be compared with the Palatine Chapel. Sometimes inscriptions were written in Glagolitic script, but soon the Latin alphabet replaced the altar railings and architraves of old Croatian churches. When Croatia lost its independence to Hungary, it became much more of a Western and Central European country, just as England became less Scandinavian after the Norman conquest. All the important styles came along, with Romanic and Gothic art, and with Zagreb Cathedral as one of the

highlights of this era. The Renaissance first came to Dalmatia and Dubrovnik, the former being under the rule of Venice and the latter having formed its own glorious republic. Many splendid works emerged, in many artistic fields. Mannerist painter Andrija Medulić was even the teacher of El Greco, while Marko Marulić's works inspire awe and fascination even today. Dubrovnik stands en par with all the world’s top cities, as is evident in tourists' appreciation for its Renaissance heritage. Unification came under the Habsburg crown, and the long-impoverished Ottoman Slavonia became a flourishing Austrian playground, with baroque towns and amazing fortresses.

YOU ARE HOW YOU EAT Croatian cuisine is heterogeneous, and for this reason it is known as a regional cuisine, because each region has its own part of Croatian culinary tradition. The cuisine in the country’s interior has more in common with Austro-Hungarian cuisine, and sometimes Turkish. On the Croatian Adriatic the influences of ancient Illyrian cooking, and later Mediterranean cuisines, especially Italian and French, are visible. Croatian continental cuisine is characterised by the more complex preparation and a number of nutritious foods, such as all types of meat, all kinds of vegetables, fruits, grains, and dairy products and eggs. Croatia’s coastal and island cuisine is primarily based on fish, seafood, fruit and vegetables, and olive oil. What diversifies you will make you stronger. In the case of Croatia, many different influences and foreign empires have made the Croats extremely culturally diverse, but a strong sense of belonging has kept them together, and ensured it has undoubtedly one of the most interesting cultures in Europe.

CROATIAN CUISINE IS HETEROGENEOUS, AND FOR THIS REASON IT IS KNOWN AS A REGIONAL CUISINE, BECAUSE EACH REGION HAS ITS OWN PART OF CROATIAN CULINARY TRADITION CROATIA 2017

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The Public Institute of Krka National Park Trg Ivana Pavla II br.5, 22000 Šibenik, Croatia +385 (22) 201 777 • info@npk.hr

Fotografije: Krka NP Archive/Mario Romulić

CORP ORAT E

KRKA NATIONAL PARK

Natural and Karst

PHENOMENON Krka National Park offers some of the most unusual and beautiful landscapes. Travertine waterfalls, lakes and many cultural and historical monuments can be seen on the sight

rka National Park lies within Šibenik-Knin County, and covers a total area of 109 km² of the loveliest sections of the Krka River, and the lower course of the Čikola River. With its seven waterfalls, Bilušića buk, Brljan, Manojlovački waterfalls, Rošnjak, Miljacka, Roški waterfall and Skradinski buk, the Krka is a natural and karst phenomenon. The travertine waterfalls of the Krka River are the fundamental phenomenon of this river. Due to its exceptional natural value, the Krka National Park was proclaimed in 1985. On its territory there are many cultural and historical monuments such as archaeological sites (Oziđana cave, Burnum), medieval fortresses (Ključica, Nečven, Trošenj, Kamičak, Bogočin), monuments of religious heritage (Visovac Island, Krka Monastery) ethnography (mills), and monuments of industrial architecture (Krka HE). Skradinski buk is one of Croatia's best known natural features, made up of travertine cascades, islands and lakes. It is one of the most unusual and beautiful landscapes in Krka National Park. Upstream there is Roški waterfall which is exceptionally interesting due to its cascades, called the necklaces by the locals. Oziđana cave, a locality within the framework of the educational walking trail Stinice – Roški waterfall –

