see magazine 04

april 4rd - april 17th

01

southeast europe · a fortnight in review

no.04 / subscription only / 4 th april 2012

in media res / Upcoming Elections: Serbia's Fight Club

politics / Bosnia & Herzegovina Politicking:Saving Private Komšić

a reality check / Montenegrin Tobacco Spring

destinations / Rijeka: Gateway to the Adriatic...

event horizon / Croatia's Fantastic DuoWeaving a New Deal

CROATIA'S NEW DEAL

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03

At a time when a new car must not only have space, comfort, and safety, but also fu-el economy, hybrid vehicles present them-selves 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 combina-tion 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 ax-le 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 maxi-mum torque figure. With 300Nm of diesel en-gine, at low speeds the electric motor is able to add another 200Nm, which significantly contributes to driving performance, particu-larly 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 on-ly difference is the shifter for the automat-ic transmission and command for the hybrid drive. The driver is always free to choose be-tween an automatic mode (ZEV, an all-elec-tric mode), 4WD, or a sports mode. In au-tomatic 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 active-ly adjusting the driver's needs for power de-livery, depending on the driving cycle. Dur-ing deceleration and braking the system uses the vehicle’s excess energy for charging bat-teries, which further contributes to low fuel consumption.ZEV, being fully electric, brings a new dimen-sion to driving, with a completely silent oper-ation that is active up to speeds of 60 kmph. 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 inspi-ration from the aviation industry, instrumen-tation that is unique to this hybrid, all of this takes the driver and passengers straight into

the future. Inside the driver and passengers can enjoy a feeling of spaciousness and well being, thanks to the impressive glass roof which offers an abundance of natural light. Active safety, all-wheel drive and the excep-tional suspension shared by the 3008 family are combined with numerous safety systems like ABS and ESP, which are specifically opti-mised to work with the HYbrid4 drive. Because of its unique characteristics, the combination of performance, driving pleas-ure, 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 CO² 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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04


05

content

in media res

politics

a reality check

editorial

event horizon

investments

social economics

real estate

fairing about

destinations

good stuff

legal & regulatory

the industry

to do list

introductory epistle

05

06

08

12

16

18

20

24

22

26

28

32

34

38

42

48

50

The EconomyOf General Interest

Croatia's New Deal

fortnightly news

12

18

16

24

42

Upcoming Elections: Serbia’s Fight Club

B&H Politicking: Saving Private Komšić

Montenegrin Tobacco Spring

Money And Ethical Dysfunction...Especially In Politics

JAT - Get Profitable or Perish

All Change in the EU Audit Market?

The Fantastic Duo Weaving a New Deal

British-Croatian Business Forum

YES We Can

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

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

Rijeka: Gateway to the Adriatic… And Beyond

Easter Pleasures in Four Strokes

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06


07

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the last two-odd weeks was...well...sur-prising, 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, inves-tors. Even the public officials and office holders we spoke with seem to have loos-ened 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.

Croatia's New Deal

introductory epistle

Somewhat oddly – in thematic keep-ing with the Peugeot ad on the open-ing spread – this issue is also a hy-

brid, 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 com-plained about the absence of ground-breaking events, this period was more than eventful, what with pre-election campaigning heating up in Serbia, what with Željko Komšić revoking his irrevo-cable 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, journalis-tically 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 endeav-our witnessed in practically all the pro-fessional encounters they have had over

editor-in-chief

Igor Dakić

executive editor

Lee Murphy

[email protected]

graphic editor

Ivor Vinski

art editor

Stiv Cinik

country editors

Dylan Alexander (Slovenia)

Milan Milošević (Serbia)

Aida Tabaković (b&h)

Miroslav Tomas (lifestyle)

issn 1848-4107

impressum

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Stephen B. Young (editorial)

James Thornley (regulatory)

Ivica Jujnović (real estate)

Vicenco Blagaić (yachting)

Ivana Marić (politics)

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That said, I can only hope that our read-ers 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 posi-tive 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 differ-ent 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 ex-plained above this has not been an easy in-troductory 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 Peuge-ot. 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.

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08

fortnightly news / the economy

The largest (for the time being) solar pow-er plant in Croatia has just come online. The plant, set up in Kukuljanavo near Rije-ka, is situated on the rooftop of the Ma.Co.T, a salt processing company, and was built by Adria Sol (who also have part owner-ship 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 pow-er over 100 family homes. While Adria Sol will need to wait roughly 6 years before they see a return on their 500,000 Eu-ro investment, they are clearly confident that they are moving in the right direc-tion: they plan on opening a second, larg-er plant, which will produce 315kWp, near Trilj in Dalmatia, within the coming months.

It is widely expected that the Croatian Gov-ernment will seek to divest itself of the 50.63% stake it holds in the fertiliser pro-ducer Petrokemija. While any sale is un-likely to be completed before the end of the year, speculations which surrounded this story were enough to spark a flurry of ac-tivity on the Zagreb Stock Exchange. In the days after the story emerged Petrokemi-ja saw their stock prices rise by more than 15%, with almost 5 million Kuna traded.

Ivica Todorić, owner of the Konzum su-permarket chain, as well as food brands Ledo and Zvijezda, has once again tak-en poll position in the latest edition of the Forbes Croatian Rich List. Todorić is val-ued at 500 million Euros. The Besnier fam-ily, who own dairy giants Dukat, was sec-ond, valued at 240 million Euros, and the Lukšić family came in third with 110 mil-lion Euros. Fourth place is occupied by Emil Tedeschi, President of the Atlan-tic Group and Honourary Irish Consul, with a fortune amounting to 105 million Euros.

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 delay-ing opening their 2nd and 3rd stores in Croatia, and that they were committed to the region.

Idea, the Serbian branch of Agrokor's re-tail 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 ceremo-ny 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 pub-lic spending. Included amongst the aus-terity measures are a moratorium on hir-ing in the Public Sector, a reduction in the privileges available for acting and former public officials, a reduction of sever-ance payments and bonuses and, on top of all of this, a 6% cut to all elected offi-cials’ salaries. It is estimated that these latter savings will account for a 10% re-duction in salaries paid when compared to the outgoings of the former establishment.

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 Eu-ros 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 pre-vent Agrokor from forcing a takeover. Both takeovers failed for a number of reasons.

a step in the right direction

petrokemija to be privatised?

croatian rich list announced

swings & roundabouts for ikea

idea opens new supermarket in niš

slovenian government acts to reduce public

spending

pivovarna laško announce major losses


09

One of the world leading producers of in-dustrial and off-road vehicle tires, Cooper Tires, has opened a plant in Kruševac, utilis-ing facilities previously owned by tire pro-ducing company Trajal. Having purchased the former Trajal property for 13 million Eu-ros, Cooper Tires invested a further 50 mil-lion Euros into the plant, creating 700 new jobs. The opening ceremony was attend-ed by US Ambassador to Serbia, Mary Vor-lick, and Serbian President Boris Tadić, who stated that such investments repre-sent a model for future Serbian progress.

