Construction is barely surviving Due to lack of work on the Croatian market, unfair competition has become favoured by the Public Procurement Act
Ivan Pavelić, Board President, Croatian Forests Croatian forests are the most beautiful and most intact due to satisfactory management
The most endangered plant species and habitats Support for nature protection essential for grassland maintenance
CONSTRUCTION PAGES 2-3
INTERVIEW PAGE 4
HABITATS PAGE 8 2008 2009 2010 2011
Croatian Business & Finance Weekly Established in 1953 Monday / 2nd April / 2012 Year V / No 0193 www.privredni.hr
S U P P O R T E D
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pvinternational pv international C R O A T I A N
C H A M B E R
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E C O N O M Y
FOREIGN INVESTMENT IN CROATIA
Čačić: Russia may invest €1billion Russian energy companies have been invited to participate in tenders for research and exploitation of oil and gas with Sberbank a desirable candidate for the Croatian Postal Bank Igor Vukić ussian investment potential in Croatia is €1billion, according to Radimir Čačić, the first Government Vice-President and Minister of Economy, following a meeting in Moscow where he presented Croatian investment projects. The announcement regarding Russian companies interested in purchasing the Kutina-based Petrokemija has certainly been most widely discussed thus far. Čačić explained that Petrokemija was not explicitly mentioned during the meetings with ministries and that there were enquiries coming from Russian business circles regarding the privatisation of the government share of the company. Similar enquiries also came from Norway, USA and from the European Bank for Reconstruction and Development, as pointed out by Čačić. Russia has huge quantities of gas that is the principal raw material in the production of artificial fertilisers. Supporters of such synergy believe that satisfactory quantities of gas at more acceptable prices would significantly contribute to Petrokemija being more competitive and creating higher profits than in 2011 of around €0.13 million. The company needs fresh capital for capacity expansion. The decision is yet to be made and ideas from Russia will be tak-
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en into consideration, as pointed out by Croatian representatives. The current government is open to Russian investment in Croatia, which, according to Čačić, is an important fact. “We have clearly stated that Russian investors will not have to deal with an embarrassment of obstacles as was the case in the recent past. If Russian investors are welcome in Germany, Austria and throughout the EU, they must be welcome in Croatia”, concluded Čačić. Nevertheless, during the tender for the construction of a new block of the Plomin thermal power plant Russian companies were not provided with insight into tender documentation. In addition to Plomin, there is interest in participating in the construction project of the thermal power plant in Ernestinovo and the expansion of the gas thermal power plant in Sisak, where Russian equipment has already been used as compensation for clearing an old debt. Different stance towards foreign investors Russian energy companies have been invited to participate in tenders for research and exploitation of oil and gas. Nevertheless, there have been some reservations: Croatia will provide the use of pipeline from Slavonski Brod to Omišalj for the transport of oil and oil derivatives and
hire warehouses, yet she will not sell the infrastructure, irrespective of any interest from Russian investors. On the other hand, Sberbank is a preferred candidate for the purchase of the Croatian Postal Bank, which is to be privatised. Sberbank has penetrated the Croatian market by taking over Volksbank and is planning to expand its business activity through new investment. The possibility for a segment of the Južni tok main gas line passing through Croatia has been
reconsidered. In addition, there have been talks on the Croatian implementation of the project of a LNG terminal on Krk and proposals for Croatia to look for Eastern partners for financial assistance. Nevertheless, it appears Russian investors believe Croatia needs to alter its stance towards investors in general. This opinion is shared by ambassadors from western countries, who have shown considerable dissatisfaction regarding the treatment of foreign investors in Croatia.
