Croatian economic movements Positive trends in the economy primarily depend on the efforts of those in power
Krešimir Rožman, State Secretary for Labour World Bank demands higher contributions to the second pension pillar
6% fall in GDP in 2009 In the third quarter of the previous year, GDP registered a decrease of 5.7% year-on-year
ECONOMIC TRENDS
INTERVIEW
GDP ANALYSIS
PAGE 3
PAGE 4
PAGE 6
Croatian Business & Finance Weekly Established in 1953 Monday / 25th January / 2010 Year III / No 0094 www.privredni.hr
S U P P O R T E D
B Y
pvinternational pv international T H E
C R O A T I A N
C H A M B E R
O F
E C O N O M Y
FUNDS FOR SALVAGING THE ECONOMY
Financing is difficult without government help Production companies have low expectations from the announced measures for aiding potentially successful companies made insecure by the crisis Igor Vukić
F
or producers the most important thing now is to generate sufficient funding and to somehow survive this tornado that has lasted for over a year, says Vladimir Wagner, Board President of Dalit corp, a machinery and equipment producer. It is important to overcome this situation by the end of the year, and the rôle of the government is quite significant. Local production companies will find it hard to obtain funding if they rely solely on banks, says Wagner in his comment on the proposed government measures for economic assistance, from which many companies, especially those in production, do not have high hopes. Loans are cheaper abroad than in Croatia. How can we compete with Slovenian companies, with interest rates of between 3% and 4%, when ours will be 7%, according to the announcement? Charges will be 8%-9%, stresses Wagner. It appears that the government decided to react to the criticisms that accompanied the announcement of the new measures. Borislav Škegro, advisor to the Prime Minister, Jadranka Kosor, said the interest rate will be below 7% in a recent statement.
The Association of Machinery and Devices Producers at the Croatian Chamber of Economy (HGK), of which Wagner is the president, organised a meeting with representatives from the Croatian Bank for Reconstruction and Development (HBOR) in order to hear information concerning new funding. Aleksandra Arbanas from HBOR explained that companies will be able to use loans in which HBOR will participate with a share of 30%, and banks with 70%. In this way, HBOR and banks will share any risk, she added, suggesting that the production sector has great
potential for co-operating in this programme. They will receive guarantees for covering loan risk in new development projects. Guarantees will be given at specified auctions, in which banks will be able to participate in projects they intend to monitor. Positive measures announced The third channel of assistance will be a fund for economic cooperation, which will invest in certain companies the same way as risk-capital funds. It will rescind ownership only when a company is stronger. The money
Loans based on already existing HBOR criteria Until the criteria for implementing the new measures are fully explained, Aleksandra Arbanas from HBOR advises entrepreneurs to contact the Bank and to study the conditions which apply for obtaining current HBOR loans, more precisely for overcoming business difficulties and for export financing.
will be allocated according to the criteria of market success and future potential, notes Škegro, explaining that funding will not be easily shared and that any investment will have to be repaid. For now, the announcement contains only good intentions and we will have to wait for all the technical elements of implementation in order to provide us with a real evaluation, says Ivan Miloloža, owner of Munja. When all elements of the new measures become known, the company might apply for a project (postponed several times) to transfer their factory to a new location, and a project for managing waste accumulators. Milan Kovač from Kopack, a company producing packaging machines and production lines for the food and packaging industry, says he built a new production facility with a loan from HBOR. What is the purpose though, when it is empty due to the crisis? At the same time, machines and production lines similar to ours are being imported, says Kovač. For this reason, he suggested an additional benefit be given, upon the approval of crisis loans, to investors using their own equipment, machinery and other products when investing.
