see magazine 04 by Igor Dakić

april 4rd - april 17th

event horizon / Croatia's Fantastic Duo Weaving a New Deal in media res / Upcoming Elections: Serbia's Fight Club politics / Bosnia & Herzegovina Politicking: Saving Private Komšić

southeast europe · a fortnight in review

a reality check / Montenegrin Tobacco Spring

no.04 / subscription only / 4 th april 2012

destinations / Rijeka: Gateway to the Adriatic...

CROATIA'S NEW DEAL

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april 4rd - april 17th

At a time when a new car must not only have space, comfort, and safety, but also fuel economy, hybrid vehicles present themselves as a logical choice in the face of these seemingly incompatible demands. However, the 3008 HYbrid4 is much more than just a hybrid automobile. Using a unique combination of a diesel engine, which drives the front wheels, and an electric rear-wheel drive, the 3008 HYbrid4 brings additional benefits, such as 4 wheel drive, exceptional fuel efficiency and superior driving dynamics, utilising as much as 200HP. The power train is based on a modern 2.0 litre diesel engine with 163HP. The rear axle is driven by a synchronous electric motor with 27kW peak power, or 37 HP, powered by a high voltage Ni-MH battery pack located under the luggage compartment floor. Even more impressive than the power is the maximum torque figure. With 300Nm of diesel engine, at low speeds the electric motor is able to add another 200Nm, which significantly contributes to driving performance, particularly in off-road situations. Although, at first glance, HYbrid4 seems complicated, in use it is extremely simple and transparent. Surrounding the driver is a modern interior, just as in the classic Peugeot 3008. The only difference is the shifter for the automatic transmission and command for the hybrid drive. The driver is always free to choose between an automatic mode (ZEV, an all-electric mode), 4WD, or a sports mode. In automatic mode operation of the diesel and

electric drive is fully optimised and delivers the lowest fuel consumption of just 4.0 litres per 100 km in combined cycle, while actively adjusting the driver's needs for power delivery, depending on the driving cycle. During deceleration and braking the system uses the vehicleâ&#x20AC;&#x2122;s excess energy for charging batteries, which further contributes to low fuel the future. Inside the driver and passengers consumption. can enjoy a feeling of spaciousness and well ZEV, being fully electric, brings a new dimenbeing, thanks to the impressive glass roof sion to driving, with a completely silent operation that is active up to speeds of 60 kmph. which offers an abundance of natural light.

For cases with a demanding road conditions such as mud or snow, 4WD mode provides additional flexibility and security, with up to 40% of available torque to the rear axle at low speeds. When it is necessary to further sharpen the driving responses and provide greater driving dynamics, the logical choice is sports mode. With the fast gear changes and use of higher engine speeds, the hybrid drive contributes to better allocation of power between the axles for greater stability, which further highlights the advanced suspension of 3008 Hybrid4.

At any time the driver is informed, via a colour display, of not only the drive mode, but the battery status and direction of flow of energy in the system. The high technology theme is reflected in the interior that exudes discreet luxury. Colour display and "head-up" display, switches in the centre console that take inspiration from the aviation industry, instrumentation that is unique to this hybrid, all of this takes the driver and passengers straight into

Active safety, all-wheel drive and the exceptional suspension shared by the 3008 family are combined with numerous safety systems like ABS and ESP, which are specifically optimised to work with the HYbrid4 drive. Because of its unique characteristics, the combination of performance, driving pleasure, comfort and low fuel consumption, the 3008 HYbrid4 offers an ideal solution for those who love modern technology, but it stands out as an ideal business sedan, due to its COÂ˛ emissions of only 104g/km. With features that are not seen elsewhere in the world of the hybrid, the 3008 HYbrid4 opens a new chapter in the automotive world.

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april 4rd - april 17th

content

introductory epistle

Croatia's New Deal

fortnightly news

The Economy Of General Interest

06 08

in media res

Upcoming Elections: Serbia’s Fight Club

politics

B&H Politicking: Saving Private Komšić

a reality check

Montenegrin Tobacco Spring 16

editorial

Money And Ethical Dysfunction... Especially In Politics

the industry

JAT - Get Profitable or Perish

legal & regulatory

All Change in the EU Audit Market? 18

event horizon

The Fantastic Duo Weaving a New Deal

investments

British-Croatian Business Forum social economics

YES We Can

28 32

real estate

Rextra, Rextra, Read All About It! Rexpo That Is…

fairing about

14th Croatia Boat Show: The Big Guns Are Coming to Split

destinations

Rijeka: Gateway to the Adriatic… And Beyond 42

good stuff

Easter Pleasures in Four Strokes

to do list

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april 4rd - april 17th

introductory epistle

Croatia's New Deal

omewhat oddly – in thematic keeping with the Peugeot ad on the opening spread – this issue is also a hybrid, for we too have been travailing with two propulsion systems. On the one hand, there was the need to put into context all those things – the good, the bad and the ugly, as the old spiel goes – that took place across the region in this past fortnight or thereabouts. Unlike in late February, when we all but complained about the absence of groundbreaking events, this period was more than eventful, what with pre-election campaigning heating up in Serbia, what with Željko Komšić revoking his irrevocable resignation from SDP B&H, what with the anti-Government protests in Montenegro...and so on. It was Balkans more or less as usual, which, journalistically speaking, demands that one use a very specific propulsion system: at once hectic and cautious. In contrast – though I must admit this may well have been by sheer accident – the amount of positive energy that the Croatian crew of this publishing endeavour witnessed in practically all the professional encounters they have had over

the last two-odd weeks was...well...surprising, to say the least. There is optimism even in those industries where one has grown accustomed to looking for it last: among the developers, event organisers, marketing and automotive execs, investors. Even the public officials and office holders we spoke with seem to have loosened up, as if expecting better days ahead. As we will discuss later on in this issue, there is something in the air – a „New Deal“ of sorts, perhaps – and no, I do not believe that all of this can be attributed to the workings of the Spring. Some of it without doubt, but not all of it.

That said, I can only hope that our readers in other regional centres will forgive us for dedicating more than a half of this issue - as many as thirty pages - to Croatia alone. The idea was to ride with the positive trend – as we perceive it – to give an additional kick, howsoever small, to this subtle but detectable forward movement and, who knows, hope that it might also rub off on those who haven't felt the same exhilarating emotion. And this, anyone who has ever worked in the media would tell you, demands a completely different propulsion system. We have all of us, especially in the Balkans, forgotten how to write about positive things, or how to write positively. It has become all but a lost art. As far as I am concerned – and as far as it concerns me – for the very reasons explained above this has not been an easy introductory letter to write. I too am rusty, but can only be pleased with it. And, as we started with a note on Peugeot, we might as well end with another note on Peugeot. It is all about a correlation of Motion and Emotion, and in this instance the said correlation leaves very little to be desired. Let us hope it lasts.

impressum

editor-in-chief Igor Dakić executive editor Lee Murphy lee@see-magazine.eu graphic editor Ivor Vinski

contributors Stephen B. Young (editorial) James Thornley (regulatory) Ivica Jujnović (real estate) Vicenco Blagaić (yachting) Ivana Marić (politics)

art editor Stiv Cinik

photography Mens-Libera Photo, Shutterstock, IStock, Wiki Commons unless otherwise specified

country editors Dylan Alexander (Slovenia) Milan Milošević (Serbia) Aida Tabaković (b&h) Miroslav Tomas (lifestyle)

printer Tiskara Radin; Gospodarska 9, Sveta Nedelja, Croatia

issn 1848-4107

director Igor Dakić igor.dakic@see-magazine.eu sales & marketing (cro & slo) Miroslav Tomas miroslav.tomas@see-magazine.eu + 385 95 63 99 702 sales & marketing (serbia) Miša Milošević misa@see-magazine.eu + 381 63 224 223 sales & marketing (b&h) Amela Tanović amela@see-magazine.eu + 387 63 691 393 publisher Mens Libera Media d.o.o. Ksaver 215, 10000 Zagreb tel/fax +385 (0)1 46 77 165

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fortnightly news / the economy

swings & roundabouts for ikea

pivovarna laško announce major losses

While ikea was announcing that they were due to return to Belgrade after a 20 year absence, they were also shelving plans to expand in Croatia. Citing an unfavourable economic environment as the reason for postponing their expansion, ikea were quick to point out that they were merely delaying opening their 2nd and 3rd stores in Croatia, and that they were committed to the region.

Although sales are up, the Slovenian brewery Pivovarna Laško has announced that they saw heavy losses during 2011. These losses are as a result of interest on their financing, which cost in the region of 15 million Euros alone, as well as a 17.5 million Euros loss which was due to the falling price of stock in their holdings. Laško own stock in Mercator, Delo, and Probanka. Mercator had sought to buy out Laško late last year in an effort to prevent Agrokor from forcing a takeover. Both takeovers failed for a number of reasons.

slovenian government acts to reduce public spending

croatian rich list announced

a step in the right direction The largest (for the time being) solar power plant in Croatia has just come online. The plant, set up in Kukuljanavo near Rijeka, is situated on the rooftop of the Ma.Co.T, a salt processing company, and was built by Adria Sol (who also have part ownership of the building). According to Adria Sol, the plant has a power output of 283kWp and is expected to produce in the region of 300kWh of electricity, enough to power over 100 family homes. While Adria Sol will need to wait roughly 6 years before they see a return on their 500,000 Euro investment, they are clearly confident that they are moving in the right direction: they plan on opening a second, larger plant, which will produce 315kWp, near Trilj in Dalmatia, within the coming months.

Ivica Todorić, owner of the Konzum supermarket chain, as well as food brands Ledo and Zvijezda, has once again taken poll position in the latest edition of the Forbes Croatian Rich List. Todorić is valued at 500 million Euros. The Besnier family, who own dairy giants Dukat, was second, valued at 240 million Euros, and the Lukšić family came in third with 110 million Euros. Fourth place is occupied by Emil Tedeschi, President of the Atlantic Group and Honourary Irish Consul, with a fortune amounting to 105 million Euros.

idea opens new supermarket in niš Idea, the Serbian branch of Agrokor's retail chain Konzum, has opened the very first 'Super Idea' supermarket in Niš. There are already 40 Idea stores in Niš, but this recent addition is the biggest one by far, with a floor space of 1600m². The opening ceremony saw the ribbon cut by the Mayor of Niš, Miloš Simović, and Idea General Manager Aleksandar Seratlić. Idea used the occasion to donate 300,000 Dinars to the Niš refuge for street kids, as well as pledging a three month supply of food and hygiene products.

The Slovenian Government has announced a seven point plan of cutbacks in public spending. Included amongst the austerity measures are a moratorium on hiring in the Public Sector, a reduction in the privileges available for acting and former public officials, a reduction of severance payments and bonuses and, on top of all of this, a 6% cut to all elected officials’ salaries. It is estimated that these latter savings will account for a 10% reduction in salaries paid when compared to the outgoings of the former establishment.

petrokemija to be privatised? It is widely expected that the Croatian Government will seek to divest itself of the 50.63% stake it holds in the fertiliser producer Petrokemija. While any sale is unlikely to be completed before the end of the year, speculations which surrounded this story were enough to spark a flurry of activity on the Zagreb Stock Exchange. In the days after the story emerged Petrokemija saw their stock prices rise by more than 15%, with almost 5 million Kuna traded.

april 4rd - april 17th

ht launches 4g mobile network The first lte (long term evolution) technology based network has been put into operation by Croatian Telecom (ht). lte, or 4G technology, allows for 10 times faster data transfer then previous 3G networks. For the time being the first 4G stations are located in Zagreb, Rijeka, Osijek and Split, with plans to cover other urban centres in Croatia in due time.

ljubljana airport grounded There are further problems for Ljubljana Airport as both Air India and Ryanair have announced that they will be postponing their flight schedule for the Slovenian airport due to the high cost of fuel. If some sort of compromise is not reached, then both carriers are likely to seek to relocate their routes to a neighbouring country. The loss of Air India’s business will be felt keenly as they were expected to route some trans-Atlantic flights through the Slovene capital. In the meantime Ryanair announced, in an unrelated statement, that they are to begin flights from Montenegro starting in June this year.

thyssen krupp moving into bosnia? Representatives of the ThyssenKrupp group met with the Federal Minister of Development, Craft, and Entrepreneurship Sanjin Halimović, presenting him with plans for a possible entry into the Bosnian market. As one of the world's leading mining tool companies, ThyssenKrupp are interested in modernising the Bosnian mining industry, which would mean the reconstruction of mining shafts, modernisation of exploration systems, and the maintenance and servicing of mining equipment and mechanisation.

adriatic islands to see investment See contributor Paul Bradbury will be pleased to see the varying efforts of tourism lobbying as the UK paper The Guardian has printed a list of Croatia’s most beautiful islands, with Hvar taking the ‘Best Party Island’ spot. Paul has long held that Hvar is one of the finest tourist destinations the region has to offer. Clearly this opinion is also held by those in charge of the purse strings as it appears that the investment fund ‘Arqaam Capital’, from Dubai, have been looking at developing a 5-star luxury hotel and resort worth over 100 million Euros. It is expected that the complex would be managed by a South African company, Kerzner International Resorts, which is owned by Russian businessman Solomon Kerzner. The group also runs similar projects in the Bahamas, the Maldives, Mauritius, Morocco, and Dubai. In addition to the expected boost to the local economy from increased tourist traffic, almost 300 jobs will be created, not to mention the employment created during construction itself. The investment group have said that they are willing to spend extra in order to improve the transport infrastructure in the area.

cooper tires open plant in serbia One of the world leading producers of industrial and off-road vehicle tires, Cooper Tires, has opened a plant in Kruševac, utilising facilities previously owned by tire producing company Trajal. Having purchased the former Trajal property for 13 million Euros, Cooper Tires invested a further 50 million Euros into the plant, creating 700 new jobs. The opening ceremony was attended by US Ambassador to Serbia, Mary Vorlick, and Serbian President Boris Tadić, who stated that such investments represent a model for future Serbian progress.

cačić seeks russian investment Croatian Minister of the Economy and Deputy Prime Minister Radimir Čačić went on an official trip to Moscow seeking potential investment. On the top of Čačić's list are proposals for the privatisation of the state share in the fertiliser industry Petrokemija, as well as the shipyards in Trogir and Rijeka. Čačić met with representatives from Gazprom, Lukoil and Zarubezhneft, hoping to get them to commit to entering the Croatian market.