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Privredni vjesnik Year V No 0193
Damir Ciglar, Director, Imago Advertising Agency
Headache following recession I would be particularly enthusiastic to work on advertising where long-term orientation is not merely declarative and focused on short-term goals e have seen recession, economic instability and uncertainty resulting in lower consumer spending. Thus the question, what is the point of advertising? Perhaps you have cancelled the entire marketing and advertising budget (consequently improving your balance sheet over the short term). We have seen investment into advertising fall for three consecutive years (2009-2011) and the trend appears this will continue through the fourth. Almost no one (or no one of great importance in the business world) has viewed this crisis as a challenge and an excellent opportunity for (appropriate) expansion of market share, or as an opportunity to point out the extreme importance of creativity during the current economic situation. Currently, most advertising appears to be poorly conceived exactly as those washing powder advertisements everyone used to deride. It appears as if all advertisers have hired the same consultants without ideas, telling them what to look like and what to communicate, where even the short-term effects and certainly the branding in their advertisements are questionable. It is a well-known philosophical premise that excellent short-term results generate poor long-term results and vice versa. Yet if you have opted for short-term gain (or inaction), it will surely impact on your brand, if not immediately, then most probably following the recession which will end sooner or later. It is comparable with a
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( 25,000
lost construction jobs
CONSTRUCTION IS BARELY SURVIVING
Fewer legal o
Due to lack of work on the Croatian market, unfair comp interpreting “the most favourable offer” as the “cheap Drago Živković uring the past 30 months, the Croatian construction sector has seen a 40% decrease in the value of work, whilst the total number of workers reduced almost by a quarter, from 108,000 to 83,000. If dismissals should continue, it would create an even larger loss in the qualified work force, which would bring the sector long-term and almost irreparable damage, warns Rudolf Rom, Director of the Construction and Utility Services Department of the Croatian Chamber of Economy. In order to prevent that, investment in both private and public sector must be stimulated, and exports assisted. According to Rom, the priority of the public sector should be projects with more a rapid return on invested funds and projects that contribute to the development of the entire economy, such as energy, water supply, and gasification. The private sector must be provided with better financing conditions and lower interest rates. Concerning export subsidies, a key rôle should be played by the Croatian Bank for Reconstruction and Development that already has two programmes for subsidising construction. The first concerns financing craft capital and investment, and the second a guarantee programme for exporters. According to the construction sector, the potential of HBOR should be tripled, since other states have export banks that stimulate constructors in export. However, HBOR for now does not have the financial strength to keep up with companies in need of guarantees.
D wild night out: if you have overindulged in alcohol, you are going to pay for it the following day in terms of a hangover or severe headache. Similarly, if you are currently allocating fewer funds for advertising (even though they may generate satisfactory results), you will have a headache following the recession. Nevertheless, this situation is not restricted to Croatia. Croatia is too small to create trends or have a significant impact on them; Croatians mainly import ideas. I would be particularly enthusiastic to work on advertising for a brand whose long-term orientation is not just declarative and focused on short-term goals, but for someone with more courage, willing to move away from the expected and not constantly complaining about the tragic situation we are currently enduring.
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 Lučana Banek lucanab@gmail.com Mirjana Cibulka mirjana.cibulka@gmail.com
EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
INTERNATIONAL OPERATIONS Ray Fletcher fletcher@privredni.hr
Complex guarantees Seeking guarantees from nor-
mal banks is not considered a good solution since most banks are in foreign ownership. As a result, local constructors fear banks would give competitors from their country of origin greater insight into the offer of Croatian companies in international tenders. Furthermore, according to the constructors, complex guarantees are required to cover commercial and political risks. In addition to HBOR, insurance companies and state institutions should also become involved, including economic diplomacy. They should take action themselves to become more competitive on foreign markets, which primarily includes joining clusters and consortia. The CCE has also prepared a legal basis for establishing consortia. One has already been established for work in Libya, but failed to start
