InFocus Serbia by Diplomacy&Commerce magazine

Serbia 2019

SERBIA & CROATIA

WE HAVE TO COOPERATE

H.E. MIRA NIKOLIĆ

MARKO ČADEŽ

LUKA BURILOVIĆ

Ambassador of the Republic of Serbia to Croatia

President of the Chamber of Commerce and Industry of Serbia

President of the Croatian Chamber of Economy

02 VAMPIRE IS FROM HERE

The Croats gave the world neckies, the Serbs gave vampires. “Vampire” is the most famous Serbian word that is accepted and used across the world. Furthermore, the first vampire wasn’t count Dracula but Petar Blagojević, about whose vampirism was extensively written about in the Austrian press in 1725.

01 LAND OF

EMPERORS

Between the 3rd and 4th century, a total of 18 Roman emperors were born on the soil of what is modernday Serbia. That number accounts for a fifth of all Roman rulers. They built famous cities like Viminacium, Felix Romuliana, Sirmium and Iustiniana Prima.

06 THE LAND OF TENNIS

05 SAGRADA

FAMILIA IN VIVO

Astonishing is the similarity of the tops of the Serbian natural wonder of the Devil's Town (Đavolja Varoš) and the Sagrada Familia Church in Barcelona, designed by Antoni Gaudí. Maybe Gaudí dreamt of the Devil's Town when he designed his masterpiece?.

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Novak Đoković (Croat from meternal side) is currently the No. 1 ATP tennis player and second in all-time list since he has won 15 Grand Slam singles titles, leaving only Roger Federer ahead. Apart from Djoković, Jelena Janković and Ana Ivanović were female No. 1 players.

03 MOUNTAIN SNOW!

Serbia as a landlocked country, is predominantly mountainous in its southern hald, giving oppoortunity for ski sports, and the No. 1 resort is undoubtably Kopaonik which is one of the largest in Southeast Europe. There are 25 ski lifts with capacity of 32,000 skiers per hour.

04 THE BIGGEST FORTRES

The biggest fortress in Europe is Petrovaradin Fortress in Syrmia, after Verdun was destoyed in WWI. The Austrians kept their treasurhy there during Napoleonic wars, since the fortress was deemed unconquerable.

08 THE CROATIAN HEROES

07 THE

RASPBERRIES

Those raspberries you’re eating are probably Serbian! Serbia has been topping the global raspberry export list for several years now. In 2012, almost 95% of the world’s raspberries came from this country (now the percentage is smaller).

Arguably the bet known Croatian hero, Ban Josip Jelačić, was born in Serbia, in Petrovaradin, in Syrmia. You can see his imposing blue birth house with an appropriate plaque! Jelačić active fought for Croatia against Hungarians during the 1848 Revolution..

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WE HAVE TO COOPERATE H.E. MIRA NIKOLIĆ

Ambassador of the Republic of Serbia to Croatia

To our satisfaction, the process of resolving open issues picked up the pace in 2018 thanks to the special contribution by the President of the Republic of Croatia, Kolinda Grabar-Kitarović, the President of the Republic of Serbia, Aleksandar Vučić and their respective teams. We want this trend to continue in 2019 too

he state and national interests of Serbia and Croatia far exceed the daily politics. Maybe for a long time, we will not be able to build a true friendship in our relations, but it is absolutely necessary to forge a cooperation on a rational foundation says H.E. Ms Mira Nikolić, the Ambassador of the Republic of Serbia to the Republic of Croatia, with whom we talked about a number of current issues in bilateral relations between Serbia and Croatia. You were appointed Serbian ambassador to Croatia at a very sensitive time when the relations between the two countries were somewhat strained. What is the situation today, four years later?  First and foremost, I would like to highlight that the comprehensive improvement in the relations and cooperation with the Republic of Croatia is especially important for Serbia. Hence, our aim is for our relations to be based on mutual respect, understanding, the principles of good neighbourly conduct and common European values. We should not build our relationships on irrational categories,

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because they, whether positive or negative, are an obstacle to a rational and unburdened approach. In that sense, we should recognize the evident common interests, given that our two countries rely on each other, as the main pillar of our relations and prosperity for both countries. Unfortunately, even after all these years, bilateral relations between the two countries are not at the level that they should be and what we would like them to be. These relations are complex, layered, cover different areas and are at different levels. However, we should bear in mind that they are also encumbered

I THINK IT'S TIME TO LEAVE THE PAST IN THE PAST AND MOVE FORWARD. THERE ARE MANY MISSED OPPORTUNITIES BEHIND US AND WE ARE CONSTANTLY RUNNING AROUND IN CIRCLES

with events from the recent and older past, as well as with a series of unresolved bilateral issues. As a diplomat, you served in various countries. What is your view of the challenges that the bilateral relations between the two countries had to endure? Are they given too much or not enough media attention?  As I have already mentioned, the challenges in the bilateral relations between the two countries are still present. Slow resolution of open issues represents a burden for both countries and contributes to the unnecessary creation of a climate of distrust between the two neighbouring countries and nations. We should point out that our state and national interests far exceed the daily politics. Maybe for a long time, we will not be able to build a true friendship in our relations, but it is absolutely necessary to forge cooperation on a rational foundation. I think it's time to leave the past in the past and move forward. There are many missed opportunities behind us and we are constantly running around in circles. As soon as we start thinking that we have

business entities in Serbia that are majority owned by legal and/or physical persons from the Republic of Croatia). Most of them have had positive experiences in Serbia. The reason for this can be found both in the attractiveness and potential of the Serbian market, as well as in its openness which is something that the state can do a lot about. In this context, and es-

made a step forward, we make two or three steps back. We have to learn from the past not to repeat the same things over and over again. Also, this past is rife with moments that both Serbs and Croats can be extremely proud of. The active and constructive functioning of the media is something that certainly contributes to the creation of an overwhelmingly positive atmosphere. However, some media report about certain issues plaguing bilateral relations exclusively in the sensationalist context, not ignoring the negative connotations and not being mindful of the consequences that such reporting may have.

WE EXPECT TO FINALIZE THE ISSUE OF THE RETURN OF CULTURAL PROPERTY, WITH A SPECIAL ACCENT ON FURTHER EFFORTS TO SOLVE THE ISSUE OF MISSING PERSONS AND THE IMPROVEMENT OF THE STATUS OF NATIONAL MINORITIES

Which segments of the bilateral cooperation would you like to single out as especially successful?  Regardless of the current circumstances, there are areas of cooperation between Serbia and Croatia that are very satisfactory. First and foremost, I would like to single out economic cooperation, primarily in the segment of trade and investments. To illustrate this, I would like to mention that, after a long time of inactivity, a meeting of the Intergovernmental Mixed Committee for Economic Cooperation between Serbia and Croatia was held in 2018. For the second consecutive year, the value of the external trade between the two countries exceeded a billion euro and is constantly growing. It is our intent to perpetuate this trend. When it comes to investments, we have to say that Croatian investments in Serbia far outweigh Serbian investments in Croatia. Also, Croatian companies are much more represented in Serbia (there are 1,372 active

Trade

pecially after the visit of Serbian President, Aleksandar Vučić to Croatia in February 2018, Serbia expects from Croatia to show a higher level of openness to investments from Serbia, as this is something that our business people constantly reiterate. The importance of economic cooperation is also reflected in the fact that Croatia has re-opened the representative office of the Croatian Chamber of Economy in Belgrade after a long time. Another segment of cooperation that has achieved great results is the one in the culture which, considering the simi-

larities in our languages and the fact that we belong to a similar cultural milieu, is a good example for other types of cooperation. This was also noted during the recent meeting of the Serbian Minister of Culture and Information, Vladan Vukosavljević and the Croatian Minister of Culture, Nina Obuljen-Koržinek. The return of cultural property, as one of the open issues between the two countries, is an area where we made the biggest progress. Politically speaking, there are no open issues in this segment any more with all that needs to be done is to resolve certain technical issues. What open issues have you been working on together with your Croatian counterparts, and what are your priorities?  The process of resolving open issues picked up the pace in 2018 to mutual satisfaction. What is particularly important is that both sides have demonstrated the will to resolve these open issues, such as the issue of the missing persons, the status of national minorities, the state border marcation, the prosecution of war crimes, the succession of the former SFRY, in particular the issues related to the Annex G, and other issues that burden the relations between our two countries. President of the Republic of Croatia, Kolinda Grabar-Kitarević and President of the Republic of Serbia, Aleksandar Vučić and their respective teams gave a special impetus to solving open issues. In this sense, together with our Croatian counterparts, we are working on intensifying political dialogue within existing and new mechanisms and boosting the trust between the two countries.