2 VIEWPOINT
Privredni vjesnik Year III No 0094
TIMBER INDUSTRY
Mario Grassl, Board President, Holcim Hrvatska
LACK OF STATE DISCIPLINE CREATES A VICIOUS CIRCLE
Continuing crisis through low prices from Eastern Europe
The economy needs to be restructured, which means making difficult decisions in order to create a base for productive and efficient companies
C
orporate social responsibility is a concept according to which organisations, through all aspects of their activities, accept responsibility for considering the interests of buyers, employees, stockholders and the entire community, as well as the responsibility for environmental protection. The concept is tightly linked to the principles of sustainable development, which means that entrepreneurs should base decisions, not only on financial factors, such as profitability and dividends, but also on the indirect and long-term social and environmental consequences of their activities. Measuring sustainability through regular reports on corporate sustainable development became a standard a few years ago. Holcim presented its regular annual report in October 2009. In addition to information on environmental protection, these reports include information on measures for a healthy and safe working environment, minimising any negative effects on the environment, as well as financial and other contributions for satisfying the needs of the community within which the company operates. During the past few years, Croatia profited within a dominant envelope of economic growth, although a greater part of this growth was based on loans to both public and private sectors. The crisis has hit everyone who IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik. hr/subscription
operated on the basis of financing projects with high indebtedness. This concept has never been sustainable, given the economy is constantly developing over economic cycles. The culture of business needs to change in order to overcome the crisis. The problem in Croatia is a lack of discipline in terms of paying the state as an investor, which leads to late payment or even non-payment of state projects. This creates a vicious circle throughout the entire economy where the share of de facto barter economy is constantly increasing. In order to regain trust, decisions have to be transparent and public. The collection and distribution of public money needs to be transparent and traceable for all interested groups in order to avoid fraud. The economy needs to be restructured, which includes making difficult decisions in order to create a base for productive and efficient companies, capable of creating new jobs and producing for both local and foreign markets.
FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr
IMC MANAGER Dea Olup +385 1 5600028 olup@privredni.hr
EDITOR IN CHIEF Darko Buković +385 1 5600003 bukovic@privredni.hr
TRANSLATION Tr@duco traduco@zg.t-com.hr
EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
COUNSELLOR, INTERNATIONAL OPERATIONS, LANGUAGE EDITOR Ray Fletcher fletcher@privredni.hr
Production decreased by 30% last year Krešimir Sočković
T
he Croatian timber industry has suffered a heavy blow from the crisis. According to data provided by the Central Bureau for Statistics, the fall in exports totalled 30% during eleven months of 2009 on a year-on-year basis. Last year, exports decreased to the level of 2006, and many entrepreneurs do not expect stability to happen this year. Wood processing and furniture production are export orientated, since 60% of income is achieved abroad. Wood producers account for almost 8% of total Croatian exports, and more than 70% of these goods consist of finished products. More than 90% of raw materials for the Croatian timber industry come from local renewable sources. Croatian oak parquet, doors and furniture are in global demand. As a result, exports doubled between 2003 and 2008, exceeding US$1 billion. In the past few years, considerable funds (some €95.9 million) have been invested in new technology. Competition from Europe In 2008, total profit amounted to €1.09 billion, whilst the raw material base was worth some €0.19 billion, showing a high degree of achieved added value.
The timber industry is one of the rare Croatian industries that is consistent in achieving a surplus, which totalled $72 million in 2008. Wood producers had been aided by the state through a plan for the development of the timber sector. The aid amounted to €8.49 million, and will be even higher this year. However, entrepreneurs believe this will not be sufficient for ensuring guaranteed growth in this area. Zdravko Požgaj, Board President of the Požgaj Group, one of the biggest parquet producers in Croatia, as well as the President of the group Wood in Construction at the Croatian Chamber of Economy says they might face problems with European competitors during the next few years. “China is not a problem. However, we cannot compete with Romania and Poland which have devalued their currency to a great extent, thus lowering the prices of their raw materials and quality products by 15%. We cannot lower our prices, and the only thing that can save us is quantity, for which we have to have a market. It will not be easy since our orders for 2010 have plummeted by 50%”, says Požgaj, adding that the criterion of price is currently the most important, and this is an area in which Croatian wood producers cannot compete.