www.privredni.hr Business & Finance Weekly
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( 40%
decrease in value of construction work
obstacles but more work
petition has become more expressed, favoured by the Public Procurement Act. It turns out the state, pest”, favours illegal work, the grey economy and illiquidity in construction
due to the onset of civil war. In addition to Arabian countries and states in the immediate surroundings, target markets for constructors are countries of the former Soviet Union, especially Kazakhstan, where large infrastructural projects have been announced. The State subsidy programme managed to bring some life back into the Croatian market for residential construction. Through this programme, 1,454 apartments were sold last year, and judging by the great interest, this year almost all envisaged funds will be used for subsidising another 510 apartments. The programme has proven to be successful. Its only flaw is that it is quite expensive for the state since the subsidy per apartment will equate to around €10,000. Constructors hope the state will continue the programme in spite of this, and increase fund-
ing for subsidies in order to relieve the market of thousands of unsold apartments, built during times when housing construction peaked with over 20,000 apartments per year. They are also dissatisfied with the current legal resolutions, regarding the legalisation of illegal building, since the obligation to obtain energy certification as a required precondition for changing the ownership of a legal building, additionally complicates buying and selling, putting even more strain on the real-estate market. They suggest enabling buying and selling of unfinished legal buildings, since according to the present law, they cannot be sold as an investment, considering they do not own a licence for use since they are not finished. Due to lack of work on the local market, unfair competition has
become even more expressed, favoured by the Public Procurement Act, since it prefers offers according to the lowest price criterion. ‘Dumping offers’ thus usually pass which do not even cover the price of materials or infrastructural connections. Work in such projects lacks quality; poorer materials are used; suppliers are not paid and illegal workers hired. It turns out the state, interpreting “the most favourable offer” as the “cheapest”, favours illegal work, grey economy and illiquidity in construction. Projects on hold due to financing One of the rare companies that still manages to operate with stability in Croatian construction is the Stipić Group. However, Board Member, Sven Müller, says this year they will be satis-
fied if they achieve 90% of anticipated income of €80 million, with minimal profit. Thus, their primary goal is to conserve capacity, the number of employees and market presence. The year started turbulently, confirms Müller. Investment is minimal, and contracted projects are on hold since it is impossible to close the financial construction. Restrictive financing brings many problems. Personal capital is demanded more; it is also more expensive, which creates a vicious cycle. Stipić Group currently has around €110 million of contracted work that they are hoping will actually begin. With a lack of public investment, government policy must head in the direction of other financing models, according to Müller. Up to now, projects have been ordered, paid and finalised. In the future public-private partnership will have to be an option, regarding leasing and concession models, in order to open a new wave of investment. Müller does not expect the new models will come to life by the end of this year since they must be designed and then defined by regulations. It is not enough that an individual just ‘happens to decide’ to build a nursery. He must also meet with banks, leasing companies, contractors and users, and then view that enterprise as a multidisciplinary creation. A user cannot be the only one to prescribe conditions and methods of completion. Everyone must ask themselves, otherwise the cycle will not close, warns Müller. However, even when the model picks up and the investment cycle starts, we cannot have any illusions: construction as a sector will never be as big as it was five or six years ago.
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Privredni vjesnik Year V No 0193
( 2 million hectares ( around forests managed by Croatian Forests
%
continental Croatia comprised of forests
IVAN PAVELIĆ, BOARD PRESIDENT, CROATIAN FORESTS
Forests are an entirely different story Croatian forests are amongst the most beautiful and most intact forests in this part of Europe, mainly due to satisfactory management with the relevant ministries. National Parks focus on park maintenance, yet forest maintenance needs to be implemented by Croatian Forests, hence resulting in synergy.