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fortnightly news / of general interest

public sector over inflated

croatia receives observer status in eu parliament From the start of the month Croatia will have a more substantial presence in Europe. While not a full member of the eu until July 1st, 2013, it will be able to send twelve mps to the European Parliament in the interim. These mps will be granted ‘observer’ status and, while unable to vote, will be permitted to debate legislation and make their opinion known. The twelve individuals will be well looked after for their extra duties, with each mp set to pocket 6,000 Euros (45,000 Kuna) per month.

sanader maintains his innocence The Fimi Media trial made some progress recently as Nevenka Jurak, Branka Pavošević, and Mladen Barišić all pleaded guilty to the charges laid out before them. However, former Croatian Prime Minister Ivo Sanader and former hdz spokesman Ratko Maček stood by their previous pleas of notguilty. While the three who plead guilty have claimed that they funnelled money into the slush fund of the then ruling Croatian Democratic Union (hdz) at Sanader’s behest, the man in question has denied doing so.

voting difficulties remain The contentious issue of the Serbia local and Parliamentary elections continues to confound the un delegation in the region. Contrary to un and eu wishes Serbia has decided to push forward with holding these elections within Kosovo, a territory they still lay claim to. International opinion holds that Kosovo is for all intents and purposes a sovereign state, something which the Serbian politick do not agree with. This, despite a directive from the eu that full Serbian membership cannot happen unless the former Province is granted full independence.

The Croatian Civil Service made the headlines again when it was revealed that they employ over 63,000 individuals. The Civil Service had been under pressure from the media and various other groups amidst conflicting accounts of the exact numbers of people working for the State. Croatia needs to cut the number of workers in the public sector if it is to reach targets set forward in the budget as part of the planned austerity measures.

kosovan feasibility study gets green light The Commissioner for eu Enlargement, Štefan Füle, was in Kosovo recently finally to announce the Feasibility Study. Füle did not mince his words either telling the gathered Kosovans that “this is the path followed by all of yours neighbours and marks the beginning of a new stage in the European Union's relationship with Kosovo.” The study is to determine what Kosovo needs to do in order to be able to sign a Stabilisation and Association Agreement, a small step towards eventually joining the European Union. Some obstacles still remain from the eu’s point of view, as 5 of the 27 member states have yet to recognise Kosovo as a legitimate body.

draža mihailović to be rehabilitated? Proceedings have begun at the Belgrade High Court whereby the Second World War Chetnik leader, Draža Mihailović, might be rehabilitated. Mihailović was convicted, shot, and buried at an undisclosed location as a war criminal by the Communist authorities in 1946. The prospect of rehabilitation would ‘announce’ that Mihailović had been wrongfully convicted. Seen by some as the first anti-fascist insurgent in Occupied Europe, and as a Nazi-collaborator by others, Mihailović served as Minister of Defense in the exiled Royal Government. Although recognised as an ally he only managed to rescue a handful of downed airmen, instead preferring to focus on fighting the Communist Partisans, so as to prevent any plans they might have for creating a post-war Communist state. In this respect the Chetniks have, on numerous occasions, served as an auxiliary force to both the German and Italian armies. Having committed numerous atrocities against non-Serbian populations in the region, Mihailović’s potential rehabilitation has caused quite a stir, as the man is not only perceived as a war-criminal, which is undoubtedly the case, but also as an outright fascist and collaborator.

b&h to follow uskok’s example The March 22nd session of the b&h Federal Government saw a draft of the Law on Confiscation of Property Acquired by Felony or Misdemeanour brought before the House. Federal Prime Minister Nermin Nikšić stressed that it was the intention of the Federal Government to provide the judiciary with the appropriate means to wage an efficient fight against organised crime, especially in relation to property gained through illicit actions. Mr. Nikšić said that it would be necessary to form an agency dedicated to the pursuit of prosecutions brought about by this legislation, modelled on the Croatian uskok.

april 4rd - april 17th

implications of bribery in the republika srpska media Members of the Government of Republika Srpska have found themselves in a position to be charged on suspicion of paying out millions to the media with the intended aim to bribe and control output. President Aleksandar Džombić, Minister of Finance Zoran Tegltija, as well as other members of the cabinet have been named in the indictment which has been filed by the Centre for Humane Policies in Doboj. Over the past three years the Government has donated almost 8 million Euros to the media industry, of which 2 million Euros specifically went towards the financing of five daily and weekly newspapers. The Centre has long campaigned to limit state based interventionist policies where they might lead to corruptive practices.

little done, more to do

bosnian eu ambitions gather pace

Macedonia appears to have more work to do in order to come up to eu standards as their three candidates for the Council of Europe’s Human Rights Committee have been rejected. Despite several qualified individuals putting their names forward, including lawyers, judges, doctors, and University lecturers, the Government chose instead to submit the names of three civil servants. Macedonia has been regularly criticised by the European Union for their treatment of prisoners and other minorities.

Bakir Izetbegović, the Chairman of the b&h Presidency, has declared that b&h would be ready to join the European Union possibly by the end of the decade, if only they were able to focus more readily on what was needed, stating: “It is realistic if we act responsibly, if we do not keep making delays of several years which have put us last in the regional race of countries aspiring to join the eu.”

differences put aside in b&h military protest

janković re-elected as mayor of ljubljana Zoran Janković will be returning to his old position as Mayor of Ljubljana after winning the election with a sizeable 62% of the vote. After being elected to Parliament in December of last year, Janković was obliged to resign from his Mayoral office since Slovenian regulations prohibit any Member of Parliament from holding any other public office. Janković was a front-runner to become the new Prime Minister following the election, but was unable to form a government. The former Mayor returns to his old position, with Janez Janša serving as Prime Minister, the same as when he first took office in 2006.

Men and women who were once sworn enemies and fought each other on the battlefield have come together in unison to protest against their lack of pensions, demanding that the upcoming 2012 Budget address the shortfall. They’re looking for a sum equating to 15 million Euros to cover what has been due since 2010. Vjekoslav Bevanda, President of the Presidency, had demanded of his Ministers that suitable cuts and savings be made in order to try and meet the needs of the veterans, but it was reported that such things would take time, and that no guarantee could be given to the protesters. The Government was shamed into prompt action following the actions of the former soldiers, who proceeded to go on hunger strike. Several were hospitalised as a result. Senad Hubjer, the spokesman for those seeking their pensions, said: “We share the same problem and make the same unified claim… We are, after all, former colleagues who have worked shoulder to shoulder with one another”. While not expected to result in a similar outcome, the Croatian Army is also looking to decommission a number of officers in order to reduce the strain upon the public coffers.

the passport affair A group of six people were recently arrested in relation to the long running controversy surrounding the ‘trafficking’ of Croatian passports. The individuals, who count among their numbers members of the police force, officials from the Croatian Consulate in Tuzla, and some employees from the Ministry of Internal Affairs, have been charged with having sold more than 50 passports during the period 2006-2010. According to the prosecution the group had been using the identities of refugees (Croatian Serbs) who had as of yet not claimed the Croatian documentation to which they were entitled. Each passport fetched between 10,000 and 50,000 Euros. Croatian passports have been used in the past by a large number of the Serbian criminal underground, as well as, infamously, Radovan Karadžić, who used the alias of Dragan Dabić to travel freely across the region and beyond; this despite him being a wanted war criminal for more than a decade. With this being just the latest in a string of such scandals, it must surely be that this recent arrest is nothing more than the tip of the iceberg.

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At the onset of the campaign, one thing is clear: this gamut of political parties, if brought together, would probably make an ideal national â&#x20AC;&#x153;salvationâ&#x20AC;? government.

april 4rd - april 17th

in medias res

Upcoming Elections: Serbia’s Fight Club It’s on, as they say, the campaign is, which means that the jack-inthe-box full of controversy has already sprung open. But even though a superficial glance at Serbia from abroad would ordinarily warrant a sweeping qualification of political instability (on account of Kosovo, if nothing else), the political landscape displays a surprising degree of stability, which means these may well be the least ‘testing’ elections in Serbia since the year 2000. Something seems to have changed in the land of the eagles… By Miša Milošević

he electoral campaign in Serbia has begun with little in the way of surprise and a strong sense of déjà-vu; same faces, same flags, same paroles. It’s all here: political parties presenting programmes and promulgating promises packed in creative solutions, which would be far more suitable for marketing pitches than the serious talk about, say, responsible jobs which we want to hear and which they pretend to perform. In fact, no elections have been so decorated or PR-oriented in Serbia, so far. At the onset of the campaign, one thing is clear: this gamut of political parties, if brought together, would probably make an ideal national “salvation” government and make everyone happy. This turn of events, alas, is highly unlikely.

under crossfire The beginning of the electoral campaign was marked by the standard war of mutual recriminations, which, as you might expect, target only those who would likely fail to become allies and office partners come May. Although there is an exception, and in a true Balkan tradition to boot: the United Regions of Serbia (urs), presided over by Mlađan Dinkić, led a campaign against the Democratic

Party (ds), probably its closest political ally, while sparing Nikolić's Serbian Party of Progress (sns), at least for the time being. The reasoning behind this may lie in the fact that only a couple of days ago Dinkić’s party were under the 5% threshold, and for all intents and purposes about to lose their presence in Parliament. Consequently, urs might need to increase its profile, and their core vote, by differentiating itself from us. Vojislav Šešelj’s Serbian Radical party (srs) is currently only targeting Nikolić’s sns – another instance of erstwhile like minds and party brethren targeting one another – with some intermittent sniping at the Government. We can therefore expect more clashes between these two, now divorced, political groups, with sns drawing additional attacks from further down the polls by the Socialist Party (formerly Slobodan Milošević’s party, now reformed), with which it shares a similar populist platform, and Čedomir Jovanović’s Liberal Democratic Party (lds), the first political outfit in Serbia to have openly “let Kosovo go”. An air of fatalism has always surrounded sns, and although their programmes have always been formulated to suit the needs and ambitions of a large part of the Serbian population, at least on paper, this

same differentiation makes them a lonely rider on the political scene, without any coalition partner, and often bringing pyrrhic election victories and never any real power. Ivica Dačić, the current Minister of Interior and President of the Socialist Party, will surely attempt to keep his voters together; he can do this by simultaneously criticising both Tadić's and Nikolić's parties, going to the very core of the ds election programme. Dačić clearly wants and needs to showcase his political weight and importance, although his party’s ratings are currently under the magic five percent. Still, this should not add any great confusion as to the future relationship with ds, which has, in the past, proved to be very stable. While we can expect more ferocious, perhaps even spiteful, clashes between the election finalists in the coming four weeks, a new and independent force has used the opportunity to sneak its way into the fourth position (in an online poll conducted by the independent website www.eizbori.com), and that is Dveri, a notorious group heavily outcast as clerical, fascist, and extremely rightwing, but which has built much of its current ratings (14.22%) on the sheer fact that they wouldn't take any other

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party as an ally in the campaign run-in because none of the others would sign an agreement promising not to enter into a coalition with any of the current ruling parties. As simple and straightforward as it may seem, however, Dveri is unlikely to maintain its current lofty position, primarily due to the absence of any concrete programme, or a charismatic leader. Let us remember that the initial polls often tend to show discontent with the Government, which has found a home, temporary though it might be, in Dveri’s manifesto, and as the election date approaches, voters are likely to turn conservative and go with safe, tried, and tested options. Still, the analysts are pretty confident that, while we did have some levels of excitement at the beginning of the campaign, there doesn’t seem to be any unexpected outcomes heralded on the horizon. Plus ça change.