THE VALUE OF THE EXTERNAL TRADE BETWEEN THE TWO COUNTRIES EXCEEDED A BILLION EURO AND IS CONSTANTLY GROWING. IT IS OUR INTENT TO PERPETUATE THIS TREND SERBIA 2019

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At every single occasion, the Republic of Serbia and its officials underline the need for improving relations and political dialogue. We want this trend to continue in 2019 too. Considering the current situation, what would you consider the biggest diplomatic success in 2019?  Bearing in mind the overall relations between the two countries, as well as open issues that have been going back years, it is rather unfair to give forecasts or to expect that some things can be solved overnight. However, our expectations are that the existing mechanisms continue to actively pursue open issues this year too, along with the bilateral official visits at the highest level that would give an impetus to the entire process. As I have already pointed out, we expect to finalize the issue of the return of cultural property, with a special accent on further efforts to solve the issue of missing persons and the improvement of the status of national minorities, as well as talks on the drafting of agreements on issues of war crimes prosecution, plus on other issues that are the subject of the dialogue that takes place between the relevant working bodies. One of the issues that were being dealt

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THE ACTIVE AND CONSTRUCTIVE FUNCTIONING OF THE MEDIA IS SOMETHING THAT CERTAINLY CONTRIBUTES TO THE CREATION OF AN OVERWHELMINGLY POSITIVE ATMOSPHERE with on the bilateral level and under the framework of the EU integration process, is the issue of the position of the Serbian national minority in Croatia and the Croatian national minority in Serbia. What is the current situation in this area?  The issue of national minorities is high on the agenda in the relations between Croatia and Serbia and is part of the dialogue that is being held under the auspices of the Intergovernmental Mixed Committee for Minorities, which is supposed to meet in the beginning of March this year in Zagreb. Both countries have a good legal framework that regulates the

position of minorities, which is a good basis for continuing the dialogue on the improvement of their position, which is something that Serbia has always been open to and ready. When it comes to the rights of Croats in Serbia, the majority of the things that were agreed are implemented, as confirmed by the President of the Democratic Alliance of Croats in Vojvodina, Tomislav Žigmanov. As far as the Serbs in Croatia are concerned, this issue is much more complex and more difficult to resolve due to a sheer number and nature of issues. As far as I can see, according to the Serbs living in the Republic of Croatia, a number of key issues such as education issues, official use of the Cyrillic alphabet, sustainable development, re-electrification, etc. have not yet been adequately addressed. Unfortunately, as we have been informed, a big obstacle is the denial of crimes committed in World War II, as well as an increase in hate speech and intolerance. We are aware that the issue of the position of minorities is very important also in the EU integration context. We have a very ambitious Action Plan for chapters 23 and 24 concerning the rule of law, which implementation, or progress, is closely monitored not only by the EU but by the Member States too. I want to underline

that Serbia is using all of the most important international mechanisms related to the promotion of minority rights, and we hope that our efforts in this context will be recognized by Croatia. In the first half of 2020, Croatia will assume presidency over the EU and during that period, the question of EU accession of the Western Balkan countries will be at the forefront again. What are your expectations from this presidency in terms of Serbia's integration into the EU?  First of all, I would like to use this opportunity to wish Croatia a successful presidency over the Council of the EU which comes at the time when the EU is facing serious challenges and visible enlargement fatigue. I would also like to express our appreciation and support that Croatia provides to the EU enlargement in SEE and especially the fact that Croatia will treat enlargement as a priority issue during its presidency. Plus, we welcome Croatia's plan to hold a high-level summit dedicated to the enlargement, 20 years after the first summit in Zagreb. In regard to Serbia's accession process, our government has underlined several times that it was willing to continue serious and important reforms that are closely tied to the EU integration process and are in the best interest of our citizens. From Croatia, as a neighbouring country, we mostly expect a constructive approach, neighbourly support and the support in sharing their experiences with us. It is important to underline that Serbia is investing a lot of effort internally in order to create prerequisites for opening of the remaining accession chapters and that Croatia, once it assumes its presidency over the EU, will do everything in its power to help us with our accession path, in the context of promotion of European values. In contrast to politics and somewhat stagnant economic relations, cultural exchange is emerging as an example of good cooperation. What particular events would you like to highlight as contributing the most to the cultivation of good relations?  Of course, cultural events are always a good way to bring countries and nations

BEARING IN MIND THE OVERALL RELATIONS BETWEEN THE TWO COUNTRIES, AS WELL AS OPEN ISSUES THAT HAVE BEEN GOING BACK YEARS, IT IS RATHER UNFAIR TO GIVE FORECASTS OR TO EXPECT THAT SOME THINGS CAN BE SOLVED OVERNIGHT together. I would like to single out the guest performances of theatres and cultural and artistic societies (especially the excellent cooperation between Lado and Kolo ensembles), the exchange of museum collections and exhibitions, the cooperation between film artists, as well as the individual artistic performances. Also, I would like to highlight popular gatherings especially of young people, such as concerts and festivals. Among the numerous projects, I would like to also single out the cooperation between

the cities that have both been declared the European capitals of culture - Rijeka (2020) and Novi Sad (2021). It is certainly worth mentioning the Day of the Serbian Culture organized by the Serbian National Council and the Prosvjeta Serbian Cultural Society in cooperation and with the help of the Embassy and Consul General of the Republic of Serbia. Also, with the help of the Serbian National Council and in cooperation with the Croatian Film Union, the Serbian Film Centre and the Yugoslav Film Archive, the Embassy has been organizing the Days of Serbian Film in Zagreb for two years now and proved to be quite popular with the audiences. Furthermore, bilateral visits by state and local officials at all levels give a good impetus to the cooperation which keeps the dialogue alive and encourages the resolution of open issues. This year we already had a visit of the Minister of Culture and Information of Serbia, Vladan Vukosavljević and Serbian Minister of Justice, Nela Kuburović, but we also expect visits by other officials. Also, I would like to emphasize the importance of holding meetings of mixed committees and other bodies for resolving open issues, since we should not allow this process to stagnate or die out in any segment, despite being well aware that some topics are not pleasant for either side.

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TOGETHER WE ARE STRONGER MARKO Ä&#x152;ADEĹ˝

President of the Chamber of Commerce and Industry of Serbia

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Our two chambers can help business people a lot by together creating the conditions for the free market and healthy competition to function even better through communication with institutions from our respective countries. The increasingly better economic cooperation is a validation that we are succeeding in this

ast year, more than 3,200 individual products from Serbia were sold in Croatia. This is another proof that thanks to the work of the Serbian and Croatian chambers of commerce, barriers in bilateral cooperation are disappearing. "It is up to us, business associations, to support partnerships between our companies, to make better use of the traditional ones and to create new fields of cooperation. To overcome some of the problems that cause enormous damage to the economy, we do not need money, but good will, agreement and better organization, "says Marko Čadež, President of the Chamber of Commerce and Industry of Serbia. Despite these challenges, the balance of economic cooperation between the two countries is undoubtedly positive. Do the opening of the representative office of the Croatian Chamber of Economy in Serbia and the return of the Chamber of Commerce and Industry of Serbia to Croatia bring us back to the time before the global financial crisis when the two chambers could afford the representations, or is it that new time carries new messages?  Last year's return of the Croatian Chamber of Economy (CCE) to Belgrade has ensured that, together, we can provide an even stronger support to Croatian companies already operating in Serbia and those which intend to expand their operations to our market, but also to Serbian investors and exporters to strengthen their presence in the Croatian market. With the change of political climate in the region, the bolstering of regional initiatives and the growing trend in bilat-

eral trade and investment cooperation, the Chamber of Commerce and Industry of Serbia (CCIS) is again planning to open representative offices in the region, which closed temporarily due to the cutting back on costs of running a network of representative offices. Back in the day, the CCIS's office in Zagreb was the last one to close in the region and it will definitely be among the first ones to re-open. We already have premises in Zagreb and we are grateful to the CCE and President Burilović for this offer.