Goran Šikić he state-owned company Croatian Forests manages 2 million hectares of Croatian forests; Ivan Pavelić, the new Board President, is faced with a huge challenge of managing a company with 9,000 staff. The current issue is whether state-owned forests will be sold or granted to concessionaires
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What is your stance on wood within the context of national resources? I believe wood, water and mineral resources certainly need to be considered as national resources. The issue of the sale of the Croatian Postal Bank and the Croatia insurance company is dictated by the market, as they are not national resources per se and are competitive in the market. However, the three resources I mentioned are an entirely different story and need to be considered within this context. Some 47% of continental Croatia is forested, with nearly 78% state-owned. On the other hand, in Slovenia and in Austria the situation is completely different – around 20% of forests are stateowned. What is your opinion of the management of Croatian forests? Croatian forests are amongst the most beautiful and intact forests in this part of Europe, mainly due to the satisfactory management by the state-owned company Croatian Forests. I would like to point out yet again the fact
Every piece of land can become a forest, if allowed a sufficient amount of time that we need to cut down trees, since if forests are cleared, they are healthier and generate better results. According to market research comparing two parallel forests under identical conditions, if you left one for 10 years without management whilst clearing the other in compliance with standards, warehousing the cut wood, and after 10 years cut down both forests, the managed
forest would generate far better results. It clearly indicates the requirement for forest management. What about forests in National Parks which were once managed by Croatian Forests? In my opinion, it is a step backwards. Specific criteria are applied to National Parks, whilst forests are merely one of their aspects. Within that segment, the standards adopted by National Parks do not entirely coincide with forest management as implemented by Croatian Forests. Consequently, we are planning to discuss this issue
How do these two approaches to forest management differ? Forests are not adequately cleared when managed by National Parks and only fallen trees are removed, which may lead to their being overgrown. Every piece of land can become a forest, if allowed a sufficient amount of time. Nevertheless, there is the issue of purposefulness. Croatian Forests manage some areas, yet here our approach differs and our intervention is insignificant, as it is the only ecologically acceptable method of management. In National Parks, such as Plitvice lakes, forests are an accompanying aspect. Nevertheless, I believe these forests need to be adequately managed in order to avoid undesirable incidents such as forest fires. How is forest biomass used in Croatia? There are two cogeneration plants within Croatian Forests using forest biomass and producing thermal energy. There are several more such plants in Croatia. There is the Slavonski Brod-based Đuro Đaković test facility plant, focusing on the development of small, low-capacity plants using forest biomass, since it is an interesting and ecologically acceptable method of producing electricity. In Austria, for example, there are nearly 50 similar plants.
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( €121 million ( €12 million subsidy for pasture land
milk subsidy
Agricultural subsidies
EU regulated subsidies From this year, all farmers wishing to obtain subsidies must submit a request to Agronet no later than May 15 subsidies for last year will be paid by the summer Krešimir Sočković ll farmers, wishing to obtain direct subsidies for this year must submit a Unique Request by May 15 through the Agronet system. This is a protected internet programme accessed with the User ID and password of the recipient of subsidy. As opposed to the earlier system of agricultural subsidies, the new process, in force since this year, includes direct payments and subsidies for rural development measures in the same way as they are paid in the EU. After a farmer receives a subsidy, their work will be monitored by environmental and nature to health and water inspections. In case of violations, subsidies will be reduced depending on the frequency and seriousness of violation.
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A l l subsidies regulated by law will be paid in full, announced Deputy Minister of Agriculture, Vesna Gantner. Overall, the amount will be higher than for the past several years. Subsidies for 2007 to 2010 were paid last year.
Only an insignificant amount was paid for 2011. The Ministry will have enough money for all subsidies mandated under law, and they will be paid before legal obligations so that sowing may be planned and performed, says Vesna Gantner. This year, the Payment Agency will conduct an informative campaign for farmers. All information on the procedure for submitting Unique Request, control and payment of subsidies will be included in the brochure “Manual for Agricultural Farms – How to obtain direct subsidies in 2012” currently in preparation. Payment of incentives The Payment Agency for Agriculture, Fisheries and Rural Development started the payment procedure for half of the incentives from 2011. Due
to the start of spring sowing, the payment of subsidies began three months before the legally prescribed deadline. A total of €121.3 million will be paid for meadows and pasture as well as other types of use, for production related payments – sugar beet, organic and integrated production, aggravated farming conditions, tobacco, olive oil and cattle – nursing cows, sheep and goats, dairy cows and sows. According to the announcement by the Ministry of Agriculture, the remainder of the subsidies will be paid by the end of June. In January and February this year, a total of €32 million in subsidies was paid, where the largest share includes debts for milk – over €12 million. Together with payments in March, a total of €0.15 billion will be paid in the first quarter.
