Nadan Vidošević: A new investment cycle is ahead of us, in which Turkey and Russia, should become serious strategic partners
Interview: Mustafa Rifat Hisarcıklıog˘lu It is clear that political consensus on Turkey’s EU membership is lacking
Dark intrigue and sweet secrets of Zagreb Actress guides visitors ts through former streets of carnal pleasures
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Croatian Business & Finance Weekly Established in 1953 Monday / 17th September / 2012 Year V / No 0213 www.privredni.hr
S U P P O R T E D
Millions of kuna for guidance on motorways
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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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STRONGER TAX DISCIPLINE
The government is planning to reduce state debt by granting motorway concessions. The government will invite applications for the appointment of a consultant to assess the possibility of granting concessions by 17th October. Prime Minister Zoran Milanović expressed his strong belief in the overall positive impact following this decision. “The motorways will remain in Croatian
TAX OFFICE FOR LARGE BUSINESSES Previously, tax supervision covered only 5% of large businesses; now Government has implemented a Tax Office for large businesses Igor Vukić ownership, yet they will be managed by someone who is able to do it more effectively and slash costs. The state will in return receive funds to settle the loans obtained to construct the motorways, loans which are a heavy burden on the budget”, stated Milanović, adding that some of loans have high interest rates and were applied for by the previous government. €0.5 million has been allocated for the consultants who will grant the concessions, whilst their remuneration, provided the procedure is fully completed, can reach a high of €10 million.
round 600 large businesses in Croatia pay 46% of all taxes and contributions. Their total revenue in 2011 stood at €54 billion and created jobs for over a quarter of all those employed. Only 5% of large businesses were covered by the single tax supervisor. Consequently, a Tax Office for large businesses has been established at the Tax Administration following a recent government decision. Its headquarters will be in Zagreb and its jurisdiction will extend throughout Croatia. The introduction of a Tax Office for large businesses is a result of modernisation within the Tax Administration, and part of a pro-
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ject implemented in agreement with the World Bank. According to Slavko Linić, Minister of Finance, the new Tax Office will establish direct communication with entrepreneurs and will also significantly assist tax supervision. Moreover, it will tackle daily uncertainties in business. Large
Budget deficit hovering around €1.34 billion – 3.1% of GDP businesses will be entitled to propose amendments and improvements to the tax collection system. Tax discipline is one of the cornerstones of a new development cycle. Minister Linić presented
the report on state budget revenue and expenditure and pointed out the fact that both remained as planned, irrespective of economic indicators showing downward trends. The budget deficit will hover around €1.34 billion, 3.1% of GDP. In addition, the collection of receivables will be spurred by the implementation of amendments to the Foreclosure Act. Municipal courts will be entitled to implement foreclosures and there are plans for the implementation of specialised foreclosure courts. The financial execution process will be implemented following a court decision, as well as a foreclosure settlement, as opposed to the need for a separate court proceedings thus far.