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

There are further problems for Ljubljana Air-port as both Air India and Ryanair have an-nounced that they will be postponing their flight schedule for the Slovenian airport due to the high cost of fuel. If some sort of com-promise 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 ex-pected to route some trans-Atlantic flights through the Slovene capital. In the mean-time Ryanair announced, in an unrelat-ed statement, that they are to begin flights from Montenegro starting in June this year.

Representatives of the ThyssenKrupp group met with the Federal Minister of Develop-ment, 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 com-panies, 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 servic-ing of mining equipment and mechanisation.

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 ap-pears that the investment fund ‘Arqaam Capital’, from Dubai, have been look-ing 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 compa-ny, 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 ex-pected boost to the local economy from in-creased tourist traffic, almost 300 jobs will be created, not to mention the employment created during construction itself. The in-vestment group have said that they are willing to spend extra in order to improve the transport infrastructure in the area.

Croatian Minister of the Economy and Dep-uty Prime Minister Radimir Čačić went on an official trip to Moscow seeking potential in-vestment. On the top of Čačić's list are pro-posals 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.

cooper tires open plant in serbia

ht launches 4g mobile network

ljubljana airport grounded

thyssen krupp moving into bosnia?

adriatic islands to see investment

cačić seeks russian investment

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10

fortnightly news / of general interest

The March 22nd session of the b&h Feder-al Government saw a draft of the Law on Confiscation of Property Acquired by Fel-ony or Misdemeanour brought before the House. Federal Prime Minister Ner-min Nikšić stressed that it was the inten-tion of the Federal Government to provide the judiciary with the appropriate means to wage an efficient fight against organ-ised crime, especially in relation to prop-erty gained through illicit actions. Mr. Nikšić said that it would be necessary to form an agency dedicated to the pursuit of pros-ecutions brought about by this legisla-tion, modelled on the Croatian uskok.

The Croatian Civil Service made the headlines again when it was revealed that they em-ploy over 63,000 individuals. The Civil Serv-ice 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 budg-et as part of the planned austerity measures.

The Fimi Media trial made some progress re-cently as Nevenka Jurak, Branka Pavošević, and Mladen Barišić all pleaded guilty to the charges laid out before them. Howev-er, former Croatian Prime Minister Ivo Sa-nader and former hdz spokesman Ratko Maček stood by their previous pleas of not-guilty. While the three who plead guilty have claimed that they funnelled money into the slush fund of the then ruling Croatian Dem-ocratic Union (hdz) at Sanader’s behest, the man in question has denied doing so.

From the start of the month Croatia will have a more substantial presence in Eu-rope. 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 in-terim. These mps will be granted ‘observ-er’ status and, while unable to vote, will be permitted to debate legislation and make their opinion known. The twelve in-dividuals will be well looked after for their extra duties, with each mp set to pock-et 6,000 Euros (45,000 Kuna) per month.

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 be-ginning of a new stage in the European Un-ion's relationship with Kosovo.” The study is to determine what Kosovo needs to do in or-der to be able to sign a Stabilisation and As-sociation 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.

The contentious issue of the Serbia local and Parliamentary elections continues to con-found the un delegation in the region. Con-trary to un and eu wishes Serbia has de-cided 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 purpos-es a sovereign state, something which the Serbian politick do not agree with. This, de-spite a directive from the eu that full Ser-bian membership cannot happen unless the former Province is granted full independence.

b&h to follow uskok’s example

public sector over inflated

sanader maintains his innocence

croatia receives observer status in

eu parliament

kosovan feasibility study gets green light

voting difficulties remain

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 author-ities 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 Eu-rope, and as a Nazi-collaborator by others, Mihailović served as Minister of Defense in the exiled Royal Government. Although rec-ognised as an ally he only managed to res-cue a handful of downed airmen, instead preferring to focus on fighting the Commu-nist Partisans, so as to prevent any plans they might have for creating a post-war Communist state. In this respect the Chet-niks have, on numerous occasions, served as an auxiliary force to both the German and Italian armies. Having committed numer-ous atrocities against non-Serbian popu-lations in the region, Mihailović’s potential rehabilitation has caused quite a stir, as the man is not only perceived as a war-crimi-nal, which is undoubtedly the case, but al-so as an outright fascist and collaborator.

draža mihailović to be rehabilitated?


11

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 region-al race of countries aspiring to join the eu.”

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 Decem-ber of last year, Janković was obliged to re-sign from his Mayoral office since Slovenian regulations prohibit any Member of Parlia-ment from holding any other public office. Janković was a front-runner to become the new Prime Minister following the elec-tion, 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 en-emies and fought each other on the bat-tlefield have come together in unison to protest against their lack of pensions, de-manding that the upcoming 2012 Budg-et address the shortfall. They’re look-ing for a sum equating to 15 million Euros to cover what has been due since 2010.Vjekoslav Bevanda, President of the Presi-dency, 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 pro-ceeded 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 shoul-der to shoulder with one another”. While not expected to result in a similar outcome, the Croatian Army is also looking to de-commission a number of officers in order to reduce the strain upon the public coffers.

Members of the Government of Republi-ka Srpska have found themselves in a po-sition to be charged on suspicion of pay-ing out millions to the media with the intended aim to bribe and control out-put. President Aleksandar Džombić, Minis-ter 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 Eu-ros specifically went towards the financ-ing of five daily and weekly newspapers. The Centre has long campaigned to limit state based interventionist policies where they might lead to corruptive practices.

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 in-dividuals putting their names forward, in-cluding lawyers, judges, doctors, and Uni-versity lecturers, the Government chose instead to submit the names of three civ-il servants. Macedonia has been regular-ly criticised by the European Union for their treatment of prisoners and other minorities.

A group of six people were recently arrest-ed in relation to the long running controver-sy 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 In-ternal Affairs, have been charged with having sold more than 50 passports during the pe-riod 2006-2010. According to the prosecu-tion 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 crimi-nal underground, as well as, infamously, Ra-dovan 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 scan-dals, it must surely be that this recent arrest is nothing more than the tip of the iceberg.

bosnian eu ambitions gather pace

janković re-elected as mayor of ljubljana

differences put aside in b&h military protest

implications of bribery in the republika

srpska media

little done, more to do

the passport affair

www.see-magazine.eu

12

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.