IN ORDER TO HAVE A JOINT APPROACH TO GLOBAL MARKETS, WHICH IS OF ESSENTIAL IMPORTANCE FOR THE FUTURE OF OUR SMALL, NATIONAL ECONOMIES FROM THE EX-YUGOSLAVIA, WE NEED A HIGHER DEGREE OF POLITICAL STABILITY In terms of the advancement of the cooperation, what are the key topics for the CCIS and CCE?  It is up to the Chamber of Commerce and Industry of Serbia and the Croatian Chamber of Economy, as business associations, to support partnerships between our companies, and to better utilize traditional and create new fields of coop-

eration which are currently below the potential of our respective economies, objectively speaking. Our two chambers can help business people a lot by together creating the conditions for the free market and healthy competition to function even better through communication with institutions from our respective countries, to suggest what needs to be improved, which barriers to eliminate, which regulation, institutions and practices to synchronize and how to adjust education systems to the needs of businesses. Our job is to support especially small and medium-sized enterprises with boosting their capacities, becoming technologically and digitally modernized, more successfully involved in the supply chains of large domestic and multinational companies, helping them to network among each other and bring together our companies and people, their references and free capital. We also need to help them with establishing various types of business cooperation, forming joint ventures, jointly investing and producing common products and pooling them into a regional product offer that we then sell in the international market. Furthermore, we have to create regional value chains and new large regional stakeholders that will be able to fight competition in world markets - in Europe, Russia, America and China. Serbian businesses have been recording a surplus in trading with Croatia. Which companies and which products contribute to this the most?  In the last ten years, the external trade between the two countries has almost

Increasingly better results

CALCULATING WHO HAS A HIGHER SURPLUS OR A LOWER DEFICIT IS LESS IMPORTANT THAN THE FACT THAT THE EXTERNAL TRADE BETWEEN OUR TWO COUNTRIES HAS BEEN GROWING AND THAT MORE COMPANIES ARE TRADING TOGETHER YEAR-ON-YEAR SERBIA 2019

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doubled and for the second consecutive year, its value exceeds 1 billion euro. In the last few years, this external trade has also been more balanced. With the balanced growth on both sides, and according to the Statistical Office of the Republic of Serbia, Serbian companies sold 570.7 million euro worth of goods in Croatia while Croatian ones sold 498.8 million euro worth of goods in Serbia in 2018. Due to the inconsistent statistical methodologies, there is a discrepancy in the amount of several dozen million euro worth of surplus or deficit, depending which side you ask. However, more importantly, our external trade has been growing and year-on-year, we have more companies from both countries trading between themselves. In 2018, 4,825 companies and entrepreneurs from Croatia did business with Serbian companies, with 3,280 of them actually exporting to Serbia which is close to 500 more companies than in previous years. Among these are Croatian companies that have invested and become owners of factories in Serbia, and successfully operate and export from Serbia not only to Croatian but also to other European markets, such as Atlantic Group. More and more goods are crossing our respective borders with over 3,200 individual products from Serbia sold in Croatia last year. There have been no big changes in the structure of the external trade between

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the two countries, and it is a good thing that we see new products in this trade. Serbia mostly exported the following goods to the Croatian market - copper cathodes and cathode sections, engine petrol, tin sheets, bitumen from crude oil, plastic bottles and gallons, edible sunflower oil, women's bathing suits, mineral and chemical fertilizers, and acyclic ethers and their derivatives. Are Serbian food products well-received by the Croatian market? Are political challenges from the past, particularly in regard to the Serbian confectionary

EVEN THE BEST ROADS OR THE FASTEST RAILROADS WON'T HELP OUR COMPANIES MUCH IF WE DO NOT SPEED UP THE BORDER CROSSING OF GOODS, I.E. IF WE DO NOT SHORTEN THE WAITING TIME AND DO NOT HARMONIZE THE WORK OF THE INSPECTION SERVICES

products, forgotten now?  Although every unreasonable political move or statement, and I am not only referring to Pionir's chocolates here, remains recorded and is against the economic interest of our companies and our citizens, it is good that the final decision about what will be bought in the shops is not made by politicians, but consumers themselves. It is actually Pionir that has the highest number of individual products on Croatian shelves out of all Serbian confectionary producers while recording higher sales of brands such as Medeno Srce, Negro candy and hazelnut caramels. All Pionir wants is for its chocolates and new products to be given an equal opportunity as its Croatian competitors and to be able to win over the consumers. Consumers care about price, quality, sales conditions and consumer habits that are still strong in what was the common market area, and not who makes a product. After all, most confectionary products that Serbia exports are regional brands, regardless which factory, whether located in Croatia or Serbia, produced them, or who owns that factory (Serbs, Croats or foreigners). Are the two countries cooperating in other ways apart from bilateral trade?  Croatian companies have invested more than 800 million euro in Serbia so far. Today, 1,419 companies and entrepreneurs with majority Croatian capital are registered in Serbia, and out of 452 registered companies, more than half of them have made serious investments and operate in the Serbian market. Serbian investors have begun entering the Croatian market only recently. We would like to see the list of Serbian companies and investors in Croatia become longer. Currently, we have businessman Petar Matijević whose company, after purchasing agricultural cooperatives in Jankovci and Negoslavci, successfully operates in Croatia, and who uses state support programmes and works well with the state institutions. Then there is Miodrag Kostić, who, after acquiring the Kempinski Hotel in Portorož, became the owner of the Kempinski Adriatic Hotel in Savudrija, investing so far about 100

million euro in the hotel business and tourism in Croatia and Slovenia. Maybe the speed at which all of this is happening is not fast enough, but after large companies, which always come first, we are now seeing investments by smaller companies too like the Serbian-Iranian company, Dentalant which leased premises at the Business-Innovation Centre in Vukovar where they have started producing dental implants. The CCIS keeps receiving more and more inquiries from Serbian companies from construction and fitting&overhaul segments regarding doing business in Croatia and the relevant regulation there like, for instance, how to open a branch office, how to register workers, how to make payments abroad, the information regarding ATA carnets, etc. Serbian companies have also been winning at tenders launched by private Croatian developers, and are even commissioned to do large-scale projects like constructing marinas. We have also seen Croatian and Serbian companies jointly participating in an overhaul of a large energy facility in Croatia, and there are examples of sales of innovative technological solutions. How much do volatile bilateral political relations affect the networking between business people?  If we were to observe only the growing trade, we could come to a conclusion that the inherited and unresolved issues and political turbulence in the entire region, not only between Serbia and Croatia, have no major negative effects on economic relations. True, our companies sold and bought from each other even when the circumstances were much more aggravating. Croatian companies invested in Serbia even at the time of big political disagreements. But in order to do more than that – namely, to form joint ventures and consortia and to have joint approach to global markets, which is of essential importance for the future of our small, national economies from the ex-Yugoslavia – we need a higher degree of political stability that offers safety and encouragement to business people to do business together. I won't even go into how important this is for foreign investors. Although significant progress has been made in recent years and the awareness

WITH THE CHANGE OF POLITICAL CLIMATE IN THE REGION AND THE GROWING TREND IN BILATERAL TRADE, THE CCIS IS AGAIN PLANNING TO OPEN REPRESENTATIVE OFFICES IN THE REGION about the need for regional cooperation has become higher, every time politicians sharpen their rhetoric, this is causing great damage to our economies. Worsening of political relations slows down or stops some processes that depend on governments and state institutions, that are important to business people. Is there any good news regarding institutional cooperation that business people are still not aware of?  Good news for business people is certainly the last year's agreement to jointly start the reconstruction of the Zagreb-Belgrade railroad. Also, by the end of May of this year, Serbia should complete the reconstruction of a motorway segment

from the border with Croatia to Sremska Mitrovica. However, even the best roads or the fastest railroads won't help our companies much if we do not speed up the border crossing of goods, i.e. if we do not shorten the waiting time and do not harmonize the work of the inspection services. Although both countries use the common customs electronic system, it often happens that our trucks are stuck at the border in lines that are five to six kilometres long. Sometimes, they spend up to ten hours waiting in the Batrovci-Bajakovo cross-border zone, which is four to five times longer than waiting time at the Horgoš border crossing. Furthermore, it happens that phytosanitary inspectors, on one side of the border, work 24/7, while those on the other side of the border leave work at 3 o'clock and don't work weekends. In some cases, there are no phytosanitary inspectors at all, like at the Šid-Tovarnik railroad border crossing. And it is companies that pay the price for this in higher transport costs and penalties for late delivery of goods to their clients in Croatia, Slovenia or anywhere in the EU. This causes huge damages to companies from both sides of the border, increases costs for manufacturers, freight forwarders and end customers, and make products non-competitive. We don't need money to overcome these problems, but good will, agreement and better organization.