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Oziđana cave, is a site of exceptional natural, cultural and historical significance with an in situ archaeological collection that has been put on display in the cave. More upstream of Krka river lies Manojlovac waterfall which is the tallest and considered by many to be the

The Krka National Park can be visited year round. It covers a total area of 109 km² of the loveliest sections of the Krka River, and the lower course of the Čikola River

loveliest waterfall on the Krka River. Nearby is the archaeological locality Burnum where visitors can view the arches of the command building in the camp, military amphitheatre in Croatia (near the village of Ivoševci) and several walls of the military exercises area. The archaeological artefacts extracted from

this locality (weapons, tools, daily use items) are on display at the Puljane Eco Campus. The lake-like sections of the Krka River are true oases of peace. In the first such section, Visovac Island is home to a Franciscan monastery and the Church of Our Lady of Mercy. Visovac Island is among the most important natural and cultural values in the Republic of Croatia. Another tame widening of the Krka River is the site of the Monastery of the Holy Archangel, one of the most important spiritual centres of the Orthodox Dalmatian Eparchy. It is interesting also for the Roman catacombs lying under the Byzantine-style church. The Krka National Park can be visited year round. When planning a visit, it is good to know that the individual features can be several kilometers distant from each other. Some areas are connected by excursion boats, while other sites in the Krka National Park can be reached by car. The Public Institute of Krka National Park is about to delight all true nature lovers with the option of joining the Friends of the Krka Club. Membership is open to all visitors, domestic or foreign, at a price of HRK 200 for adults and HRK 90 for children from 7 to 18 years of age visiting the park with a parent, and is valid for a one-year period from the date of purchase.

CROATIA 2017

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TOURISM

LAND OF PLENTY The whole of Europe in one country

Opatia, Maiden with the Seagull

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mmediately after World War I, famous poet Jovan Dučić, who engaged in politics and loved Dalmatia, nevertheless expressed his discord with the “unwise decision” of the then King to include the Dalmatian coast in his realm, describing the coastal regions as generally impoverished fishing areas. How little old Dučić knew about tourism! No matter how brilliantly he depicted towns and cities, he completely missed the point when it came to summer tourism. And nowadays it is crucial and, of course, there are few places in the world that are able to offer as much as Croatia, at least as far as seaside tourism is concerned.

WHERE IT ALL STARTED AND WHY TUXEDOES? It all started in the 19th century, of course, when doctors determined that bathing is “good” and not “evil”, and when spas sprung up around Europe. The tradition of organised tourism in Croatia dates back about 150 years, although even before that, at the beginning of the 19th century, some forms of travel, similar to tourism, did exist (such as pilgrimages or trips to spas for treatment), so the country’s first inns, hotels and spas were built for that purpose (Daruvarske Toplice, Stubičke Toplice and Varaždinske Toplice). Apart from spas, doctors also determined that sea air and salt water, combined with a prolonged stay in the sun, can improve one’s health. They might not have known about the ions, but they were right. As the entire Croatian coastline was then under the rule of Austria-Hungary, the first visitors would naturally come from the Empire itself. And the first region to be developed was the so-called Austrian Riviera, which stretched from Rijeka (then formally part of Hungary) to the border with Italy,

Korčula overview

KORČULA WAS THE BIRTHPLACE OF MARCO POLO'S FAMILY, WHILE HOLLYWOOD ACTOR JOHN MALKOVICH IS POPULARISING ZADAR AND THE SURROUNDING AREA, SINCE HIS FAMILY HAILS FROM THERE

comprising many lands that are today Italian. However, at the heart of the Austrian Riviera was the region of Istria, which is still the gem of Croatia’s tourist offer today. The Riviera was the closest point when arriving via train from Vienna, and there was another reason for the popularity of Opatija, as opposed to, for instance, the equally or even more beautiful Split, Zadar, Šibenik or even Dubrovnik. Since casual dress back then was not as casual as it is today, the warm climate of Dubrovnik was not suitable for wearing ball gowns and tuxedoes, while the fresher climate of Opatija was perfect for that. O tempora, o mores! Now-

