Croatia 2021 by Diplomacy&Commerce magazine

Croatia

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HUM Hum, the smallest city in the world, is situated in the centre of Istria with barely 20 inhabitants. You can see in Hum the preserved city walls and its two small streets with three rows of houses.

GOT KING'S LANDING Dubrovnik was the main filming location in Croatia for King's Landing, a fictional city in Game of Thrones, the famous TV series based on the series of fantasy novels “A Song of Ice and Fire”.

THE NECKTIE Thanks to Croats you look so good in official suite. It's unclear when exactly the necktie was invented, but Croatian soldiers wore red cravats as part of their uniform during the Thirty Years' War.

THE PULA ARENA The sixth-largest surviving Roman amphitheater—and the only one to preserve all three of the classical orders of columns—is a majestic site, even after almost 2000 years.

ZLATNI RAT BEACH Depending on the current winds, the beach slightly changes it shape particularly the top tip of the triangle that tend to move towards the east or west.

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Relations Between Croatia and Serbia are Key to the Region's Stability We have a huge job ahead of us and a huge challenge. Economic relations have been stable, even in a slight upswing in recent years, despite the pandemic. This is indisputably encouraging as it indicates that, in real life and the so-called real sector, there is a kind of energy and discovery of mutual interests that override nationalist and isolationist rhetoric

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H.E. HIDAJET BIŠČEVIĆ Ambassador of the Republic of Croatia

e interviewed the Croatian Ambassador to Serbia for the latest edition of InFocus Croatia about current topics when it comes to relations between Serbia and Croatia - diplomatic, political, economic and joint projects that are building new bridges of friendship. H.E. Hidajet Biščević notes that there is a shift in relations and adds: "I have no claim about having a special role in this, but lately, we have put relations on a more organized track. There are differences, occasionally sparks fly, but we don't have Zagreb or Belgrade sending each other protest notes once a week. We are talk-

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ing, at various levels, and we are focused on key issues.“ At the very beginning of your term in the office, you stated that, when it comes to the relations between our two countries, it is very important to break the chains of the past. After more than a year of being the Croatian ambassador to Serbia, what is your view of the relations between Croatia and Serbia today? — Honestly, it would be an exaggeration to say that we have broken those chains. Old narratives are still spinning, old slogans are still echoing, old consciousness is still breaking

We still have a huge job ahead of us, a huge challenge…

through. What is worrying is something we don't notice enough - it’s been three decades since the breakup and separation, i.e. almost three decades since the war ended. Thirty years, that is! True, everything that happened in the 1990s, with the collapse of the former state, was the biggest and most shocking change in the geopolitical configuration in Europe after the fall of communism and the Berlin Wall. No region of Europe has gone through such a tunnel and such earthquakes. In addition, this is ethnically, religiously, politically, culturally the most complicated corner of Europe, with a heavy legacy of suspicion, mistrust and open hostility, especially in Croatian-Serbian relations. Both of these aspects indisputably show that breaking the chains of the past is not easy, but nevertheless, it has been thirty years. If I may, perhaps, give a rather obscene comparison - German tourists spent their summers on the coastline of a country that they had devastated ten years before, at the end of World War II, and it took America and Vietnam thirty years to radically change their relations, not to mention the Germans and French and their history. So, we still have a huge job ahead of us, a huge challenge… But, perhaps most importantly, the challenge of not being a hostage of the

cess and, equally important, issues which resolution would relieve a significant part of the burden that Serbia has borne since the 1990s. I am talking, for example, about missing persons. This no longer has to be a matter of responsibility, punishment, tensions over the nature of the conflict and the like. This is simply a humanitarian issue - locating the remains of missing persons and handing them over to their families. Merkel's farewell Balkan tour and the German elections have marked this autumn. Do you think that Angela Merkel's departure spells the end of the Berlin Process? — As much as the Berlin Process, with its elaborate political and developmental components, was Chancellor Merkel's "political child", a kind of personal testimony to her commitment to the Western Balkans at a time of stagnation in the Union's relationship with the region's six countries, it has become an integral part of policies related to this part of Europe. So, I do not believe in a stalemate, much less the end of the Berlin process. Besides Germany, there are other serious interested countries involved and there are international institutions and de-

The paradox of our relations is that, in Europe, it is difficult to find two nations who share so many similar characteristics

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SU N B O S W C ! RI BE

How important are Serbia and Croatia to each other, in the region, and then in the European Union, or outside it? — I will repeat the obvious fact: Croatia and Serbia and Croatian-Serbian relations are key to the stability, peace and security of this part of Europe. We are all aware that the region is still burdened with unresolved issues, complex relations, and even frozen conflicts, but none of this can outweigh the importance of the Croatian-Serbian component in regional stability. It is also crucial from the point of view of the EU's interests because it ensures the stability of this part of Europe. As for your question goes, which implies the possibility to consider the

character of our relations in the scenario where Serbia remains outside the EU, I will say the following – first and foremost, we, in Croatia, believe that the entire Western Balkans, by the nature of historical development, geography and political expectations of the population belongs to the European Union. Secondly, you have certainly noticed that Croatia is one of the most ardent advocates of a clear and consistent policy of EU enlargement and that in this regard, it has been advocating and still advocates the continuation of the accession negotiations with Serbia, with consistent and fair compliance with fundamental negotiating conditions and rules. Honestly, sometimes I do not understand how and why such a political position of the Croatian side does not evoke an appropriate response from the Serbian side. We want to see Serbia in the EU because it is our best strategic and security interest. We encourage your accession negotiations and opening of new clusters, and yet, we are still not met with appropriate reciprocal moves. Sometimes, I hear claims that the Croatian side is resorting to blackmail, but it's just the opposite - it is about the so-called fundamental issues of the negotiation pro-

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past today is aggravated by the fact that in our wider European and global environment, a return to the past, the past as in East vs West, is noticeable. Renewing 'the Cold War' can easily restore some historical experiences regarding shaping the security map of this region because geopolitical polarization in Europe casts a shadow on these areas as well. It is very noticeable that this also affects relations in the region, to the extent that it is not easy to predict the future political and security configuration in the region.