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Privredni vjesnik Year V No 213
ZORAN URANJEK, Board Member, Harburg-Freudenberger, Belišće
MEETINGS OF CHAMBERS OF EUROCHAMBRES’ MEMBERS (non EU members)
Revival of mechanical engineering HF Belišće, a pinnacle of Croatian mechanical engineering and a producer of high-tech machinery for car tyre manufacturing “What is the current situation in Croatian mechanical engineering?” has been an unanswered question for some 20 years. Large companies at the end of the 80’s, which have ceased to exist or have significantly reduced their level of operations, are usually mentioned in an attempt to provide an answer. The Homeland War also had a substantial impact. Nevertheless, currently, 17 years after that trauma and following a slump in me-
Average employee is under 30 chanical engineering, it has to be concluded that production in this economic sector has been stagnating at an extremely low level and has provided a meagre contribution to the overall Croatian economy. Are we able to provide relevant solutions for the revival of Croatian mechanical engineering, can our prices and the quality of our products be competitive in neighbouring countries, can we compete with the Middle-East? HF Belišće, a pinnacle of Croatian mechanical engineering might provide a satisfactory answer. The company is 100% owned by a German owner and is a producer of high-tech top quality machinery for car tyre manufacturing for the most reputable global car tyre manufacturers such as Goodyear, Michelin, Continental and Pirelli, to name a few. The IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
Turkey and Russia – Croatian strategic partners Krešimir Sočković roatian accession will definitely have negative consequences to the economic attitude towards Bosnia and Herzegovina; however, we must not be discouraged by this. A new investment cycle is ahead of us, in which Turkey primarily, but also Russia, should become serious strategic partners, President of the Croatian Chamber of Economy, Nadan Vidošević, said at the traditional meeting of the representatives of economic chambers, members of Eurochambres, but also non-EU members from East Europe, EFTA and Mediterranean countries. The representatives of 10 countries participated at the meeting: Albania, Bosnia and Herzegovina, Belarus, Montenegro, Israel, Macedonia, Russia, Serbia, Turkey and the Ukraine. They discussed the economic situation and possibilities for co-operation, and a panel Croatia – the Next EU Member – was also held.
C company, which is managed by committed and professional local staff, maintains its place notwithstanding severe competition from China, India or Eastern Europe. There are several drivers of success, yet a top quality product is always imperative. HF Group develops machinery guaranteeing top quality tyres. Hence, customers are prepared to accept higher prices for such products. The company focuses on top quality production at the lowest possible cost and within agreed deadlines. The company follows a clear formula of success: it combines older, well-maintained machinery with cutting-edge highly productive CNC machinery that has been systematically invested into over the last 15 years. Multi-shift work equates to high productivity that eventually reduces overall production costs and fosters competitiveness. Long-term investment in human assets has resulted in an average age of under 30. Constant training provides innovative and modern technological solutions with additional competitiveness.
FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr
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Trade matters Turkish investors are interested in tourism, not only nautical. Turkey is growing rapidly, and needs space to expand. Even though it will also expand into the markets of North Africa and Asia, they see us as a strategic border with Europe, Vidošević said. He also added Croatia will depend on Russia for energy during this century, even in the conditions of liquefied gas development, therefore, we need to create goods for this market also, partly from other countries that will invest in Croatia and use us as a springboard.
Trade between Croatia, Albania, B&H, Belarus, Montenegro, Israel, Macedonia, Russia, Serbia, Turkey and the Ukraine totalled US$4.2 billion in 2011, which is 11.6% of total trade with foreign countries. Therefore, besides venturing onto EU markets, it is of vital importance to preserve economic relations with countries that will remain outside the EU after Croatia joins. Difficult crisis management Croatian accession is a strong message to other regional countries, President of Eurochambres Alessandro Barberis, pointed out. Regardless of the economic and financial crisis inside the EU, the business community needs “more Europe” to be able to go forward, Barberis said. He added the crisis is complex and makes it difficult to manage a community such as the EU. Croatian EU accession and the implementation of economic and political reforms present an example for us, Vice-President of Eurochambres Mustafa Rifat Hisarcıklıoğlu said. The project of European integration is worth fighting for, and Croatia is an example. We want a Europe that nurtures European values; which is open to all those wishing to join the EU and implement necessary reforms. Turkey did much work on political and economic reforms, but there is still more to be done. The EU must remain the main source of inspiration for the reforms and be open to new members, promoting co-operation between regional countries and strengthening material and legal infrastructural regional co-operation, Hisarcıklıoğlu concluded.
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INTERVIEW: MUSTAFA RIFAT HISARCIKLIOĞLU, Vice-president, Eurochambres, and President of the Union of Chambers and Commodity Exchanges of Turkey
It is clear that political consensus on Turkey’s EU membership is lacking In 2010, our economic growth was 9.2%, and 8.5% a year after. The private sector was the generator of that growth. Turkey is one of the rare countries able to make progress in increasing personal income become the member of the EU in July 2013 after countries ratify the decision at a national level.