13

Upcoming Elections: Serbia’s Fight Club

The electoral campaign in Serbia has begun with little in the way of sur-prise and a strong sense of déjà-vu;

same faces, same flags, same paroles. It’s all here: political parties presenting programmes and promulgating prom-ises 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 ide-al 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 mu-tual recriminations, which, as you might expect, target only those who would like-ly fail to become allies and office part-ners come May. Although there is an ex-ception, 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

It’s on, as they say, the campaign is, which means that the jack-in-the-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

Party (ds), probably its closest political ally, while sparing Nikolić's Serbian Par-ty 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% thresh-old, and for all intents and purposes about to lose their presence in Parliament. Con-sequently, urs might need to increase its profile, and their core vote, by differenti-ating 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 snip-ing at the Government. We can there-fore expect more clashes between these two, now divorced, political groups, with sns drawing additional attacks from fur-ther down the polls by the Socialist Par-ty (formerly Slobodan Milošević’s par-ty, 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 surround-ed 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 pyr-rhic election victories and never any real power.

Ivica Dačić, the current Minister of In-terior and President of the Socialist Party, will surely attempt to keep his voters to-gether; he can do this by simultaneously criticising both Tadić's and Nikolić's par-ties, going to the very core of the ds elec-tion programme. Dačić clearly wants and needs to showcase his political weight and importance, although his party’s ratings are currently under the magic five per-cent. 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 on-line poll conducted by the independent website www.eizbori.com), and that is Dveri, a notorious group heavily out-cast 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

in medias res

www.see-magazine.eu

14

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, pri-marily 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 Gov-ernment, which has found a home, tem-porary though it might be, in Dveri’s manifesto, and as the election date ap-proaches, voters are likely to turn con-servative 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 cam-paign, there doesn’t seem to be any unex-pected outcomes heralded on the horizon. Plus ça change.

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, lead-er 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 be-fore 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 or-der to run for the office he already occu-pies, 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?

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 expens-es would seriously undermine, if not ex-haust, smaller parties’ resources. Howev-er, they would have no choice but to run for the office so as to increase their par-ties' chances of success at parliamentary and local levels, as people tend automati-cally to choose candidates from the same party during concurrent elections. Par-liamentary and local elections would be overshadowed by the Presidential Elec-tion, and not taking part would risk los-ing votes to the other parties who put their leader forward.

THE POLITICAL PANTHEON: FROM LEFT TO RIGHT

Leader

Party

Slogan

Key promises

Opponents

• Cheaper energy

through negotiations

with Russia

• More autonomy

for Vojvodina

• Tolerance

• Profitable countryside

• energy of youth and

mature experience

brought together

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%

DSS, SNS DS

• 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

Truth Strong regions -

Strong Serbia

LDP URS

—Čedomir Jovanović

—Mlađan Dinkić

RESULTS OF A RECENT POLL

Source: www.eizbori.com


15

normally have led to some modicum of political stirring and a corresponding re-action in the streets. But they didn't, and the ruling coalition hasn't been serious-ly challenged even once in the last four years. This might prove that certain ideas, and flags, that once dominated the Ser-bian political scene may well have faded away or ceded to a more pragmatic real-ity: 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 programmatical-ly 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 ob-viously entering a post-political era in which major crystallisations have already happened and have shaped the future landscape, with any potential revers-als quite unlikely to happen in the com-ing years.

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...

SNS (DS) / DS, SPS, PUPS, LDPDS SNS All

• Struggle against

corruption and crime

• High employment rate

• Social justice

• Family care policies

• Agricultural and

regional development

• Kosovo will remain

in the Constitution

• Struggle against

corruption and crime

• Economic

cooperation with

China

• Economic and trade

union with Russia

• 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

• Building

infrastructure,

bridges and roads

• A new car factory

• Agricultural

investments

• Safe future

• Reforms and

modernisation

of Serbia

• Renewal of Christian

morality

• Inclusion of young

people in politics

• National integration

of all Serbs

• €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

Socially Just

Serbia

I vote Serbia

+ no EU.

For Serbia.

You know why.

Jobs. Investments.

Security.

Movement for

the Life of Serbia

Let's Move

Serbia

SPS SRSDSSDS DVERISNS

—Ivica Dačić

—Vojislav Koštunica

—Boris Tadić

—Vojislav Šešelj

—Executive Board

—Tomislav Nikolić

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 exist-ing partners and opponents, was entire-ly economically and socially driven. This, of course, doesn't mean that there hasn't been any cause for political tensions: ex-traditions of Bosnian leaders Radovan Karadžić and Ratko Mladić, Serbia's silent administrative concessions to Priština, and the recent eu candidacy would

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16

B&H Politicking:

Saving Private Komšić

The news that Željko Komšić, a mem-ber of the b&h Presidency and Vice-President of the sdp b&h, had re-

signed 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 satis-faction and jubilation on the part of the public who would not necessarily sym-pathise with sdp and Lagumžija, while the rest, who would be more sympa-thetic, were given yet another cause for revolt by this desperate move by a high ranking party official and a person serv-ing his second term in office.

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.

politics

By Ivana Marić

logical move. I remain a member of sdp, though without any party function; I will continue to fight for the principles of so-cial 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 re-turned him in 2010 with a total of 337,065 votes, 52,630 more than the amount sdp gained at state level.

Speculation surrounded this sud-den move, lacking, as it were, any ade-quate explanation; the story quickly, and with good reason, found itself occupy-ing headlines across the country (and be-yond). It was suggested that it might well have been due to a conflict with the Min-ister of Foreign Affairs, and sdp Presi-dent, Zlatko Lagumdžija; the two had clashed when Lagumdžija had support-ed the candidacy of his Serbian Minis-terial 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-af-fairs 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 authori-tarian 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 conclu-sions,” stated Lagumdžija. Following this meeting Komšić compounded his appar-ent naivety (at least in this matter) by not explaining the reasons for his original de-cision to resign, instead urging the pub-lic and the media to wait one more day for his official response.

