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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

The Croatian Tourism Industry and Outlook for 2013: Interview with Peter Fuchs

Balkanalysis.com editor’s note: in the following interview by Balkanalysis.com Director Chris Deliso with Peter Fuchs, CEO of Valamar Hotels and Resorts Croatia, readers are treated to an inside view of Croatian tourism from an industry leader in charge of Croatia’s biggest hospitality provider.

In the interview, Mr Fuchs discusses everything from his company’s holdings and activities to the challenges and opportunities that face Croatia  as it tries to modernlze and diversify its tourism offerings while finding creative ways to lengthen the tourism season. In the interview, Mr Fuchs voices his optimism that imminent EU membership will help the already strong Croatian tourism sector compete further on the European and world tourism market, and notes the benefits of recently increased air routes to Croatian destinations.

Introducing Valamar

Chris Deliso: Please tell us a little more about Valamar, which I understand is the biggest hospitality provider in Croatia. When was the company established, and what good practices did you use to develop and establish a dominant position?

Peter Fuchs: We are the leading Croatian hospitality management company, operating 39 properties situated on the Adriatic coast, with a major presence in two of the main tourist regions in Croatia, Istria and Dubrovnik. Valamar is the first Croatian hotel brand, present on the market since 2004, and represents a combination of international standards of service quality, Mediterranean gastronomic enjoyment and Croatian hospitality.

Balkanalysis-Interview with Peter Fuchs Valamar Croatia

“Croatia is becoming more and more interesting to foreign tourists, and I believe that its EU entrance will help raise awareness about Croatia,” attests Mr Fuchs.

We hold around 10% of overall Croatian categorized capacities which makes us the largest tourism portfolio owner managed by one company. We operate 23 hotels, seven apartment villages and nine campsites.

Our dominant position lies in the fact that we have the capacity for around 40,000 guests at almost 40 properties of various kinds. But of course that is not enough. We invest a lot in people. The hospitality industry makes the most of its business in service, and service is provided by people. We are aware of how important it is to attract the best people in the industry- not only managers but also the best chefs, waiters and other specialists.

Another factor behind our success is our lean management structure. We are completely focused on guest satisfaction. Our service approach is driven by the idea that each guest should leave our care carrying lasting memories of Valamar and our destinations. Our size and structure is also a very important factor explaining our success. Valamar as a management company focuses on sales and marketing activities, purchase department, operations management, HR and all other internal services. That makes us additionally competitive on the market.

Online Upgrades Increase Bookings

CD: You have recently announced your new website. What increased functionality does it have? How do you project it will help visitors and drive business?

PF: Our development of the new website was based on feedback we have received from our visitors at our old Valamar.com website. Our marketing department made a thorough analysis and thanks to their efforts and global trends we have been following, we created a completely different web page with clarified design, simple architecture and upgraded and optimized content. In the hospitality industry, content is very important – guests decide on their travel destinations based on picture, advice and on how well we manage to convey the experience of our destination.

In the hospitality business,  creating our own booking service has been a high priority since we want to have more reservations through our own channels. This also has a strong influence on our business. If we compare January 2012 with January this year, just through having the new web page we have generated 20% growth in online reservations and 30% growth in revenues.

Challenges to Tourism Operators in Croatia

CD: What are the biggest challenges to operating in Croatia? On the other hand, what are the best benefits the country offers- aside from the obvious sea, islands and history?

PF: Well, various taxes and administrative burdens are something that has a huge impact on doing business in Croatia. We are paying many taxes that are influencing our business on a daily basis. Our holding company, Valamar Adria Holding is one of the biggest investors in Croatian tourism. The Croatian government has made some steps towards improving the investment climate, and I hope that the new national tourism strategy – presented a few days ago by the minister of tourism – will additionally help Croatia to become one of the top 20 destinations in the world. Certainly, there is room for improvement in the current building and land legislation.

I would also like to see an educational system that would allow students of tourism schools, colleges and universities to receive an educated focused more on the practical side of the business, and to be able to respond to the market demands much better and faster. There is a gap in expertise in specific tourism knowledge like F&B specialists and operations managers and that is for sure a challenge for the whole Croatian tourism industry.