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velopment plans in place. Speaking of the previously mentioned geopolitical trends related to the Balkans, it will be important to see how the relationship, dynamics and energy of German and EU commitment to the region in the context of the visible agenda of Russia, the United States and other global stakeholders will play out. Economic relations are stable and progressing year on year. The Croatian Business Club is celebrating its 15th anniversary this year. Can political relations follow the success of economic relations? — In the political atmosphere, I tried to describe earlier, which is not ideal but is gradually moving towards calm and stabilization, even despite various "mines" that we need to navigate such as the position of a language committee that denies the existence of Croatian language, the games surrounding the so-called Bunjevac language and many unnecessary hardships faced by the Croatian minority and in contrast, the opposite position of the Serb community in Croatia, economic relations are stable, and even experiencing an upward trend in recent years, despite the pandemic. This is indisputably encouraging as it indicates that, in real life and the socalled real sector, there is a kind of energy and discovery of mutual interests that override nationalist and isolationist rhetoric. When Croatia was stricken by earthquakes, people gathered in front of your office and wanted to convey their support for the victims. Only four months later, the Croatian flag was removed from your residence. What messages do such contradictions send out? — Honestly, as a diplomat, I should not answer that question, as whatever I say could be understood as "interference in internal affairs", and that is something that diplomats, in principle, want to avoid. But I'll take a chance. First, I was immensely grateful to the people who gathered in front of the Embassy, the day after the earthquake, and expressed their emotional solidarity. This is what shows that we are and want to be human, first and foremost, that our national jerseys must not be more important than human solidarity. You saw how many initiatives were launched after that and how much the Serbian business community, artists and the Government of Serbia helped with providing assistance. As for the second part of your question, my answer might surprise you somewhat - you know, when the po-

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Let’s learn to live next to each other, as decent neighbours, who will appreciate similarities and differences. Nothing more, nothing less

lice rang at the Embassy's door at six o'clock in the morning to tell me how they found the torn flag in the container, I was, for the first half a minute, horrified and angry, but then I looked at their faces and I could see that these police officers were uncomfortable, they blushed and apologized. These are the two faces of Serbia - the face of solidarity and the face behind the torn flag. This is the controversy you are talking about and which I should not talk about, because only Serbia can resolve it, for its own good, for the good of its future. At the end of your interview last year's edition of InFocus Croatia, you said that "we are not so different". Can that similarity be an advantage in our relations? — The paradox of our relations is that, in Europe, it is difficult to find two nations who share so many similar characteristics, and yet so many mutual gaps, doubts, mistrust and repulsion. We use two languages, but we understand each other, we are culturally close, not to mention, our respective national cuisines and so on. Of course, political history has done its

thing, leaving consequences that still focus on differences. A long time ago, in a similar conversation, I said: “Well, we didn't break up just to continue arguing. Let’s learn to live next to each other, as decent neighbours, who will appreciate similarities and differences. Nothing more, nothing less.“ You have been living in Belgrade for a year and a half now. What do you like the most here? — I have always liked the same things in Belgrade, even back when I came here as a young journalist and now a little bit older diplomat and they are openness and joviality. I love it when everyone in my local cafe knows my name and when we spend time together. I like to go to Nišava in Dedinje and split a round of drinks. I love to watch the mist hovering over the river at Joca's 'Mala Kolubara' inn on the Sava River while sipping on good Serbian wine. I love Petrovaradin. But I think that love and appreciate the most the energy and strength of people who surround me, and who, despite their troubles, still believe in being open to other people, decent, mutually respectful and friendly.

We sent out strong messages Our magazine also wanted to help Croatia affected by the earthquakes, so we organized a charity auction together with you and collected a significant amount of money. How important are campaigns like this? — I am immensely grateful to your magazine and Mr Robert Čoban for this initiative. I am amazed at how quickly, in the matter of a couple of days, we thought out the whole project, gathered over thirty Serbian artists, organized a charity auction and got a fair amount of media coverage for it. I think we sent out very strong messages during the campaign, which were related to the earthquake, but they also had a much broader and deeper meaning.