Krešimir Sočković n addition to Russia, the largest and most important business community included in Eurochambres outside the EU is the Turkish business community. The Vice-president of Eurochambres is Mustafa Rifat Hisarcıklıoğlu, the President of the Union of Chambers and Commodity Exchanges of Turkey (TOBB). He is also the Board President of many companies from the construction, automobile and agricultural food sector as well as international trade, investment and development project management. We talked about co-operation between the two countries and their EU accession.
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Croatia is about to join the EU. What were the problems that slowed Turkish accession? To answer this question, I would have to remind you about the relationship between Turkey and the EU throughout history. Turkey’s relations with the EU started in 1959 when Turkey expressed an interest in integrating into the European Economic Zone. Afterwards, Turkey and the European Economic Community signed an Accession Agreement that entered into force in 1964. This document envisaged Turkey’s membership in the European Economic Community. In 1996, a Customs Union was established between Turkey and the EU on the basis of this Agreement, which entered into force that same year. In the meantime, Turkey applied for full Union membership in 1987. Turkey was granted the possibility for full EU membership in response. In December 1999, Turkey was officially recognised as a candidate country for EU membership, and in October 2005, it opened negotiations, at the same time as
We see several reasons why the accession process slowed. We know the main reason is political Croatia. Thirteen chapters have been opened to date, and only one has been temporarily closed. It seems the process has almost completely stopped. We see several reasons why the accession process slowed. We know the main reason is political. Despite the initial series of unanimous decisions of EU member countries, we are now aware the political consensus on Turkish membership is lacking. This is the main reason. I should also add that we, from the business community, regard the accession process as something independent of daily political affairs. This is a long-term and strategic goal.
Decades ago, Turkey clearly decided it wanted to be a member of the EU. When this happens, we believe it will be a situation in which the winners are both the EU and Turkey. How does Turkey view Croatian EU accession? First of all I must congratulate Croatia for its successful accession process. Croatia is now one of Europe’s success stories. It successfully managed the main economic and political problems of the transition process, which a fair share of Central and East Europe had undergone during the past two decades. It is now a pillar of safety and peaceful development in the west Balkans. Croatia proved it was ready and it could accept the responsibility and rights of an EU member country, and the Croatian public supported this project in a referendum. I believe Croatia will
During the past ten years, Turkey was not hit by recession. What was its secret? Macroeconomic and political stability is the foundation of the economic force. We managed to make deep structural changes within the macroeconomic framework, public finance management and its control, the banking system as well as healthcare and welfare. Owing to reforms implemented between 2002 and 2007, we entered 2008 and 2009 with strong public finances and a strong banking system. In 2010, our economic growth was 9.2%, and 8.5% a year after. The private sector was the generator of this growth, and 3.7 million new job vacancies have opened since 2009. Turkey is one of the rare countries that were able to make progress in increasing income growth per capita. Croatia and Turkey have been seeing stable trade for the past few years. Which areas could be improved, and is there any investment interest between the two countries? Trade between Turkey and Croatia stands at US$0.5 billion. However, this does not show our potential. These figures could be even higher. The Turkish-Croatian business council, Union of Chambers and Commodity Exchanges of Turkey and the Croatian Chamber of Economy are working on trade development. Concerning investment, I think they should be promoted together. Energy, infrastructure and tourism are the main areas where we could make the biggest progress in our economic and business relations.