“I ask you to be patient and wait un-til the next session of the sdp Presiden-cy; I also urge patience from the 337,000 citizens who voted for me,” Komšić stat-ed. What seems to have escaped Komšić is the fact that a nationally elected official, anywhere, does not only represent their

Komšić’s resignation might have ap-peared as if he had no say in the matters at hand, be they party-related or gov-ernmental. Komšić yet again turned to a time honoured spin, playing to the pub-lic gallery instead of taking responsibili-ty 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 long-er go on,” he said, “I have made the only


17

voters, but the entire citizenry. As such there is a very obvious obligation on his part to divulge, truthfully, why he em-barked 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 trou-bled by a poorly performing Government, should be burdened with.

legislation which would enable the con-fiscation of illegally acquired properties, stating that “uskok restored Croatian dig-nity”, and that he would like to see simi-lar progression in B&H as well. Comment-ing 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 specu-lation, both Komšić and Lagumdžija de-nied there was any merit to the claim that the whole incident had arisen due to any differences over the Jeremić’s un candi-dacy; “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 con-flict, shall remain a topic of conversation, no doubt, for political philosophers for many years to come.

democracy at large

In a large showing of a democracy writ, or maybe of large scale political sensation-alism, 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 mat-ter of time before such events come to pass; at a press conference it was reported that Komšić will stand for the top sdp po-sition after the General Election in 2014, while Lagumdžija is expected to relinquish the leadership. The same conference saw Komšić 'explaining' his resignation: “I re-signed 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) resigna-tion 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 in-deed, for there is finally talk of Lagumdžija’s resignation, however speculative.

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...

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 fight-ing crime and corruption, which had been a key point during his election campaign. He added that he would be advocating

www.see-magazine.eu

18

Montenegrin Tobacco Spring

March 18th, a Sunday, saw an es-timated 20,000 Montenegrins, a considerable percentage of the

overall population (almost 3%), de-scend on the centre of Podgorica to pro-test against a Government whose seem-ing “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 Gov-ernment itself is going, that they have the same end-goals: a higher degree of transparency and accountability. Obvi-ously 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 com-panies, who had been hired to ferry pro-testers 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

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

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, an-gered by the rise in the price of electric-ity, gathered in front of the government building. This time round, the messag-es were much the same, as organisers re-peated demands for the resignation of the heads of the regulatory agency for ener-gy, 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 at-tacks 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, Ele-ktroprivreda Crne Gore, which, accord-ing to the trade unionist, was sold for 100 million Euro less than the highest ten-dered offer. “Where are the seven million euro spent on bribing government offi-cials during the privatisation of Telekom? Where are the millions of Euros that Rus-sians claim they invested in the Podgorica

a reality check

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 demonstra-tion, 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.


19

Aluminium Plant," Keković went on. The students, as could be expected, demand-ed universal access to free education.

In other words, people gathered to-gether 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 Rus-sians 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 Europe-an politicians, just as we also know that he has been under suspicion for illegal to-bacco trafficking in a number of jurisdic-tions, 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

minister”, before imploring the current prime minister to join in the fight against organised crime, or else “join the ma-fia on its way to prison”. Such cognitive dissonance, on the part of the Govern-ment, can only exacerbate the situation, especially as talks with the eu proceed at a healthy pace. Indeed, Prime Min-ister Lukšić has only recently met with Štefan Füle, the eu Commissioner for En-largement, 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 wel-comed by the mass not only as a partial solution, but as a kind of (young and ed-ucated) force that could help the coun-try 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 test-ed to hard. The tipping point is perhaps now, the principal reason behind it be-ing 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 Eu-ros net. Montenegro holds a score of only four (on a scale of 0-10, where 10 is the optimal score) on the Transparency In-ternational’s Corruption Perception In-dex. 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 na-tion, is maturing, and it is only natural that, like most adolescents, it should be looking for symbols. Or a new set of sym-bols. 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 un-seemly to compare Đukanović to Al As-sad or Gaddafi – but some forward move-ment is undoubtedly on the horizon. Let us call it, giggles and all, a Montengrin Tobacco Spring.

After a test of patience...the tipping

point is perhaps now, the principal reason behind it

being Montenegrin people’s perception

of corruption.

www.see-magazine.eu

20

Money And Ethical Dysfunction...

Especially In Politics

The current presidential election cy-cle in the United States has brought to the forefront of concern and com-

ment the role of money in American pol-itics. It seems with the ever accelerating decline of political parties as vehicles for mobilization of voters and political opin-ion, money is stepping in to the vacuum so that special interests and ideological sub-cultures gain more and more influ-ence over who gets elected. The author-ization of Super-Political Action Com-mittees 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 cam-paign 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

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.

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 cit-izens are being priced out of local politi-cal competition as the costs of campaign-ing rise and rise, mostly for television ads and the experts who fine tune their emo-tional appeal. Parties, which provided the mechanism for compromise and coali-tion 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 al-ways 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 avari-cious and stingy. So, in business and poli-tics: 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

editorial

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 oth-

er things, as a university professor, consult-

ant 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 be-

came the Global Executive Director of the Caux

Round Table in 2000. He wrote the book Mor-

al Capitalism to explicate the economic and

moral approach of the Caux Round Table

to free market capitalism.


21

imposition of risk and loss on others, and immoral behavior. In business, the com-plaint seems to be universal and eter-nal: 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, favorit-ism, 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 bad-ly 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 pow-er 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 conven-ient 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 re-straint and a bridle if it is not to desta-bilize 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 ab-solutely.” Ethical systems of politics and governance seek to moralize power but

turning it into stewardship or some sim-ilar 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 pro-visions for checks and balances. Money goes to the heart of ambition and self-as-sertion. 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 them-selves. Lots of money gives us a charisma, just as possession of any great source of power does. Thus money politics is a dan-ger to the common good everywhere.

But money, like every other form of private property, provides each of us with stature and significance. Our voice

money in politics, but under some con-straints 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 in-to competitive harness: double the price of campaign commercials and give half the money to an opponent for free air-time. Frankel suggests that such a rule would turn campaigns cautious in spend-ing their money. They would think twice before making a big buy of tv time as they would be spending money to put oppos-ing thoughts and emotions out before the public. They would shift to less expensive and more time-consuming ways of influ-encing voter attitudes and behaviors.

Frankel’s idea has its drawbacks – fringe and hateful candidates (consider a Hitler) would be given exposure they oth-erwise might not be able to afford. But a response from Frankel might point out that error can be tolerated where free-dom 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 analo-gy would be to a free market in goods and services which, over time, drives out sub-standard offerings, fraud, and negligence.

Money is not going away, either in eco-nomics or politics; and human nature is not going to change. The challenge of bal-ancing power with restraint, therefore, will also remain before us.

Human nature is not going to

change. The challenge of

balancing power with restraint,

therefore, will also remain before us.