www.privredni.hr Business & Finance Weekly
3
( 6.2%reduction in economic activity
( €0.48 billion
reduction in personal lending
CROATIAN ECONOMIC MOVEMENTS
STILL IMPOSSIBLE TO ANTICIPATE EXITING THE CRISIS Positive trends in the economy primarily depend on the efforts of those in power, in terms of a remodelled economic policy, the pace of adjusting to global trends, the dynamics of concluding entrepreneurial reforms and the restructuring of the economy
Jasminka Filipas
T
he difficult situation in the Croatian economy at the beginning of 2010 has primarily been affected by inadequate macro-economic policy during the last two decades or more, whilst the current global economic crisis has exacerbated the problems. The Director of the Macro-Economic Analysis in the Croatian Chamber of Economy, Jasna Belošević Matić, opines that Croatia did not react in a timely manner to clear signs of the global crisis two years ago, nor to an apprehensive situation in global financial markets at the end of 2008. In spite of the fact that minimal liquidity was visible even then, an unrealistic budget was adopted in 2009 which relied upon economic growth of 2%. The fiscal policy did not envisage a suitable solution for decreasing public consumption, and the antirecessionary measures implemented by the government in the spring of 2009, were not successfully implemented, nor effective. Simultaneously, monetary policy
managed to rapidly stabilise the banking sector. It controlled price stability and the exchange rate, thereby contributing to the macroeconomic stability of the country. As financing on foreign markets became ever more impossible at the beginning of 2009, by May the state covered the budget deficit and the refinancing of foreign debt mainly with loans from local banks. Although the central bank provided additional facilities to banks for this purpose in order to avoid the effect of squeezing out the private sector, it nevertheless occurred, and undermined the liquidity of the real sector of the economy. Even though state demand on the local financial market did not increase by the end of the year, bank lending activity was constant in relation to the private sector. In November, personal loans amounted to €0.48 billion, whilst loans to the corporate sector were only €0.27 billion higher, compared with the end of 2008, she pointed out. She added that due to the inefficient anti-recessionary measures, virtually unavailable loans at high prices, the full force of the entire
situation fell on the production sector of the economy, which is now registering increasing illiquidity. Negative GDP trend after 10 years In these circumstances, she pointed out, the dynamics of total economic activity started to slow in the second quarter of 2008. However, since 2009, a negative GDP trend has been noted for the first time in 10 years. It was highest in the first quarter, lessening in the second and third. Consequently, total economic activity decreased by 6.2% during the first 10 months. In her opinion, the attempts to resolve the economic crisis became more serious with the third budget rebalance at the end of July. Even though the measures taken were directed towards stabilising public finances and not towards relieving companies, and even though they were somewhat overdue, a window of opportunity had been created for designing and implementing more efficient measures directed towards decreasing public consumption, thus bringing relief to the real economy and
salvaging companies with better prospects, says Belošević. She also pointed out that the budget for this year still does not contain those elements that are important for survival and for exiting the crisis. The elaboration of the programme for economic assistance is set for the beginning of this year, when the government will reach its decision regarding the measures for economic recovery and development, and the intention to participate in establishing funds for economic co-operation. Although these measures have still not been elaborated upon, they do bring a certain degree of optimism to companies. Jasna Belošević Matić concluded that problems for the Croatian economy make it hard to predict when such negative trends in Croatia will halt and recovery begin. This, she points out, depends on many factors but primarily on the efforts of the authority in power, in terms of a new economic policy, the pace of adjustment to global trends, the dynamics of concluding entrepreneurial reforms and the restructuring of the economy.
4 INTERVIEW
Privredni vjesnik Year III No 0094
KREŠIMIR ROŽMAN, STATE SECRETARY FOR LABOUR
WORLD BANK DEMANDS HIGHER CONTRIBUTIONS TO THE SECOND PENSION PILLAR Loans for further reform of the pension system will be obtained under stricter conditions from the World Bank and by decreasing administration costs for the second and third pillars taire, but also due to a horizontal harmonisation with previously passed laws that had partially regulated the substance of this law. Now, the amendments need to be elaborated upon naturally, in co-operation with social partners. In my opinion, we should do two things. Firstly, we should follow up on the implementation of the new law in order to identify possible problems and obscurities which need to be resolved. Secondly, and most importantly, we should agree on the goals these amendments wish to achieve. Without this, there is no purpose to change what we now have.