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WE RELY ON EACH OTHER LUKA BURILOVIĆ

President of the Croatian Chamber of Economy

The economy must not bear the weight of the past. This is a philosophy that Croatia has used in the last 15 years while it made 750-million-euro worth of investments in Serbia where over 220 Croatian companies successfully operate to this day. As of recently, an increasing number of Serbian companies have also started operating in Croatia too

roatian and Serbian chambers of economy are an example of good cooperation between two states. This comes as no surprise since they are backed by the best interests of business people from both countries who have strong reasons to put economic relations at the forefront both in the bilateral relations between the two countries, and in third markets too. „We can really facilitate and enrich business for each other“, says Luka Burilović, President of the Croatian Chamber of Economy (CCE), summing up the reasons why the mutual cooperation has been constantly growing in the last few years. What is your view of the economic relations between Croatia and Serbia, in the light of turbulent and unstable political relations?  True, capital is a very sensitive and timid 'animal' and goes where it feels safe. The relations between Croatia and Serbia are intertwined with complex but inextricable ties. The economy must not suffer under the weight from the past. The numbers clearly show how much we rely on each other. Croatia has invested 750 million euro in Serbia over the past 15 years, and we currently have over 220 Croatian companies operating in Serbia.

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The two economies are compatible and there is a possibility of joint cooperation in third markets. Are you talking about this with your colleagues across the border?  Each country has its comparative advantages. Croatian partners can serve to their Serbian counterparts as the basis for entry into the EU single market. The experiences that our businesses had with using EU funds can help your companies in overcoming 'the childhood diseases' that we suffered from dealing with

UNFORTUNATELY, WE BOTH SUFFER FROM THE PROBLEMS OF CLASSICAL TRANSITION ECONOMIES - LAGGING BEHIND THE COMPETITION, STRUGGLING WITH THE REFORMS THAT ARE TOO SLOW, AND HAVING TO DEAL WITH THE PROBLEM OF LACK OF WORKFORCE AS OF LATE

complicated application procedures for European funds. Of course, there are also potential joint projects, especially in the energy sector, but also in the industry or the production of car parts. Serbia, on the other hand, can be a stepping stone for Croatian companies to achieve a stronger performance in the Russian and Chinese markets. Which cooperation segments are developed the most, and which can be further improved?  The external trade between our countries is solid in the food industry, and I am not referring here solely to the export aspect of it, but also to the production facilities of Croatian companies in Serbia. After all, Serbia occupies the 4th place on the list of the most important countries investment-wise for Croatia. A lot of Serbian products have found their place on our shelves, and, due to the tradition stemming from our joint state, Croatian consumers appreciate and buy these products. The segments that I think have a growth potential are energy, chemical and metal-processing industry, transport, agriculture, tourism and many other. What are the most common problems of Croatian business people in

the Serbian market and what are you doing to improve the business environment for Serbian companies in Croatia?  Our common heritage is also visible in the field of economy. Unfortunately, we both suffer from the problems of classic transition economies - lagging behind the competition, struggling with the reforms that are too slow, and having to deal with the problem of lack of workforce as of late. Serbia is somewhat more successful in attracting foreign investments, but we also need to keep in mind that, in trying to attract investors, we must not succumb to the so-called „race to the bottom“. Business climate and the country's image as an investment destination should not be based only on cheap labour and fawning on investors to the detriment of our own citizens. As far as mutual investments are concerned, it is true that there is an imbalance, but I must point out that Croatia is systematically working on removing as many administrative barriers as possible. We are trying to put the focus on finding the right location for individual production sectors, instead of building entrepreneurial zones for everything, all across the country. I am convinced that, in time, Serbian companies will start to invest more strongly in Croatia because of our potential. The CCE's Investment Project Catalogue contains information about what is already on offer, as well as information on the type of project, activity, preparatory phase, value and foreseen sources of funding. In this way, we have a simple review of the country's investment potential. Can chambers contribute to preventing brain drain and workforce from emi-

It's easier with wine

grating, which is a problem that both countries are dealing with?  Not only can chambers do that, but they also have an obligation to do everything in their power to prevent the working-age population and educated people from leaving the country. Of course, it is difficult to match the living standard

THE EXPERIENCES THAT OUR BUSINESSES HAD WITH USING EU FUNDS CAN HELP YOUR COMPANIES IN OVERCOMING 'THE CHILDHOOD DISEASES' THAT WE SUFFERED FROM IN DEALING WITH COMPLICATED APPLICATION PROCEDURES FOR EUROPEAN FUND offered by Western countries, but the problems of our labour markets do not concern only wages, but are also structural in nature. We have hundreds of thousands of unemployed people, and yet we lack workers in virtually every labour-intensive sector. There has been a short-term attempt in Croatia to eliminate this discrepancy by increasing the import quota for workers, but the root of the problem lies in the disparity between the education system and the needs of the labour market. For this reason, the

CCE has been advocating for years the introduction of the German model of dual vocational education where students immediately become part of the labour market and companies become educational institutions. The Chamber actually serves as a bridge between the labour market and business community, while we rely on EU funds in the implementation of the programme. As we have excellent relations with the Serbian Chamber of Commerce, in terms of business and in terms of friendship, we will gladly pass on all our knowledge and experiences to try to solve this chronic labour market problem. In what direction will you continue to develop the two countries' economic relations and in that context, what is the agenda for this year?  We are currently promoting our wines under the auspices of the Vina Croatia-Vina Mosaica project. For years, we have been participating in trade fairs in Serbia which yielded certain results, with Croatian wines now being offered at an increasing number of Belgrade restaurants too. This year, we were granted a million kunas from EU funds in order to present our wines in Serbia so we can expect the cooperation in this segment to become broader. Of course, we have been traditionally organizing the presentations of Croatian companies and their networking with potential Serbian partners through various other trade fairs, like construction or book fairs. Plus, our aim is to boost economic cooperation via organizing business forums that are always very popular both among Croatian and Serbian companies.

THIS YEAR, WE WERE GRANTED A MILLION KUNAS FROM EU FUNDS IN ORDER TO PRESENT OUR WINES IN SERBIA SO WE CAN EXPECT THE COOPERATION IN THIS SEGMENT TO BECOME BROADER SERBIA 2019

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I NT ER VI EW

A STEADY RISE IN COOPERATION DAVOR TRKULJA Advisor to Minister

The ascent of economic relations between Croatia and Serbia is evident, while the European framework provides many opportunities for developing cooperation in various programmes. The only threat to these trends could be the stagnation of economic growth in countries to which both economies export

very year, the positive results of the economic trade between Croatia and Serbia assure us that the two countries have complementary economies that can jointly move the bar up. The opening of the representative office of the Croatian Chamber of Economy in Serbia is an indication that the interest of Croatian companies for the Serbian market is not deteriorating, while the Croatian government's announcement that it will improve the business climate for investors could hopefully open even more the now slightly ajar doors to Serbian capital in Croatia â&#x20AC;&#x201C; says the Serbian Embassy in Croatia.