THE POLITICAL PANTHEON: FROM LEFT TO RIGHT

— Čedomir Jovanović

— Mlađan Dinkić

Party

LDP

URS

Slogan

Truth

Strong regions Strong Serbia

Key promises

• Cheaper energy through negotiations with Russia • More autonomy for Vojvodina • Tolerance • Profitable countryside • energy of youth and mature experience brought together

• Public companies' shares worth more than €500 • Equal opportunities for regions • Old age household support of €500 per year • Agriculture budget to be doubled • Farmers will not pay pension contributions

Opponents

DSS, SNS

Leader

office at stake Will Tadić get a chance to lose? Yours truly believes it unlikely, but, in the past couple of days, there have been rumours that May 6th might also find itself playing host to the Serbian Presidential Elections. If that be the case, then the current President's challengers would be Tomislav Nikolić (sns), Vojislav Koštunica (dss), Čedomir Jovanović (ldp), Ivica Dačić (sps), and even the ex-Yugoslav pm Milan Panić on behalf of urs. In theory, Vojislav Šešelj, leader of srs, although still in custody at The Hague awaiting his fate, might present his candidacy. This line-up of leaders, which looks like the best of ‘Serbia’s Got Talent’ (politically speaking), would significantly change the course of any election.

Tadić will need to make his decision before April 7th, as the Presidential Elections have to be announced at least 30 days in advance. If he were to announce elections, then he would be obliged to resign in order to run for the office he already occupies, with 10 months remaining on his term. What are the stakes of such a move? Would one election adversely affect the other? Would it be a boon?

RESULTS OF A RECENT POLL ds, sdps, lsv, dshv, sz urs sns, ns, pss, ps dveri ldp, spo, sdu srs dss sps, pups, js

23,65% 22,44% 15,50% 14,22% 7,85% 7,20% 4,90% 4.22%

Source: www.eizbori.com

If we put aside the fact that Slobodan Milošević had proclaimed early elections in 2000 and lost them - the sole argument against this kind of move, and not exactly viable in Tadić’s case - other effects would definitely be beneficial to his party (ds). First, other parties would be pushed into the race, even though they would rather not do it, because of the evident clear risk of low ratings of their candidates - a true measure of a leader's popularity - and also because the additional campaign expenses would seriously undermine, if not exhaust, smaller parties’ resources. However, they would have no choice but to run for the office so as to increase their parties' chances of success at parliamentary and local levels, as people tend automatically to choose candidates from the same party during concurrent elections. Parliamentary and local elections would be overshadowed by the Presidential Election, and not taking part would risk losing votes to the other parties who put their leader forward.

april 4rd - april 17th

— Ivica Dačić

— Boris Tadić

— Tomislav Nikolić

— Vojislav Koštunica

— Vojislav Šešelj

— Executive Board

SPS

SNS

DSS

SRS

DVERI

Socially Just Serbia

Jobs. Investments. Security.

Let's Move Serbia

For Serbia. You know why.

I vote Serbia + no EU.

Movement for the Life of Serbia

• Struggle against corruption and crime • High employment rate • Social justice • Family care policies • Agricultural and regional development

• Building infrastructure, bridges and roads • A new car factory • Agricultural investments • Safe future • Reforms and modernisation of Serbia

• €100 Billion investment for industrial zones from Novi Sad to Belgrade; the "Aegean road" through Serbia • Thousands of new jobs • Fiscal reform • Seven new hydropower plants

• Russian loans (8 to 10 billion Euros to be invested in domestic economy) • Mixed Serbian Russian bank to stimulate exports to Russia • Declaration of political and military neutrality - 'No' to eu and 'No' to nato

• Kosovo will remain in the Constitution • Struggle against corruption and crime • Economic cooperation with China • Economic and trade union with Russia

• Renewal of Christian morality • Inclusion of young people in politics • National integration of all Serbs

SNS (DS)

DS, SPS, PUPS, LDP

SNS

All

The greatest change, better for some, worse for others, with respect to the 2008 elections, is that there haven't been any great political swings at all: no turmoil, no new major coalitions...

In this context, it is safe to say that Boris Tadić, the most popular politician thanks to his chancellor-like executive role in the country and meticulously built media exposure, would harvest a clean victory.

the post-political era The greatest change, better for some, worse for others, with respect to the 2008 elections, is that there haven't been any great political swings at all: no turmoil, no new major coalitions, and certainly no radical thinking or ideas born in the meantime. As a matter of fact, the entire dynamism, politically, between the existing partners and opponents, was entirely economically and socially driven. This, of course, doesn't mean that there hasn't been any cause for political tensions: extraditions of Bosnian leaders Radovan Karadžić and Ratko Mladić, Serbia's silent administrative concessions to Priština, and the recent eu candidacy would

normally have led to some modicum of political stirring and a corresponding reaction in the streets. But they didn't, and the ruling coalition hasn't been seriously challenged even once in the last four years. This might prove that certain ideas, and flags, that once dominated the Serbian political scene may well have faded away or ceded to a more pragmatic reality: Slobodan Milošević died in prison in 2006; Vojislav Šešelj has been there since 2002, later joined by Karadžić and Mladić; Kosovo is becoming ever less Serbia. It looks like the future, as programmatically formulated by the ruling coalition, is currently the only viable option in Serbia. And the people, or at least a critical mass, seem to have got that. Indeed, Serbia has changed and is obviously entering a post-political era in which major crystallisations have already happened and have shaped the future landscape, with any potential reversals quite unlikely to happen in the coming years.

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politics

B&H Politicking: Saving Private Komšić Political manoeuvrings are par for the course, no matter what the country… but usually between different parties, not between a party’s leadership. As one of the largest parties in b&h, the Social Democrats (sdp), finds itself the focus of every media outlet – and for all the wrong reasons – a number of questions arise, and so do a number of answers... or at least an intimation thereof. By Ivana Marić

he news that Željko Komšić, a member of the b&h Presidency and VicePresident of the sdp b&h, had resigned from all his party functions took the public by shock. It was immediately evident that this decision had been made in some haste, and that Komšić hadn't taken any time or due consideration to think twice about any consequences which might arise from his actions. In fact the, situation gave cause for satisfaction and jubilation on the part of the public who would not necessarily sympathise with sdp and Lagumžija, while the rest, who would be more sympathetic, were given yet another cause for revolt by this desperate move by a high ranking party official and a person serving his second term in office.

Komšić’s resignation might have appeared as if he had no say in the matters at hand, be they party-related or governmental. Komšić yet again turned to a time honoured spin, playing to the public gallery instead of taking responsibility for performing the duties entrusted to him. The question still remains, however, as to how a man, who resigned his party functions due to dissatisfaction with the decision-making process, can then find it in him to accept the same party’s decision to decline that resignation? Eliciting a rippling wave a shock throughout the Bosnian public, Komšić, who is the Croatian representative in the b&h Presidency, stated that his move was a matter of principle. “This can no longer go on,” he said, “I have made the only

logical move. I remain a member of sdp, though without any party function; I will continue to fight for the principles of social democracy”. Of course, while he had relinquished his position with the party itself, his position within the Presidency was unaffected; that mandate was granted to him directly by the citizenry, who returned him in 2010 with a total of 337,065 votes, 52,630 more than the amount sdp gained at state level. Speculation surrounded this sudden move, lacking, as it were, any adequate explanation; the story quickly, and with good reason, found itself occupying headlines across the country (and beyond). It was suggested that it might well have been due to a conflict with the Minister of Foreign Affairs, and sdp President, Zlatko Lagumdžija; the two had clashed when Lagumdžija had supported the candidacy of his Serbian Ministerial counterpart, Vuk Jeremić, for the Presidency of the un General Assembly, something which Komšić was in strong opposition to. In addition, it was touted that the would-be former sdp man was long dissatisfied with the state-of-affairs in the party, highlighting that all of their policies were made by a small circle of people, a circle which was unduly (in Komšić’s eyes) influenced by an authoritarian Lagumdžija; something which was seemingly driving away potential, and existing, members.

citizens on hold The day after submitting his resignation Komšić had a meeting with Lagumdžija, and it immediately became clear that the resignation would be revoked. “We talked at length, addressing all matters at hand and, as our cheerful mood reveals, the talk led us to certain positive conclusions,” stated Lagumdžija. Following this meeting Komšić compounded his apparent naivety (at least in this matter) by not explaining the reasons for his original decision to resign, instead urging the public and the media to wait one more day for his official response. “I ask you to be patient and wait until the next session of the sdp Presidency; I also urge patience from the 337,000 citizens who voted for me,” Komšić stated. What seems to have escaped Komšić is the fact that a nationally elected official, anywhere, does not only represent their

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legislation which would enable the confiscation of illegally acquired properties, stating that “uskok restored Croatian dignity”, and that he would like to see similar progression in B&H as well. Commenting on his role within the party, he said that “as Vice President (of the sdp) I am to blame for standing aside too often, for not saying what needed to be said; from now on I will be doing all that I should have, but haven’t done, in the past”. Looking to refute earlier media speculation, both Komšić and Lagumdžija denied there was any merit to the claim that the whole incident had arisen due to any differences over the Jeremić’s un candidacy; “There is no conflict over Jeremić’s candidacy… although our views on the matter are conflicted”, stated Lagumdžija. Just how there can be conflict, yet no conflict, shall remain a topic of conversation, no doubt, for political philosophers for many years to come.

democracy at large

voters, but the entire citizenry. As such there is a very obvious obligation on his part to divulge, truthfully, why he embarked on such a drastic path. Of course, it could be argued that while Komšić was elected to office, the inner workings of sdp and his conflict with Lagumdžija were not something that the public, already troubled by a poorly performing Government, should be burdened with.

irrevocable resignation revoked After summoning up the decency finally to address the public, Komšić explained his hasty move, citing guilt in not being able to make progress in the matter of fighting crime and corruption, which had been a key point during his election campaign. He added that he would be advocating

Most active media pens will agree on one point: however clumsily Komšić may have gone about the whole (fake or failed) resignation affair, he appears to have got the better of his familial adversary...

In a large showing of a democracy writ, or maybe of large scale political sensationalism, it was proposed that Lagumdžija should step down as President of sdp and allow Komšić to assume the position of Acting Head. Unsurprisingly, this motion was heavily defeated at a Party vote. However, it may well be only a matter of time before such events come to pass; at a press conference it was reported that Komšić will stand for the top sdp position after the General Election in 2014, while Lagumdžija is expected to relinquish the leadership. The same conference saw Komšić 'explaining' his resignation: “I resigned because I was being polite, and this time around, God permitting, I'm going all the way; so either somebody leaves, or I leave”. Perhaps it might have served Komšić better had he chosen such proud and brave words in advance of his ‘resignation’. Still, as things stand, concerning the battle of Komšić v. Lagumdžija – let us call it a battle of political giants on the Left – most active media pens will agree on one point: however clumsily Komšić may have gone about the whole (fake or failed) resignation affair, he appears to have got the better of his familial adversary, who seems to be standing on the brink of the unimaginable: on the brink of a dangerous precipice indeed, for there is finally talk of Lagumdžija’s resignation, however speculative.

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a reality check

Montenegrin Tobacco Spring To hear Montenegrin Prime Minister Igor Lukšić just a matter of months after he took office you would think that butter wouldn’t melt in his mouth. "I don't see a case where any member of the Government would deserve to go before the prosecutor's office. I just don't believe in many stories that I hear and I treat them rather as gossip," he said about a year ago. How he must have wished he’d stayed his tongue now, as the patience of his people wore ever thinner. By Lee Murphy

arch 18th, a Sunday, saw an estimated 20,000 Montenegrins, a considerable percentage of the overall population (almost 3%), descend on the centre of Podgorica to protest against a Government whose seeming “passability” was simply not good enough any more. Still, to be fair to the current pm Igor Lukšić, he is of the opinion that the protesters’ complaints are in sync with the direction the Government itself is going, that they have the same end-goals: a higher degree of transparency and accountability. Obviously understanding the (harsh) social and economic realities of Montenegrin life, Lukšić comes across as being honest, even in the typically political statement that a democratic society must have the capacity to accept protest as a means of expressing dissatisfaction. However, according to Vanja Ćalović, head of the ngo mans, the Government had done as much as they could so as to prevent the protest from going to plan. The mans website reported that bus companies, who had been hired to ferry protesters to and from the city centre, had come under considerable pressure from ‘official’ sources to ‘reconsider’ taking the work. The protest itself, which had to be approved by the civil authorities, had hoped to take place on the 17th, but was

only allowed to run on the following day, which meant that public workers who thought they had the day off now had to come in to work… something which might engender a feeling of bitterness towards the 20,000. Or the 7,000, if you were to believe what the Government announced in the aftermath of the short demonstration, lasting just an hour as it did.