Jasminka Filipas
A
fter the State Secretary for Labour, Vera Babić, resigned in December 2009, the new Minister of Economy, Đuro Popijač, appointed Krešimir Rožman, a lawyer at the Association of Croatian Unions and editor of Radno pravo magazine. His new duties, as well as changes that Croatia might expect in the area of social policy and employment, gave Privredni vjesnik the opportunity for a discussion with the new State Secretary for Labour. We should have received a loan from the World Bank for pension system reform, but it laid down certain conditions. In its loan contract, which still needs to be discussed in parliament, the World Bank laid down stricter conditions for early retirement pension. They included raising the age level for women, decreasing privileged pensions, the gradual convergence to a general pension system, increasing the contribution rate to the second pillar, and reducing administration costs of the second and third pillars during the phase of accumulating contributions and payment of pensions. There were significant disputes over the new Labour Law, which will need to change again. Do you feel this new changes are absolutely necessary? According to the government conclusions from October 2009, the Law will see further amendments made in agreement with social partners. New amendments to the Labour Law have been made in order to harmonise this law with acquis communau-
The level of pensions depends on contributions What do you think should be done regarding both pensions and social policy? We need to expect harmonisation of conditions for the pensions of both men and women. We also need to anticipate different relations between early pension and retirement pension, with the goal of preserving as many workers as possible, and to examine the level of privileged pensions. Future solutions should be primarily linked to the level of pensions in addition to paid contributions. People who have been working for over 40 years should be especially encouraged. It is therefore considered that the users of retirement and family pensions should be given the possibility of working on a labour contract, in addition to using their pension. Regarding social policy relating to this Ministry, it needs to be reviewed and implemented separately from the pension system.
Employers have been saying for years that workers are overprotected, that it is difficult to let them go, and that the existing Law on Labour is a big obstacle to a more rapid employment process. Is that valid? It is a fact that the process of cancelling an employment contract is complex, and that it is not easy to let a worker go if you want to abide by the law. It is a different matter if the Law is breached, and the procedure, as well as the reasons for letting the worker go, is not respected, which has quite often been the case with some employers. Naturally, such disputes would be lost. However, workers would be unable to relax, since the company could expire. Will other laws require change? Yes. By the end of the year we will have to introduce amendments to the Law on Safety at Work. At the moment I cannot say what changes will occur, but I do know they will tend towards the maximum protection of workers, in addition to decreasing costs for employers.
www.privredni.hr Business & Finance Weekly
5
Analogue TV shutdown
THREE REGIONS TRANSFER TO DIGITAL TV 90.8% of the general public received a digital signal at the end of last year Boris Odorčić
T
ransmitters of national television in the counties of Istria, Primorje and Gorski kotar will switch to being fully digital, on 26th January. The broadcasting of television programmes from HRT1, HRT2, Nova TV and RTL will cease to be analogue simultaneously with this transition. The complete shut-down of analogue television in Croatia is scheduled before the end of this year. For some time, programmes from local and regional stations will continue to be broadcast, using analogue signals, but also the experimental digital signal, so they could also switch to a fully digital state during the year, according to a statement from the Croatian Post
and Electronic Communications Agency (HAKOM). 135,075 vouchers taken up Igor Lučić, State Secretary of the Central Office for e-Croatia said
ELKA
last week that €8.36 million has been set a side for about 1.1 million vouchers, (worth €10.25) through which the government is partly subsidising the purchase of digital receivers.
These are not budget funds, but rather the difference between income and expenditure of HAKOM, pointed out Lučić. However, the budget will cover €0.26 million, which will be spent on a campaign providing information on the transition to digital television. In Croatia, 90.8% of the general public have had digital signal coverage since the end of last year, and 135,075 vouchers have been taken up. According to the Central Office for e-Croatia and the IPSOS Plus Agency, 27% of Croatian households have been receiving their signal using a terrestrial digital receiver, with 18% receiving a signal through a stand-alone receiver, and 9% through a digital receiver fitted inside the set.
TRADE AND CRAFT BUSINESSES
High-energy cables More favourable loans a priority A trend towards closing trade and craft organisations and reducing the number of employees is to be expected this year, if the government does not accept at least one third of the proposed anti-recessionary and development measures developed by the Croatian Chamber of Trades and Crafts (HOK). The Zagreb company Elka kabeli has opened a new plant for producing medium and high voltage energy cables. The investment is valued at €6.85 million, coming from private funding and the credit programme of Croatian Bank for Reconstruction and Development from funds set aside by the European Investment Bank. With its new automated plant, in which the company’s present workers have been distributed, Elka has become one of rare world cable producers, capable of producing energy cables in excess of 36 kV.