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WE DO HOPE THAT THE ECONOMIC MEASURES ANNOUNCED BY THE CROATIAN GOVERNMENT WILL GREATLY CONTRIBUTE TO MAKING CROATIA MORE VIABLE FOR A LARGER NUMBER OF INVESTORS, INCLUDING THOSE FROM SERBIA

How satisfied are you with the results of the external trade between the two countries in 2018? What trends do you expect to see? ď&#x20AC;ś According to the data collated by the Chamber of Commerce and Industry of Serbia, the value of the total trade in goods amounted to EUR 1,069.5 billion, which is a 4.2% increase compared to 2017. What is certainly interesting note and is something that we are particularly proud of is that the export to Croatia amounted to EUR 570.7 million, again a 4.1% increase relative to 2017. On the other hand, economic data shows that imports from Croatia also in-

creased by 4.4 per cent compared to 2017, amounting to EUR 498.8 million. What could be worrying for both countries in terms of economy and business is a possible economic crisis and the stagnation of economic growth in those countries which are traditionally the biggest economic partners. Such a scenario, as well as negative global economic trends, can possibly have a negative impact on the economic growth in both countries. What is your assessment of investment opportunities and trade relations between our two countries in the medium term?  Bearing in mind that Croatia is a member of the European Union and that Serbia is on a solid path to European integration, it is precisely this fact that can represent the link to achieving an even better economic cooperation. In addition to direct economic cooperation, while taking into account the complementarity of our two economies, the joint appearance of companies from both countries in third markets is considered in a longer perspective. Also, one should bear in mind that companies from both countries can participate in joint projects, that is, they can apply for multipurpose programmes from the Instrument for Pre-Accession Assistance - IPA supported by the European Commission in order to strengthen regional cooperation. These are regional instruments – the Green for Growth Fund, Western Balkans Enterprise Development & Innovation Facility II (WB EDIF II), European Fund for Southeast Europe, and Regional Housing Programme. In the course of this year, a second call is expected to be launched

within the IPA 2 Serbia-Croatia Cross-Border Cooperation Programme (2014-2020). Also, Serbia and Croatia can participate together in EU programmes such as COSME, HORIZON 2020, Erasmus +, Creative Europe, EaSI and Europe for Citizens, as well as in the ADRION (Adriatic-Ionian) Transnational Programme and the Danube Transnational Programme. Which of the Embassy's activities on fa-

THE RE-OPENING OF THE CROATIAN CHAMBER OF ECONOMY'S REPRESENTATIVE OFFICE IN BELGRADE IS CERTAINLY A GOOD SIGNAL WHICH VALIDATES THE FACT THAT CROATIAN COMPANIES ARE STILL INTERESTED IN DOING BUSINESS IN SERBIA cilitating economic cooperation would you like to single out?  In line with its capacity and capability, the Embassy in Zagreb tries to follow the latest economic trends and developments in Croatia, especially those that could be interesting to potential investors from Serbia. The Serbian Embassy in Zagreb, as well as our other diplomatic-consular representations in Croatia, had an active role

in organizing the Croatia-Serbian Business Forum that took place in Zagreb, on 12th February 2018. The aim of the Forum was to strengthen economic cooperation, define priorities for its improvement by facilitating networking between companies and their joint appearances in third markets, as well as searching for opportunities for greater mutual investments. The business forum was realized under the auspices of the official visit of the state-economic delegation of the Republic of Serbia to Zagreb, led by the President of the Republic of Serbia, Aleksandar Vučić, at the invitation of the President of the Republic of Croatia, Kolinda Grabar-Kitarović. The Serbian diplomatic-consular representations in Croatia have actively participated in the working visit of potential investors from Serbia to Eastern Croatia, that is, a meeting between a business delegation consisting of three domestic companies and the representatives of the Joint Council of Municipalities of Vukovar with the aim of informing and inspecting potential locations for investments in the Vukovar area, as well as the opportunities for potential distribution of Dunavnet software products in the Croatian and EU market. How many Serbian companies operate in Croatia today? Have the conditions for their arrival to the Croatian market improved?  Unfortunately, not as many as Croatian companies in Serbia. There are a handful of Serbian companies operating in Croatia, a rather modest number considering the complementarity of the two economies. We do hope that the economic meas-

Increasing trade

ACCORDING TO THE DATA COLLATED BY THE CHAMBER OF COMMERCE AND INDUSTRY OF SERBIA, THE VALUE OF THE TOTAL TRADE IN GOODS AMOUNTED TO EUR 1,069.5 BILLION, WHICH IS A 4.2% INCREASE COMPARED TO 201 SERBIA 2019

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ures announced by the Croatian government will greatly contribute to making Croatia more viable for a larger number of investors, including those from Serbia. Last year, the Croatian Chamber of Economy opened a representative office in Serbia after a five-year break, and we can soon expect the opening of the representative office of the Chamber of Commerce and Industry of Serbia in Croatia. Is this a foreshadowing of more good news to come?  The re-opening of the Croatian Chamber of Economy's representative office in Belgrade is certainly a good signal which, first and foremost, validates the fact that Croatian companies are still interested in doing business in Serbia. On the other hand, this is also a validation that the conditions for doing business in Serbia are positive, and that investors are still interested. Taking into account the current indicators, Serbia occupies a high place in the region in

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the eyes of potential investors, including those from Croatia. Lack of quality workforce is increasingly mentioned both in Croatia and Serbia as a limiting factor for economic growth. During tourist season, many Serbian workers find employment in neigh-

WE BELIEVE THAT A MORE OPEN AND HONEST COOPERATION BETWEEN THE COUNTRIES OF THE REGION, ESPECIALLY ON THE ECONOMIC PLANE, IS SOMETHING THAT CAN SLOW DOWN OR ELIMINATE THESE NEGATIVE TRENDS

bouring countries. How easy is for the workers from both states to find a job on the other side of the border today?  Lack of workforce is certainly one of the limiting factors for economic growth. Almost all the countries of the region are facing this burning problem, which was also mentioned on several occasions by the President of the Republic of Serbia, Aleksandar Vučić. In that sense, we believe that a more open and honest cooperation between the countries of the region, especially on the economic plane, is something that can slow down or eliminate these negative trends. In any case, the decision by the Croatian authorities to open the door to Serbian workers due to labour shortages during the tourist season is definitely a positive one. Serbian workforce has a number of advantages that make it desirable in the Croatian market, first and foremost, knowing the language, similar culture and mentality.

SERBIA 2019

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C EVERLASTING |

EC ONOMIC C O O P E RATI O N

ECONOMIC INTERESTS

Neighbours that should rely on each other 18

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roatian products in Serbia and Serbian products in Croatia have always been popular, even when they were considered "the forbidden fruit". Now they are no longer considered that, and the two neighbours have no reason not to increase their cooperation to reach the level that the two sides cannot even imagine at the moment. This is not only about the Yugo-nostalgia and a subconscious need to buy certain brands. Even if it is, it is perfectly normal â&#x20AC;&#x201C; even on Malta, Cyprus and in the Republic of Ireland, British products

are more popular than other, and this is, by no means, the result of the geographical proximity between Great Britain and the two Mediterranean islands. Even ice cream is sold in a typical British manner – from a moving ice cream truck. It is no wonder that habit is also called second nature. If this is true, why not utilize it? Secondly, the transport costs are very low since these are two neighbouring states that are connected by fast roads, as well as slower transport routes, like rivers. Thirdly, Croatian and Serbian markets, in particular Vojvodina, on the Serbian side, have been conjoined for a long time since both Croatia and Vojvodina were a part of the Austrian-Hungarian Empire back in the day. If there were no borders between Zagreb and Veliki Bečkerek (today, the town of Zrenjanin) in 1910, then there is no reason for them to exist today. Bear in mind that we have managed to distance ourselves from Romanian and Hungarian products in less than 80 years.

ECONOMIC FORUM 2018 The most important news for the Serbian-Croatian economic relations in 2018 was the Croatian-Serbian Economic Forum that took place in February, and was chaired by the top state officials Kolinda Grabar-Kitarović and Aleksandar Vučić, presidents of the two countries. "Serbia is a significant economic partner for Croatia, and this is validated by the fact that over 200 of our companies operate in the Serbian market. The result of this is that Croatia's direct foreign investments in Serbia are worth more than EUR 749.3 million, making Serbia the 4th most important country for Croatian investments, "said President of the Croatian Chamber of Economy, Luka Burilović on

Imports

the occasion, adding that two countries, despite the burdensome past, have everlasting economic interests. The gathering assembled 40 or so companies from both countries, and covered the segments that could advance economic relations like energy, chemical and metal-processing industry, transport, crude oil derivatives, production of locomotives and train cars, agriculture, tourism, construction, information technology, etc. President Grabar-Kitarović outlined the potentials

TRANSPORT COSTS ARE VERY LOW SINCE THESE ARE TWO NEIGHBOURING STATES THAT ARE CONNECTED BY FAST ROADS, AS WELL AS SLOWER TRANSPORT ROUTES, LIKE RIVERS for cooperation in industry, construction, energy, agriculture, tourism and transport. She also mentioned the cooperation on the revitalization of the Zagreb-Vinkovci-Tovarnik-Šid-Belgrade railway. One of the novelties was also Croatia's readiness to open for investments from Serbia. To quote the Croatian president again: "Croatia welcomes any Serbian company that is willing to invest in Croatia and do business with our companies. I believe that Croatia can offer many benefits to them, such as access to

the large EU market." It is encouraging to see that capital knows no borders.