Montenegro too, howsoever small a nation, is discernably maturing, and it is only natural that, like most adolescents, it should be looking for new symbols.

no more corruption In addition to the aforementioned mans, the rally was organised by the Free Trade Unions and the Student Union, and was a natural continuation, one might say, of the January protests when people, angered by the rise in the price of electricity, gathered in front of the government building. This time round, the messages were much the same, as organisers repeated demands for the resignation of the heads of the regulatory agency for energy, called on the government to resign if it cannot meet the demands presented at the protest, which also included greater freedom of speech, investigation into attacks on journalists, and putting end to what they see as nepotism prevailing in society. Srđan Keković, Chairman of the Free Trade Unions, demanded justice and sought an investigation into a number of dubious privatisations which occurred in the past. One of these was the state owned electricity utility company, Elektroprivreda Crne Gore, which, according to the trade unionist, was sold for 100 million Euro less than the highest tendered offer. “Where are the seven million euro spent on bribing government officials during the privatisation of Telekom? Where are the millions of Euros that Russians claim they invested in the Podgorica

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Aluminium Plant," Keković went on. The students, as could be expected, demanded universal access to free education. In other words, people gathered together to protest first and foremost against low wages, low pensions, high unemployment rate and overall lack of opportunity, especially in the continental part of the country, where wealthy Russians have not been so keen on purchasing property and spending the tourist Ruble as they have on the coast. It soon became apparent, however, that something else was on the crowd’s agenda, as the main thrust of the protest was now aimed at the continued freedom of Milo Đukanović, erstwhile pm, then President, then pm again; and though now he only serves as President of the leading Democratic Party of Socialists – which would make him pm Lukšić’s party boss – few would deny him the title of Montenegrin Master of Life and Death. Be that as it may, what we do know is that he is one of the wealthiest European politicians, just as we also know that he has been under suspicion for illegal tobacco trafficking in a number of jurisdictions, but that nothing was ever proven in a court of law. Ms Ćalović, in any event, would not be deterred, and so asserted that “(the Montenegrin people) want the kind of police who can arrest the former prime

After a test of patience...the tipping point is perhaps now, the principal reason behind it being Montenegrin people’s perception of corruption. minister”, before imploring the current prime minister to join in the fight against organised crime, or else “join the mafia on its way to prison”. Such cognitive dissonance, on the part of the Government, can only exacerbate the situation, especially as talks with the eu proceed at a healthy pace. Indeed, Prime Minister Lukšić has only recently met with Štefan Füle, the eu Commissioner for Enlargement, and was congratulated by the Czech politician on being able to create a

“consensus… by involving parliamentary opposition, ngos and (the) media”. As for pm Lukšić, when he was sworn into Office in the year 2010 he was welcomed by the mass not only as a partial solution, but as a kind of (young and educated) force that could help the country turn a new leaf. What on account of the broader recession, what on account of Montenegro’s endemic problems, Lukšić would discover sooner rather than later that his people’s patience had been tested to hard. The tipping point is perhaps now, the principal reason behind it being Montenegrin people’s perception of corruption. According to the 2011 unodc report on Montenegro (United Nations Office on Drugs and Crime) the average bribe paid in Montenegro was 233 Euros, whilst the average monthly salary was only 475 Euros net. Montenegro holds a score of only four (on a scale of 0-10, where 10 is the optimal score) on the Transparency International’s Corruption Perception Index. Although, it’s not that there’s no corruption in places like the usa or the uk. In fact, over there it often happens on a much larger scale – but a society, in the modern sense, absolutely demands that such corruptive practises, once found out, are prosecuted and adequately dealt with. Yes, people are demanding higher salaries, a better standard of living, but first and foremost they demand to live in a society that is less arbitrary – a society where it actually pays off to work hard.

new symbols wanted Montenegro too, howsoever small a nation, is maturing, and it is only natural that, like most adolescents, it should be looking for symbols. Or a new set of symbols. And Milo Đukanović, guilty or not, represents to many – a critical mass of people perhaps – all that is rotten in the State of Montenegro. "The Montenegrin spring has come,” Vanja Ćalović told the protesters who came by bus from all over Montenegro with banners reading such things as “The fuse is short” and “You should be afraid”. She may be jumping the gun – in all honesty, it would be unseemly to compare Đukanović to Al Assad or Gaddafi – but some forward movement is undoubtedly on the horizon. Let us call it, giggles and all, a Montengrin Tobacco Spring.

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editorial

Money And Ethical Dysfunction... Especially In Politics Steve Young of the Caux Round Table comes to the rescue to provide major insight into the troublesome correlation between money and political power. His America has its own set of problems, but it is curious how close they hit home everywhere, especially if home is in this region. Serbia, Croatia, b&h, Montenegro...listen, lest you make the same mistakes.

he current presidential election cycle in the United States has brought to the forefront of concern and comment the role of money in American politics. It seems with the ever accelerating decline of political parties as vehicles for mobilization of voters and political opinion, money is stepping in to the vacuum so that special interests and ideological sub-cultures gain more and more influence over who gets elected. The authorization of Super-Political Action Committees by an opinion of the us. Supreme Court has brought millionaires into the political fray so that a few may achieve disproportionate media presence and so influence public choices by spending a lot of money on their favorite candidates and causes. In the worlds of Occupy Wall Street, it’s the 1% lording it over the 99% in shaping political outcomes. As they say: “money talks” and big money talks loudest of all. Mitt Romney’s supporters have used such super-pac money to effectively campaign negatively against a series of more socially conservative opponents. Newt Gingrich has an “angel” who funds his presidential campaign. President Obama has decided to go the super-pac route and

By Stephen B. Young

Stephen B. Young received his ab degree from Harvard College in 1967 and his jd degree from the Harvard Law School in 1974. While in the Harvard Law School, he was made a term member and then a member of the Council on Foreign Relations, and the served, among other things, as a university professor, consultant for a number of governments, Dean of the Hamline University School of Law and, from 1990 until 1996, as the Honorary Consul of Singapore in Minnesota. Stephen B. Young became the Global Executive Director of the Caux Round Table in 2000. He wrote the book Moral Capitalism to explicate the economic and moral approach of the Caux Round Table to free market capitalism.

raise perhaps as much as a billion dollars to gain re-election. It has been estimated that this year, 2012, Americans will spend up to 6 billion dollars in all their elections. Ordinary citizens are being priced out of local political competition as the costs of campaigning rise and rise, mostly for television ads and the experts who fine tune their emotional appeal. Parties, which provided the mechanism for compromise and coalition building for nearly two centuries, are becoming anachronisms so that gridlock and recalcitrance have come to dominate policy making. Is it just American politics in a new, post-industrial, form, or does money have an existential aspect that always breeds dysfunction? The early Christian apostle, Saint Paul, famously wrote that the “love” of money is the root of all evil. Mencius spoke only of humane actions and right conduct, not of profitable gains. Qur’an instructs that God does not favor those who are avaricious and stingy. So, in business and politics: is it our love for money that causes excess and oppression or is it something about money itself? Money has long been associated with self-seeking, short-sightedness, unethical

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THE CAUX ROUND TABLE Crt is an international network of principled business leaders working to promote a moral capitalism, and its principles apply fundamental ethical norms to business decision-making. The Caux Round Table is working to raise the level of awareness of senior business leaders, thought leaders and elite opinion around the world about new opportunities to attack global poverty. These include legal and regulatory changes in developing countries that will improve the environment for productive investment of foreign and domestic equity capital.

imposition of risk and loss on others, and immoral behavior. In business, the complaint seems to be universal and eternal: chasing gain that becomes cash in the hand gives rise to bias and distortion in judgment. In politics, money is associated with corruption, abuse of power, favoritism, despotism, and the undermining of idealism and the common good. In the movie, The Godfather, Don Vito Corleone made the trenchant proposition that applies to business, politics, and life in general: when we want something badly enough, make them an offer they can’t refuse. Apply pressure on the emotions: stoke fear or harness greed. Money plays to greed and money can engage with our fears to make us more secure if we have it or more fearful if we lose it. Money is a big deal in human affairs. It gets into our souls. Money becomes an instrument of power because we do love what it can do for us. Money is a very effective and efficient form of power. Its reach in our hands is wide indeed. We can use it to buy many things and play on many emotions and desires. It is readily at hand and convenient to exchange for goods and services. It gives us control and draws people to us. Power has always been problematic in politics and governance. It needs restraint and a bridle if it is not to destabilize our life together. Unchecked, it breeds conflict and abuse and fear. Lord Acton has been widely applauded for the depth of his insight that “power tends to corrupt and absolute power corrupts absolutely.” Ethical systems of politics and governance seek to moralize power but

turning it into stewardship or some similar form of service to the common weal. Putting checks on power is the essence of constitutionalism. But money has its own magnetism that side-steps and out-maneuvers legal provisions for checks and balances. Money goes to the heart of ambition and self-assertion. It empowers us as few things can. With money, we become more influential, less vulnerable, more attractive to others who too seek a share of power for themselves. Lots of money gives us a charisma, just as possession of any great source of power does. Thus money politics is a danger to the common good everywhere. But money, like every other form of private property, provides each of us with stature and significance. Our voice

becomes more influential if we can support our words with deeds and make our preferences effectual for others. To deny us access to money in politics subordinates us to the will of others. Our human dignity would be hard to come by if we had no means of taking action. Spending money is an extension of our personality, our will, our morality into the world around us. So here is the conundrum: how can we square a circle? How can we use money to promote the good within us out of respect for our individual dignity but not have it promote what is dysfunctional and invidious to the common good, from which we stand to benefit as well? In the United States we may need to amend the Constitution so that we can still spend

Human nature is not going to change. The challenge of balancing power with restraint, therefore, will also remain before us. money in politics, but under some constraints that would provide fitting checks and balances. Max Frankel, a former editor of the The New York Times, has just proposed in the New York Review of Books that money spent for political advertising be put into competitive harness: double the price of campaign commercials and give half the money to an opponent for free airtime. Frankel suggests that such a rule would turn campaigns cautious in spending their money. They would think twice before making a big buy of tv time as they would be spending money to put opposing thoughts and emotions out before the public. They would shift to less expensive and more time-consuming ways of influencing voter attitudes and behaviors. Frankel’s idea has its drawbacks – fringe and hateful candidates (consider a Hitler) would be given exposure they otherwise might not be able to afford. But a response from Frankel might point out that error can be tolerated where freedom of speech is robust to contest it. If enough money is made available for many points of view, competition in ideas and emotions would level all opinions to some common denominator sustained by sound facts and decent ethics. The analogy would be to a free market in goods and services which, over time, drives out substandard offerings, fraud, and negligence. Money is not going away, either in economics or politics; and human nature is not going to change. The challenge of balancing power with restraint, therefore, will also remain before us.

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the industry

JAT - Get Profitable or Perish Not so long ago, national airlines were the most prestigious signatures of their countries. The passing of 2011 saw the Serbian national airline, the last remnant of what was once the pride of Socialist Yugoslavia, burdened with over 300 million Euros of accumulated debt and a fleet of 16 Boeing and atr aircrafts, 20 years old on average. Also, as a number of old contracts get pulled from the drawer, is a future even possible? By Dylan Alexander

erbia’s jat Airways has been performing a balancing act between its own illiquidity and offers for new aircrafts - one of them binding - in an effort to stay airborne, with three restructuring strategies and three offers to choose from. For years now, the Government has been seeking a solution for jat, firstly by looking for a total strategic partner; as the market remained silent, a second strategy involved the State assuming all debt and liabilities so that a new national airline, with a strategic partner, could be created a-fresh. This attempt also failed. The third option included a financial partnership of private investors with professional management. The third option is still a possibility as the provisional sums on behalf of three Serbian businessmen would not exceed 25 million Euros. The problem lies in the fact that jat Airways has, perhaps, appraised its own value at too high a mark. The Government's estimate of combined total assets approaches a figure of 300 million Euros which, coincidently, mirrors the accumulated debt of the airline. Clearly the Government is hoping that jat can restart with a balance of zero, the cost of buying new aircraft notwithstanding. The past few weeks have been unusually busy for jat. In close succession, three of the world's leading aircraft manufacturers have approached the airline with their aircraft; in early February, Russian officials from Sukhoi, together with an Italian delegation, approached the Serbian Government with their new ‘Superjet’, a 75-seat mid-range plane which merges Russian, Italian, and us technology, along with

Airbus sourced electronics. The price on offer is reported to be 26 million Euros per ‘Superjet’ in a bulk deal consisting of two to four planes: this potentially includes also the President's official jet, which is long overdue for replacement. Then came Boeing to discuss modernisation of the existing fleet and sale of the new 737-500 and 737-600, costing 22, and 24 million Euros respectively. These new 737 models, with approximately 110 seats, are of a higher quality and consequently are more expensive. Another reason for jat remaining with Boeing is that its entire flying and technical history has been tied to the American manufacturer, so transitioning to new 737 models would certainly be less costly, or arduous. In late March, Airbus sent an ultimatum to the Serbian Government, claiming it would seek court justice if provisions of a contract (signed in 1998) were not fulfilled. Back then, fr Yugoslavia signed a contract worth 580 million us Dollars for the purchase of eight a-319 mid-range planes from the European consortium. However, following the nato air campaign of 1999 and the imposition of sanctions, Serbia

was not in a position to honour its inherited contract and thus suspended any further proceedings. To date, the Serbian Government has not made any official response in relation to this contract, even an examination of which would be incredibly expensive for the State. The longer this stand-off continues, the greater the risks for all involved: Yugoslavia had paid a hefty advance of 23.5 million us Dollars, and Serbia risks losing this amount, as well as incurring a 25 million us Dollar fine for exacerbating the situation. Airbus has already indicated a willingness to modify the terms of this contract, reducing the order to four airplanes, reducing the asking price per item, as well as offering training to airline personnel. All of this, however, is conditional on a positive official word coming from Belgrade… something which seems less and less likely. Those national carriers which still exist within Europe are continually struggling against the advances of low-cost competitors: SpanAir, Malev, b&h Airways… all have left the skies in recent times, and plenty of others find themselves on the edge of bankruptcy. Those of us who have flown with jat, and have fond memories of doing so, can only cross our fingers and hope for the best. Or perhaps we should recall a news-item, published in the previous issue of see, which quoted Ulrich Schulte-Strathaus, the Secretary General of the Association of European Airlines, suggesting that the individual national carriers operating in former Yugoslav air should reunite into one, larger carrier – if they are to have a future, that is. Governments may be trying hard, but the reality is clear: get profitable or perish.