Croatia is a beautiful country, a true Mediterranean jewel. The biggest advantage of the country is its beautiful clean sea, untouched nature and traditional way of living. This is one of the best places in the world to live, with a very high quality of life. Therefore, it must be also a great place for tourists to visit and spend some time here.

Client Profiles and Target Audiences

CD: What is the typical tourist profile for Valamar, and does it vary between the hotels and residential properties? In terms of nationality, median age, place of residence, time of visit, etc?

PF: By definition, we are a leisure tourism company. Most of our guests are families and couples, but since we are building a strong MICE segment also, we have many business groups and individuals that are business-related. Our northern destinations like Poreč, Rabac or Krk are more family oriented, while Dubrovnik is more visited by couples, groups and elderly people. Istria is naturally very interesting to guests with specific interests, because of additional offers like hiking, biking or wine and gastronomic tourism offers.

Although our guests come from all over the Europe, our priority markets are Germany, Austria, Slovenia, France, Italy, Scandinavia and the UK. Most of them are aged between 25 and 45. Our camping guests, on the other hand, comprise a very specific market: most of them come from Germany, Austria and Slovenia, and visit us from April to November. Last year, our camping business did very well.

Croatian Tourism: Predictions for 2013

CD: What do you predict for Croatian tourism in 2013? Increase, decrease, and why?

PF: In 2012, Valamar enjoyed a growth rate of 7.8% in overnights and 14% in total revenue compared to 2011. Croatia is becoming more and more interesting to foreign tourists, and I believe that its EU entrance will help raise awareness about Croatia as a beautiful and safe country for nice and relaxing holidays. Last year Croatia as a destination did very well. There were many factors for that success; for sure, the uncertainties of the Arab Spring and the Greek crisis did help Croatia to have many more tourists, but I believe that Croatia has also become a top choice for many travelers who want to discover a new European jewel and a peaceful oasis in the middle of Europe. This year, Croatia will be a very interesting destination for not only European, but also Asian and other overseas guests.

The Impact of EU Membership on Croatian Tourism

CD: In your opinion, what will EU membership do for Croatian tourism and in particular your company? Is there anything – whether legislation, competition, consumer inflation, or other factors – that will affect your success and the success of the country as a whole?

PF: The investment climate in Croatia is getting better but there is still a lot to be done to remove administrative burdens for doing business and for investments. EU entrance could help by speeding up those processes. Croatia is at the moment enduring a relatively difficult economic situation and tourism is one of the most important industries, supporting GDP substantially.

Economic indicators show that Croatia will benefit from EU entrance. This will reflect on tourism too, and have some positive impacts. In Valamar we traditionally serve mostly foreign European guests. Entering the EU will additionally promote Croatia as an interesting destination.

Valamar sees an opportunity in the coming years, hence we are heavily investing in our properties and quality of service. In 2013, we are investing around 23 million euros in our properties. Our biggest investment is in Hotel Valamar Sanfior in Rabac, in Istria, which will become a four-star property for leisure guests with discerning demands. Our second biggest investment is in one of our best campsites on the Adriatc coast, Camping Krk on Krk island. It has its own pool, spa area, mobile homes with satellite TV and their own yard, beautiful beaches and essentially the full infrastructure of a hotel, under open skies. These investments, together with Croatia’s EU entrance, are making us set optimistic goals for the coming season.

The Challenge of Diversification and Destination Management

CD: In what ways do you see Croatia being able to diversify its tourism offering to becoming a more year-round destination, if this is possible?

PF: Croatia unfortunately still isn’t a year-round destination, and that is a huge challenge for Croatian tourism in general. That is also one of our priorities in Valamar. How can we bring a guest to Dubrovnik or Istria out of the season and provide him with memorable experiences? Property services are not enough. This year for the first time, we are having two hotels remain open for the whole year (Valamar Lacroma in Dubrovnik and Valamar Diamant in Poreč).

Croatia has a lack of destination management (DMC), quality management of destination that would strongly impact Croatian tourism in general, and naturally Valamar. Foreigners still don’t know that Dubrovnik, the former Dubrovnik Republic [of Ragusa], is the cradle of modern diplomacy and even when they come to Dubrovnik there are few developed offerings about history. The development of such products will have a strong influence on Croatian tourism in the future, and that is a challenge for a tourism country such Croatia.