DARK CLOUDS OVER AGROKOR ARE CLEARING OUT For several years, Todorić's empire was the source of the biggest affairs and the most painful process that Croatia had to go through, or rather what we, on surface, have known as Idea / Konzum, but what, deep down, was a huge octopus of a company called Agrokor. In Serbia, through privatizations and takeovers, Agrokor acquired Mercator S (Mercator, Idea and Roda supermarket chains), Zrenjanin-based cooking oil manufacturer Dijamant, Belgrade ice-cream and frozen fruits and vegetables producer Frikom, Kikindski Mlin, Nova Sloga (produces dry vegetables and condiments) and MG Mivela water company. Close to 20,000 people work in these companies. After a lot of trouble, the general consensus was that Agrokor was just too big to fold, and what ensued was a series of takeovers, compromises and debt clearances. In 2018, the Russian Sberbank became the majority owner of Agrokor with a 39.5% share in the new company and the situation became much more stable.

EPILOGUE All in all, the interrupted ties between the two states have to be strengthened to the level prior to 1990 or 1914, because they are partners that need to be connected. Here's an idea! There is untapped potential in the cross-border area connecting the Danube, since the borders of Vojvodina and Croatia are the only point of contact between the two countries, so that navigation on the Danube and Sava has to be improved.

CROATIA IMPORTS MORE AND MORE FOOD AND AGRICULTURAL PRODUCTS FROM SERBIA TO MEET DEMAND IN THE EVER-GROWING TOURIST SECTOR SERBIA 2019

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E C O N O MY

GOOD ECONOMIC INDICATOR

t was a real 'masterpiece' to destroy the country that Serbia shared with the rest of the 5 republics, but all these countries have managed to get themselves out of the abyss. Some were luckier that the others but some, like Serbia, were damaged maybe beyond repair, which is albeit slowly recovering now.

THE OVERVIEW In the late 1980s, at the beginning of the process of economic transition from a planned economy to a market economy, Serbia's economy had a favourable position in comparison to most of the Eastern Bloc countries, since, if we take into account the 15 ex-Soviet re-

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Exports have grown recently in many previously neglected areas of economy, like wine production, agricultural and food products, Automotive industry, IT services

publics, 6 ex-Yugoslav republics, 4 Visegrad countries and 3 other countries (Romania, Bulgaria and Albania), in total 28 countries, Serbia occupied the 3rd place, right after Slovenia and Croatia.

EXPORTS HAVE GROWN RECENTLY IN MANY PREVIOUSLY NEGLECTED AREAS OF ECONOMY, LIKE WINE PRODUCTION

Cue to 28 years later, and Serbia is one of the poorest countries in the group, just a bit ahead of Moldova, Ukraine, Georgia, Armenia, and tied with Bosnia and North Macedonia. You guessed it! Its economy was gravely impacted by the Yugoslav wars, the UN sanctions and trade embargo during the 1990s, with the country experiencing a hyperinflation in 1993 and early 1994, producing one of the highest nominated banknotes ever (a collector's item now). At the same time, the country experienced a serious brain drain which expedited after 2010 with worsening of economic conditions, slow growth, and Serbia's inclusion into the White Schengen list. After the overthrow

of Slobodan MiloĹĄeviÄ&#x2021; in 2000, Serbia went through a process of transition to a market-based economy and experienced a fast economic growth. During that period, the Serbian economy grew 4-5% annually, average wages quadrupled, and economic and social opportunities dramatically improved. During the Great Recession from 2008, Serbia suffered a decline in its economy of 3.1% in 2009, and in the following years of economic stagnation, the pre-crisis level of GDP was reached only in 2016. The average growth of Serbia's GDP in the last five years was a modest 1.3% per year, which is one of the lowest growths of all Eastern European countries. Unemployment has also declined, for the first time, the population fell under 7 million.

EXPORTS Exports have grown recently in many previously neglected areas of economy, like wine production. Serbia was the 11th largest wine producer in Europe and 19th in the world in 2014. There are 56,000ha of vineyards in Serbia, producing about 230 million litres of wine annually. Serbia has very favourable natural conditions (land and climate) for varied agricultural production. It has 5,056,000ha of agricultural land (0.7ha per capita), out of which 3,294,000ha is arable land (0.45ha per capita). In 2016, Serbia exported agricultural and food products worth $3.2 billion, and the export to import ratio was 178%. One of the main export products of Serbia are rapsberries with Serbia topping the list as the world's main producer of these sweet berries, taking a lion share of the world's market. Automotive industry (with Fiat Chrysler Automobiles as a forebearer) is dominat-

IN 1991 SERBIA OCCUPIED THE 3RD PLACE IN TERMS OF DEVELOPMENT, RIGHT AFTER SLOVENIA AND CROATIA ed by an automotive cluster located in Kragujevac and its vicinity which contributes to export with about $2 billion. One of the principal vehicles for export, which Serbia tried to export to as many countries as possible, is Fiat 500L, a new version of the popular Topolino. Kosovo recently imposing the 100% import tax was a severe blow to the Serbian export to Kosovo, but at the same time, the country is approaching signing a deal with the Eurasian Economic Union, which opens up the markets of Russia, Kazakhstan. Belarus, Armenia and Kyr-

gyzstan, one of the greatest cumulative markets in the world, to Serbian export. The Serbian IT industry is rapidly growing too. In 2017, IT services exports reached the value of $1.1 billion. With 6,924 companies in the IT sector (2013 data), Belgrade is one of the information technology hubs in this part of Europe, recording a strong growth. Microsoft Development Center located in Belgrade was, at the time of its establishment, the fifth such centre in the world. Many global IT companies choose Belgrade as their regional or European centre such as Asus, Intel, Dell, Huawei, NCR etc. These companies have taken advantage of Serbia's large pool of engineers and relatively low wages. Novi Sad IT cluster of domestic startups is a kind of miracle, on pair with Lviv, Timisoara or Minsk, its biggest rivals. As a country hungry for FDI, all of this could be an advantage. It is worth mentioning that the tourists from Russia and China have also contributed to the growth of this economic branch.

Startup

NOVI SAD IT CLUSTER OF DOMESTIC STARTUPS IS A KIND OF MIRACLE, ON PAIR WITH LVIV, TIMISOARA OR MINSK, ITS BIGGEST RIVALS SERBIA 2019

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CORPORATE

The Adventures

OF THE SPIRIT

Novi Sad, Danube, Tourist Organisation of the City of Novi Sad

Serbia is a country with authentic cultural heritage. Hereby, we would like to present to you a part of the abundant cultural heritage we have inherited and are passing it on to new generations, through several cultural and historical entities that we have chosen – Belgrade, Novi Sad and Subotica

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CULTURAL SPIRIT OF BELGRADE

Belgrade lives life to the fullest, it is the hub for all happenings, and is always interesting. The city's cultural spirit permeates everything - from museums, galleries and theatres to film and music festivals. The peaceful and sublime atmosphere of a museum can easily turn into a true spectacle. From prehistoric sculptures to helmets of Roman legions or medieval icons; from the handicrafts of the typical Serbian household to the royal crown and the insignia of the Serbian royal dynasties, in Belgrade's museums - the National Museum, the Museum of Contemporary Art Belgrade, the Museum of Jugoslavija, the Nikola Tesla Museum - you will experience a cultural, social and political adventure. There are very few cities that are synonymous with one name, and there aren't many celebrated and famous people who can identify themselves with just one place. Art galleries have also left an indelible mark on a city's cultural identi-

ty - the Fresco Gallery, Art Gallery of the Cultural Centre of Belgrade, the Prozor Gallery, the Singidunum Gallery – to mention just a few. Classical music is a significant part of cultural heritage. The Belgrade Philharmonic Orchestra is today the leading orchestra in the region and a breath of fresh air on the international concert scene. The Great Hall of the Ilija M. Kolarac Foundation is one of the most representative music concert ven-

TOP 10

Because of its leisurely and relaxed lifestyle, the city of Novi Sad, where 20 different nationalities live in harmony, was included in the „Top 10 Cities to Visit in 2019“ list by Lonely Planet, ranking in third place

Subotica, City Hall and Catholic Cathedral (in the background), Subotica Tourist Organization

ues in Serbia with 300 music programmes taking place there all year around. The Belgrade Music Festival (BEMUS) is one of the most recognizable classical music festivals in Southeast Europe, which has been held for 50 years. Belgrade also pays a lot of attention to contemporary music production and musical stage performances, which often strive for alternative artistic results. Since its establishment in 1971, the International Film Festival, FEST has always been a prestigious event. The Festival welcomes films and filmmakers from around the world, even those films that are not screened at cinemas. Belgrade International Theatre Festival (BITEF) is one of the oldest, most important, most prominent and rarest festivals in the family of the global theatre festivals. This year, it will be held for the 53rd time and is a must-see event in Belgrade. w ww.tob.rs

VISIT NOVI SAD, A CITY THAT PROUDLY CARRIES TWO EUROPEAN TITLES

For three centuries, which is how long it has been called Novi Sad / Vididek / Neusatz, this city has been the hub of diverse and abundant cultural heritage of many nationalities living in it. Novi Sad was de-

Belgrade, The Victor Monument, Kalemegdan. Photo: Aleksandar Matić

clared the Youth Capital of Europe in 2019 and the European Capital of Culture in 2021. With the amazing views from Petrovaradin Fortress, numerous galleries and ateliers, and the beautiful old town centre, this is one of the must-see destinations in Serbia. Petrovaradin Fortress is a real masterpiece of baroque military architecture.