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legal & regulatory

All Change in the EU Audit Market? James Thornley of kmpg’s Serbian office sets out to tackle and unravel the difficult – some would say arcane – arena of audit, especially after the eu Commission published a new set of proposals in November of last year. With regulatory novelties looming on the horizon, brace yourselves – both big and small.

n 30th November 2011, the European Commission published proposals that could bring major changes to the audit market if adopted. This is the latest stage in a consultation process that started with the publication of the Green Paper Audit Policy – Lessons from the Crisis in October 2010. The said proposals have two main thrusts and objectives: (1) to reduce concentration in the market for audits, with new requirements imposed for audit tendering and auditor appointment; and (2) to address perceived threats to auditor independence, such as long tenure and non-audit services, by mandating audit firm rotation and imposing significant new limits on non-audit services, and potentially requiring the largest networks to be composed of audit-only firms within the eu. The Commission is also proposing changes to the form and content of an auditor’s report to shareholders, the requirements relating to Audit Committees, and to the structure and regulation of the audit market in the eu. The proposals introduce an expanded definition of a

By James Thornley

With 20 years of professional experience, including the last 15 years in kpmg (6 years with kpmg Leeds and 9 years with kpmg Belgrade), James Thornley currently serves as a Chief Executive Partner – Head of Audit. He is also a partner in charge for Quality & Risk Management and IFRS Reviewing. He is a member of the Institute of Chartered Accountants of England & Wales (icaew), and has had extensive experience in a wide range of industry sectors, including manufacturing, financial (banks and other financial institutions), real estate, fmcg/ oil and related products, construction, retail and distribution.

A limited number of non-audit services would be permitted. Within the EU, they would be subject to pre-approval on a case-by-case basis...

Public Interest Entity (pie) which, in addition to listed entities, encompasses a range of financial institutions, as well as a new ‘Large pie’ category (broadly listed companies with a market capitalisation, or relevant financial institutions with balance sheet/assets under management in excess of €1 billion). The proposals now pass from the European Commission to be considered by the European Parliament and the European Council in a process which may take two or more years. For those unaware, the key features of the proposals are as follows.

mandatory audit firm rotation Under the Regulation, the auditor of a pie would have to be appointed for at least two but no more than six years. The maximum appointment term would be nine years if there were joint auditors for the entire period. There is a limited ability to obtain permission to extend appointment terms in exceptional circumstances. In most eu countries, this proposal would represent a major change, with significant cost implications due both to the frequent rotation of audit firms and also the tendering requirements noted below. It might also prevent the Audit Committee (see below about the Audit Committee) from selecting the audit firm that they believe is most capable, and could potentially be detrimental to audit quality.

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mandatory tendering for appointing auditors The Audit Committee of a pie would be required to identify at least two choices, unless it is proposing reappointment of the incumbent auditor (subject to the maximum six or nine year tenure described above). It would identify which firm it preferred and would have to provide a justification of its recommendation. At least one of the firms invited to tender at the start of the process must be a smaller firm, i.e. one that has less than a 15% share of the audit fees of Large pies in that member state. The Regulation contains specific requirements for the process that the Audit Committee must follow. eu-level regulatory bodies would also develop further guidelines on the process for auditor selection. Auditor appointments for credit institutions or insurance undertakings would be subject to a veto by the relevant prudential supervisory authority. These requirements would restrict Audit Committees’ discretion to decide when and how to tender.

However, the fees for related financial audit services to an audit client would be limited to 10% of the audit fees paid by that entity. A limited number of non-audit services would be permitted. Within the eu, they would be subject to pre-approval on a case-by-case basis by the Audit Committee (e.g. comfort letters) or the relevant competent authority (e.g. acquisition due diligence services).

restrictions on non-audit services Under the Regulation, there would be very few non-audit services that could be provided by the audit firm or other firms within the audit firm’s network to a pie or its parent/subsidiaries within the eu. The permitted ‘related financial audit services’ would be limited to: • audits and reviews of interim financial statements; • assurance on regulatory reporting by financial institutions; • certification on compliance with tax requirements when such attestation is required by national law; and • assurance on corporate governance and social responsibility statements.

The Regulation requires all pies, with certain concessions or subsidiaries and certain types of financial institution, to have an Audit Committee comprised of nonexecutives or shareholder-appointed members. In addition, it mandates firstly that at least one member must have competence in auditing and another member must have competence in accounting and/or auditing, and secondly that the committee members as a whole must have competence relevant to the sector in which the audited entity is operating. The Audit Committee is given greater responsibility as to the oversight of the audit and in the appointment and dismissal of the auditor. While the governance standards in many eu countries are well developed, the requirements of the Regulation are likely to result in changes to the composition and activity of the Audit Committee.

special rules for the statutory audit of smes

choosing an auditor There will be prohibition on contractual clauses limiting the audited entity's choice of an auditor, which means that any contractual requirement that limits an entity’s choice of auditor would be precluded, including, for example, a bank specifying a requirement, as a condition of a loan, that an entity appoint a specific audit firm or a category of audit firm.

requirements for audit committees

Other proposals from the Commission would remove the requirement for the audit of small entities. Member states would be permitted to formulate audit requirements for audits of medium-sized entities and voluntary audits of small entities.

conculsions audit only firms? Audit firm networks meeting certain criteria would have to become audit-only within the eu, and this requirement would apply to any network whose member firms have combined annual audit revenues within the eu over €1,500 million, as well as to any network which has at least one member firm that generates more than one third of its annual audit revenues from audits of Large pies. If these thresholds are exceeded, then all of the member firms of that network, including those outside the eu, would be banned from providing nonaudit services within the eu. This requirement seems intended to apply only to the Big 4. It could impair the ability of member firms of the affected networks to access the breadth and depth of expertise they currently bring to their audits.

It is clear from the above highlights that fundamental changes are anticipated. For now, the focus has been on their impact upon the big 4 accountancy firms, where these changes could fundamentally impact upon current business models. However, a brief look into the details shows that these proposals are not just about the big 4. Corporate governance standards and audit regulatory bodies are evolving in the see region; quite a decent number of entities may meet the definition of a pie, which means that small firms of auditors may find their sme market completely erased. These changes, if they come through as proposed, will impact heavily upon these organisations also. In other words, big or small, an interesting period lies ahead for all those involved in the audit arena!

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event horizon

The Fantastic Duo Weaving a New Deal Milanović, Čačić, Linić. Government, the economy, finance. Have the trio in power finally set the right trajectory for Croatia's economy, or are we looking at another barrage of promises and semi-self-congratulatory gestures? It is difficult to tell, but something is in the air... Something positive. Perhaps even a “New Deal”. By Igor Dakić

ceptics may abound and come in all shapes and sizes, but it is safe to say that it all began as early as early February, with Finance Minister Slavko Linić announcing drastic fiscal and administrative measures (an increase in vat, harsher penalties for companies that do not make good on their liabilities on time, tougher regulation of bankruptcy and liquidation procedures, stricter collection of the tax backlog etc.) increasing the liquidity of the economy. It continued with Radimir Čačić, the Minister of the Economy, who promised he would clean up in the biggest State owned companies, i.e., hep (the electricity utility), Hrvatske vode (the water utility), Hrvatske autoceste (Croatian motorways), hž (Croatian railways), precisely in such companies as were identified as those which have the highest investment potential. “The investment cycle would be financed to a large measure by Public Sector capital, generated by monetising the existing but non-operational assets”, put Čačić in his proposal. eu structural funds, as well as public-private partnership models, figured largely in his plan, and the projectbased financial framework would be a combination of equity and debt. Quite sensible, quite sane, quite modern… if one were a German politician. No one said this author too would not voice a healthy dose of scepticism.

privatisation climate Whatever the case, however, what was set in motion was a particular kind of climate, or a climate in which (at least) the language had changed, which subsequently led to openly voiced plans to initiate of a whole series of privatisation projects: the Croatian Postal Bank, Croatia osiguranje, Petrokemija – to name just the biggest ones. Nothing unusual for a transitional economy in dire need of extra cash, where the state owns a majority stake in 77 companies (not including the utility companies) and a minority stake in as many as 651 companies; but something had changed, for it no longer felt like the Government was again bent on organising a crisis-situation fundraiser. If one read between the lines and listened attentively, one could almost detect a major concern permeating the ranks of the ruling coalition, concern that they might not have the people – the right number of the right kind of professional – efficiently to run this gargantuan economic apparatus. Emboldened, but just as frightened, by their arduous lobbying effort (and success, at least for the nonce) so as to retain the country's third-rate credit rating, the politicians, arguably for the first time in Croatia's history, may have – I say it very cautiously, just may have – begun to view ‘privatisation’ from a functional

Old boy, let's role up our shirtsleeves and get to work.

macro-economic perspective; and may have, just may have, consequently created the type of ‘union-silencing’ climate which is surely without precedent. Large scale layoffs in the public sector, namely in the civil service or public administration, are nonetheless extremely unlikely at this time, but over the last two months Finance Minister Linić has been very severe in his rhetoric, condemning the ‘Greek’ model as unsustainable.

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The most recent reiteration of what most sensible people know already came from Željko Lovrinčević of the Economic Institute, who roughly said that we're still caught up in a vicious cycle of politics on one hand, which readily offers the statist economic model as it has never even entertained the notion of offering anything else; and the citizenry on the other, who are averse to risk and accustomed to social giving. What is important for present purposes is that such views are being voiced with increasing frequency, and from all corners of the political-economic spectrum. No concrete results yet, perhaps, but a "New Deal" is somewhere up there, in the air: one can smell it.

energy efficiency and public (fire)works In the meantime, Deputy pm and Minister of the Economy Radimir Čačić himself came out with a 'new deal': as could

My dear fellow, I'll see this thing through even if it means I have to tread over a field of dead bodies.

be expected, his stomping ground will be the broader construction arena, his aim to save money and create 50,000 jobs in the process. With even more caution we will mention that, as this issue goes to the printer, the Government will have launched an investment cycle worth some 1.8 billion Kuna (cca 235 million Euros), intended to jumpstart Croatia's economy and reanimate the fallen construction sector. The

If Čačić pulls it off... that will be an asset for the future. Now, that would be something new, even worthy of public fireworks. key phrase is “Reconstruction of StateOwned Buildings and Facilities” in accordance with the principles of energy efficiency, and to depict the magnitude of the project – and potential savings involved – it is estimated that the State, cities and municipalities control a veritable empire of some eleven thousand-odd buildings and facilities which rack up an annual electricity and water bill amounting to as much as 1.67 billion Kuna, or 220 million Euros. Much of this empire, of course, is in a serious state of disrepair, and to put things further into perspective the average energy consumption in public buildings is 250-350 kwh/m², or five times higher than eu standards would prescribe. But there is something in Čačić's scheme, if he can pull it off, which is even more important than the potential savings. Firstly, large scale construction projects have the capacity to employ substantial numbers of both blue and white collar labourers, which is crucial in any economy, much less the one plagued by such high unemployment rates, and the one in which the ratio of the number of working bodies vs. the number of pensioners stands at the unimaginable figure of 1.15: 1. Secondly, one should never underestimate the power of symbols, of creating a nation which has a reason to be proud of itself: in this sense, Čačić's 1.8 billion Kuna would be spent – if they be spent prudently – on fixing down-town facades, on improving amenities in public buildings, on modernising not only the mechanics of energy consumption, but also on modernising the way one perceives one's immediate environment,

which is an invaluable asset for the future. Now, that would truly be something new, perhaps even worthy of public fireworks.

a deeper background The only real opposition party on the national level is the Croatian Democratic Union (hdz), but hdz, the slush-fund trial against former pm Sanader and indictment against the party itself aside, is currently in the middle of a party primary and is beset by a whole gamut of internal rifts. In these circumstances, pm Zoran Milanović has afforded himself the comfort of a populist balancing act. Whilst his ministers in charge of the economy and finance speak of infrastructural projects, budgetary cuts and privatisation, he himself every so often speaks of "preserving social models and the welfare state". If this balancing act is a calculated scheme to absorb the "popular damage" done by concrete measures as proposed by Čačić and especially Linić – sdp, after all, is a proclaimedly socialist party – then it is perhaps even to be commended. One should not be insensitive to the political realities of the region, one of which is that the Right is often on the Left, and vice versa. Just as it took the authoritarian and oftentimes violently right-wing hdz to get Croatia on the path to Europe (and extradite her generals), it might take no less than former communists to create a climate in which old socialist habits will be shirked and a new – competitive – economic model erected. In the meantime, we can only observe and cheer from the stands, which is not as useless an activity as many people might think. Societies have their executives and their consciences, just as businesses have their financial and marketing directors, proverbially at odds with one another. One party serves to the other as a form of a corrective, in rare moments even as a Deus ex-machina, coming to save the day. And all your author can hope for is that this article – along with the remainder of this issue, dedicated in its entirety to positive energy in Croatia – might, just might, in howsoever modest fashion, resonate with those few Croatian politicians who are our subscribers, and that it might entice them to ride on the wings of this improving climate and do something brilliant. No more skulls and bones.