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Privredni vjesnik Year V No 213
( 32.4 degrees Brix
maraska sour cherry quality according to Berlin-based GfL
EU AGRICULTURAL POLICY APPLIED IN CROATIA
A huge comeback for maraska A young fruit grower’s ambition to spur local development Lada Stipić-Niseteo he EU Common Agricultural Policy (CAP) has been applied in the rocky Omiš hinterland. It covers an area of 40 hectares of orchards for which the company Dalmaconsult obtained a 50-year concession. There are plans for an additional 9.5 hectares of organic production of the traditional Dalmatian sour cherry variety maraska, officially recognised as the best sour cherry in the world. The idea behind the project is to spur local development. The requirements of CAP (in force in Croatia from 1st July 2013) have been met – organic production, local sour cherry varieties, top quality and a rural development support programme. The person behind the project is Denis
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“As an economist, I was not able to tell the difference between an apple and a banana. Nevertheless, I was willing to learn” Rubić, Director of Dalmaconsult, and lead partner in the Terra marascae project. Rubić is an economist from Germany but local to the area, with ample experience in EU projects, a Board Member of German-Croatian Chamber of Industry and Commerce (on a voluntary basis) and currently involved in creating a landmark project to encompass the whole local area, bringing together sour cherry growing
and processing and tourism support. He is not interested in providing raw materials for others, since his wish is for a large number of traditional recipes, created for centuries based on the cult of Dalmatian sour cherry, dried or frozen, to be transformed into liqueurs, wines, jams and juices primarily in the vicinity of the orchard. Sour cherry success The orchards will start providing a yield sufficient for commercial processing in two to three years. Rubić has opted for maraska due to its tradition and since people once made substantial profits from this activity in the past, as demand notably exceeds production. Furthermore, the project covers a wide range of environmental features, which require specific procedures and controls, includes beekeepers and local cattle breeders. Surprisingly, Rubić encountered no problems in his communications with ministries and other institutions and managed to meet all requirements rapidly. He has also been co-operating with various experts in an equally successful manner. “As an economist, I was never
able to tell the difference between an apple and a banana. Nevertheless, I was willing to learn”, stated Rubić. Machinery has been used in accordance with the special procedures to transform the inhospitable rocky ground into soil suitable for growing fruit trees. Sour cherry seedlings of the clone ‘Brač 6’ originated in Kaštela and there are plans to include other varieties in the future. He applied for IPARD funds with 5,000 new seedlings during the first extension of the orchard; the second phase was officially opened at the orchard by Masaru Tsuji, the Japanese Ambassador to Croatia, as ‘godfather’ to the project. The project is being implemented with the support from ‘godfathers’ throughout the world. Rubić pointed out the fact that ‘godfathers’ are not solely investors but also have a multiplier effect in marketing and providing moral support and advertising. Rubić has recently sent them an email with an excellent news – the analysis of the leading Berlin-based laboratory for the food processing industry, GfL, has confirmed the top quality of maraska, which had already been
considered the best sour cherry in the world, by assessing it at 32.4 degrees Brix, up from last year’s 28.2. Sour cherry with Brix degrees exceeding 20 is considered top quality. Exports through co-operation Rubić does not fear competition. “We are not even able to meet local demand due to our size. If we manage to involve some 10 young local fruit growers in the project, it will be a huge success. I will provide all the information with utmost pleasure. Croatia needs at least 10 maraska factories to make the best sour cherry in the world globally famous. We can use the same channels through synergies. I was delighted to hear about a new plantation currently being developed near Zadar. We cannot be competitors, we need to strengthen co-operation”, he explains. As a result of his previous work as a consultant in the Biograd area, Rubić is also involved in forming a Local Action Group (LAG) to strengthen the absorption capacity of EU funding at a micro-regional level. He expects to be working with a committed team and anticipates excellent results.