CROATIA HAS MADE A NAME FOR ITSELF; NOW EVERYBODY KNOWS ABOUT IT. DUBROVNIK IS STILL THE GEM OF THE ADRIATIC, AND THIS WAS NOTICED BY THE PRODUCERS OF HIT TV SERIES GAME OF THRONES CROATIA 2017

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adays people tend to be so in love with sunshine and warmth that the centre of tourist activities has shifted slightly southwards, though Istria has nevertheless remained one of the most important tourism areas.

COAST & THE REST The Adriatic Coast first emerged as a national treasure in Yugoslavia, when the first visitors started, in the 1950s and ‘60s, bathing in front of baffled fishermen. This culminated in the late ‘60s, when almost every factory or state-owned company had its own “odmaralište”, or company resort, in Dalmatia. Visiting them was obligatory: all families were almost pressured into going there for their summer holidays with their children, for the benefit of their health. Of course, this meant the start of mass tourism in the country. After 1990, plans emerged to shift towards the more exclusive segment of seaside tourism, but the unfortunate war caused the roads to be cut and sent the message that it was not too safe there. However, after 1995, or rather starting with the summer of 1996, Croatia re-emerged as a tourism superpower. After a self-confident approach showed that there were new competitors, like Turkey, Egypt, Greece, Bulgaria, or even Ukraine and Georgia, not to mention Portugal, Dubai or Tunisia, Croatia noticed that being a former superpower could not fulfil the dreams of tourist workers – Turkey had “the income of Mali Lošinj in 1989 and by 2003 it had become a major player”, Croatian magazines noted in 2003. However, something changed and it was hugely successful, given that in the last 13

WHEREVER YOU GO, YOU WILL FIND SOMETHING – TRAKOŠĆAN IS A PEARL AMONG CASTLES, ZAGREB HAS ITS MITTELEUROPEAN AND COSMOPOLITAN SPIRIT, WITH ARGUABLY THE BEST MUSIC SCENE IN THE REGION 40

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years Croatia has made a name for itself; now everybody knows about it. Dubrovnik is still the gem of the Adriatic, and this was noticed by the producers of hit TV series Game of Thrones, who included Dubrovnik in this fantastically popular show. Now a certain overdependence on tourism is evident, as it is in Montenegro, for that matter, given that tourism in Croatia is concentrated in the areas along the Adriatic coast and is strongly seasonal, peaking in July and August. This has all led to the adopting of newer, better strategies for developing and broadening Croatia’s tourism offer and extending the season. And that is not everything – Croatia has also finally noticed its mountains. The eyes of the skiers were fixed upon Slovenia in earlier times, then Montenegro and Mace-

WHEREVER YOU GO, YOU WILL SEE THAT CROATIA IS A MAGICAL PLACE, AND THAT IT IS REALLY “THE MEDITERRANEAN IS IT ONCE WAS” donia opened up, Sarajevo hosted the Olympic games, and Croatia, somehow, together with Serbia, failed to see the potential of its mountainous lands filled with snow. After Janica and Ivica Kostelić became bright stars in the world of skiing, Croatia became a skiing superpower, and even the

modest but attractive Sljeme became a respectable ski-centre, with many others following. Eight areas of the country have been designated as national parks, with the landscape of these areas provided with extra protection against development. Several companies run flotillas of yachts along different stretches of the coastline, which is also popular with divers. The castles in the Croatian regions of Zagorje and Međimurje, along with old cities like Karlovac or Osijek, have become yet another source of income, combined with the successful Hungarian recipe of “spas and towns”, which proved to be a winning combination for the Pannonian part of Croatia, especially Slavonia and around Zagreb. And someone said “let there be music”, and music there was. Numerous festivals, starting with the INmusic Festival in Zagreb, enabled foreigners to discover yet more beauties of Croatia. INmusic has shown us the beauties of Zagreb, while Terraneo has shown us the beauties of Šibenik. Zrće was perfectly suited for electronic music and many others followed. The basic idea in the 2010s is that sales of music are collapsing and bands cannot earn money by selling music, so they must perform live in order to make a living. Croatia has many fine places, towns and islands, and the summertime is always the right time for festivals… and for seaside holidays. So why not combine the two? The recipe visible in Spain and Portugal quickly found its place in Dalmatia, and what better opportunity to excel in the vast offer of seaside resort than to say “Hey, we have great sea, but you can also come to see your favourite bands or Djs?” This is an industry on the rise.