THE CAUX ROUND TABLE

Crt is an international network of principled

business leaders working to promote a moral

capitalism, and its principles apply fundamen-

tal 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 glo-

bal poverty. These include legal and regulatory

changes in developing countries that will im-

prove the environment for productive invest-

ment of foreign and domestic equity capital.

becomes more influential if we can sup-port 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 digni-ty 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 re-spect 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

www.see-magazine.eu

22

JAT - Get Profitable or Perish

Serbia’s jat Airways has been per-forming a balancing act between its own illiquidity and offers for new

aircrafts - one of them binding - in an effort to stay airborne, with three re-structuring 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 man-agement. The third option is still a possi-bility as the provisional sums on behalf of three Serbian businessmen would not ex-ceed 25 million Euros.

The problem lies in the fact that jat Air-ways has, perhaps, appraised its own value at too high a mark. The Government's es-timate of combined total assets approach-es a figure of 300 million Euros which, co-incidently, 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 air-craft; in early February, Russian officials from Sukhoi, together with an Italian del-egation, approached the Serbian Govern-ment with their new ‘Superjet’, a 75-seat mid-range plane which merges Russian, Italian, and us technology, along with

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

was not in a position to honour its inher-ited contract and thus suspended any fur-ther proceedings. To date, the Serbian Government has not made any official re-sponse in relation to this contract, even an examination of which would be incred-ibly 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 al-ready 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 air-line personnel. All of this, however, is con-ditional 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 com-petitors: 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 pre-vious issue of see, which quoted Ulrich Schulte-Strathaus, the Secretary Gener-al 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. Govern-ments may be trying hard, but the reality is clear: get profitable or perish.

the industry

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 al-so the President's official jet, which is long overdue for replacement.

Then came Boeing to discuss moderni-sation 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 consequent-ly 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 transi-tioning to new 737 models would certainly be less costly, or arduous.

In late March, Airbus sent an ultima-tum 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 con-tract 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


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24

All Change in the EU Audit Market?

On 30th November 2011, the Europe-an Commission published propos-als that could bring major chang-

es 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 con-centration in the market for audits, with new requirements imposed for audit ten-dering and auditor appointment; and (2) to address perceived threats to auditor independence, such as long tenure and non-audit services, by mandating au-dit firm rotation and imposing significant new limits on non-audit services, and po-tentially 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 re-quirements relating to Audit Commit-tees, and to the structure and regulation of the audit market in the eu. The propos-als introduce an expanded definition of a

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.

legal & regulatory

Public Interest Entity (pie) which, in ad-dition 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 Eu-ropean Commission to be considered by the European Parliament and the Eu-ropean Council in a process which may take two or more years. For those un-aware, 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 max-imum 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 appoint-ment terms in exceptional circumstanc-es. 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 not-ed below. It might also prevent the Au-dit Committee (see below about the Au-dit Committee) from selecting the audit firm that they believe is most capable, and could potentially be detrimental to audit quality.

By James Thornley

With 20 years of professional experience, in-

cluding the last 15 years in kpmg (6 years with

kpmg Leeds and 9 years with kpmg Belgrade),

James Thornley currently serves as a Chief Ex-

ecutive Partner – Head of Audit. He is also a

partner in charge for Quality & Risk Manage-

ment and IFRS Reviewing. He is a member of

the Institute of Chartered Accountants of Eng-

land & 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...


25

requirements for audit committees

The Regulation requires all pies, with cer-tain concessions or subsidiaries and cer-tain types of financial institution, to have an Audit Committee comprised of non-executives or shareholder-appointed members. In addition, it mandates firstly that at least one member must have com-petence in auditing and another mem-ber must have competence in account-ing 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 re-sponsibility as to the oversight of the au-dit and in the appointment and dismiss-al of the auditor. While the governance standards in many eu countries are well developed, the requirements of the Reg-ulation are likely to result in changes to the composition and activity of the Audit Committee.

special rules for the statutory audit of smes

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

conculsions

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 im-pact upon current business models.

However, a brief look into the de-tails shows that these proposals are not just about the big 4. Corporate govern-ance standards and audit regulatory bod-ies 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 chang-es, if they come through as proposed, will impact heavily upon these organisations also.

In other words, big or small, an inter-esting period lies ahead for all those in-volved in the audit arena!

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 serv-ices would be permitted. Within the eu, they would be subject to pre-approval on a case-by-case basis by the Audit Com-mittee (e.g. comfort letters) or the rele-vant competent authority (e.g. acquisi-tion due diligence services).

mandatory tendering for appointing auditors

The Audit Committee of a pie would be required to identify at least two choic-es, unless it is proposing reappointment of the incumbent auditor (subject to the maximum six or nine year tenure de-scribed above). It would identify which firm it preferred and would have to pro-vide a justification of its recommendation. At least one of the firms invited to ten-der 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 con-tains specific requirements for the proc-ess that the Audit Committee must follow. eu-level regulatory bodies would also de-velop further guidelines on the process for auditor selection. Auditor appointments for credit institutions or insurance un-dertakings would be subject to a veto by the relevant prudential supervisory au-thority. These requirements would re-strict Audit Committees’ discretion to de-cide when and how to tender.

choosing an auditor

There will be prohibition on contractu-al clauses limiting the audited entity's choice of an auditor, which means that any contractual requirement that lim-its 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.

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 fi-nancial institutions;• certification on compliance with tax re-quirements when such attestation is re-quired by national law; and• assurance on corporate governance and social responsibility statements.

audit only firms?

Audit firm networks meeting certain crite-ria would have to become audit-only with-in the eu, and this requirement would ap-ply 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 non-audit services within the eu. This require-ment 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 cur-rently bring to their audits.

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26

The Fantastic Duo Weaving a New Deal

Sceptics may abound and come in all shapes and sizes, but it is safe to say that it all began as early as early Feb-

ruary, with Finance Minister Slavko Linić announcing drastic fiscal and administra-tive 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 big-gest State owned companies, i.e., hep (the electricity utility), Hrvatske vode (the water utility), Hrvatske autoceste (Croatian motorways), hž (Croatian rail-ways), precisely in such companies as were identified as those which have the highest investment potential. “The in-vestment 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, fig-ured largely in his plan, and the project-based 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.

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

macro-economic perspective; and may have, just may have, consequently cre-ated 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 ad-ministration, are nonetheless extremely unlikely at this time, but over the last two months Finance Minister Linić has been very severe in his rhetoric, condemn-ing the ‘Greek’ model as unsustainable.

event horizon

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 lan-guage had changed, which subsequently led to openly voiced plans to initiate of a whole series of privatisation projects: the Croatian Postal Bank, Croatia osiguran-je, Petrokemija – to name just the big-gest ones. Nothing unusual for a transi-tional economy in dire need of extra cash, where the state owns a majority stake in 77 companies (not including the utili-ty 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 organis-ing a crisis-situation fundraiser. If one read between the lines and listened at-tentively, one could almost detect a ma-jor 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 – efficient-ly to run this gargantuan economic appa-ratus. Emboldened, but just as frightened, by their arduous lobbying effort (and suc-cess, at least for the nonce) so as to re-tain the country's third-rate credit rat-ing, 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.