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PHARMACEUTICAL INDUSTRY
With the help from Pfizer, Genera is entering the medicine market Genera is especially strong in Iran, where it holds over a third of the poultry vaccine market, North Africa as well as the former Soviet Union Drago Živković enera Pharmaceuticals are at the same time one of the oldest and newest players on the Croatian pharmaceutical market. The beginnings of Genera date back to 1901 when the Royal Croatian-Slavonic Bacteriological Institute was founded, which later became Veterina, Pliva’s offshoot company. Three years ago, when it was taken over by the attorney, Marijan Hanžeković, Veterina became Genera and started to produce veterinary products and human medicines. The Central Office of Genera is located in Kalinovica with 250,000m2 of production area, development and analytical laboratories as well as warehouses and administrative offices. Today, Genera has over 270 employees and over 220 products exported to 23 countries. They are especially strong in Iran, where they hold over a third of
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Genera has over 270 employees and over 220 products exported to 23 countries the poultry vaccine market, and in North Africa as well as the former Soviet Union. Although their revenue on the Croatian market
is in decline, mainly due to the cattle and poultry farming crisis, their total revenue is increasing as a result of exports, whose share exceeded 50% during the first six months of this year. In the area of human medicine, Genera owns a portfolio of 26 molecules on the basis of which they produce or will produce generic medicines. Three medicines went on the market in June, and another five by the end of the year, announced Board President Marko Smetiško. In 2013, they plan to place a further six medicines in the field of oncology. Joint research Genera made significant progress by signing a co-operation agreement with the American corporation Pfizer, the largest pharmaceutical company in the world. The co-operation includes 12 CNS products (central neurological system) and cardio-
therapeutic groups of medicine that Genera will sell exclusively in Croatia for Pfizer. The patent protection is out of date and they had seen sales revenue of around €1.1 million in Croatia. Genera have so far co-operated with Pfizer on the research of a medicine for preventing kidney failure in chronic patients. This research, as Smetiško says, is going well, although the final results remain to be seen. Genera’s most important customer, as to all others, is the Croatian Institute for Health Insurance (HZZO). Since Genera is relatively new on the market, and HZZO’s payment deadline is 200 days, the company has still not received any payments from the Health Institute. In spite of this, Genera’s plan for the next couple of years is to take up a strong share on the Croatian medicine market, although it does not intend to compete with the largest players, for example, Pliva.
RECORD HIGH PRODUCTION LEVEL AT SAME DEUTZ-FAHR ŽETELICE FACTORY
400 combine harvesters built in 2012 Svetozar Sarkanjac The Županja-based combineharvester factory has been achieving positive business results since the Italian Same Deutz-Fahr Group (SDF) purchased it for €8.7 million from the Slavonski Brod-based Đuro Đaković in 2005; the number of employees in the factory increased from 140 to the current 350 following privatisation. Anticipated production output for 2012 is around 400 combine harvesters, almost one per employee and expected turnover for 2012 is €35 million. Damir Kobaš, Technical Director of Same Deutze-Fahr Žetelice factory has confirmed the positive expectations for this year to Privredni vjesnik. “We developed
our expectations for 2012 based on orders placed at the beginning of the year and thus we expect to see record high production levels in 2012. At the time we planned our production output would reach 320 combine harvesters, but according to the current order book, it will reach around 400 units”, stated Kobaš adding that the best results achieved by the factory were in 2008 when it produced 280 combine harvesters. The Italian owners are ambitiously planning additional investment and development, as well as annual production
output to reach 1,000. Products are mainly exported (97%) to Germany, France, Italy, Spain, Poland, Romania, Egypt, Bulgaria, Serbia and Russia to name a few. Domestic sales saw a slight revival following the product range expansion with eco-combine harvesters as a result of the demand for a more affordable product. Consequently, in 2011 the factory produced some 50 eco-combine harvesters, 10 of which were sold on the domestic market.
Same Deutz-Fahr Group The headquarters of the company Same Deutz-Fahr (SDF) is in Treviglio in Bergamo (North Italy). It is one of the world’s leading producers of tractors, combine harvesters, agricultural machinery and diesel engines. SDF produces and sells its products as SAME, Deutz-Fahr, Lamborghini and Hürlimann brands. The Group employs around 2,500 staff globally, with a sales turnover of €855 million and EBIT of €20.1 million. Production is in three factories in Europe (Italy, Germany and Croatia), one in India and there are plans for expansion into China.
