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Croatia

Capital Zagreb
Time Zone CET (GMT+1)
Country Code 385
Mobile Codes 91,92,95,98,99
ccTLD .hr
Currency Kuna (1EUR = 7.26HRK)
Land Area 56,594 sq km
Population 4.5 million
Language Croatian
Major Religion Roman Catholicism

Terminating the Terminator

By Maja Cvetkovic Raic* in Zagreb

Editor’s note: on his first visit to Russia in 22 years, California governor and cinema icon Arnold Schwarzenegger has received a warm welcome from President Medvedev (and even a lighthearted offer to become Moscow’s mayor).

However, the legendary film franchise that Arnie started, The Terminator, got a frostier reception in Croatia, when leaders showed little interest in ideas to shoot parts of the series’ fourth installment in their country. Maja Cvetkovic Raic asks whether this is part of a larger trend at work in Croatia today- one that might be having harmful effects on foreign investment levels, social inclusiveness and the workings of public institutions.

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It is hard to find a foreign company that has not encountered problems dealing with bureaucracy in Croatia. Slow and inefficient administration, resistance from local communities and various misunderstandings are sending investors to other countries. The most prominent problems faced by foreign companies include huge paperwork, insolvency and poorly structured institutions- precisely the institutions that should be encouraging investment, not driving it away.

Croatia vs. Hollywood’s Filmmakers

This seems to be what Croatia is doing with the film industry. Despite the global financial crisis, Hollywood is still investing in new pictures. Autumn is always an exciting period for the cinema, a time when new films are being prepared for December premieres. Some are blockbusters, and potentially candidates for the Academy Awards. The connection between Hollywood and Croatia? Some of these films were supposed to have been filmed here.

The producers of two quite different films – The Chronicles of Narnia: The Voyage of the Dawn Treader and Terminator 4: Terminator Salvation – have one thing in common. They were both unwelcome in Croatia, due to bureaucracy, the absence of the proper laws, and a lack of interest from high officials to receive them. Croatian officials did not have time to listen to their requests for filming, because they had more urgent EU issues to solve. And so the producers went to Slovenia, which was happy to adapt legislation and offer tax deductions for the filmmakers. Other neighboring countries, like Hungary, Czech Republic and Serbia have also not had any problem adapting to the needs of foreign investors from the film industry. In Croatia, however, it was not even possible for them to stay longer than ninety days.

According to Zagreb daily Jutarnji List, producers of The Chronicles of Narnia visited Croatia in early 2009; they intended to pay homage to the exquisitely beautiful Croatian coast, by filming all of their underwater scenes here. “However, nobody had time to receive a delegation from Hollywood,” noted the newspaper. “Prime Minister Ivo Sanader didn’t want to see them, [giving] the excuse that he ‘must dealt with some issues related to the European Union and [thus had] no time to socialize with them.’”

Alas, even though the film’s American producers then “knocked on several doors,” unfortunately they “all remained closed.” In the end, only the former president, Stipe Mesic, met with the Hollywood producers, but he could only give verbal support to the project, “because he had no other powers.”

Being pragmatic Americans, the newspaper concludes, the producers simply said: “if you don’t want it, somebody else does.” And so the shooting location for the film went to Slovenia.

In the case of Terminator 4, a film project that could have been even more lucrative for the country, Croatia said no “because of disorganized bureaucracy and a lack of law,” reported Jutarnji List. In the end, the US state of New Mexico was able to offer enough tax incentives and flexibility to get much of the project filmed there.

Yet even as Hollywood productions like The Terminator bypass Croatia, nearby countries have been keen to get in on the action. Hungary and Poland are leading destinations, as is the Czech Republic– the last, ironically a shooting location for the previous Narnia installment, Prince Caspian, and for mega-hits like Daniel Craig’s first role as James Bond in Casino Royale. Meanwhile, Serbia is benefiting from the likes of Johnny Depp, who will play the role of Pancho Villa in a new film directed by his friend, Emir Kusturica.

Diversity Enriches Societies… Elsewhere

Croatia has relatively few embassies in the entire world. Their working procedures combine something from both the old Yugoslav system and the new EU system. In practice, therefore, the combination does not work very well.

For some aspiring travelers, it is quite difficult to get even a tourist visa for Croatia. This is not because they are unwelcome, but rather because standard procedures and infrastructure do not exist. For example, there is no Croatian Embassy in the whole of west and east Africa. Certainly, there are not terribly many regular visitors from that part of the world to Croatia, though interest does exist.

One consequence is that no official wants to be responsible for those Africans who do want to come. Such foreigners have to fight for many years to make any progress at all. One example is that of a young woman from Nigeria wishing to move to Croatia. All documents issued by Croatian institutions are valid only in Croatia’s legal domain, and documents issued in Nigeria are valid only in Nigeria. They can be used in the international domain only if they are verified. Croatia and Nigeria do not have a bilateral agreement, so the documents need to go to a third country for fourfold legalization. Again, instead of dealing with these hassles, many foreigners are choosing neighboring countries as places for visiting or residence.

This might not be such a considerable issue if it were not for the fact that one of Croatia’s main income sources is tourism. A recent example of the ‘power’ of Croatian bureaucracy is the case of a 50-year-old gentleman from the Czech Republic, who has been visiting the Croatian coast ever since he was seven. However, this year’s visit will not be very fondly remembered.

As it happened, the Czech tourist arrived at his Croatian friend’s house on a Friday afternoon, when the cadastre was closed. Therefore, the Croatian host could not take proprietary and excerpt from the cadastre, and so could not sign in his Czech guest. The following week, when he tried to do so, the local authorities punished the tourist for the “serious violation” of not having been signed in as a guest within 48 hours of arriving in Croatia.

Investment Declines, But Do New Opportunities Lie Ahead?

A frustrated German investor complains that Croatian bureaucracy is worse than that which previously existed in Soviet-era East Germany. The problem is an unwillingness to open up to foreign capital, which was clearly explained by a comparison of investment made by journalist Ante Srzic for Tportal:

“…in the first nine months of 2009, the dominant investors were from the Netherlands, with 839.1 million euros, Austria with 501.9 million and Luxembourg with135.8 million euros. Among other large investors we have Slovenia with 95.6 million euros, 47.5 million euros from France, Denmark with 33.8 million euros, 27.6 million euros from the United Kingdom and then the United States, with 23.6 million Euros.

On the other hand, Sweden withdrew more funds from Croatia than it invested. The difference in the amount is 60 million euros. Hungary did the same, [recording a difference] of 26 million euros and Germany, with a 0.2 million euro difference.

Compared with 2008, this was a huge loss. The largest investors then, were the Austrians with 1,048 million euros, followed by the Hungarians with 952 million euros and the Dutch Antilles, with 851 million.”

The drop in foreign investment in 2009, compared with the year before, is more than obvious and considerable. The only visible solution could come from EU accession. Among Croatia’s EU negotiations chapters (.PDF), the chapter on Justice, Freedom and Security is still open, so changes are possible and inevitable. However, it will take more than a change in laws to wake up Croatia to the opportunities it is missing- it will take a change in mentalities as well.

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*Maja Cvetkovic Raic’s main focus as a freelance journalist is cultural affairs and cultural policy in the Balkans. She works in the music industry in Croatia, managing the Menart record label, and organizes the annual Supetar Super film and music festival on the island of Brac. She graduated in Journalism and Political Science from the Faculty of Political Science in Zagreb.