Growing Economic Cooperation During the first six months of 2021, the value of trade between Serbia and Croatia amounted to 594.3 million euros, which is an increase of 88.4 million euros, or 17.4%, compared to the same period last year C O O P E R AT I O N

erbia exported goods worth 315.5 million euros to Croatia, which is an increase of 43 million euros (15.8%), and imported goods worth 278.8 million euros from Croatia, which is 45.41 million euros more (19.45%), compared to the first half of 2020. These trends contributed to the decline in the surplus in the observed period, which in the first six months of 2020, amounted to 39.1 million euros, and in the first six months of this year, stood at 36.7 million euros, a 2.4 million euro or 6.1% decline. In the observed period, companies whose majority owners are legal and/or natural persons from the Republic of Croatia generate a turnover in the amount of EUR 79.18 million, of which goods worth EUR 25.76 million were imported from Croatia and goods worth EUR 24.4 million were exported to CroatiaThese data indicate that the aforementioned companies’s share in the total recorded exports to Croatia, in the first six months of the current year, stood at 7.7%. The value of the total trade between Serbia and Croatia in 2020 amounted to 1.07 billion euros, which was a decrease of 16.7 million euros, compared to the data from 2019. This 1.5% decline in trade is the result of an increase in exports to Croatia and a decrease in imports from Croatia, thus in 2020, there was a higher trade surplus relative to 2019. Exports from Serbia to Croatia increased by 6.4 million euros (by about 1.1%), and imports decreased by 23.1 million euros (by about

4.5%), which resulted in Serbia generating a surplus in the amount of 78.9 million euros, which is 29.5 million euros or almost 60% more compared to the previous year. • Serbia mostly exported the following products to Croatia (the CT12 customs classification) in 2020 - copper cathodes and cathode sections; raw sunflower oil; tights; sunflower oil for other purposes; resin cements and other sealants; other pasta; petrol engines; iron and steel structures and parts; mineral or chemical fertilizers with P and K; seats with wooden skeletons. • Serbia mostly imported the following products from Croatia (the CT12 customs classification) in 2020 – unclassified goods according to the customs tariff, Portland cement, electricity; urea with >45% by weight of nitrogen; corrugated cardboard paper; other retail medicines; fertilizer, ammonium nitrate; food products, others; meat products, edible offal; washing and cleaning preparations. External trade between Serbia and Croatia in 2020 was affected by the COVID-19 pandemic, which led to the implementation of various restrictive measures in business, trade and movement of people in many countries around the world, including Croatia, in which the epidemic began in early March 2020. A state of emergency was declared in Serbia on March 15, 2020, and it lasted until mid-May of the same year. As the Serbian and Croatian economies are very interconnected, the ex-

The total trade between Serbia and Croatia in 2019 amounted to 1.086 billion euros, a 1.5% increase compared to 2018

ternal trade during 2020 was difficult, in some periods of the year extremely slow and affected by frequent restrictions regarding the flow of people, including workers. The trade results, as well as its structure (import, export), show that even the difficult business conditions, caused by the pandemic, could not permanently jeopardize the established business relations between Serbian and Croatian business partners. The total trade between Serbia and Croatia in 2019 amounted to 1.086 billion euros, a 1.5% increase compared to 2018. Exports to Croatia amounted to 567.8 million euros, which is 0.6% less than in 2018. Imports from Croatia were 4% higher than in 2018 and amounted to 518.4 million euros. The trade surplus amounted to 49.4 million euros. • Serbia mostly exported the following products to Croatia in 2019: copper and copper products; plastics and products; boilers, machines and devices; furniture, mattresses, bedding; oils; mineral fuels: iron and steel products • Serbia mostly imported the following products from Croatia in 2019: unclassified goods according to the customs tariff; fertilizers; paper and cardboard; sulfur, so; mineral fuels; electrical machines; meat products, fish. On the list of countries that Serbia exported the most to in 2019, Croatia ranked 12th with a 3.2% share in total Serbian exports, and in regard to the list of countries that Serbia imported the most from in the same year, Croatia ranked 14th, with a 2.2% share in Serbia's total import. Croatia's rankings did not change in 2020. In 2019, 4,975 of Serbian companies traded with the Republic of Croatia, and in 2020, that number was 4,886.

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100 Years of Successful Business Performance

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It was an entire century of hard work and commitment of our scientists, engineers, experts and all other employees, who have been improving and developing our world-renowned brand for many generations C O R P O R AT E

believe KONČAR will stand out in the future and will increase its presence in the market to the satisfaction of both clients and citizens in Serbia. We also hope to make a more significant contribution to the development of the local economy, recognising our competencies and local partners as much as possible.

This year, KONČAR celebrated 100 years of successful business performance. As the company developed, what would you like to highlight about such a significant anniversary? — Yes, KONČAR Group celebrated its centenary at the beginning of this year. Our history has been marked by numerous achievements worldwide, where we now operate based on the principle of a unique approach to each client, while continuously investing in research, development and human resources. Today we can proudly say that we are the regional leader in electrical industry and rail solutions. Over the last century, KONČAR has always strived for excellence, innovativeness and competitiveness, which is reflected in the development and manufacture of high-technology products exported to 130 countries. What is power engineering like today? How has KONČAR been adapting to new trends? — The last decade has been one of the most dynamic periods of development, primarily in terms of technology. We are currently living in a new power engineering reality, an era of power grid digitalisation, in which KONČAR is actively involved. This is supported by the fact that KONČAR has managed to respond to these changes timely and successfully. The company has focused on further development of technologies and

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IVAN TOMŠIĆ Member of Management Board of KONČAR – Power Plant and Electric Traction Engineering, Director of Representative Office in Belgrade

KONČAR has participated in the construction of almost all major infrastructure facilities in Serbia, including the majority of hydro power plants

products that will combine green and smart solutions, enabling our partners to stay up to date with European trends, but also with the global initiative and the overall direction in which power engineering is heading. Regarding digitalisation, we have stepped up the implementation of comprehensive digital transformation, not only of our products, but also of our processes, in order to use all the potential and the capacities we have available. What is KONČAR’s biggest strength in terms of its contribution to the countries in the region, including Serbia? — The region represents our most important market. In Bosnia and Herzegovina our presence is continuous. We are constructing a new 400 kV substation Ohrid in North Macedonia, which is also very important for Albania, where we achieved great results in electricity transmission in the last 15 years. We have increased our activities in Montenegro as well. In terms of references, but also its size and potential, Serbian market is particularly noteworthy. KONČAR has participated in the construction of almost all major infrastructure facilities in Serbia, including the majority of hydro power plants. However, considering the size and strength of the Serbian market, I have to point out that our results have not been significant in the last 30 years or so, particularly if we consider our comparative advantages, such as proximity – which certainly allows for a quick, high-quality response, identical standards, a common history of the electric power system, language, etc. In the upcoming period, we see the greatest potential in revitalising the existing hydroelectric power plants and in constructing new power engineering infrastructure facilities and railway infrastructure.