27

The most recent reiteration of what most sensible people know already came from Željko Lovrinčević of the Economic In-stitute, 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 en-tertained the notion of offering anything else; and the citizenry on the other, who are averse to risk and accustomed to so-cial giving. What is important for present purposes is that such views are being voiced with increasing frequency, and from all corners of the political-econom-ic spectrum. No concrete results yet, per-haps, 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 Minis-ter of the Economy Radimir Čačić him-self came out with a 'new deal': as could

key phrase is “Reconstruction of State-Owned Buildings and Facilities” in ac-cordance with the principles of energy efficiency, and to depict the magnitude of the project – and potential savings in-volved – it is estimated that the State, cit-ies and municipalities control a verita-ble empire of some eleven thousand-odd buildings and facilities which rack up an annual electricity and water bill amount-ing 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 pub-lic 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 sub-stantial 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 pen-sioners stands at the unimaginable fig-ure of 1.15: 1. Secondly, one should nev-er 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 pub-lic buildings, on modernising not on-ly the mechanics of energy consumption, but also on modernising the way one per-ceives 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 na-tional level is the Croatian Democrat-ic Union (hdz), but hdz, the slush-fund trial against former pm Sanader and in-dictment against the party itself aside, is currently in the middle of a party pri-mary and is beset by a whole gamut of internal rifts. In these circumstances, pm Zoran Milanović has afforded him-self the comfort of a populist balanc-ing act. Whilst his ministers in charge of the economy and finance speak of infra-structural 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, af-ter all, is a proclaimedly socialist party – then it is perhaps even to be commended. One should not be insensitive to the po-litical 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 – eco-nomic 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 direc-tors, proverbially at odds with one anoth-er. 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 remain-der of this issue, dedicated in its entire-ty to positive energy in Croatia – might, just might, in howsoever modest fashion, resonate with those few Croatian politi-cians 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.

If Čačić pulls it off...that will be an

asset for the future. Now, that would

be something new, even worthy of

public fireworks.

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 men-tion that, as this issue goes to the print-er, 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 reani-mate the fallen construction sector. The

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

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28

British-Croatian Business Forum

The titular event was held in sur-rounds that can only be described as majestic: in the Gvozdanović Pal-

ace, now in the care of the City of Zagreb but formerly the residence of the epony-mous family. The former patriarch of the Gvozdanović clan was also the founding member of a group of like-minded busi-nessmen, 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 wom-enfolk. Whatever else may have tak-en 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 Minis-ter of Finance, Slavko Linić, Minister of

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

investments

Construction and Physical Planning, Ivan Vrdoljak, to name but two. The Minis-tries of Culture, the Economy, Maritime Affairs, and Tourism all had their repre-sentatives 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 in-terest by the multitude of cameras (tele-vision and newspapers) in Mr Linić when

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’...


29

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 in-dustries 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 mem-ber of the European Union, and if there is one thing that the eu looks upon un-favourably it’s Government ‘interference’ in fields where other European compa-nies 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 Gov-ernment to engender a market situa-tion where these national resources are in demand. The longer the status quo re-mains, 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 fo-cus 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 capi-tal 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 bank-ers, consultants, and venture capital-ists, then this would surely be it. How-ever, we spoke of honesty, and when we spoke with one individual from the pri-vate sector who was involved with prop-erty, he was not overly impressed with what he had seen and heard: “I’m disap-pointed with the event so far, since none of the presentations hold any great inter-est 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

be noted that the gentleman in question was back in the room once Vojko Ober-snel, Mayor of the City of Rijeka, took to the podium, of which more later.

What was perhaps of most inter-est, not just for Croatia, or even the ex-tended 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, revi-talise 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-reli-ant. While these are developments that would not be considered ‘new’, and in-deed 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 dec-ades ahead of the rest of Europe (peak-ing in the seventies were hydroelectrici-ty 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 finan-cially (cheaper bills means more disposa-ble income), the sector itself is quite prof-itable 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 Gov-ernment. Indeed, local ‘chiefs’ have not stood idly by, and have taken measures in order to help invigorate their own lo-cales 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 Minis-try 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 invest-ment incentive Rijeka needs as the May-or’s presentation showed detailed plans for over 2 billion Euros worth of capital projects, which included city centre re-newal as well as redevelopment of the Ri-jeka docklands, intended to help both the cargo and tourism industries.

Photo by Liderpress

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30

Chris Hodge, Charge d’Affaires of the Brit-ish Embassy, had told the gathered press and delegates that “the British Govern-ment is committed to economic growth in Europe and beyond. Growth is the en-gine that will drive prosperity for British citizens and those of our European part-ners. The British Government is therefore determined to give the maximum possi-ble support to the efforts of British com-panies to deepen and extend their range of business partnership overseas.”

However, while this is of course very much the case, the market does not nec-essarily support huge swathes of invest-ment from so far afield, at least not in eve-ry 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 ir-respective 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 bottom-less 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 State-owned Croatian Postal Bank (hpb), for in-stance, is up for sale, so it felt more than relevant that we ask some of the gathered experts their views on the matter. Happy

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 cer-tain 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 custom-er! They’re closing branches, either out-right because of financial difficulty, or else by selling them on to other region-al 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 in-terest 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”.

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 cer-tain 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 inaccessi-ble 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 frui-tion. And, if jobs are created as a con-sequence? Well, that’s something eve-rybody can understand and appreciate. Especially in the Government, perhaps even in the long defunct Kvak Klub. Good for the morale, isn’t it.

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 Photo by Liderpress


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32

YES We Can

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.

By Miroslav Tomas

social economics

Croatia’s Young Executives’ Society has presented the third generation of laureates of its yes Junior initia-

tive, 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 guid-ance 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 lit-tle 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 fac-tory 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 execu-tives, who have transformed a number of

struggling socialist enterprises into suc-cessful and competitive companies. Ledo is one of many such examples, a compa-ny 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 on-ly 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 Execu-tives’ Society. Addressing the matter of

Domagoj Milošević, former Deputy PM

Damir Kuštrak, Executive VP of Agrokor

Ante Todorić, executive VP of Agrokor

Davor Majetić, HUP Secretary General YES JuniorsPhoto by Liderpress

Photo by Liderpress

Photo by Liderpress

Photo by Liderpress


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Innovation Agency, addressed the mat-ter of social betterment and further in-corporation 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 de-scribed as being more intuitive, com-mitted to interpersonal relations and co-operation 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 ab-sorb new technologies more quickly and who implement fresh ideas with more enthusiasm.”