CONCERT SCENE

The Belgrade Philharmonic Orchestra is today the leading orchestra in the region and a breath of fresh air on the international concert scene It was built in the 17th and 18th century and is a cultural and historical monument. The Fortress is home to the Museum of the City of Novi Sad, Academy of Arts, Art Circle, Planetarium and the City Archives. 16km-long underground military galleries, spanning four levels, represent the biggest tourist attraction of the Fortress. Because of its leisurely and relaxed lifestyle, the city, where 20 different nationalities live in har-

Novi Sad, Petrovaradin Fortress, Tourist Organisation of the City of Novi Sad

mony, was included in the „Top 10 Cities to Visit in 2019“ list by Lonely Planet, ranking www.novisad.travel in third place.

SUBOTICA, A SECESSION GEM

Subotica, the northernmost city in Vojvodina, a multiethnic environment, and the epicentre of secession, provides numerous opportunities for a meaningful holiday. The strong desire of the citizens of Subotica and the great inspiration of builders, artists and craftsmen have resulted in many Secession style buildings built in Subotica, which even after a whole century, remain equally beautiful, attractive and intriguing - the City Hall, the Synagogue, the Raichle Palace, and various banks. Subotica is also known for its relaxed atmosphere, good food and quality wines from the sandy wineyards. By all means, visit the Palić Lake, which is in the close proximity to Subotica, where you can see the Water Tower, Big Terrace, Women's Beach, Music Pavilion and memorial fountains painted in the shade of red that is so characteristic of Palić, which all exude the spirit of secession. Make sure to visit the Palić Lake, granges and wineries nearby. www.visitsubotica.rs www.srbija.travel

Novi Sad, Roman Catholic Parish Church of “The Name of Mary”, Tourist Organisation of the City of Novi Sad

SERBIA 2019

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CULT U R E

FROM SLAVIC TO BALKAN A house in the middle of the road

hen the Old Slavs came to the Balkan Peninsula, perhaps they thought it was a promised southern land, with fruits and sunshine everywhere. However, it proved to be “a house in the middle of the road”. This does not apply only to the Serbs – many nations that would be otherwise wealthy and prosperous, like Croats, Slovenians, or Bulgarians, also “made their houses in the middle of the road”. The very same road, that is! Some of them

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THE PAGANISMS AMONG SERBS INCLUDE KNOCKING THREE TIMES ON THE WOOD, CALLING THE WOOD SPIRITS, MAKING A SMALL BED FOR HOUSE SPIRITS AND SO ON

had more luck, some less. But the very idea that Europe was torn apart by the cultural and religious wars for domination between different Christian factions (Catholics, Protestants and Orthodox) was the doom for the continent for many centuries, and with the arrival of Islam, yet another competitor joined the club.

PAGANISM AND PAGAN ROOTS Slavs were pagans when they arrived to today's Serbia. Lots of their old religion was preserved and got syncretised with

Catholics and Muslims (indicating their pre-schism roots). As for the Christian tradition mixed with the Slavic one, wooden churches of Šumadija share the same stiking beauty as those in Norway.

the adopted Christianity, for example the tradition of badnjak, a holy oak branch burned for Christmas. In many other areas from England to Italy and Bulgaria we have the same pagan atavism, called Yule log, a piece of wood ritually burnt for Yule or Christmas. The other paganisms include knocking three times on the wood, calling the wood spirits, making a small bed for house spirits and so on.

THE FOREIGN SUBSTRATES

CONVERSION TO CHRISTIANITY Conversion of the South Slavs from Paganism to Christianity began in the early 7th century, long before the Great Schism, the split between the Greek Orthodox East and the Roman Catholic West. The Serbs were first Christianized during the reign of Heraclius (610-641), but the process was completed by Eastern Orthodox Missionaries (Saints) Cyril and Methodius in 869 during the reign of Basil I, who sent them after Knez Mutimir, and had acknowledged the suzerainty of the Byzantine Empire. After the Schism, those who lived under the Byzantine sphere of influence became Orthodox and those who lived under the Roman sphere of influence became Catholic. Very few Catholic Serbs in Serbia nowadays acknowledge their Serbianity, so to speak, and very few Orthodox Croats, for example, acknowledge their Croatism. In due time, all of them sided with the majority, and that is a pity, since the true multiculturalism got lost in the process. Nowadays, we connect Serbs mainly with their Orthodoxy. One of the special events found in Serbs is slava, which is celebrated as a family patron saint day. Slava is now a personal holiday in Serbia, and each Orthodox person can choose a saint as

THE MAJORITY OF WORDS, VOCABULARY, CUSTOMS, SONGS, DANCES AND DISHES CAME FROM THE AUSTRIANS, TURKS, ITALIANS AND HUNGARIANS a patron. Similar or identical traditions are found in different countries on the Balkans and not only among the Serbs, but also among other Slavic and non-Slavic groups (Vlachs, for instance), including

There is a lot to be said about the substrates of the domicile peoples of the Balkans, like Illyrians and Thracians, and Celts and Romans. The bulk of the customs were inherited from the Vlach population that was an amalgamation between the Celts, Thracians, Illyrians and Romans, whose language they accepted. Many people accepted Vlach ending -UL for their names, hence the surnames Radulović, Kožulović etc. Hungarian and Germanic tribes were an early mixture, giving the typical Hungarian ending -OŠ to many Serbian and Slavic names, like Miloš, Dragoš, Uroš, Radoš etc. But later on, the real occupying forces – Austrians, Turks, Italians – left an indelible mark. The majority of words, vocabulary, customs, songs, dances and dishes came from these three nations, including the Hungarians. The Hugarian and Austrian influence is quite obvious in Vojvodina (tamburitza, salaš farm, windmills), and parts of Central Serbia (accepting accordeon and violin as the main national instruments), while Turkish influence got much prominence in the south, where even the Orthodox Serbs from Vranje have folk costumes very similar to the Turkish and women wear sharavaries, while men wore fez until the early 20th century as far as Niš. All in all, it all melted into an interesting and enchanting mix that is Serbian culture today that is considered one of the most traditional ones in Europe.

Slava

ONE OF THE SPECIAL EVENTS FOUND IN SERBS IS SLAVA, WHICH IS CELEBRATED AS A FAMILY PATRON SAINT DAY SERBIA 2019

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T R ADI T I ON S

IN THE BORDERLANDS... …the great food is made!

erbian culture and identity were shaped in-between the superpowers – Venice, Austria, Turkey, Russia, Byzantium - and today are coloured by their influences. Serbia’s culture has always been known for its cultural splits. Just like Croatia, the country looks like a patchwork of different cultures and customs,

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only connected by the common sense of belonging to the same nation.

THE BYZANTINE / FRANKISH SPLIT When the Serbs, or better to say Ancient Slavs came to this part of Europe from the north, they settled on the frontier of what was and would be known as

Byzantine and Frankish Empires. They were not separated back then but the churches, where Latin and Greek was spoken, and which were increasingly diverging, were a bad omen for all the nations around here. So, the Serbs got their influence from both sides - some of them were baptized by Greek missionaries and adopted the Cyrillic script, while

others succumbed to Latin and Catholic influences in the southern regions. The dichotomy was pretty obvious when Stefan the First-Crowned was declared king by the Pope. This indecisiveness is still present in the Serbian culture and politics, since Serbia has always been trying to serve as a link between the East and the West, sometimes successfully neutral, sometimes paying the ultimate price for not aligning.