How has the company performed this year? Has the pandemic affected the realisation of transactions or the number of new contracts? — Despite the coronavirus crisis, KONČAR Group’s business has continued growing steadily throughout 2021, which can be seen in all key performance indicators. Compared to 2020, consolidated operating income increased by 18.5% in Q1-Q3 2021. Export sales are still growing and have increased by EUR 20 million (11.1%) compared to Q1-Q3 2020. Order intake shows a year-on-year increase by 51%. At the end of September, the backlog reached the highest amount ever – EUR 693 million, representing a 22.4% increase compared to the balance at the beginning of the year. This year we have concluded a contract with Rimac Automobili for constructing a 110/20 kV substation, which will be used to power the future Rimac research and production facility. For the first time ever, we have won a contract in the demanding Japanese market. In the context of that project, KONČAR is to provide services to the Japanese client which include design, manufacture and supervision of assembly of three generators for two different small hydropower plants. This is the first time that Japanese investors have opted for a European generator supplier. As a result of a yearslong systematic approach and sales activities in the Swedish market, we concluded a contract with a Swedish distribution system operator, Vattenfall Eldistribution. We also signed a contract with a Swedish transmission system operator, Svenska kraftnät. The contracts relate to a very complex reconstruction of a 130 kV facility at the substation Finnslätten in Västerås and replacement of the protection system on four 400 kV substations.

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We Can Boost Each Other Even Better

Good cooperation is present at every step and in every sector, but there are still areas where we can boost each other and progress together

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n the past 18 months, we have witnessed business successes in higher value-added sectors on a global scale. Our IT companies have achieved great success and are breaking into new markets. The demand for the workforce is so great in this sector that we have no problems with preserving jobs, but the problem is how to create and provide enough new workforce, which is a prerequisite for further growth and development of IT companies.“

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The COVID-19-induced crisis has hit every single country. How is the Croatian economy coping with the consequences of this crisis? — We can say that, despite the pandemic, the Croatian economy is doing well, better than expected, considering the first much more pessimistic projections. A large proportion of the companies had limited operations, especially in tourism, food and beverage services sector, the event industry and transport. However, compared to most other countries in Europe, we had a less strict lockdown, so it was still easier to do business in Croatia than elsewhere. This approach also enabled a faster return to normal business operations.

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Companies have also adapted by implementing new ways of work organization, i.e. those companies that were able to facilitate remote work. Great progress has been made in the digitalization of business. This was already a necessity even before the coronavirus, but the pandemic has accelerated the process. We can conclude that, for now, we are coping well with the consequences of the crisis, thanks to joint activities of institutions and the system and the strength of our companies. The funds from the National Recovery and Resilience Plan, the 2021-2027 budget framework and the EU funds that will be available to us in that period are crucial for the economy to get back on its feet and be even stronger than before. Is the economic recovery moving at the expected pace, given that the tourism sector has achieved very good results compared to last year? — The pace of recovery is certainly satisfactory, and even better than announced and expected, especially in the context of the tourist season. A good balance between the lockdown and the liberalization of measures, along with the smart and targeted promotion of Croatia as a safe tourist desti-

MARKO JURČIĆ Advisor to the President of the Croatian Chamber of Economy

Serbia has competitive workforce costs and resources that can easily boost and expand the production or development capacity of companies

nation, have yielded outstanding results. Our tourism companies have done a great job. However, we are still chasing the best past results when it comes to tourism, so we cannot expect the latest tourist results to match those from the best years of tourism and return to the pre-pandemic level. We are trying to control the damage so that the decline is as small as possible, compared to the best periods. Tourism has an important overall share in our economy, but we must now pay more attention to sectors that have proven resilient even during the crisis, which have excellent business results and a steady increase in the number of employees. I would like to mention another very important piece of data and that is the growth of export of goods, which in the first eight months of this year, went up by 25.5% compared to the same period last year. Imports grew more slowly, at only 19.8%. This figure is all the more significant when we know that export of goods in 2020 fell by only 0.7%, while imports declined by about 17%. This just validates the robustness of our export-oriented industry. Of course, we need to work on the recovery, resilience and strength of tourism on the one hand, but we also

need to make sure that higher value-added industries and exporters make up the bulk of our GDP. This combination will ensure that we have much stronger and economically sustainable economic growth. The trade between Croatia and Serbia is growing year on year. How can we further improve economic cooperation? — Good cooperation is present at every step and in every sector, but there are still areas where we can boost each other and progress together. Our cooperation should not only be based on trade.