CROATIAN QATAR ASSOCIATION
Qatar creating new opportunities Qatar Air is launching its Zagreb-Doha direct flight on 9th May. The direct connection will initiate and foster more intense business and cultural co-operation between the two countries, according to members of Croatian Qatar Association, which has recently held its first session in Zagreb, taking several concrete steps. Danijel Koletić, Association President, with Aziz Hasanović, Director of Croatian Halal Quality Certification Centre, have signed a contract on co-operation. Halal certification will enable Croatian products to penetrate 44 countries, as Hasanović pointed out.
Halal tourism is strengthening globally, whilst tourists from Islamic countries opt for hotels holders having halal compliance certification. Baška Hotels are currently the sole halal certificate holders, whilst several hotels in Zagreb and in Northern Croatia are undergoing the halal compliance certification process. The construction sector in Qatar is booming, as a result of huge oil and gas reserves and revenues and also due to sports competitions which Qatar is hosting in the near future. Consequently, hotels comprising 80,000 rooms will be constructed for the 2022 World Cup Football Champi-
onship which Qatar is hosting. “Qatar is becoming the largest construction site globally, whilst Croatian representatives with their vast experience in organising the World Handball Cham-
pionship held in Croatia 2009 could provide significant assistance”, opined Koletić. In addition, the Emir of Qatar is likely to visit Croatia again, following the completion of the Rijeka-based mosque. His visits to countries in the region have often led to considerable investment of Qatari capital. A chain of petrol stations has recently started operating in Macedonia, whilst in Albania there has been considerable investment in agriculture. Croatia has not achieved similar results following the Emir’s visits and therefore, according to Koletić, this new opportunity must not be missed. (I.V.)
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Privredni vjesnik Year V No 0193
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
7.54
5,855173 5,646421 6,852503 6,230841 9,005419 5,623580 7,506917
63,219 civil servants in Croatia According to the data provided by the Ministry of Administration as reported by the Trade Union of state and local civil servants and employees, there were 63,129 state civil servants and employees in Croatia at mid-March There were 51,276 civil servants and employees in state administrative bodies, 8,169 in judiciary, with 2,285 employees in the armed forces. There were 496 employees in government offices. 90,000 employees on low salaries Over 90,000 employees in Croatian companies received a nett salary for March 2011 under €330, with some 8,600 employees’ salaries below €253, according to data provided by the Croatian Bureau of Statistics (DZS). The average nett salary of employees in Croatian companies in March 2011 stood at €731, whilst according to statistical data, 55% of employees received the average nett salary of up to €667. Higher unemployment Unemployment in Croatia in February stood at 20.1%, the highest unemployment level since April 2003. Simultaneously, unemployment saw an increase of 0.5% compared with February 2011. The highest share (65%) of newly unemployed were those having been laid off.
5.70
27.3.
28.3.
29.3.
30.3.
CHF
6.26
7.53
5.68
6.25
7.52
5.66
6.24
7.51
5.64
6.23
7.50
5.62
6.22
7.49 26.3.
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USD
5.60 26.3.
27.3.
28.3.
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6.21 26.3.
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THEME SESSION OF THE CCE ZAGREB
More favourable loans for exiting the crisis In co-operation with banks, HBOR approves even shorter short-term loans for micro-company funding with the interest rate depending on entrepreneurial success
e are currently negotiating with banks on extending the grace period and payment deadline of loans according to the A Plus Model, said Director of the Credit Sector of the Croatian Bank for Reconstruction and Development, Ivanka Maričković Putrić, at the theme session of the Croatian Chamber of Economy, Zagreb. The main topics included more favourable crediting via HBOR programmes, designed to exit the crisis as easily as possible and how legal regulations required for business can be accessed through the portal of the Croatian Information - Documentation Referral Agency (HIDRA). This session represents one of many opportunities for our members, but also other economic operators, to access information that
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could be useful in their daily work, highlighted the President of the Zagreb Chamber of the CCE, Zlatan Frohlich, at the start of the assembly in which many entrepreneurs participated. Lower interest rates, longer payment terms The HBOR representative reminded that the capital of the development investment bank is €0.97 billion, and that in addition to 27 credit programmes, the bank offers exporters and others insurance from political and commercial risks, guarantees, accreditation and counselling. She also reminded entrepreneurs that interest rates were reduced by 1% last month with the goal of encouraging new investment in agriculture, fisheries, tourism, industry, energy efficiency, envi-
ronmental protection and renewables. For example, market competitive entrepreneurs (exporting 30% of products), who operate on islands and areas under Special State Care, can obtain loans at a 1% interest rate. Various credit programmes include even shorter short-term loans for micro-company funding, approved in co-operation with commercial banks. The interest rate for these loans depends on entrepreneurial success. Therefore, those facing bankruptcy pay 12.9% interest, and those who are successful pay 4.2%. Chief expert advisor at HIDRA, Tamara Horvat, said their portal includes between 800 and 1,000 addresses of state administrative bodies, databases of international contacts and all legal regulations. (J.F.)