CROATIA REGISTERED 11.8 MILLION TOURIST VISITORS IN 2012, WHILE IN 2013 IT HAD OVER 14 MILLION TOURISTS AND 73.25 MILLION OVERNIGHT STAYS

FACTS AND FIGURES Croatia registered 11.8 million tourist visitors in 2012, while in 2013 it had over 14 million tourists and 73.25 million overnight stays. Croatia aims to double these figures by 2020, with the national strategy aiming to bring in 17.5 million foreign tourists and generate revenue from tourism exceeding $17 billion. According to the official website, Croatia.eu, “although in terms of the number of tourist arrivals, Croatia cannot compare with major tourism powers, such as France, Spain, Italy or Greece, with 11.8 million tourist arrivals in 2012 and a trend of increasing numbers for many years, Croatia has certainly become one of the most popular countries on the Mediterranean.” And that is true. After the largely unsuccessful Arab Spring, all of those aspiring nations that were aiming for a better life and more democracy ended up stranded and lost their tourists. This was especially true in the cases of Tunisia and Egypt, not to mention Syria. Turkey, hit with instability and terrorism, also lost many tourists, with the sudden winners becoming Italy, Portugal, Greece and, of course, Croatia. Improvements have also been caused by some other things that have been happening over the past decade, such as: the “discovery” of Croatia in an increasing number of articles in leading world magazines and other media, praising the country’s natural and cultural attractions; the obvious rise in the number of tourist arrivals from a growing number of generating countries; the significant share of tourism in Croatia’s total GDP (14%); the rise in the number of objects declared as protected tangible and non-tangible cul-

tural heritage sites; the increase in investment in tourism and associated infrastructure; the increasing variety of the offer of contents for tourists, etc. As for recommendations and “discoveries”, that started

AND SOMEONE SAID “LET THERE BE MUSIC”, AND MUSIC THERE WAS. NUMEROUS FESTIVALS, STARTING WITH THE INMUSIC FESTIVAL IN ZAGREB, ENABLED FOREIGNERS TO DISCOVER YET MORE BEAUTIES OF CROATIA to happen some ten years ago, when Lonely Planet declared Croatia the top pick destination for 2005, and then National Geographic Adventure Magazine named Croatia Destination of the Year for 2006. Of the total number of overnight tourist stays in 2012 (63 million), 92% were made by foreign visitors. Most foreign tourist overnight stays (32%) were spent in the County of Istria, where tourism is the most developed in terms of infrastructure. The other coastal counties in order of popularity are: Primorje-Gorski Kotar (19%), Split-Dalmatia (17%), Zadar (11%) and Dubrovnik-Neretva, Šibenik-Knin and Li-

ka-Senj (17% combined). All other counties, i.e. the continental counties, accounted for 4% of the total number of overnight stays. Accommodation is distributed according to these figures, mainly along the Adriatic coast. This is an indicator that much has to be done in the future to reduce the unevenness of tourism distribution.