6 WE PRESENT AUTOMATIKA I PROCESI, ZAGREB
Privredni vjesnik Year V No 213
PAMPA TEA, KOPRIVNICA
Homemade tea blends for good health We keep up to date with the global market and are preparing for large companies entering the market in the near term but can rely on our loyal customers
Stable irrespective of static market AIP has implemented a wide range of projects in the shipbuilding sector, drinking and waste water industry and in ventilation systems utomatika i procesi (AIP) was created three years ago. Its core activity is the delivery and installation of products made by the Croatian subsidiaries of Danish
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Milan Stanić is not anticipating short-term impact through EU accession on company activity companies Danfoss Power Electronics and MJK. Milan Stanić, Director of AIP, stated that the company has implemented a wide range of projects in the shipbuilding sector, drinking and waste water industry and ventilation systems. “Our mission is the delivery of top quality products and automation systems and the implementation and use of delivered equipment in various processes. We strive to be recognised as an innovative company employing experts with complementary knowledge and operating in narrow market niches”, emphasised Stanić. AIP, whose annual revenue slightly exceeds €0.47 million, employs two graduate electrical engineers. The idea behind AIP is a result of Stanić’s five-year work experience at Danfoss where he was responsible for the Electric Motor Plant Department in Croatia. “The idea behind AIP is striving to be close to our cus-
tomers, as well as being as agile as possible”, he explained. Business Uncertainty Stanić believes that Croatian market has been noticeably static for some three years, lacking any significant changes or decisions to spark economic activity and growth. “Industry and the construction sector have an immense impact on our activity and hence we need greater effort to achieve our expected results. Nevertheless, our business activities are stable within an uncertain situation which is highly discouraging concerning long-term investment plans”, stresses Stanić. “There are several market segments which are highly active irrespective of the current recession, such as drinking and waste water industry, as well as the solar energy sector”, he stated. He is not anticipating any shortterm impact from EU accession on company activity and on Croatia as a country. “Croatian EU accession is a positive and a costeffective move from a long-term perspective, provided that we are aware of our responsibilities and strive towards greater competitiveness, innovativeness and focus on substantial improvement of the quality of our products and services”, opined Stanić. In addition, he highlighted several company plans and primarily those concerning penetration of new markets, stressing his particular interest in the solar energy market. (B.O.)
he Krznarić brothers from Koprivnica have been involved in the production and processing of herbs for 12 years. They specialise in homemade tea blends and their brand called Pampa čajevi (Pampa teas), comprise 18 different blends available in health food stores and herbal pharmacies throughout Croatia. Tea blends produced by Pampa tea, are in accordance with the HACCP system, with herbs being compliant with GAP standards. The production is continuously monitored, from tea farming, the supply of raw materials and the blending of herbs, to the
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Our teas are produced in accordance with HACCP system and herbs comply with GAP standards final product. Most plants and herbs are grown in locally, some are cultivated in VirovitičkoPodravska County, with sage and winter savory (Satureia Montana) being purchased on the islands of Hvar and Murter. In addition, the company grows 6,000 seedlings of thyme and 500 of elder tree, as well as chamomile, calendula, Lemon balm (Melissa Officinalis), mint, black and
white mallow, yarrow, corn silk, cantarion (Hypericum Perforatum) and field horsetail over an area of 2 hectares. Strictly controlled conditions “We grow our herbs under strictly controlled conditions without using pesticides. Our property is surrounded by forest, which is a natural air filter. Considerable knowledge of agricultural technology, as well as a deep insight into botany and cultivated soil are all fundamental in herb farming”, explained Krešimir Krznarić. In addition, the brothers are developing co-operative production and are currently co-operating with some 30 to 40 producers and collectors of herbs. Fierce competition is not a major obstacle for them and they are prepared to face it. “Our quality and prices are competitive. We keep up to date with the global market and are preparing for the Croatian market to be penetrated by large companies. We rely on our loyal customers who we contact directly at fairs and market places and hence we are well provided with thorough information about their requirements”, stated Krznarić. The company has won an award for best quality from amongst 26 tea producers throughout the Balkan area participating at the Dubrovnik-based Mediterranean Health Food and Medicinal Herbs Fair. (G.G.)