The new line for producing cables up to 110 kV is located in a facility covering 1,830 m2, whilst the installed equipment has been imported mainly from the EU. The CEO of Elka kabeli, Darko Belić, pointed out that this is the first significant investment by the company in the past 22 years, and that it will preserve jobs after a difficult 2009. Elka produces around 25,000 tonnes of various types of cables each year, and exports some 50% of its production with a value of €25 million. The new plant was opened by the Croatian Prime Minister, Jadranka Kosor. (D.Ž.)
This statement recently was made by Mato Topić, President of HOK, stressing that last year the number of trade and craft organisations decreased by over 7,000 as a result of the recession, and the number of employees by some 14,000. Topić believes that
a further reduction in the number of such organisations can be prevented, through amongst other methods, by decreasing parafiscal duties and granting favourable loans. HOK is proposing that newly opened trade and craft units should be excluded from paying taxes on income during the first three years of their operation. He pointed out that the crisis is not only caused by recession, since the trend started in 2004. Hence the reason why the Faculty of Economy in Zagreb will make an analysis of conditions covering the period 2004 to 2009, which will serve as guidelines for the strategy of their development and recovery. According to HOK, the state should set aside at least HRK100 million from the fund in order that entrepreneurs could more easily obtain loans under more favourable conditions. (E.D.)
6
Privredni vjesnik Year III No 0094
CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR
4,673018 4,917705 5,702691 4,957850 8,368399 5,150558 7,288039
Source: HNB
EUR
Croatia’s credit rating confirmed at BBB and A-3 Standard&Poor’s rating agency has confirmed Croatia’s long-term BBB and short-term A-3 credit rating, albeit with negative predictions. The evaluation is based on a considerably higher GDP per capita, the stabilisation policy of Croatian monetary authorities and reforms regarding EU accession. The weaknesses concern high private sector debt levels, slow structural reforms for increasing competitiveness, and the fiscal system, as well as a significant government dependence on the tourist sector. Start of the construction of the Lumini shopping centre The Norwegian investment and development group Verdispar has marked the beginning of the construction of a shopping and entertainment centre Lumini by laying the foundation stone in an entrepreneurial zone near Varaždin. Lumini will be the first regional third-generation shopping centre, scheduled to open in the spring of 2011. This will be the largest centre to be built in northern Croatia, said Erik Mohorović, CEO of Verdispar in Croatia. Croatian companies above EU average according to internet sales In 2008, Croatian companies achieved 14% of income through internet sales compared with the European average of 12 %, according to results from a Eurostat survey. The survey on the use of information and communication technologies in 2008 was conducted in 27 EU members, Croatia and Norway. Data on the average share of income achieved through internet sales in 27 EU member countries does not include Belgium. As with Croatian companies, Hungarian companies also achieved 14% of income through internet sales.
USD
5.20
19.1.
20.1.
21.1.
22.1.
23.1
CHF
4.97
7.30
5.16
4.96
7.29
5.12
4.95
7.28
5.08
4.94
7.27
5.04
4.93
5.00
7.26
WEEK ENDED JANUARY 25, 2010
::: news
7.31
19.1.
20.1.
21.1.
22.1.
23.1
4.92 19.1.
20.1.
21.1.
22.1.
23.1
ANALYSIS
6% fall in GDP in 2009 In the third quarter of the previous year, GDP registered a decrease of 5.7% year-on-year
A
ccording to estimates from the Central Bureau for Statistics, GDP in the third quarter of the previous year showed a decrease of 5.7% yearon-year. Compared with two quarters during which the fall came in at 6.7% and 6.3%, the slow-down in the third quarter was anticipated and mainly due to the low statistical base of the third quarter of 2008. This slow-down was mostly highlighted by the most important component in GDP – personal consumption. After personal consumption had plummeted by almost 10% during the first half of the year, the third quarter resulted in a 6.9% decrease. Part of this decrease was influenced by the low base of the
same quarter in 2008, when personal consumption increased by only 0.4%, but also a higher level of consumption by the general public in the summer and early autumn, due to the tourist season, and preparation for the new school year, points out Ivana Jović, PBZ analyst. She added that for the first time, after 22 consecutive quarters of growth, state consumption registered a 0.6% fall year-on-year. Imports of goods and services plummets by 23.5% There is still positive contribution to GDP from nett foreign demand, although not at such a level as during the last two quarters. Exports of goods and services decreased by 17.6%
GDP, prices (2000. base year) 8,0 6,0 4,0
4,2%
4,2%
5,5%
4,7%
2,4%
2,0 0,0 -2,0 -4,0
q/q-4
-6,0 -8,0
Annual growth level -6,2%
2000.