Yes, a non profit organisation found-ed in 2006 as an initiative of the Croatian Association of Employers (hup), aims to bring together accomplished individuals from all walks of life: managers, entre-preneurs, academics, scientists, artists... To some, as the old story goes, it may smack of elitism. But elitism – the pos-itive, meritocratic kind – might be just the thing we need, if we are to see that much needed shift in mentality.

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 econom-ic crisis. To put things into a simpler per-spective, what ‘competitiveness’ implies is a better, cheaper product in a short-er time-frame. Unlike other conditions, such as geo-strategic position and the al-location of natural resources, which are beyond our control, increasing compet-itiveness can be significantly affected by

the transfer of knowledge and experience of the business community to younger generations.”

Each of the yes Junior programme par-ticipants 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 socie-ty Mirna Dumičić, a young macroecon-omist and participant in the Junior pro-gramme, stated that “the networking of young professionals represents a great foundation for the promotion of new ide-as, which are useful in business, but also in a broad social sense. Though the opin-ion that one person cannot exact any ma-jor change is widespread, it is my firm belief that each of us can affect our im-mediate environment, first of all through conscious and committed performance, but also through a wider social engage-ment, indirectly or directly.”

Another Junior program partici-pant, Antonija Mršić, a communications expert working with bicro, Croatia’s

“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 Photo by Liderpress

Photo by Liderpress

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

SEE Rexpo is a new event on the calen-dar. 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 mar-kets 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 add-ed enough of our own experiences in the property market to make ours stand out. I won’t say we’ve micro-managed every-thing, but we do feel we’ve put an inordi-nate amount of effort into making it as easy as possible for business to be done, espe-cially 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 econ-omies 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…

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…

real estate

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 substan-tial 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.

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 individu-als and companies from every country in the region – Croatia, Serbia, Bosnia and Herzegovina, Slovenia, Montenegro, Macedonia, and Albania. We have an ad-vantage here in that many of the consult-ants 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 ac-cessible, then I say we’ve done our job. The more an investment brings, in the end,

IJ Not to boast or anything, but so far the response we’ve received from varying embassies and investors has been noth-ing short of fantastic. President Josipović himself is backing our endeavours; he un-derstands the need to attract investment in order to stimulate economic growth. In addition to his support we’ve been in con-tact at all times with the Croatian Gov-ernment, the Croatian Chamber of Econ-omy, as well as the Croatian Employees’


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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 poten-tial 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 middle-man? We certainly look to try and bring together all the components of a business deal… We want to gather all the key par-ticipants in the regional real estate mar-ket and help them realise new business

opportunities. Maybe we can help intro-duce new or adaptive business models, and we’re definitely doing as much as we can to bring in as much foreign invest-ment as possible. That’s why it’s impor-tant to us to have as much support as pos-sible 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 in-vestor 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, inves-tors, designers, consultants, etc. Do you feel that having such a broad spread of individuals and groups might dilute the

“There’s still money out there

for investment, but whoever signs the cheques needs us to help facilitate the best advice.”

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weekend? We're loathe to use the phrase 'Jack of all Trades', but....IJ We are witnessing the fact that the in-vestment potential of the Adriatic region is not being sufficiently exploited. The reasons? On one hand it’s the global eco-nomic 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 interdis-ciplinary process which requires a wide range of highly experienced profession-als. 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 prepara-tion of projects and the promotion of the most perspective projects to investors in-terested in the region.

SEE We spoke at another gathering like this, and you weren't hugely impressed with the quality of material/presenta-tions which were of relevance to some-one 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 differ-ence, compared to other events, is a rich programme which will encourage the es-tablishment of Business to Business and Business to Government connections. By establishing direct communication, we expect better cooperation between the business (private) and government (pub-lic). That should encourage the discus-sion of specific problems and challeng-es. Along with exhibiting stands, we have rexpo match making - organised meet-ings between interested parties in spe-cially equipped meeting rooms, rexpo Speed matching - a short presentation of a project or service, followed by a busi-ness 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 simi-lar fairs, mipim and Expo Real, it offers

an extra added value to exhibitors, pan-ellists and visitors. According to our ex-perience 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 cap-ital to invest; is it worth my while com-ing 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 at-tending. Croatia will become an eu mem-ber in 2013; the region has excellent road infrastructure, especially for access to Western European countries, a stable po-litical situation – all facts that only serve to underline the excellent investment po-tential for everybody.

REXPO IN BRIEF

The Mission

To provide new business opportunities and new

business contacts for all participants of invest-

ment and the commercial real estate market!

The Vision

To become the leading regional business event!

The Goals

• Gather all key participants of the region-

al real estate market and initiate their mutu-

al 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 govern-

mental decision makers are present at this event


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14th Croatia Boat Show: The Big Guns

Are Coming to SplitWith 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.

fairing about

SEE 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 buy-ers and those who simply wish to see the show. The boating and yachting industry, as you may well imagine, was hit partic-ularly hard in recent years, especially in small markets. But I am definitely see-ing 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 tre-mendous. 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.

SEE But what of the Nauticus Show? How does it differ from or complement the

‘main event’?VB Although the Croatia Boat Show prop-er, 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 syner-gy which simply needs a good port of call

– the Nauticus Show in other words – to be properly accumulated and then un-leashed onto the market.

Show, which will undoubtedly remain the main attraction, we decided to in-clude 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

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SEE But what of the ‘main event’, the Croatia Boat Show?VB Croatia Boat Show is an event or-ganised at the highest international lev-el, and as such it provides an opportuni-ty for exhibitors, sponsors and partners to reach maximum promotional effects in all segments of the five day happen-ing. Croatia Boat Show is a meeting point of yacht builders and their buyers, motor and equipment manufacturers, nautical clothing and shoe makers, those who of-fer nautical recreational activities, banks, leasing companies, insurance agents...Our goal is not only to justify their ex-pense – or investment, as it were – but al-so 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 increas-ingly 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 – tru-ly 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.

VB Many businesses and projects are di-versifying, and so is the Croatia Boat Show. There is no other way for one to stay com-petitive, 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 win-ners across a number of categories, and are selected on the basis of their propul-sion 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 il-lustration of their know-how, inspiration and talent. And you’ve heard correctly, the Trophy winners’ parade is an unfor-gettable 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 go-ing to ask you this – your company is in-volved in a major development project just North of Dubrovnik. How are things progressing?VB Yes, the property is located rough-ly 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 pro-jected 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 ap-proved, and suffice it to say that we are ready to start construction. Much de-pends on the State, or on the financing available from the Croatian Bank for Re-construction and Development. Financ-ing is generally the key issue, as it would be, but I can finally say that the invest-ment climate has improved significantly. Let us leave it at that for now.