HIGHLIGHTS WILL SHINE ON However, whatever we say about the uneven structure of Croatian tourism, the fact remains: countries like Montenegro, Malta, Portugal, and even Bulgaria or Albania, can be explored in one or two years of summertime seaside holidays, while countries like Croatia, Greece, Italy or Spain require many years of repeated visits to numerous regions of their coast. If someone is fed up with Istria, they can try the Islands. Korčula was the birthplace of Marco Polo's family, while Hollywood actor John Malkovich is popularising Zadar and the surrounding area, since his family hails from there. Brad Pitt strolling the streets of the lovely Šibenik is yet another “walking ad” for Croatia. Diocletian's Palace in Split and the Arena in Pula are timeless Roman monuments that everyone should see. Wherever you go, you will find something – Trakošćan is a pearl among castles, Zagreb has its Mitteleuropean and cosmopolitan spirit, with arguably the best music scene in the region, and even the ski-centre atop the city. Wherever you go, you will see that Croatia is a magical place, and that it is really “the Mediterranean is it once was”.

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CORP ORAT E

Place for Real

ADVENTURE

HVAR

Tourist board of City of Hvar (information office) Trg sv. Stjepana 42 Tel/fax: + 385 (021) 741 059, (021) 742 977 E-mail: tzg-hvar@st.t-com.hr & info@tzhvar.hr www.tzhvar.hr

Hvar, a true magnet for modern nomads, has been joyfully preparing to mark a great jubilee – 150 years of organized tourism on the island

or a century and a half, the island of Hvar, the synonym for tourism, has been a top destination which is a well-deserved title considering the island's intriguing beauty, great cultural heritage, and pioneering tourism endavours which started with the establishment of its Hygienic Association in 1868 which also marks the beginning of the era of modern tourism in Europe. Despite changing trends in the last few decades, there is one constant, and that is that Hvar remains to be the haven for daredevils of all kinds, and ideal place for perfect adventure all year round thanks to its mild Mediterranean climate, and over 2,700 sunny hours a year. The island's sporty spirit can be seen in competitions that assemble hundreds of competitors from all over the world, like the last year's 40th International New Year's Regatta for lasers and optimists organized by the Zvir sailing club which gathered almost 200 competitors from 16 nations. Then there is the Hvar Half Marathon, a unique event where the competitors run from Stari Grad to the town of Hvar which is one of the most beautiful, and also one of the most demanding half-marathon tracks in the world. On a hot August day, over 244 marathon runners from 39 countries competed. Owing to successfully organizing sporting events, Hvar now occupies a special place on

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the map of sports destinations. The latest example is the European veteran championship Laser Masters 2016, organized by the Zvir sailing club, the town of Hvar, and the Hvar Tourist Board in October. The international sailing association EurILCA said that the competition was one of the best they had seen so far. Also, after a short recess, Hvar is again hosting the Easter PBZ Regatta right at the beginning of unofficial tourist season.

Hvar remains to be the haven for daredevils of all kinds, and ideal place for perfect adventure all year round

Hvar has been bestowed with a great honour this year by being chosen to host two qualification runs for the ÖTILLÖ Swimrun World Championship (swimrun is a very difficult aquathlon discipline) which will be organized by the town of Hvar and the Hvar Tourist Board in early April. By hosting this event, Hvar has made Croatia one of the few countries that have hosted the championship – apart from Sweden, Germany, Great Britain, and Switzerland. Several hundred competitors, who will compete in the ÖTILLÖ Swimrun World Championship, will run and swim 45km while experiencing the most beautiful places in Hvar – the historic town centre, the protected nature's parks that are Pakleni Otoci (the Pakleni Islands) and the Pelegrin peninsula, the ruins of ancient Roman monuments, olive orchards, vineyards and lavender fields. This is the same route of the recently opened 13 cycling tracks which total length is 500km, and which have been meticulously mapped and posted online which is all a part of an organized and professional approach to cyclotourism. Exploring various hiking trails that coincide with the ancient roads used in old Roman times is a special treat. Therefore is Hvar, a true magnet for modern nomads, happily preparing for the celebration of the Great Jubilee, moving forward into a new era of its unique tourism story.

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