In a global context, both of our markets are small and often we cannot cope on our own with global competition in foreign markets. Therefore, I am also in favour of business partnerships and the pooling of common resources, especially human resources that are extremely valuable today in the developed sectors, where joint market presence is possible. Our companies do not have to only trade with each other, but can also become real business partners. I see opportunities in the EU int e g ra t i o n p ro ce s s . O u r ex p e r ience, cross-border cooperation and cross-border projects are an impetus for the development of joint business

infrastructure or implementation of commercial projects. The leaders of the Croatian and Serbian chambers of commerce have been continuously highlighting the good cooperation between the two. What are current relations between the two respective chambers like and to what extent are the driving force behind economic cooperation between our countries? — The Croatian Chamber of Economy and the Chamber of Commerce and Industry of Serbia have traditionally had excellent relations. We were the first to stimulate economic coop-

eration long before we, as societies, were ready to open up in the political realm. So far, we have been the forerunners of new positive relations. We will continue to be the driving force and encourage stronger cooperation between our economies and companies in the same way. Furthermore, and besides our basic job of helping our companies, we also work on the exchange of best practices, as we are continuously learning from each other how as chambers to be even better at doing our job. The Croatian Business Club marks the 15th anniversary of its inception in Serbia, while Croatia is one of the

The biggest future challenges are not local, but rather global these are global inflation and challenges in supply chains, logistics and distribution

largest investors in Serbia. What do you think are the advantages of investing in Serbia? — The biggest advantage for Croatian companies is proximity and good knowledge of language and culture, as well as tradition and good business cooperation. For these reasons, it is easy to enter the market and achieve recognition and trust. In terms of investments, proximity also facilitates ease of market entry, management and achieving the desired efficiency. Serbia has competitive workforce costs and resources that can easily boost and expand the production or development capacity of companies. Also, the similarity between our companies and the regulatory framework create an environment where our companies can easily find their way around and can start a business very quickly and efficiently. On the other hand, there are very few Serbian investments in Croatia. How to create a more favourable economic environment that will facilitate more Serbian investments in Croatia? — I think that a template for this process can be seen in the example of Croatia and Slovenia, whereby Croatia became an investor in Slovenia only when stronger growth was achieved which, in turn, led to our companies developing sufficiently for such an appearance on the Slovenian market. In the case you mentioned, we are faced with the practice where, as a rule, investments flow from those centres that have a higher degree of development to locations with a lower degree of development, for the sake of cost efficiency and efficiently achieving a higher degree of competitiveness. So, today we have a similar situation like that from 15 years ago when Austria, Italy and even Slovenia made investments in Croatia, while Croatia did not invest much in those countries. This is a natural process that will level off in the foreseeable future. I think that is the only reason (why there aren't more Serbian investments in Croatia) and that it has nothing to do with operational or political obstacles.

Challenges in 2022 What do you think will be the biggest challenges for the Croatian and regional economy next year? — The biggest future challenges are not local, but rather global - these are global inflation and challenges in supply chains, logistics and distribution. Global economic measures implemented after the last crisis, which resulted in large amounts of available money and low cost of money, combined with huge budget costs at the global level spent on fighting against the pandemic, have led to a situation where there is a threat of inflation that could be higher

than the desired one and the one that facilitates healthy economic growth. I am confident that, as a society and economy, we will be able to deal with this, but in order to be effective, we must monitor and predict possible scenarios in the coming years so that we can react on time and adjust our systems to withstand possible shocks and changes. As small economies, which should be more flexible and faster in their reactions, we must look for areas where we will make gains and progress that we would not be able to do in standard business and activities.

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15 Years of Support in Serbia

Since its inception, the role of the Croatian Business Club has been to provide companies coming here with information about the market and help them start a business in Serbia I N T E RV I E W

a business association, we have been here for 15 years, supporting our members, monitoring the situation, and providing adequate and timely information. Also in times of crisis, we try to provide all the necessary information and contacts to overcome this critical period as easily as possible," says Marija Radulović, President of the Croatian Business Club (CBC), in her interview for InFocus Croatia.

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This year, the Croatian Business Club is celebrating its jubilee, 15 years since its inception in Serbia. What has changed over the years in terms of business? It’s quite a success that all these years we have not only survived, but also significantly increased the number of members. Currently, we have about 40 renowned companies as members, as well as small and medium-sized enterprises are interested in exchanging experiences and know-how at our gatherings, but also beyond. Of course, the business and economic environment has changed in the past fifteen years, and since then a large number of Croatian companies have come or returned to this area. Back then, some Croatian companies came to Serbia again with their products and services, while many came later, expanding their business to the region, and were welcomed again here. Since its inception, the role of the Croatian Business Club has been to provide companies coming here with information about the market, conditions for doing business, customs regulations, as well as help them with finding adequate business premises and establishing business contacts. Today, the CBC supports small and medium-sized companies, both Cro-

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atian that are opening in Serbia, and local ones that want to cooperate with them in any way, be it on the Serbian or Croatian market. What do you think about economic cooperation between the two countries and are you satisfied with the Croatian investments in Serbia? — During the previous period, we witnessed various political disagreements, but economic cooperation has been going well, which is good for both sides. There are a lot of big investments in Serbia that are not that known. They have been made since the year 2000 and even earlier. For example, the Rasco Company, which was founded 30 years ago and does business in five continents, has made a very successful acquisition in Senta, where it operates under the name Rasco Tump. Here, the company produces utility equipment and fittings. A very successful investment is the Rotografika printing company in Subotica, while one of the most successful investments in the region was made by Atlantic Group. These are just some of the examples that business and money know no borders and do not agree to political barriers. Which industries would you single out as the biggest investors and which business segments could do with more investments? — At the moment, we can single out the Nexe Group as one of the largest investors. Of course, there is still a lot of room for cooperation, be it new technologies or having joint production in smaller companies, especially when it comes to cross-border cooperation in Vojvodina and Slavonia which is something that our Club’s members have shown interest in. There is also a

MARIJA RADULOVIĆ President of the Croatian Business Club

need regarding the implementation of joint projects in energy, environmental protection, and waste disposal and processing. A number of other possibilities can stem from this, especially when it comes to small and medium-sized enterprises. What problems do your members here usually face and how do you help them so they can invest without problems? — There are no special aggravating circumstances for companies coming from Croatia, compared to investors from other countries. Thanks to the good cooperation between the CBC and the representative office of the Croatian Chamber of Commerce with the Chamber of Commerce and Industry of Serbia, we have very quickly and efficiently managed to dispel any doubts and problems regarding breaking into the Republic of Serbia’s market.