Many businesses and projects are diversifying, and so is the Croatia

Boat Show. There is no other way for one to stay competitive...


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Rijeka: Gateway to the Adriatic…

And BeyondForget 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

destinations


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Sitting deep inside the Bay of Kvar-ner is the city of Rijeka, third larg-est Croatian urban centre and the

country's primary shipping port. Rije-ka is a city of particular appeal, stretch-ing along the Adriatic coast and rising up into the foothills of the northern-most branches of the Dinaric Alps, provid-ing a distinct contrast between the tow-ering mountain massif to the rear and a magnificent vista of the bay and Kvarn-er islands. The city and its surroundings represent a meeting point of the Medi-terranean 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, Šibenik or Split; it is immediately noticeable that the city's architecture resembles Zagreb, Vien-na, 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 cov-ered mountains of Gorski Kotar before re-vealing 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), mak-ing Rijeka a somewhat vital and strategic location, which goes a long way towards explaining its fascinating, if overly war-like, history. Suffice it to say that were you to have lived here during the pe-riod from 1918 to 1991, you would have found your domicile having existed with-in six different countries. It may well be because of this oft-changed sovereign-ty 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 oth-erwise, over the past century.

home sweet home

The first settlements in the area date back to pre-Roman times with the Celtic set-tlement of Tarsatica, far above the city, and now the site of a magnificent medie-val fort. Later, during Roman times, ‘Tar-sa’ evolved into a town which was locat-ed, roughly, where the old city centre is today. Numerous archaeological remains, such as the foundations of the city walls,

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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 Hun-garian 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 Na-poleonic Wars, only to be returned to the authority of the Hapsburgs in 1814. The course of the 19th century saw further dis-putes 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 set-tlement 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 appear-ance, 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 creat-ed by native Ivan Lupis Vukić – the tor-pedo. Vukić sold his patent to Englishman Robert Whitehead, who, having perfected the design, chose to establish his produc-tion facilities in the Croatian’s hometown, which was, of course, Rijeka.

As we’ve already mentioned, the pe-riod between 1918 and 1991 was a rather tumultuous one: Rijeka was first occu-pied by Italian fascists – (in)famously led by Gabriele D’Annunzio, esteemed man of letters, overall impresario, and part-time adventurer – and then officially found it-self under the control of Italy proper fol-lowing 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, Ri-jeka was briefly occupied by the Wehr-macht 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 industrialisa-tion with the rapid development of ship-building, which was ultimately thrown into some disarray upon the fall of social-ism and the break-up of the country.

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 Ro-man Empire, in the 5th century, the city changed hands between numerous con-querors. The first mention of a medieval town dates back to the 13th century with two settlements, Trsat, a fortress, and Ri-jeka, 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 Aus-trian Hapsburgs in 1466. When the Ot-toman onslaught moved through the re-gion, Rijeka and the neighbouring Bakar remained the only ports of call, serving as the 'remnants of the once glorious king-dom of Croatia', which was now a part of the Hapsburg Monarchy. Through-out the course of the 16th and 17th centu-ries Rijeka grew into an important centre of trade and commerce, despite the ev-er 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


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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 ma-jor transit hub, is in need of reinventing itself, both in the field of tourism and in the areas of industry for which it exhib-ited a high level of skill, namely ship-building. 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 ex-pand, where necessary; the planned de-velopments were as follows: a University hospital, to accompany one of the old-est 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 stag-gering 2.3 billion Euros. Quite a figure for a city, especially one which has been los-ing out in the tourism market to Split and Zadar.

“Some of these projects are already underway – the World Bank has giv-en us a loan of around 120 million Eu-ros 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?"

Photo by Liderpress

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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 mil-lion 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 im-pressed. Up until now, the port was ac-tually 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 in-crease 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 im-provements 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 im-mediate region in the area of urban tour-ism – 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 re-main 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 stun-ning 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 Ri-jeka will certainly welcome them, all the more if they happen to have a few hun-dred 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 as-

sign 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 histo-

ry, 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 wit-

nessed 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 lim-

ited field of Titanic-lore, the Peek & Poke Muse-

um 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 cultur-

al 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, sail-

ing so often out of Fiume, fell to a torpedo, built

in that very same city.


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Easter Pleasures in Four StrokesEggs, booze, chocolate, ham… all with a twist.

Enough said.

good stuff

Zvečevo's Mikado Truffles

Twice Cooked Ham Hock by Chef Gauci

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 bitter-sweet 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!

Easter Egg a l'OnionNo 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.

Beware the Yellow WaspSeeing 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.


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to-do list

Triple Bill Ballet HNK, Zagreb (19:30h)/

Pierre-Laurent AimardCankarjev dom, Ljubljana/

Croatia Boat ShowSplit/

Filipović RE ConferenceRegent Esplanade Hotel, Zagreb/

Construction fairZagreb Fair/

REXPOHypo Business Centre, Zagreb/

Fashion Week Sarajevo/

GodibodiLjubljana Puppet Theatre, Ljubljana/

Beautiful is BizarreNational theatre, Belgrade (20h)/

Fashion WeekBelgrade/

GiselleSlovenian National Theatre, Ljubljana/

PassionKD Vatroslav Lisinski, Zagreb (19:30h)/

Z. Predin & M. DedićBosnian Cultural Centre, Sarajevo (20h)/

Ibrica JusićTvornica kulture, Zagreb (21h)/

Eric SardinasHard Place, Zagreb (21h)/

Three world famous short ballet pieces

French pianist performs the works of Liszt, Wagner and Berg

Biggest boat show in the region

8th International conference on the Croatian real estate market

International construction and home decoration fair

Internationa real estate and investment expo for the Adriatic region

Insight into the b&h fashion scene

5th World Music Festival

Guest performance by Jacoby & Pronk, contemporary ballet

Talented young fashion designers show off

A ballet by Adolphe Adam and David Coleman

Zagreb Philharmonic's traditional Lenten concert

Soft jazz experience

Legendary Dubrovniksinger/songwriter

Exclusive small club blues performance

April 5th

April 6th & 7th

March 31st - April 7th April 11th

April 4th April 14th

April 13th

April 17th

April 17th - 22nd

April 17th & 18th

April 17th - 21st

April 19th - 20th

April 18th - 22nd

April 17th - 21stApril 4th

Ibrica Jusić Zoran Predin & Matija Dedić Sarajevo Fashion Week


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