www.privredni.hr Business & Finance Weekly
WE PRESENT
FERAL TOURS, ZADAR
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ZRIKA, ZAGREB
Zrika speaks marketing Due to social networks and new multimedia communication channels the line between PR and marketing has grown ever thinner
Good holiday – the requirement for successful life Local and foreign tourists offered a range of boats to rent as well as hotel and private accommodation n 2004, a group of people with many years of experience in reception and business tourism as well as similar activities, founded Feral Tours, a Zadar based company specialising in renting boats and other vessels to tourists as well as cruising in the Adriatic. Today, Feral Tours has two employees. Local and foreign tourists have the possibility of many rental boats as well as hotel and private accommodation. They may rent sailing, motor and gulet boats as well as catamarans, said Iva Bencun from Feral Tours. Customers are mainly foreign tourists, with the ratio between local and foreign tourists 85:15. The aim of Feral Tours is to become partner with tourists since they wish to offer a perfect holiday. Moreover, a good vacation is a requirement for successful life and work. Therefore, their programme must be appropriate in terms of content, duration and price.
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Premium class We started by offering tourists a wide selection of rental boats, categorising them in several classes with client needs in mind. We created Premium class, which includes newer boats with stateof-the-art equipment, pointed out Iva Bencun. Feral tours promotes its products to all world markets, and company employees speak
English, French, Italian and German. As additional service for visitors who arrive to Croatia by plane, they offer transport services. The vehicles are in company ownership; therefore they are able to offer service packages, providing tourists an even more pleasant holiday. However, as other companies, Feral Tours
The aim of Feral Tours is to become partner with tourists since they wish to offer a perfect holiday encounters many problems in their business. As Iva Bencun noted, some refer to the booking failure to respond on time due to constant changes in regulations, increasing fiscal loads, slow state institutions, a lack of knowledge of institutions in charge of such areas and paid for this work, for example, the Croatian Tourist Board and Croatian Chamber of Economy. In the future, we plan to expand our business. Concerning the main problems in tourism, Iva Bencun pointed out lack of a long-term strategy, weak connections between tourism related companies, for example agencies, hotels and restaurants, underhand competition and unplanned expansion. (S.P.)
fter 15 years of corporate experience in a multinational corporation, Zrinka Makovac decided to use her know-how in marketing, marketing communications and public relations to create added value for her clients. She founded Zrika – an agency specialising in integrated marketing communications and counselling. She notes the agency is committed to creating an image for clients on the market, building it through a carefully thought-out strategy, plans and long-term as well as quality relations with consumers and users. As an agency, we are mainly oriented towards business operators, helping them in the entire process, from setting new communication strategies and plans, creating interesting communication and marketing campaigns to designing their public appearance and relations. Since the company beginning, we decided to specialise in an integrated marketing approach to communications since the line between PR and marketing has never been thinner due to social networks and many new multimedia channels, she explains.