We always plan our activities for the coming period so that we are always up to date with new trends and that we can inform our members about our findings

Do you expect to see new challenges in the coming period and how do you plan your activities? — We are always up to date with new trends and that we can inform our members about our findings. New technologies as a rapidly evolving trend bring with them considerable dangers to business, so we, as a business club, have joined the Initiative for Development of Information Security, which brings together companies and business associations that can contribute to raising awareness of business risks in the digital environment. Our goal is to keep abreast of the dangers, but also the ways of prevention and the possibilities of financial compensation when it comes to damages from cyber attacks and social engineering, as well as to contribute to general security by disseminating information.

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The Goal Was to Boost Economic Cooperation

The founders of the CBC branch in Serbia talk about the reasons for the establishment of the CBC office in Serbia 15 years ago I N T E RV I E W

e talked with Tonči Staničić, the person who initiated the inception of the Croatian Business Club's (CBC) branch in Serbia, and Krunoslav Bešvir, the first president of the CBC in Serbia and Director of the Culinary Business Programme at PODRAVKA d.d., about what it is like to be one of the founders and the first president of CBC, as well as economic relations between the two countries.

bia to do what we all live off, and that is business. I rate our economic relations as good. However, by assessing the situation from a distance, I have noticed that diplomats, businesspeople, chamber leaders and others have been repeating the same phrase for years - "the relations are good, but can be better". Ambassador Biščević used a good term – „stable stagnation“. I would say they have to be better because good is not enough since the economic relations between Croatia and Serbia have great potential. The fact remains that there are problems in political relations, as well as that some problems are created on purpose. Some people are still in the civil war and Second World War in their heads. Perhaps the solution is for the economy to move forward and force politics to follow suit.

TONČI STANIČIĆ,

The initiator of establishing CBC's branch in Serbia and former Croatian Ambassador to Serbia

KRUNOSLAV BEŠVIR,

the first president of the CBC in Serbia and Director of the Culinary Business Programme at PODRAVKA d.d.

As co-founders, the Croatian Embassy and the Croatian Chamber of Economy in Belgrade decided to establish the Club because we had invested a lot of effort into improving economic relations between the two countries. Our partners in Serbia, businesspeople and the Chamber of Commerce and Industry of Serbia had the same ambition, so the result of the joint effort was excellent – we have been recording a significant increase in bilateral trade and investments year on year. The then new, well-structured Free Trade Agreement also contributed to this. I am happy that CBC is not only alive and healthy after 15 years, but that it also continues to significantly help the business partners of Croatia and Ser-

Today's economic relations between Serbia and Croatia are good, but, without a doubt, they can be even better and more dynamic

The basic idea of establishing CBC was to improve economic relations and boost economic cooperation between the two countries. The focus was primarily on commerce and investments, but also beyond. It is clear that, as a Club, we have invested a lot of effort into improving the business conditions for Croatian companies that have opened branches

in Serbia. At the same time, new investors in the Seian economy were accepted by the Serbian authorities in a very befitting way, because, these are Serbian companies founded with Croatian capital, which employ domicile people and create new value in Serbia. Precisely for these reasons and the desire to normalize relations between the two countries, we have received great support from the Government of the Republic of Serbia, whose deputy PMs and ministers were often guests at professional meetings we organized. Back then, we also saw the first major investments and takeovers of domestic companies by Croatian investors taking place, which, in turn, were excellent examples of how the business operations of companies in the new ownership structure can be improved. I can vouch for the same even today when it comes to the development that these companies have experienced in the last 15 years. Because of all of the aforementioned, I think that the establishment of the Croatian Business Club was an excellent initiative by the Croatian Chamber of Economy, the Embassy of the Republic of Croatia, headed by Ambassador Tonči Staničić, and a group of businesspeople who recognized the need and opportunity to improve working conditions through such an association. The fact that we were contacted and our meetings were attended by Serbian businesspeople, who wanted to start a business in Croatia, confirms that we did well. Today's economic relations between Serbia and Croatia are good. Without a doubt, they can be even better and more dynamic, especially in the IT industry where both countries are strong, but also in traditional industries such as food, metal processing or construction. In the years to come, I believe that Croatia will be Serbia's partner on its road to EU membership, which will further accelerate economic cooperation and facilitate the flow of goods, and which positive effects will also lead to reducing brain drain in both countries, particularly among young people.

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C ROAT I A

Activities of CBC in 2021 AC T I V I T I E S

roatian business club organizes every year a several business events with aim to gather the members and give them useful infromatoons as well as the opportunity to meer each other and to exchange opinions, experiences and contacts.