Source: CBS
2005.
2006.
2007.
2008.
2009.
year-on-year, similar to the first half of the year. However, considering the exports of goods and services (due to the tourist season and the huge fall in tourist revenue), it had far greater significance in the third quarter, than during others. The negative effect on the total GDP was significantly greater, she added. She also pointed out that at the same time the import of goods and services registered a 23.5% fall, which is somewhat less than the previous three month period. As high-frequency indicators, for example movements in retail, industrial production and construction work from October until November have fluctuated significantly from the movements registered during the previous three quarters, we do not expect any significant recovery in local demand, or any significant changes in nett foreign demand, which should give a somewhat more positive contribution to total GDP than had been the case in the third quarter. In the fourth quarter of 2009, all GDP components should continue to reduce their falloff pace, but mostly due to a low statistical base of the same quarter in 2008. We estimate that overall GDP reduction in 2009 will be around 6%, ventures Ivana Jović. (V.A.)
www.privredni.hr Business & Finance Weekly
WE PRESENT 7
PROLIGHT, ZAGREB
Light at the end of the tunnel
IVICA I MARICA, KARANAC
A Baranja-style fairytale
Despite falls in income, companies did not lay-off workers but chose to temporarily cut back on new investment
S
aving is certainly good but can have negative consequences. This is well known to companies with significantly decreased income through the introduction of savings measures within state institutions and companies, and in many private companies. One such is the Zagreb-based company Prolight which offers the rental, design and programming of special lighting effects. According to the Director Hrvoje Šimić, Prolight’s income has decreased by over 50% since the end of 2008, when the former Prime Minister ordered general savings, and his policy has since been elaborated further by the current Prime Minister. As the company was not involved with the recently concluded presidential campaign, there was no effect on income growth. Notwithstanding the decline in income, Šimić points out they did not lay-off their workers (they currently have four employees and all have a technical background) but preferred to temporarily turn away from any new investment in equipment, although in the past this has been necessary for their development. Fortunately, Prolight already uses the full range of high-end professional equipment. As is the case with most entrepreneurs, es-
On their farm the Piljić family want to show visitors local traditions in a local atmosphere and with local food pecially small and medium, the biggest problem for Prolight is increasing illiquidity, confirms Šimić. Illiquidity – the greatest problem Payment deadlines range from three months and more, to those that do not pay at all. Prolight tried to collect their debts through factoring, but with no results. Šimić says that enforcements do not help, as when they pass authentication from the public notary, the enforcement debtor usually files an appeal on any grounds and the entire case is referred back to court. Šimić says they have been waiting for their first hearing for over a year. They have managed to collect some of their debts by compensation, but they lose on value. Although government officials say economic recovery will be seen during this year, Šimić does not believe it. He is sceptical to the point where he is expecting 2010 to be worse than 2009, and the the first signs of any recovery not until 2011. Recovery is slowed by fierce competition, since there are some ten companies in Zagreb offering services similar to Prolight, and the small market has decreased drastically during the recession. (D.Ž.)
N
ada and Marko Piljić from Osijek traded their fast urban lifestyle for the idyllic countryside of Karanac. They created a farm called Ivica i Marica (Hansel and Gretel) in a picturesque village of Baranja, uniting their desire for an oasis of peace with their love of nature and animals. They enjoy sharing their dream with visitors, offering them hospitality on the farm, which exudes an old-time atmosphere, and offers comfort to the modern visitor. “Having a desire for our son to grow up in a healthy environment, we found what we wanted in Baranja. We fell in love with Karanac at first sight. Now, we wake up to the sound of roosters and bells from the village church. We listen to the birds’ singing, the dogs run around us and we enjoy the view of our horses in the paddock. Overall, we live happily, spending our days on Ivica i Marica, says Nada Piljić, pointing out they try to fulfil their visitors’ wishes, and provide them with an unforgettable experience of Baranja, which is only now becoming a tourist destination. The ethno-village Karanac plays an important role, specifically for its large number of well-preserved and populated traditional Pannonian houses surrounded by ethnic aspects of everyday life
from olden days - ploughs, carriages and mangers. Bringing tradition closer to visitors On their farm, the Piljić family want to show visitors local traditions, local accommodation and serving local food. The house which accommodates 20 people is equipped with handmade furniture from sanded oak, achieving an effect of antiques blended with modern equipment. They have two large rooms for 20 or 50 people where they hold various celebrations and business presentations. “All tourist-related workers in Baranja should join together. We send our visitors, who come from various parts of Croatia and abroad, to visit Kopački rit, Tikveš, the winemakers of Baranja and other farms. We also recommend local restaurants, canoeing, and tours in off-road vehicles,” says Nada Piljić. She mentioned they are planning to increase their animal kingdom, which includes five Lipizzaner horses, Croatian shepherd dogs, chickens and geese. They intend to build a barn for all types of domestic animals, primarily intended for children. They are also planning to build a replica of the gingerbread house from the fairytale of Hansel and Gretel, as well as a souvenir shop and sport areas. (E.D.)