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CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
Kuna exchange mid-rate
EUR
7.45
6,003765 5,872327 7,255947 6,082691 9,193149 5,668205 7,403243 WEEK SEPTEMBER 15, 2012
USD
5.90
11.9.
12.9.
13.9.
14.9.
6.16
7.44
5.85
6.14
7.43
5.80
6.12
7.42
5.75
6.10
7.41
5.70
6.08
7.40 10.9.
CHF
5.65 10.9.
11.9.
12.9.
13.9.
14.9.
6.06 10.9.
11.9.
12.9.
13.9.
14.9.
Producer prices
PBZ ANALYSIS: BANKING
7.8% growth on local market
Corporate deposits down, private deposits up For the first time since the beginning of the crisis a negative rate of private loans (-2%) has been seen at a yearly level. The same concerns corporate loans (-1%), while total loans grew only 2% at a yearly level ata provided by the central bank concerning the banking system for the end of July reflect the already familiar facts regarding decreased personal income, the illiquidity of companies and significantly lower demand for loans. For the first time since the beginning of the crisis a negative rate of personal loans (-2%) has been seen at a yearly level. The same concerns corporate loans (-1%), while total loans grew only 2% at a yearly level. Compared with the end of 2011, they stagnated. In order to explain these figures, it is important to mention the state took over shipyard loans in May, decreasing the amount of loans issued to companies, and at the end of July, the kuna was 4% stronger on a yearly level in relation to the Swiss franc, which reduced the amount of loans to the general public. Regardless of these facts, it is obvious that where companies are concerned, the refinancing trend of foreign claims has been slowing, with no new investment in
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sight. Concerning the household sector, rational behaviour in terms of clearing debts has continued in line with high unemployment (17.6 % in August) and real income falls (nett salaries were 1.3% lower in real value year-on-year during the first six months of this year). As a consequence, companies and the general public have taken out short-term loans, and according to data provided by the Croatian National Bank (HNB), the share of short-term loans to total newly approved loans (quarterly average) increased to almost 80% at the end of March, or 10% more in relation to the period before the crisis, says PBZ analyst Ana Lokin. Deposits 3% up At the end of July, total deposits grew 3% on an annual level (+1% compared with December 2011), where corporate deposits plummeted by 6%, and public deposits increased by 5%. The continuing negative trend of corporate deposits is the re-
sult of problematic liquidity, an increased number of bankruptcies and repayment of tax owing, while the increasing public deposits are based on the seasonal inflow in July, exchange rate movements and interest on savings and to a lesser degree on the increased inflow of new deposits (savings) to the system. It is interesting that high inter-annual growth rate of kuna savings have been seen this year (9%-10%), which Ana Lokin views as the
Foreign currency private savings increased by €0.73 billion result of higher interest rates on kuna deposits that motivated the public to increase their savings in local currency. In terms of absolute amounts, this growth totals only €0.24 billion. As a comparison, personal foreign currency savings increased by €0.73 billion during the same period. (V.A.)
According to latest data provided by the Central Bureau for Statistics, producer prices for total industry grew in August by 5.7% year-on-year, a decrease in relation to July. In August, local prices increased by 7.8% year-on-year, representing a more intensified increase in relation to August 2011 (+6.6%), mainly due to higher energy prices. With energy prices excluded, producer prices actually increased only by 1.6% and by 2% in non-local markets. The largest price increase was in energy prices (+21.2%). Only the prices of non-durable consumer goods increased in August, whilst decreasing in other categories. These data confirm that higher producer prices do not result from a recovery in the local demand, but rather higher energy prices during the same period of last year. In relation to July, producer prices increased by 1.5% on the local market, and by 1.7% on the non-local market. Considering the price growth of energy at the beginning of the year, RBA analysts anticipate the producer prices will remain high. (V.A.)