THE OTTOMAN / HABSBURG SPLIT And then came another split! The Ottoman Empire conquered Serbia in 1459 and ruled its territory for several centuries, suppressing the Serbian culture but also greatly influencing Serbian art, especially in the southern regions. Meanwhile, in northern regions, the Habsburg Monarchy expanded into modern Serbian territory starting from the end of the 17th century, culturally interlinking this part of the nation to Central Europe rather than the Balkans. Central Serbia was the first to emancipate as the Principality of Serbia in 1815, and started to gradually expand into the Ottoman and Habsburg-held regions. This split was visible in all aspects in life, from food to customs and mentality, and maybe the most strikingly, in architecture.

SERBIA’S CULTURE HAS ALWAYS BEEN KNOWN FOR ITS CULTURAL SPLITS. JUST LIKE CROATIA, THE COUNTRY LOOKS LIKE A PATCHWORK OF DIFFERENT CULTURES AND CUSTOMS

FOOD, FOOD! Of course there are a few exceptions! Serbs generally like and eat a lot of meat, including famous pljeskavica (sometimes styled in the West as “pleskavitsa”), and ćevapčići (derivation from Turkish kebab), burek (also common for all of the Balkan areas) and rakija, typical for the wider region from Ukraine to Northern Macedonia and Hungary to Bulgaria. In fact,

Grill

historically, Serbian food is characterized by a mixture of Byzantine–Greek, Mediterranean, Turkish–Oriental and cuisine of the Austro–Hungarian Empire, as well as medieval Slavic influences. Serbs take a lot of pride in their cuisine, and no wonder that this mixture makes for delicious food. A number of foods which are usually bought at shops in the West

are often made at home in Serbia. These include rakija (fruit brandy), slatko, jam, jelly, various pickled foods, notably sauerkraut, ajvar or sausages. The famous dishes that can be considered national are Karadjordjeva šnicla (Karadjordje's schnitzel), prebranac beans, rinflajš and goulash from Vojvodina, as well as the šopska salad, tarator and urnebes from Shopluk region. The meat products that are very popular are sausages, especially so-called Syrmian sausage (sremska kobasica) and kulen, both hailing from Vojvodina, plus there is pršuta (type of prosciutto), with the most popular one hailing from the Zlatibor area of Western Serbia. Also, cheeses are extremely popular, and local kajmak is a delicacy. Not to forget that the regions of Sandžak and Kosovo also bear a strong and decisive influence of Turkish and Oriental cuisines, which include mantije, tufahije, urmašice and other delicacies often found in Turkey, Bosnia, Albania and elsewhere.

SERBS GENERALLY LIKE AND EAT A LOT OF MEAT, INCLUDING FAMOUS PLJESKAVICA (SOMETIMES STYLED IN THE WEST AS “PLESKAVITSA”), AND ĆEVAPČIĆI (DERIVATION FROM TURKISH KEBAB) SERBIA 2019

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LANDLOCKED, YET STUNNING East for West, West for East

rom the Austrian-influenced cities and towns of Vojvodina, to the forest bosom of Šumadija, from the wild mountainous beauty of Tara, Drina, Raška and Sandžak to the equally wild beauty of Shopluk and Torlačko, Serbia is one of the last undiscovered jewels of European tourism. It has become almost impossible for the historians to calculate how many times exactly have the East and West col-

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SERBIA 2019

THERE ARE MORE THAN 53 HOT SPRINGS WITH MINERAL WATERS IN SERBIA THAT, AS SERBS LIKE TO CLAIM, TREAT ALL AILMENTS

lided in this region. A stormy past, multicultural encounters from all directions of the world, different cultures and civilizations, interwoven traditional and modern rules of life, incredible variation of terrain, luscious nature, hospitality at every corner, gourmet specialties of unforgettable taste - Serbia is all that and more. From geographical point of view, Serbia belongs to Southeast and Central

special beauty, a natural good on which humans had a limited impact. There are five magnificent national parks in Serbia - the lovely Fruška Gora, iron entrance to the Danube - the gorgeous Djerdap, the Silver Mountain - Kopaonik, the largest winter tourist centre, the idyllic Tara and the monumental Šara. Zlatibor, Stara Planina, Palić, Zobnatica, Golija, Mokra Gora and many other green treasures are also stunningly beautiful nature’s parks. There are more than 53 hot springs with mineral waters in Serbia that, as Serbs like to claim, treat all ailments. There are also many untamed mountains that are masterfully hidden from the world’s eyes, vociferous waterfalls and various other natural phenomena, rare animal and plant species and many more incredible features that you can discover during organized tourist visits or by exploring on your own.

THIS IS THE MAGICAL AND MYSTERIOUS SERBIA, WHERE EVERYONE CAN FIND SOMETHING TO DO AND SEE, BUT WILL ALSO FALL IN LOVE WITH ITS IRRESISTIBLE BEAUTY Europe. In the north, the Pannonian Plain extends over indefinitely, along clear rivers and marshes, scarce mountains and groves, while down south, it stretches into lush forests, high peaks, green valleys, and wide lakes stringing across the land. Every day we discover a new, beautiful destination here while various historical riddles invite us to dig them out of the soil and solve them. It could be said that even Serbs don’t know enough about their natural and cultural wealth. After all, this is what one of its famous poets Desanka Maksimović wrote - "Serbia is a great secret". Strategically located at the heart of the important intersection of the continent, this country full of contrast has enormous untapped economic and tourist potential. A national park is a protected area of

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There is not an inch of the country without a significant archaeological site. Fortunately, many have been turned into modern tourist centres, and you can visit them whenever you want. Definitely go and see the mysterious pearl of the world prehistory - Lepenski Vir on Djerdap, the seat of the first urban European civilization in Vinča, the former Roman metropolis Sirmium in Sremska Mitrovica, Felix Romuliana near Zaječar, Mediana in Niš, Viminacium near Kostolac ... Every important spot on the Danube River is “guarded” by a fortress. These are just some of the greatest fortifications on this powerful river - Petrovaradin, Golubac Castle, old Ram and Fetislam. Belgrade is one of the oldest European capitals. Its fortress, Kalemegdan has a great story to tell you, rising above the point where the Danube and Sava meet. Belgrade is known for its numerous events, good fun and nightlife, and since ancient times, it has been called “the city with soul”, and this is, by no means, a coincidence. The centre of Vojvodina,

called salaši. Sail the Morava and Drina rivers, enjoy in the rapids of the volatile Tara, pass the Danube through the time, swim in the Sava River or the Silver Lake. Visit Mokra Gora, drop by to see Niš, Čačak or Valjevo, take home at least one carpet from Pirot, sudžuk from Novi Pazar, and cheese from Sjenica, explore over 1,500 caves, breathe in the fresh air of Zlatibor and Divčibare, try out the skiing skills on Kopaonik or Stara planina, take a peek into the bosom of mysterious eastern Serbia, indulge yourself in the colourful Šumadija accompanied by trumpet sounds, dance to the tambouritza music in the cheerful Vojvodina... This is the magical and mysterious Serbia, where everyone can find something to do and see, but will also fall in love with its irresistible beauty.

Novi Sad, is the capital of the culture of all the epochs and all the nations who had passed through this region. Sremski Karlovci is a small town with a great history and unforgettable wine tours. There are other breathtaking towns and sites in Vojvodina like the noble Subotica, the joyous Sombor, Vršac, Mitrovica, Zrenjanin, Kikinda, and picturesque stand-alone farms in the middle of fields

BELGRADE IS ONE OF THE OLDEST EUROPEAN CAPITALS. ITS FORTRESS, KALEMEGDAN HAS A GREAT STORY TO TELL YOU, RISING ABOVE THE POINT WHERE THE DANUBE AND SAVA MEET

Soul

BELGRADE IS KNOWN FOR ITS NUMEROUS EVENTS, GOOD FUN AND NIGHTLIFE, AND SINCE ANCIENT TIMES, IT HAS BEEN CALLED “THE CITY WITH SOUL”, AND THIS IS, BY NO MEANS, A COINCIDENCE 30

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SERBIA 2019

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