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investments

British-Croatian Business Forum As you might expect with an event of this sort, there were a myriad of Government presentations, designed to shower the assorted guests with a raft of figures, numbers, flashy PowerPoint displays. One could also notice, however, a rarely seen vein of forthright honesty from both sides of the podium – even in a country in which British investments, historically, have not been many. By Lee Murphy

he titular event was held in surrounds that can only be described as majestic: in the Gvozdanović Palace, now in the care of the City of Zagreb but formerly the residence of the eponymous family. The former patriarch of the Gvozdanović clan was also the founding member of a group of like-minded businessmen, the Kvak Klub. Now, while public perception saw it as some Croatian variant of the Freemasons, the reality was far from this; in truth, it was merely a way for the ‘lads’ to escape the various travails of their daily lives and relax with a few drinks, without, as was the custom of the day, the attention of their womenfolk. Whatever else may have taken place at the Kvak Klub we shall leave to the ponderings of others, and instead we turn our attentions to more modern times and the ever evolving pursuit of a more modern business model. This was only the 2nd British-Croatian Business Forum, organised, as its name might suggest, by the British Embassy and uk Trade & Investment. However, while the numbers discussed may well have been Croatian in nature, the ideas and the concepts on display can, and will, surely be examined by the neighbouring states as Europe beckons ever closer for all. The speakers were primarily from the Public Sector: the Croatian Minister of Finance, Slavko Linić, Minister of

Yugoslavia was once decades ahead of the rest of Europe in the green energy field; with some shrewd investment the region may well yet find itself once more a ‘player’... Construction and Physical Planning, Ivan Vrdoljak, to name but two. The Ministries of Culture, the Economy, Maritime Affairs, and Tourism all had their representatives in front of the microphones as well. Some had more to say and show than others, but perhaps to the detriment of the general public there was undue interest by the multitude of cameras (television and newspapers) in Mr Linić when

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he, of all who spoke, had the least to say. Granted, he’s the man who is responsible for the budget, but this day was meant to be all about the Private Sector and their wishes and needs. It’s no secret that a great many industries in Croatia, and of course in all the former Yugoslav countries, are State controlled. However, as of July 1st, 2013, Croatia will become a fully fledged member of the European Union, and if there is one thing that the eu looks upon unfavourably it’s Government ‘interference’ in fields where other European companies will soon be treading. That’s not to suggest that this prideful Nationalism is somehow wrong (it often has its place in any economy), but it behoves the Government to engender a market situation where these national resources are in demand. The longer the status quo remains, the more the balance of power (as it stands now) shifts in the favour of those seeking to invest.

taxes and bankers Corporate Tax was one of the main focus points of Tamara Obradović Mazal’s presentation. The Deputy Minister of the Economy spoke of a sliding scale of tax rates, from the standard 20% decreasing to 0% depending on the amount of capital invested by any interested party (the magic number needed here amounts to 8 million Euros). If anything were to spark some interest among the gathered bankers, consultants, and venture capitalists, then this would surely be it. However, we spoke of honesty, and when we spoke with one individual from the private sector who was involved with property, he was not overly impressed with what he had seen and heard: “I’m disappointed with the event so far, since none of the presentations hold any great interest for us… that’s not to say that none of this is important, just that it doesn’t really relate to our business.” However, it must

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be noted that the gentleman in question was back in the room once Vojko Obersnel, Mayor of the City of Rijeka, took to the podium, of which more later. What was perhaps of most interest, not just for Croatia, or even the extended region, was the presentation by Darko Lorencin, Assistant Minister with the Ministry of the Economy, Labour, and Entrepreneurship. Mr Lorencin spoke at length on the Green Energy sector, on the need to develop wind-energy, revitalise the hydro-electric industry, as well as the integration of more self contained energy systems which are designed to make industry more and more self-reliant. While these are developments that would not be considered ‘new’, and indeed other countries are pursuing much the same policies, it is nevertheless an exciting time for anyone working in this field: after all, Yugoslavia was once decades ahead of the rest of Europe (peaking in the seventies were hydroelectricity and pump storage facilities), and with some shrewd investment the region may well yet find itself once more a ‘player’ in this market. For let us not fool ourselves: while Green Energy is of immense benefit to everyone, both ecologically and financially (cheaper bills means more disposable income), the sector itself is quite profitable in the long term, as clearly evident by the wealth of wind-farms being built, and already in operation, across much of North Western Europe. Past news items in this magazine have indicated that the tourism market is one of some importance to the current Government. Indeed, local ‘chiefs’ have not stood idly by, and have taken measures in order to help invigorate their own locales and their economies. Mr. Vojko Obersnel, Mayor of Rijeka spoke to us at length on his vision for what must appear to be a wholesale re-imagining of his city, and surely hopes to take full advantage of the tax breaks Oleg Valjalo of the Ministry of Tourism touted – namely, a reduced tax rate for tourism-related industries, as well as a 0% rate for a reinvestment of profits. This might be the sort of investment incentive Rijeka needs as the Mayor’s presentation showed detailed plans for over 2 billion Euros worth of capital projects, which included city centre renewal as well as redevelopment of the Rijeka docklands, intended to help both the cargo and tourism industries.

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to talk, and offer their non-attributable opinions, the general consensus was that yes, hpb would be an astute purchase but not, as the local media reported, by one of the large global outfits. “The banking sector is rationalising,” a high-ranking British banker told us, “where once you might have had certain operations absorbing smaller banks and simply changing the branding, now you find that banks need to optimise the capital available to them and put it to use in a manner that’s best for them, and for their own investors, the customer! They’re closing branches, either outright because of financial difficulty, or else by selling them on to other regional groups, who wouldn’t really be in the same league as them. If hpb is going to find an outside buyer, let’s say someone outside of the Balkan region, the chances are that the buyer will come from France, Italy, or Austria… someone who has interest in the region already. Being honest, the Chinese are never likely to purchase something like that directly… Finance a purchase perhaps, but that’s a matter between the Chinese and someone else”. Chris Hodge, Charge d’Affaires of the British Embassy

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If HPB is going to find an outside buyer, the chances are that the buyer will come from France, Italy, or Austria… someone who has interest in the region already. Chris Hodge, Charge d’Affaires of the British Embassy, had told the gathered press and delegates that “the British Government is committed to economic growth in Europe and beyond. Growth is the engine that will drive prosperity for British citizens and those of our European partners. The British Government is therefore determined to give the maximum possible support to the efforts of British companies to deepen and extend their range of business partnership overseas.” However, while this is of course very much the case, the market does not necessarily support huge swathes of investment from so far afield, at least not in every aspect of business. We can substitute

the term ‘British’ for a multitude of other nations, and indeed there was a Chinese delegation in town in the same week. And while it’s no lie to suggest that the value of a Euro, or a Dollar, remains constant irrespective of the nationality of its source, we cannot expect everything to appeal to the Russian oligarchs or Chinese bankers, who would appear to have a near bottomless pit of financing available to them. Yes, Croatia, Serbia, Montenegro all have appeal to foreign investors, but not so much as we might expect. The Stateowned Croatian Postal Bank (hpb), for instance, is up for sale, so it felt more than relevant that we ask some of the gathered experts their views on the matter. Happy

moral(e) of the story So, is this to be the lesson learned? The moral of this story? That these events are somehow not as important as they’re made out to be? While it’s true that a certain amount of pandering to the media is expected, it would be disingenuous to disregard these gatherings as some sort of self-congratulatory ego boost for the would-be investors, or as some sort of begging extravaganza on the part of the Government or public bodies involved. While it is unlikely that any of those attending would be writing cheques to fund the countless projects mentioned from the podium, one can be sure that business was nevertheless done. These sorts of forums might seem inaccessible to an outsider, and some of those in ‘the know’ would probably feel the same. But it often takes just a solitary chance meeting, that one stroke of luck, to get an idea from the planning stages to fruition. And, if jobs are created as a consequence? Well, that’s something everybody can understand and appreciate. Especially in the Government, perhaps even in the long defunct Kvak Klub. Good for the morale, isn’t it.

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social economics

YES We Can Domagoj Milošević, former Deputy PM

The entire region has been beset by a new, and very specific, problem for some time; transition from one’s university education into the labour market. However, an even bigger problem arises when it comes to finding and filtering through quality individuals in the corporate sector. And that is where yes comes in – to act as that filter, to find the best young professionals and guide them along the path of professional development.

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By Miroslav Tomas Damir Kuštrak, Executive VP of Agrokor

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Ante Todorić, executive VP of Agrokor

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Davor Majetić, HUP Secretary General

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roatia’s Young Executives’ Society has presented the third generation of laureates of its yes Junior initiative, a programme bringing together 16 young junior executives who will, over the course of one year, be mentored by 28 accomplished professionals and take part in a series of educational workshops, lectures, project work, and expert guidance in their professional development. The Society’s mission, with respect both to its overall objective and that of the Junior programme, was perhaps best summed up by a statement given by Ante Todorić, the Executive Vice-President of Agrokor, in his introductory address: “I am not fearful of what is to become of the people gathered here in this room; what worries me is what is to become of the little working man. The key to the success that our future is dependent upon lies in good organisation. We need excellence at all levels - ranging from waiters and factory workers to top level managers, as that is the only way to make the Croatian economy a successful one. Agrokor is led by four thousand 'kids'; it is these very people, young and capable executives, who have transformed a number of

struggling socialist enterprises into successful and competitive companies. Ledo is one of many such examples, a company that has been transformed, under the umbrella of Agrokor, into the third largest producer of ice-cream in Europe.” It is a self-evident truth that only through competition can one realise one’s full potential, and in that manner it is perhaps indicative that the Secretary General of the National Competitiveness Council, Mr. Marko Lacković, performs the same role within the Young Executives’ Society. Addressing the matter of

YES Juniors

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“Increasing competitiveness has become an inevitable part of any plan... To put things into a simpler perspective, what ‘competitiveness’ implies is a better, cheaper product in a shorter time-frame.” Marko Lacković, Secretary Genral of YES, giving his introductory address

need for competitiveness in the modern business surroundings, he gave us some insight into the Junior program. “Increasing competitiveness”, Lacković said, “has become a practically inevitable part of any plan for resolving the economic crisis. To put things into a simpler perspective, what ‘competitiveness’ implies is a better, cheaper product in a shorter time-frame. Unlike other conditions, such as geo-strategic position and the allocation of natural resources, which are beyond our control, increasing competitiveness can be significantly affected by

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the transfer of knowledge and experience of the business community to younger generations.” Each of the yes Junior programme participants is assigned a mentor, an older experienced entrepreneur, businessman or other accomplished specialist who helps him or her face challenges brought about by everyday business. yes Junior is the only programme of this sort in Croatia. Speaking of the perspectives of young professionals within Croatian society Mirna Dumičić, a young macroeconomist and participant in the Junior programme, stated that “the networking of young professionals represents a great foundation for the promotion of new ideas, which are useful in business, but also in a broad social sense. Though the opinion that one person cannot exact any major change is widespread, it is my firm belief that each of us can affect our immediate environment, first of all through conscious and committed performance, but also through a wider social engagement, indirectly or directly.” Another Junior program participant, Antonija Mršić, a communications expert working with bicro, Croatia’s

Innovation Agency, addressed the matter of social betterment and further incorporation of women into the business world also rather eloquently: “The major challenges facing the Croatian paradigm are the low innovation rates, high youth unemployment, and inequality between women and men in the business world. The female way of thinking is usually described as being more intuitive, committed to interpersonal relations and cooperation as a means of achieving goals based on flexibility and team work. And it is the young people who are more open to learning and cooperation, who absorb new technologies more quickly and who implement fresh ideas with more enthusiasm.” Yes, a non profit organisation founded in 2006 as an initiative of the Croatian Association of Employers (hup), aims to bring together accomplished individuals from all walks of life: managers, entrepreneurs, academics, scientists, artists... To some, as the old story goes, it may smack of elitism. But elitism – the positive, meritocratic kind – might be just the thing we need, if we are to see that much needed shift in mentality.

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real estate

Rextra, Rextra, Read All About It! REXPO That Is… On the weekend of April 19th-20th, the Hypo Business Centre in Zagreb will play host to rexpo, an international real estate and investment expo for the Adriatic region. Indeed, truly ‘regional’ is the word of the day, although one couldn’t help but notice that the rexpo crew have their mind set on introducing the best practices from the world over. We caught up with Ivica Jujnović, the man managing the project and a man who certainly knew the value of presenting a quality event…

EE Rexpo is a new event on the calendar. Is there anything specific you’d like to tell me about it? What differentiates it from all the others? IJ Well, we feel that the Adriatic region is currently one of the most attractive markets for investment. We wouldn’t be doing this if we felt otherwise. We’ve modelled our event after similar affairs in Cannes (mipim), Munich (expo real), and Vienna (real vienna), and, we hope, we’ve added enough of our own experiences in the property market to make ours stand out. I won’t say we’ve micro-managed everything, but we do feel we’ve put an inordinate amount of effort into making it as easy as possible for business to be done, especially now that the countries in the region are either joining the eu (Croatia), or are on their way to doing so (Serbia). We’d like to think that some of the deals that come out of this event will help strengthen the economies here, not only for altruistic reasons, but because it would mean we’ve done something right and that would justify our own faith in what we’re trying to do. SEE Lofty ambitions indeed! I hope all the relevant players have as much trust in Rexpo as you do…

Association – and those are just some of the public sector bodies that are involved. Deutsche Bank, Barclays, the Hilton group, kpmg, Luxor… these are just some of the names from the private sector who’ll be coming, and coming, we believe, with every intention of getting some substantial business done. There’s still money out there for investment, but whoever signs the cheques needs us to help facilitate the best advice available to them.