FEBRUAR 2021. CBC ASSEMBLY MEETING This year's Croatian Business Club (CBC) Assembly meeting was held at the Amsterdam Hotel, a new member of the CBC, in the presence of almost thirty representatives of companies, all members of the Club. The report about the CBC’s work in 2020 was adopted, when the CBC had to adapt a number of its activities to the extraordinary circumstances caused by the pandemic. At the same time, the CBC adopted an activity plant for the current year. The novelty of this plan is that the CBC will hold a set of online workshops for employees which members of other chambers and business clubs can participate in too. The workshops will cover topics like cyber security, customs regulations and sales models adapted to the work operations during the pandemic.

MARCH 2021 DIGITAL BREAKFAST "Business environment of Serbia why invest in Serbia" was the topic of the digital breakfast which was organized in March. Guest lecturers were Radoš Gazdić, acting Director of the Development Agency of Serbia, who spoke on the topic "Why invest in Serbia?", Djordje Andrić, head of the Centerefor Investment Support and Public Private Partnership, who talked on the topic “The work done by the Chamber of Commerce and Industry of Serbia related to investments in Serbia "(special reference

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to public-private partnership) and Alexander Samonig from ECOVIS SEE doo, WestBalkan Partner, who covered the topic “Tax aspects of investing in Serbia (from the Slovenia – Croatia stance).

MARCH 2021 MEMBER 2 MEMBER This year's publication was launched with the aim of providing support to member companies during the Covid-19 pandemic. The publication offers a unique combination of promoting companies and their products and services, promoting collaboration between members, increasing member sales, and increasing member visibility for marketing to the wider business community in the country. The publication has a wide range of special offers and discounts that apply to all member companies of the five participating business associations that will be valid from May 2021 to November 2021.

MAY 2021 DIALOGUE BETWEEN THE STATE AND BUSINESS Online working meeting of member companies of five bilateral business associations in Serbia was held with representatives of the Ministry

of Finance and the Chamber of Commerce and Industry of Serbia. During the meeting “Macroeconomic developments in Serbia in the context of the COVID-19 pandemic”, Ognjen Popović, Acting Assistant Minister – Financial System Department, and Mihailo Vesović, Director of the Sector for Strategic Analysis, Services and Internationalization at the CCIS, presented the current and the expected trends in the Serbian economy.

SEPTEMBER 2021 INTERNATIONAL NETWORKING COCKTAIL RECEPTION Over 200 representatives of companies and enterprises that are members of as many as 13 bilateral chambers of commerce in Serbia, gathered on Thursday, September 16, at the Metropol Hotel, for the International Networking Cocktail. The guests were greeted by the chamber presidents, and the event, which takes place once a year, lived up to the expectations. The guests had the opportunity to exchange experiences related to business, but also to exchange business contacts and continue their communication through business cooperation.

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Photo: Trabantos / Shutterstock

Museums From Classical to Innovative Something that Zagreb may be globally compared or regionally envied is, above all, its continuous museological evolution and the present museum internal competitiveness C U LT U R E

Museum of Arts and Crafts

MIMARA MUSEUM

Age of Pericles for the Zagreb Museums began in the mid-80s of the last century through the transformation of the high school building on the Roosevelt Square at the time, to become the seat of the future collection of the private assemblage of collector Ante Topić Mimara (1898-1987), which he donated to the state as his permanent legacy. Mimara was a painter, restorer and a significant collector on a European scale, where he lived throughout the continent until returning to Zagreb, to donate 3500 items of classical archaeology, paintings, and sculptures as well as applied art works ending with oriental and Chinese art heritage.

GLYPTOTHEQUE HAZU

For the Glyptotheque of the Croatian Academy of Sciences and Arts, we can freely say that it is early anticipation, what is today the global museological trend, transformation of industrial constructions heritage into spaces dedicated to museums and creative industries. Founded in 1937 as Gipsoteka (gypsumtheque), it is actually the foundation of the Croatian sculpture of the 19th and 20th century, with 11,000 exhibits, since 1940, housed in the building of the former leather factory of Kožara.

ART PAVILION

The building was erected in 1898, at the initiative of the most noteworthy not only the Croatian, but also the most beloved South Slavic painter Vlaho Bukovac, and as the premier space of future representative exhibitions, by ingenious relocating of the cast-iron structure of the Croatian Pavilion from the Millennium Exposition in Budapest to the Zrinjevac Park, that is King Tomislav Square. For decades in continuity it is a privileged space for promoting retrospective exhibitions and art cycles

HOME OF HDLU The home of the Croatian Association of Visual Artists, known as

in 1982 converted into a Museum that holds the highest exhibition and program standards and therefore having the highest number of visitors to this day.

USEUM OF M CONTEMPORARY ART

Meštrović, has been initially in recent past used as a modernist gallery space, then during World War II served as a mosque, and finally as a Museum of Revolution. Architecturally structured in the shape of a rotunda, in our time and literally has come full circle, returning to its original purpose through the monumental and multimedial exhibition dedicated to Nikola Tesla as the so-called "Mind from the future" his life presented in an interactive installation of films and animations having been an exhibition of the year 2017-18.

LOVIĆEVI DVORI K GALLERY Klovićevi dvori is the largest gallery - museological institution in Croatia. It is located within four floors of the former monastery from the 17th century, which was

MSU Zagreb, the largest new implemented museum project of the previous decade in SEE region, is founded in 1954. The present building, just like the institution itself in the Vjećeslava Holjevac Avenue on 15,000 m2 having 3,500 m2 of exhibition space in the past, it held some of the biggest events such as the retrospective of Kožarić, Richter, Srnec and Picelj.