8
Privredni vjesnik Year III No 0094
CARNIVALS IN CROATIA
Masquerade - the fifth season of the year Masquerade events nurture and develop a centuries-old Croatian tradition
Sanja Plješa
A
nnual masquerade events nurture and develop a centuries-old tradition. Carnivals are especially important in the Kvarner region, but also in the north-west of the country, especially in Samobor, which becomes a Free Masquerade Republic from 26th January, until Tuesday, 16th February, when the “Prince Fašnik” will be put on trial. On the other hand, masks have already taken over the keys to the city of Rijeka. According to the Tourist Agency, Rijeka is the capital of masquerade, and
this period is called the fifth season of the year. It is similar in Opatija and its hinterland. In the old city of Kastav the Road to Kastav (Pust va Kastve) has begun. “The carnival is an event going back several centuries. It fascinates everyone with its authenticity; those who appreciate such non-commercialised events,” said the director of the Tourist Agency of Kastav, Dolores Kukurin, adding that Kastav is the only one that has been granted a Carnival Statute. The annual 352nd Carnival of Senj will take place this year. The carnival started in Senj on 9th January (traditionally every
first Saturday after Epiphany), and will last until 16th February. There will be six thematic carnival events held by the final day. According to tradition, which requires fully masqueraded masks, awards will be given to the most magnificent
er for Europe stands at €11,699, representing a decline compared with the previous year, when it stood at €12,500. Croatia ranks 27 with € 4,800.
still do not, but are convinced they will. Some 5% think the company they work in will not be hit by the crisis, whilst 2% say it has had a positive effect on their business. Half of responses showed that individuals believe the crisis will last for another year or two, with only 7% who think the crisis will end this year.
carnival groups, says the director of the Senj Tourist Agency, Marijana Biondić, pointing out that in Senj, every other weekend in August, a summer carnival takes place, which draws a significant number of tourists to the city.
Bell-ringers scare away winter Over the whole of the Kastav area, and almost the whole northern Adriatic region, the tradition of bell-ringing has been preserved. The beginnings of this custom go back to the pre-Christian era, when masked people carrying bells would visit villages, scaring away winter and evil spirits, summoning spring. It needs to be mentioned that zvončari (bellringers) have been included on the UNESCO list of world non-material cultural heritage.
::: news Purchasing power of the average Croat is €4,800 The annual purchasing power of the average Croat stands at €4,800, which is 40% of the European average, according to the latest Gfk research. Purchasing power represents the sum of all available financial means on an individual basis, or the nett income of the general public, and is one of the most significant indicators of consumer potential. The sale of goods and services directly depends on this level. The average of purchasing pow-
Economic crisis hits 82% of companies The economic crisis has hit 82% of Croatian companies, according to a survey conducted by MojPosao and business.hr in December 2009. Almost 82% of responses indicated that they feel the crisis consequences in their company, whilst 11% said they
Successful representation of Croatia Croatia was presented at the biggest Austrian tourist fair held between 14th and 17th January
in Vienna, according to Ranko Vlatković, Director of the Representation of the Croatian Tourist Agency in Austria. Croatia is popular, said the Director of the Vienna Fair, Mathias Linbeck, describing the Fair as a tourist barometer for this year. Vicinity will play an important role this year, those destinations that can be reached by car in only a couple of hours (for example, Croatia, Italy and Greece). I think Croatia finished the Fair as a winner, proven by the interest of visitors, opined Linbeck.