IJ Not to boast or anything, but so far the response we’ve received from varying embassies and investors has been nothing short of fantastic. President Josipović himself is backing our endeavours; he understands the need to attract investment in order to stimulate economic growth. In addition to his support we’ve been in contact at all times with the Croatian Government, the Croatian Chamber of Economy, as well as the Croatian Employees’

SEE What about the ever present red tape and bureaucracy which is so famous in these parts. Will that be a problem for Rexpo? IJ Well we’re playing host to individuals and companies from every country in the region – Croatia, Serbia, Bosnia and Herzegovina, Slovenia, Montenegro, Macedonia, and Albania. We have an advantage here in that many of the consultants who are based in these places either have counterparts across the border, or have an existing relationship with their peers in other countries. It removes a lot of the red tape for all involved, and if that makes a business opportunity more accessible, then I say we’ve done our job. The more an investment brings, in the end,

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the more likely it is that the next investor will be afforded a smoother process by the powers that be. Remember, most of the embassies are behind us, and they want these investments as much, if not more, as the next country. There’s no economy out there that can afford to stymie potential investment. SEE So you see yourself being more than just a host? Would it be fair to call it being a middle-man? IJ Possibly… can an event be a middleman? We certainly look to try and bring together all the components of a business deal… We want to gather all the key participants in the regional real estate market and help them realise new business

“There’s still money out there for investment, but whoever signs the cheques needs us to help facilitate the best advice.”

opportunities. Maybe we can help introduce new or adaptive business models, and we’re definitely doing as much as we can to bring in as much foreign investment as possible. That’s why it’s important to us to have as much support as possible at a governmental level – traversing bureaucratic red tape can be difficult at the best of times, as we’ve already noted, and we’d never want to see a potential investor put off by any obstacles when we could help facilitate an easier process. SEE Rexpo looks to attract people from several fields, be they developers, investors, designers, consultants, etc. Do you feel that having such a broad spread of individuals and groups might dilute the

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REXPO IN BRIEF The Mission To provide new business opportunities and new business contacts for all participants of investment and the commercial real estate market! The Vision To become the leading regional business event!

weekend? We're loathe to use the phrase 'Jack of all Trades', but.... IJ We are witnessing the fact that the investment potential of the Adriatic region is not being sufficiently exploited. The reasons? On one hand it’s the global economic crisis, and on the other hand it’s down to the business sector which has not adapted to global market conditions. We still lack the cooperation between specialised companies which precedes each segment of complex investment projects. Preparation of projects is an interdisciplinary process which requires a wide range of highly experienced professionals. Therefore, I strongly believe that rexpo will bring together various experts and provide a solution for the highlighted problem. This way, rexpo is promoting a new way, a new approach, in real estate project development which will result in new ideas and encouraging the preparation of projects and the promotion of the most perspective projects to investors interested in the region. SEE We spoke at another gathering like this, and you weren't hugely impressed with the quality of material/presentations which were of relevance to someone in your line of work. Our question is this: Do you feel that rexpo could be improved upon? Are there grand future plans for 2013 and beyond, or do you feel the weekend is as balanced as it might possibly be?

IJ As I mentioned, rexpo is a business fair focused on investment projects and commercial real estate. The main difference, compared to other events, is a rich programme which will encourage the establishment of Business to Business and Business to Government connections. By establishing direct communication, we expect better cooperation between the business (private) and government (public). That should encourage the discussion of specific problems and challenges. Along with exhibiting stands, we have rexpo match making - organised meetings between interested parties in specially equipped meeting rooms, rexpo Speed matching - a short presentation of a project or service, followed by a business card exchange and pre-arranged meetings, rexpo Forum - more than 40 experts, investors and decision makers, and finally rexpo Gala party. This concept supports the rexpo vision and mission, which is to become the most important regional business event by offering new opportunities to all companies involved in real estate investment projects. This should result in more successful projects and more satisfied investors. SEE Now that you mention it, I've been looking at the list of events being held at rexpo; matchmaking, speed matching, gala party... Should we be packing our dancing shoes? IJ Rexpo is a modern fair and, as similar fairs, mipim and Expo Real, it offers

The Goals • Gather all key participants of the regional real estate market and initiate their mutual business cooperation through new business opportunities • Promote new models of project preparation and business cooperation • Attract foreign investors and promote regional investment potentials • Present attractive investment projects and emphasise existing and already developed quality projects • Impose professional discussion on key regional problems in project development while governmental decision makers are present at this event

an extra added value to exhibitors, panellists and visitors. According to our experience from most popular investment fairs, every indicated event has a targeted audience. At the end of the first day is the rexpo Gala party, which will also be an opportunity to socialise and network in a more informal manner. Of course, along with modern music and great Dalmatian red wine, we expect vibrant atmosphere with lots of dancing steps. To answer your question, yes, take your dancing shoes. SEE I'm a private citizen, with some capital to invest; is it worth my while coming here? Or have the large investors cornered the best markets already? IJ The Adriatic region has opportunity in abundance for all varieties of investor, from private citizens to global investment funds. So yes, you should consider attending. Croatia will become an eu member in 2013; the region has excellent road infrastructure, especially for access to Western European countries, a stable political situation – all facts that only serve to underline the excellent investment potential for everybody.

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april 4rd - april 17th

fairing about

14th Croatia Boat Show: The Big Guns Are Coming to Split With Croatia Boat Show in its final stages of preparation for its 2012 edition, we sat down with Vicenco Blagaić, ceo of the Split based company Profectus which is having a go at it for the 14th time. In an interview in which a picture’s truly worth a thousand words, Mr Blagaić and his team do yet have a few other cards up their sleeve. Stay with us, and see you in Split between the 17th and 22nd of April, for there cannot be a better location for proper nautical fireworks than an old harbour located mere meters away from Diocletian’s famed palace.

EE This is the fourteenth time you’re organising the Croatia Boat Show. How are things looking this year? VB To tell you the truth, exceeding our expectations. I know it’s going to sound like adrenalin is talking – the show is a mere two weeks away – or like the typical organiser’s enthusiasm, but we’ve been getting a lot of positive energy, and from both sides – from exhibitors and buyers and those who simply wish to see the show. The boating and yachting industry, as you may well imagine, was hit particularly hard in recent years, especially in small markets. But I am definitely seeing signs of recovery, perhaps even major recovery. Bear in mind that in between 2006 and 2008 we were no less than the sixth largest boat show in the world. We are still in the top ten, but the decrease in volume in the interim has been tremendous. Now, there’s no doubt about it: we’re going up again. SEE Good to hear, that. And, in light of what you’ve just told us, anything new on the agenda for the 2012 show? VB Indeed. In addition to the Croatia Boat

after the Zagreb Auto Show was cancelled earlier this year for wont of interest on the part of the sponsors and exhibitors. I hear the same thing happened in Belgrade last month as well.

Show, which will undoubtedly remain the main attraction, we decided to include two additional events: the Nauticus Show and the Split Auto Show. I needn’t tell you that cars and yachts go hand in hand, and I’m particularly proud that we’ve managed to pull it off, especially

SEE But what of the Nauticus Show? How does it differ from or complement the ‘main event’? VB Although the Croatia Boat Show proper, which will present the newest models of yachts and sailing boats as well as the appending equipment and engines, is our ‘core’ business and the main source of the Fair’s revenue, we too have had to adapt our model and seek a greater number of smaller clients. The Nauticus Show is the result of that process, as it is intended for all those operating in the auxiliary and/or service segment of the yachting industry: charter companies, brokers, used boat dealers, marinas, wine-makers, nautical restaurants and other service providers. All these activities have a natural synergy which simply needs a good port of call – the Nauticus Show in other words – to be properly accumulated and then unleashed onto the market.

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SEE But what of the ‘main event’, the Croatia Boat Show? VB Croatia Boat Show is an event organised at the highest international level, and as such it provides an opportunity for exhibitors, sponsors and partners to reach maximum promotional effects in all segments of the five day happening. Croatia Boat Show is a meeting point of yacht builders and their buyers, motor and equipment manufacturers, nautical clothing and shoe makers, those who offer nautical recreational activities, banks, leasing companies, insurance agents... Our goal is not only to justify their expense – or investment, as it were – but also to enhance their business appeal to the maximum by offering them specific and variegated activities, a chance to present their products or services to an increasingly demanding clientele in a setting that is at once entertaining and professional. True, the backdrop of the Old Town of Split – of Diocletian’s Palace, of the Riva – truly is spectacular, but we wouldn’t get far on scenery alone: one must build an entire infrastructure, one must entertain, one must facilitate, one must endorse. Trust me, companies and boat makers such as Princess, Sunseeker and Ferretti Group would not come if that were not the case. SEE Fair enough. Seems to me like you yourselves have truly learned the lesson of diversification.

Many businesses and projects are diversifying, and so is the Croatia Boat Show. There is no other way for one to stay competitive... VB Many businesses and projects are diversifying, and so is the Croatia Boat Show. There is no other way for one to stay competitive, especially if your goal is to stay competitive and relevant on the toughest international – or global – level. SEE Tell us something about the Croatia Boat Show Trophy. Many locals say it’s a night to remember. VB The best vessels are proclaimed winners across a number of categories, and are selected on the basis of their propulsion systems, dimensions, performance, design and other key features. The Croatia

Boat Show Trophy is not only an award given to – or earned by – naval architects and yacht builders, but also a compliment to all those participating in the creation of ultimate pleasure vessels – a genuine illustration of their know-how, inspiration and talent. And you’ve heard correctly, the Trophy winners’ parade is an unforgettable event in Split, a gala performance of lights and music, a culinary and wine festivity...ending with fireworks – for all to see. SEE For last – and you knew we were going to ask you this – your company is involved in a major development project just North of Dubrovnik. How are things progressing? VB Yes, the property is located roughly 25 kilometres North of Dubrovnik, and involves seven hotels, 200 villas, 500 apartments and a 27 hole golf-course. The investment in the first phase alone is projected at 920 million Euros, and all in all it could reach as high a mark as 5 billion. All the plans have been adopted and approved, and suffice it to say that we are ready to start construction. Much depends on the State, or on the financing available from the Croatian Bank for Reconstruction and Development. Financing is generally the key issue, as it would be, but I can finally say that the investment climate has improved significantly. Let us leave it at that for now.

april 4rd - april 17th

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destinations

Rijeka: Gateway to the Adriatic… And Beyond Forget New York, Rijeka is so good they named it at least four times. With massive amounts of urban redevelopment currently underway, we said we’d take a closer look at the city everybody seemed to want. And then there’s another affair, that of Carpathia... By Miroslav Tomas & Lee Murphy

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itting deep inside the Bay of Kvarner is the city of Rijeka, third largest Croatian urban centre and the country's primary shipping port. Rijeka is a city of particular appeal, stretching along the Adriatic coast and rising up into the foothills of the northern-most branches of the Dinaric Alps, providing a distinct contrast between the towering mountain massif to the rear and a magnificent vista of the bay and Kvarner islands. The city and its surroundings represent a meeting point of the Mediterranean and Central Europe both in a geographic and cultural sense. It is clear that Rijeka is certainly unique, differing largely from the typically Mediterranean cities such as Zadar, Ĺ ibenik or Split; it is immediately noticeable that the city's architecture resembles Zagreb, Vienna, or Budapest more than it would its neighbours further down the coastline. With the new motorway in situ, Rijeka is now just a short hour and a half drive away from the capital of Zagreb; a tour that will take you through the pine covered mountains of Gorski Kotar before revealing the blue Adriatic as you descend towards the city. The unusual topology of the region has an added benefit of course, and that is the creation of a deep water harbour (Trieste is the only other such harbour in the Northern Adriatic), making Rijeka a somewhat vital and strategic location, which goes a long way towards explaining its fascinating, if overly warlike, history. Suffice it to say that were you to have lived here during the period from 1918 to 1991, you would have found your domicile having existed within six different countries. It may well be because of this oft-changed sovereignty that Rijeka is characteristically known for a welcoming atmosphere of tolerance, and has served as home, or safe haven, for any number of minorities, ethnic or otherwise, over the past century.

home sweet home The first settlements in the area date back to pre-Roman times with the Celtic settlement of Tarsatica, far above the city, and now the site of a magnificent medieval fort. Later, during Roman times, â&#x20AC;&#x2DC;Tarsaâ&#x20AC;&#x2122; evolved into a town which was located, roughly, where the old city centre is today. Numerous archaeological remains, such as the foundations of the city walls,