USEUM OF ARTS AND M CRAFTS MUO is not only the oldest but by content most important museum in Zagreb today. Through the generations of the following different and significant managers came to the position of the last year's "60s in Croatia" exhibition as the largest - most significant anthropological museological event, making it a probable museum of the year, unavoidable in realization of this year's similar program ambitions, too.

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C ROAT I A

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Cavtat

TOURISM

The Best Small Towns in Croatia Tiny Croatia villages and towns you have to see

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roatia is no longer a wellkept secret. Throngs of visitors hit the Adriatic coast every year to enjoy the food, nightlife and beauty of this bountiful little country. But you can escape the growing crowds for a more enriching and authentic Croatian experience by heading straight for the best small towns in Croatia.

CAVTAT Sitting nine miles from Dubrovnik on the Adriatic Sea is Cavtat. Founded by the Greeks in 6th Century BC, ruled by the Romans in 228 BC, and then the Avars and Slavs in the 7th century, Cavtat has had a turbulent history. But when multiple cultures rule a city through time, they all leave an indelible stamp on the area. You can see architecture and ruins from each period of this city’s violent history. Cavtat is a great escape from the bus-

ier Dubrovnik, is situated on a harbor with beautiful beaches and crowned by a series of lush hills. Come here to escape the tourist crowds.

SKRADIN This beautiful riverside town’s biggest attraction is the nearby Krka National Park. This stunning park features a valley full of travertine rock formations that make for stunning waterfalls. The crystal clear water of the river that feeds the waterfalls invites sum-

VELI LOŠINJ

mer travelers to cool off. Admission to the park includes a boat ride to the park’s seventh, largest and final travertine formation and its most brilliant waterfall — Skradinski Buk. After enjoying the park, return to town to explore a ruined fortress and to refuel on some local cuisine.

PUČIŠĆA

py to help you with river and waterfall adventures. For the daring, there are class-three rapids. For the sporty, there is the single kayak. And you can even link rafts for a family expedition. One hotel with about 100 rooms awaits those who stop here on their way to the Plitvice Lakes.

MOŠČENICE

Slow down in Veli Lošinj. This tiny little community on the island of Lošinj in Primorje-Gorski Kotar County in western Croatia is a collection of authentic houses, restaurants, hotels, shops and bars on a scenic harbor. Rovenska, another beautiful bay, is just a 10-minute walk from here. The biggest attractions in Veli Losinj are the old sea captain’s houses that were adorned with exotic plants collected as prizes from long voyages. The houses line the main road to the bay. Be sure to look for dolphins playing in the harbor in April and May.

Less than 2,000 residents call Pučišća on the island of Brač home. This little village, with its stunning bay and beautiful white limestone buildings, is often listed as one of the prettiest towns in Europe. The island of Brač itself is pretty surreal. You’ll travel through fields of boulders to get to Pučišća due to decades of backbreaking work by the women of Brač to clear land for vineyards, figs and olives. It was once a privilege of aristocrats and artists to live here, and you can see why. The island rises quickly from the sheltering bay to make the town look as though it sits in an amphitheater.

MOTOVUN

Moscenice is a typical hilltop medieval town sitting high above the Istrian Peninsula. The outer walls of the outer ring of houses serve as fortified walls for the enclosed town. This doesn’t leave a whole lot of space inside creating a tight-knit community, literally. The narrow streets and enclosed walkways on the inside of the castle provide the small town with charm. Get a peak above the walls as Moscenice stands 170 meters (570 feet) above sea level to give you a beautiful view of the sea and nearby islands.

JELSA

PRIMOŠTEN

Just off the coast, in the Adriatic Sea, sits beautiful little Primošten. The Turks threatened the city back in the 16th century so the citizens of Primošten made this little inlet and island connected to the mainland with a drawbridge. Fortified walls went up and the small city survived. The island was returned to being an inlet with a causeway but the walls remained. Unfortunately, you’ll have to visit this little tourist gem during the high season in the summer months as the place hibernates in winter. The cobblestone streets come alive during warm weather with music, festivities and local vendors.

The smaller places offer a different view on life in Croatia, and visitors can experience a more authentic lifestyle often undisturbed by tourism

White buildings with salmon-color roofs seem to spiral up a hill to a double-walled castle in the town of Motovun. Sitting inland in Istria, this medieval town may remind you of scenes from Game of Thrones. Modern homes and shops lead you up to the gates of the old town. Fortified in the 14th century by the Venetians, the old town has now been turned into a cloister of artist studios, restaurants and shops. This is a popular destination where tour buses routinely drop off throngs of visitors at the base of the 275-meter (900-foot) hill.

RASTOKE Rastoke looks like it came to life off the pages of a fairytale book. Old wooden bridges traverse rivers alive with waterfalls that are ripe for kayaking and rafting. About 100 permanent residents maintain over 22 mills on the thatch of rivers that criss-cross the landscape. Locals are all too hap-

While Hvar Island may be one of the most-visited islands in Dalmatia, you can still escape the crowds. This tiny town is located in the middle of the island’s north coast, neighbored by the two highest mountains on the island—Hum and St. Nikola. Surrounded entirely by hills and pine forests, this sheltered—almost hidden—coastal town features a welcoming atmosphere and oozes historic charm. Although there may not be any impressive Renaissance architecture like in the town of Hvar, it makes up for that with its cozy squares, lush parks, and narrow alleyways. Nearby, a number of sweet swimming spots offer refuge from the hot summer sun.

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Croatia FOCUS ON

2021