8 ::: news More new workers in tourism During seven months of this year 14,700 newly employed staff were registered in the Croatian tourism sector, 10% more compared with the same period of 2011. According to data provided by the Central Bureau for Employment, they accounted for a 57% share in the total number newly employed in Croatia. The number of seasonal workers employed in the tourist sector totalled 10,400 or 11% more than in 2011. Istria, Dubrovnik and islands are of greatest interest This year, the tourist company Uniline sold most of its holiday packages to Austria, Slovenia, Germany, Benelux, Italy and Croatia. The most popular destinations were Poreč, Rab, Mali Lošinj, Dubrovnik and Umag. Tourists on average spent seven days in Croatian resorts.
Salt Festival in Nin The salt factory Solana Nin organised the first Salt Festival (Festival soli) which was held recently in Nin. Visitors enjoyed a unique experience of a night salt harvest, culinary and natural beauty products workshops. Daily tourist spending at same level as last year This year Visa conducted another survey on tourist spending habits in Croatia. The survey was conducted in August in Zagreb, Zadar, Split and Dubrovnik on 200 individuals between 19 and 55 years of age. Some 93% had saved a year for their holiday. However, 40% spent the same amount as last year, and 27% planned to spend more than in 2011. The majority did not consider Croatia to be more expensive in relation to other Mediterranean countries.
Privredni vjesnik Year V No 213
THEME WALK CARNAL TOUR OF ZAGREB TO BE HELD EVERY FRIDAY THROUGHOUT THE YEAR
New tourism programme of dark intrigue and sweet secrets of Zagreb brothels The walk is led by actress Petra Težak, who, dressed as a luscious prostitute Margarita from the old age of Zagreb, guides visitors through former streets of carnal pleasures Sanja Plješa rom this month, locals and visitors can see Zagreb from a completely new perspective - Zagreb’s night life reigned by the ladies of the night. Prostitutes worked legally; they had a craft license and contributed to the economy of the capital and a quite vivacious night life. The happy times, between the late 19th and early 20th century are to be revived by the tourist agency Zdenac života in co-operation with the theatrical company Don Hihot. The themed walk Carnal Tour of Zagreb will be held every Friday throughout the year, except in cases of rain or heavy snow. The gathering place is on Ban Jelačić Square, where prostitutes once lured their clients. “The idea for this type of programme came accidentally. I heard of a student from the Vern University who wrote a thesis on the subject of ‘Carnal Zagreb’. I was intrigued by this and started to research this mysterious side of the city. The Tourist Board of Zagreb soon invited a tender for cultural-tourist programmes, and I sent my idea project the Carnal Tour of Zagreb. They accepted it”, said the Director of Zdenac života, Tatjana Kotrulja. The walk is led by actress Petra Težak, who, dressed as a luscious prostitute Margarita, guides
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The history of prostitution is one of Zagreb’s most intriguing stories
No ID - no prostitution! UNREGISTERED PROSTITUTES WERE EXILED The history of prostitution is one of Zagreb’s most intriguing stories. It started when steam baths opened in the mid 19th century. It was believed the water could heal and that it was good for health. However, in addition to looking after their health, the locals had tremendous fun in these baths. Taverns and restaurants with diet (!) foods had also started to open in conjunction with the steam baths. When Roža Aranjoš and her husband Vilim realised the steam baths attracted crowds of men, they spotted an opportunity for a lucrative business. They bought ‘Peter’s bath’ (Petrova kupelj) and opened the first brothel in Zagreb. The owner of the concession for women’s affairs, the popular Madame Aranjoš was one of ten owners of fancy brothels in the city centre. The Mayor at the time decided to introduce order to the oldest craft in the world, which resulted in a Prostitution Regulation (1899). It consisted of 31 articles, which precisely described who could work in brothels. Today’s record show that there were 46 registered prostitutes in Zagreb in 1907. Each had to own a photo ID, and they were required to have monthly health checks. Those that worked in secret were immediately exiled from the city when discovered.
visitors through former streets of ‘carnal pleasures’. She revives the mysterious times and events, telling stories from the late 19th and early 20th centuries. She
intrigues visitors with juicy rumours from the life of ‘ladies of the night’. The Carnal Tour of Zagreb is intended for all visitors over 16.