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remnants of the city gates, and thermae, or bath complexes, were all discovered during excavations, and offer a reminder of the city’s history where, perhaps, not many visual aides remain. After the fall of the Western Roman Empire, in the 5th century, the city changed hands between numerous conquerors. The first mention of a medieval town dates back to the 13th century with two settlements, Trsat, a fortress, and Rijeka, or Rika, a walled city erected on the spot of the Roman Tarsa. The entire region was a possession of the Frankopan family before coming under the rule of the Austrian Hapsburgs in 1466. When the Ottoman onslaught moved through the region, Rijeka and the neighbouring Bakar remained the only ports of call, serving as the 'remnants of the once glorious kingdom of Croatia', which was now a part of the Hapsburg Monarchy. Throughout the course of the 16th and 17th centuries Rijeka grew into an important centre of trade and commerce, despite the ever present Ottoman threat and ongoing disputes with Venice. Once the Ottoman threat had receded, and the Hapsburgs had reached a truce with Venice, the 18th century brought rapid development to

the city with its first modern industries starting up, and the infrastructure of a road network being developed so that the Monarchy might have a major port at their disposal. Because of this new ‘project’, in 1779 the Empress Mary Theresa declared that Rijeka would now be a separate body within the Monarchy, under direct Hungarian control, thus leaving the Austrians with full authority only over the port of Trieste. Rijeka briefly became a part of the French Ilyrian Provinces during the Napoleonic Wars, only to be returned to the authority of the Hapsburgs in 1814. The course of the 19th century saw further disputes over the city, with conflicts between Croats and Hungarians that were finally settled with the so called 'Rijeka patch', a piece of paper glued onto the original document of the Croat-Hungarian settlement of 1868, making the city once more a separate body under Hungarian rule. It was this final period of Hungarian rule which gave the old city its, by now, recognisable Central European appearance, and turned it into a major industrial centre. An oil refinery, paper factory and railway connecting it to Budapest were all developed during the latter half of the 1800s. Rijeka’s most famous, or infamous,

industry of all, however, was that created by native Ivan Lupis Vukić – the torpedo. Vukić sold his patent to Englishman Robert Whitehead, who, having perfected the design, chose to establish his production facilities in the Croatian’s hometown, which was, of course, Rijeka. As we’ve already mentioned, the period between 1918 and 1991 was a rather tumultuous one: Rijeka was first occupied by Italian fascists – (in)famously led by Gabriele D’Annunzio, esteemed man of letters, overall impresario, and part-time adventurer – and then officially found itself under the control of Italy proper following the signing of the Roman Accord. However, the Accord left a portion of the city on the southern bank of the Riječina River, called Sušak, under Yugoslav rule. After getting an early taste of fascism, Rijeka was briefly occupied by the Wehrmacht following the Italian capitulation in 1943, before finally being liberated by Tito's partisans and becoming a part of communist Yugoslavia, a period during which the city saw further industrialisation with the rapid development of shipbuilding, which was ultimately thrown into some disarray upon the fall of socialism and the break-up of the country.

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the mayor’s major enthusiasm The present day Rijeka is a shyly vibrant urban centre that, in spite of being a major transit hub, is in need of reinventing itself, both in the field of tourism and in the areas of industry for which it exhibited a high level of skill, namely shipbuilding. It certainly wouldn’t hurt if there were some new developments in the pipeline, perhaps some new resorts, a rejuvenated city centre, perhaps even a teaching hospital… It was fortunate then, that we were able to sit down with the Mayor of Rijeka, Vojko Obersnel, to discuss some of the plans that he was hoping to see fulfilled during his time in office. “It all started”, he told us, “about a year ago. I was in the uk with the then Ambassador to Croatia, David Blunt. My main reason for being there was to take a look at some of the British cities that had managed to ‘reinvent’ themselves following the collapse of their industrial legacy: Glasgow, Newcastle, Edinburgh. All three cities were once giants of heavy industry, just as we in Rijeka were, but as the global economy changes so must we – and so we felt that if these cities could do it, then so could we.” “As you already know, Rijeka is in a key position within the Adriatic. Within 500 kilometres of the city you can reach Rome, Milan, Munich, Prague, Vienna, Budapest… need I go on? There was no reason why we shouldn’t be able to reach new heights, so long as we can get the right investments, for the right projects.” The Mayor was only too happy to walk us through his presentation, and expand, where necessary; the planned developments were as follows: a University hospital, to accompany one of the oldest Universities in Europe, a full port and waterfront redevelopment, leisure and sports facilities, as well as reinventing Rijeka as a centre for urban tourism. In fact, when we totted up all the numbers involved, it came to in excess of a staggering 2.3 billion Euros. Quite a figure for a city, especially one which has been losing out in the tourism market to Split and Zadar. “Some of these projects are already underway – the World Bank has given us a loan of around 120 million Euros towards the Rijeka Gateway Project,

“Rijeka is in a key position within the Adriatic. Within 500 kilometres of the city you can reach Rome, Milan, Munich, Prague, Vienna, Budapest… need I go on?"

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which is more than 50% of the capital we need to complete it. Certainly if some of your readers happen to have 110 million Euros lying around, I’m sure they’d like to invest it with us,” explained the Mayor. Indeed, looking at the plans for the Gateway, we couldn’t help but be impressed. Up until now, the port was actually inside the city, which is to say that ships would need to sail up the river in order to dock and unload their cargo. The idea is to take advantage of the depth of the harbour and develop what is known as Zagreb Pier, so that it is retooled for the berthing of main container vessels. Already a new passenger terminal has been built, intended to deal with the increase in maritime tourism. For the first time in many years the citizens of Rijeka will finally benefit from direct access to sea by means of a marina and associated businesses at Porto Baross. “If you’re not aware,” continued Obersnel, “there are already some improvements in transport infrastructure underway in the area surrounding Rijeka. The rail network will be upgraded soon, and this ‘Gateway’ will provide us with even more access to the water than ever before. Add in an excellent road network which links us with much of Western Europe, as well as our sister cities to the East, and you begin to see what we like to call an ‘International transportation multimodal hub’. With Rijeka Airport we feel we can become dominant in the immediate region in the area of urban tourism – city breaks. There’s no way we can compete with Split for what you might term ‘summer tourism’. But we want to be able to maintain our new businesses for more than just the holiday months. It does us no good if companies cannot remain open for a full calendar year.” Rarely had we seen such exuberant enthusiasm, much less from a political figure, but nevertheless Mr. Obersnel was adamant that he would ‘rescue’ his city from economic drudgery. Rijeka might not be as visually stunning as Dubrovnik or Plitvice or other such destinations, but it certainly seems as if it could well be a choice destination for professionals who just want to get away from it all for a few days. And Rijeka will certainly welcome them, all the more if they happen to have a few hundred million Euros knocking about.

RIJEKA’S TITANIC JOURNEY Out of the night it came, that menace of the seas, Unmarked by sound and unobserved, its prey of souls to seize; A pallid shape, dim in the fog, a monster, on it came. And wallowed in the ocean path, its toll of deaths to claim. So begins a poem, The Destroyer, recounting the final moments before the villain – if one can assign human characteristics to inanimate objects – of the piece would forever enter the annals of history as the cause of one of the most infamous maritime disasters ever. We all know the history, in brief at least: on the night of April 14th, 1912, hms Titanic struck her ‘destroyer’, an iceberg, and less than three hours later she was no more, resting in her watery grave, untouched until 1985 when Bob Ballard found the wreck. This led to a resurgence of interest in the ill-fated voyage, and from there the books, the films and the myths followed. In the past number of years we’ve witnessed restorations in Cobh, Ireland, with the Titanic Experience, and the Harland and Wolff

shipyard in Belfast seeing activity for the first time in decades, albeit not in actual shipbuilding. So, you ask, is there a Balkan link to any of this? Rms Carpathia was a Cunard Line transatlantic passenger, sailing from New York, America, to Fiume, in what was then the Austrian-Hungarian Empire. Today the city is better known to us as Rijeka. While New York and Cobh, as destination and final port of call, tend to dominate the limited field of Titanic-lore, the Peek & Poke Museum in Rijeka has sought to draw more attention to their own part in the tale. Considered a “must see” tourist attraction in the region, the museum has established its credentials within the cultural world over the past 5 years. The rms Carpathia was herself sunk just off the coast of Ireland on July 15th, 1918, and settled some 200 kilometres off what is known as Fastnet Rock, the same rock from which the last sighting of hms Titanic was made before her death. Ironically, the ship, sailing so often out of Fiume, fell to a torpedo, built in that very same city.

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good stuff

Easter Pleasures in Four Strokes Eggs, booze, chocolate, ham… all with a twist. Enough said.

Beware the Yellow Wasp Seeing as Easter marks the end of Lent, this holiday more than any other represents a return to, well, indulgence. Renouncing (in theory at least) small pleasures for a period of time leaves poor souls wanting them again all the more. This is especially true of alcohol, and particularly of our regional choice no.1 when it comes to rakija. Enter the Serbian or Šumadian high spirited (quite literally) delicacy, Žuta osa (Yellow Wasp), a 90 proof distilled from the finest organic plums and aged in oak casks which give it a specific aroma and yellow colour. With a nasty sting all wrapped up in one package, moderate consumption is nonetheless strongly advised.

Easter Egg a l'Onion No greater secular symbol of Easter than the egg; and as painting them is often no trifling matter, what better way to start than divulge the old-school (Balkan) 'granny recipe'. Before the introduction of artificial dyes, the common thing used were red onion peels. The trick is to boil them in hot water along with the eggs, a process which turns the latter rust red. In some instances clover or parsley leaves are glued to the egg prior to cooking, to act as stencils. And though the tradition of the Easter egg hunt does not really exist in this region, a common custom well rooted in folklore is the battering of Easter eggs, with the winner being the one whose egg does not break in the process.

Twice Cooked Ham Hock by Chef Gauci

Zvečevo's Mikado Truffles No Easter without playing to the sweet tooth, as we all know. On this occasion we recommend one of the leading regional chocolatiers, Zvečevo, which has yet again won over our hearts with their new exclusive line of Mikado Truffles. These high-end chocolate delicacies come in four different flavours: caramel, classic, white coffee and hazelnut, and are made from the finest chocolate in accordance with a traditional French recipe. Thanks to their soft centre, Mikado Truffles melt in your mouth as all the while the cocoa powder sprinkled on the outside gives them a unique and irresistable bittersweet aroma. Boxed in ruby red, Mikado Truffles should make an ideal gift for all occasions, and a luxurious Easter treat no doubt.

To part with tradition and offer an inovative twist to the holiday mess, we give you a recipe courtesy of Chef Christopher Gaucci of the Dubrovnik Hilton Imperial. Put a ham hock into a medium size pot with one leek, onion, carrot and few black peppercorns, cover with cold water and simmer for two hours after bringing it to boil. After cooking, trim the ham hock from the outside skin and bones, roughly chop and mix with cooked vegetables cut into small cubes (circa 5x5 mm), add 50g of clarified butter and mix well by hand until all ingredients are well incorporated. Wrap the mixture in cling film and make it into a tight roulade about 4cm thick. Keep the roulade in a fridge at least 24 hours before serving. Boil 50 g of barlotti beans in ham stock until they are cooked but slightly firm, then mix with 50 ml olive oil and a few table spoons of cooking liquor and blend it into a smooth puree adding salt and pepper to taste. To make the dressing blend well the grain mustard (30g), honey (30g) and water (30ml). Cut the roulade and serve garnished with barlotti puree, dressing, and baby spinach leaves as shown in the picture. Bon appetit!

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to-do list

Ibrica Jusić

Zoran Predin & Matija Dedić

Sarajevo Fashion Week

March 31st - April 7th

April 11th

April 17th - 22nd

Belgrade / Talented young fashion designers show off

Slovenian National Theatre, Ljubljana / A ballet by Adolphe Adam and David Coleman

Split / Biggest boat show in the region

April 4th

April 13th

April 17th - 21st

National theatre, Belgrade (20h) / Guest performance by Jacoby & Pronk, contemporary ballet

HNK, Zagreb (19:30h) / Three world famous short ballet pieces

Ljubljana Puppet Theatre, Ljubljana / 5th World Music Festival

April 4th

April 14th

April 17th - 21st

KD Vatroslav Lisinski, Zagreb (19:30h) / Zagreb Philharmonic's traditional Lenten concert

Bosnian Cultural Centre, Sarajevo (20h) / Soft jazz experience

Zagreb Fair / International construction and home decoration fair

April 5th

April 17th

April 18th - 22nd

Tvornica kulture, Zagreb (21h) / Legendary Dubrovnik singer/songwriter

Cankarjev dom, Ljubljana / French pianist performs the works of Liszt, Wagner and Berg

Sarajevo / Insight into the b&h fashion scene

April 6th & 7th

April 17th & 18th

April 19th - 20th

Hard Place, Zagreb (21h) / Exclusive small club blues performance

Regent Esplanade Hotel, Zagreb / 8th International conference on the Croatian real estate market

Hypo Business Centre, Zagreb / Internationa real estate and investment expo for the Adriatic region

Fashion Week

Beautiful is Bizarre

Passion

Ibrica Jusić

Eric Sardinas

Giselle

Triple Bill Ballet

Z. Predin & M. Dedić

Pierre-Laurent Aimard

Filipović RE Conference

Croatia Boat Show

Godibodi

Construction fair

Fashion Week

REXPO

april 4rd - april 17th