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Completing the story We were interested in the origin of the agency unusual and interesting name. We experienced many failed attempts to register the company name at the Trade
Court that refused our ideas several times. At one point we lost our inspiration and that is when the word zrika somehow emerged. Not only is it similar to my name, Zrika also represents the sound (onomatopoeic sound) of crickets, which we create for our clients. This is how our motto was created: We create your image with every chirp, the Agency director points out, adding how a small cricket became part of their logotype, completing the entire story. Since they started working only recently, they have not employed any workers yet. At the start, we will solve potential increasing business needs through partnerships with complementary associates and
The agency is committed to creating an image for clients on the market agencies. New opportunities and projects will create demand for new workers, and at the moment, it seems this will happen sooner than we expected. As soon as the need for back-up emerges, we will not hesitate. Without investing in people, sales, marketing and public relations, you cannot expect growth and development in the long-term. If you do not invest and take risks, you will not profit, Zrinka Makovac concludes. (B.O.)
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Privredni vjesnik Year V No 0193
THE MOST ENDANGERED PLANT SPECIES AND HABITATS
Grasslands vanish without human care Forest habitats are least endangered but support for nature protection essential for grassland maintenance Sanja Plješa ccording to a global study on endangered plant species, every fifth specie of the world’s 380,000 plant species is endangered. Nevertheless, plant species in Croatia are not as endangered as in the rest of Europe, as pointed out by Professor Jasenka Topić, at Zagreb Faculty of Science. Population decline in Croatia, particularly in rural areas, has been threatened by many factors arising from human activity, whilst the global situation is much different. According to her, in Croatia there are currently still huge areas of floodplains; many similar areas throughout the
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world were destroyed in the past. The most endangered are fenlands and fen species – typical vegetation found in North and Atlantic Europe, which in Croatia are relics from the Ice Age. Whilst there are many fenland areas in Finland, Sweden and Norway, they have been disappearing as a result of thousands of years of gradual warming and have virtually disappeared in the south of Europe. Grazing lands becoming thickets “It is a natural process. There are fen maintenance projects in Croatia, as it are in our interests to preserve them for as long as possible”, she stated.
Grasslands are also endangered in Croatia; there are none in Baranja and Eastern Slavonia, whilst in Lika and Gorski kotar they have become thickets and forests. This is particularly evident in mountainous areas. She also stated that the last cow disappeared from the area around Velebit mountain in 1971, since there were no grazing lands left which could be maintained solely through grazing. Other methods of protection of grasslands are ineffective and contribute to changes in the composition of the flora. The most endangered types of grasslands are those with minimal yields, usually located on acid and moist soils. They are usually abandoned
due to being cost-ineffective and are impossible to protect without support for nature protection which is common in almost all European countries.According to Jasenka Topić, the most endangered plant species and habitats in Croatia can be found throughout the country; the least endangered are forest habitats, since Croatia, as with the a large part of continental Europe, is primarily a forested area in terms of climate. Mountain meadows and natural vegetation are not endangered as long as they are located in an area with a high mountain climate. Natural habitat varieties of water and swamps are endangered due to immediate human activity.
::: news Further industrial production downturn Irrespective of the absence of official statistical data thus far, a further industrial production downturn is expected for February, following its plunge of 4.9% in January. According to five macroeconomists who participated in a Hina survey, industrial production weakened by 0.8% compared with the same month last year. Nevertheless, two macroeconomists expect a production increase from 0.5% to 1.5%, whilst, according to three more, we will
witness a downturn of between 1% and 3%. Macroeconomists believe the downturn is due to the weakening of European economies, the largest Croatian trade partners, which is also the reason for lower demand for imported products in these economies. Apartment prices down 2,169 new apartments were sold in Croatia during 2011, 6.4% down with respect to 2010. 1,352 apartments were sold in Zagreb, with 817 apartments being sold throughout the rest of the country.
The average new apartment price per m2 during the second half of 2011 stood at €1,540 and was 5.1% down over the first half of 2011, according to the data provided by the Croatian Bureau of Statistics. Consumers still fear recession According to the GfK Consumer Confidence Index, Croatia witnessed stagnation in March. The component measuring consumer sentiment has seen a slight increase, as well as that estimating the current financial status. Nev-
ertheless, expectations regarding income in the near future have gone down slightly and consequently the overall result is index stagnation at a level slightly above the lowest recorded thus far, indicating recessionary fears amongst consumers still prevail.