On the other hand, through providing financial support, the ministry of tourism has done a good job of stimulating air traffic in the pre- and post-season periods. For example, this year we have had, for the first time, direct Croatia Airlines flights to Dubrovnik from some major European cities. This had a very positive impact on tourist arrivals to Dubrovnik this winter, and it is one of the main drivers for tourists to visit certain destinations- first of all, to have a suitable way of getting there.

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Croatia on the Verge of EU Membership: Interview with Andrej Plenković

In this new interview for Balkanalysis.com, Croatian correspondent Ante Raić gets the informed views of Andrej Plenković, state secretary in the Ministry of Foreign Affairs and European Integration, on issues surrounding Croatia’s accession to the European Union. The interview touches one everything from currency questions, the country’s lengthy border and entrance into the Schengen Zone to the current and expected level of public support for joining the bloc, in anticipation of a popular referendum on the country’s EU membership.

Andrej Plenković has served as state secretary in the Croatian Ministry of Foreign Affairs and European Integration since April 2010. A graduate of the Faculty of Law in Zagreb, he also completed diplomatic school at the Diplomatic Academy of the Ministry of Foreign Affairs. In 2002, he also received an MSc in international public and private law at the Faculty of Law.

Prior to his current position, Mr Plenković served as chief in the Sector for European Integration in the Ministry of Foreign Affairs, and later as Deputy Chief of Mission/Minister Consultant at Croatia’s Mission to the EU in Brussels. Most recently, Mr Plenković served as deputy ambassador in the Croatian Embassy in Paris.

………………………..

Ante Raić: Croatia has finally ended negotiations with the EU. What does this mean for Croatia? In your opinion, what are the most positive things that becoming an EU member-state bring to Croatia?

Andrej Plenković: Croatia’s accession to the European Union is a historic process which will affect all segments of society, leading to a better standard of living, increased trust in the impartiality and efficiency of the judiciary, greater opportunities for employment, the establishment and freedom to provide services in all other EU member states, and increased mobility in the area of education.

The implementation of EU legislation will positively influence environmental standards, consumer protection and public health, and every citizen will enjoy the same benefits as do all other European citizens.

According to State Secretary Plenković, ‘strategic investments immediately following accession will be concentrated on areas important for the development of our economy and employment incentives.’

AR: Which chapters, or to be more precise, which benchmarks, were hardest for the country to complete?

AP: When compared to previous enlargement rounds, Croatia-EU membership negotiations have been the most complex so far, owing to 138 precisely-defined opening and closing benchmarks, in almost all chapters.

For us, the toughest to negotiate were certainly those chapters in which the financial and socio-economic implications of EU membership are the highest.

AR: Are there some specific examples, in this respect?

AP: Yes. In the complex chapter regarding the environment, transitional periods for the full implementation of the acquis have been agreed with the EU regarding outstanding alterations in certain financially challenging areas for Croatia, such as air quality and waste management, and adaptations with regard to reference periods for carbon gas emissions.

In the demanding chapter on agriculture and rural development, Croatia negotiated a number of transitional periods and exemptions. Some reference periods were adapted to enable a definition of the financial envelope for Croatia (e.g. milk and sugar quotas). A special EU financial package, the so co-called “mine envelope,” was established for mined arable land. Also continuation of state aid was agreed for a limited period in some sectors.

The chapter on the judiciary and fundamental rights is a sum of almost all the political criteria. The domain of assessment was a detailed review of Croatia’s legal framework, the efficiency of institutions, as well as the proper functioning of our system at all levels. Crucial issues included the reform of the judiciary and public administration, the fight against corruption, human rights and the protection of national minorities and continued full cooperation with the ICTY.

AR: Are you satisfied with using of pre-accession assistance funds? Which opportunities are opening in the accession funds?

AP: Yes. Croatia can be considered successful regarding its absorption capacity of EU pre-accession assistance. The rates of contracted funds for the so-called 1st generation of EU pre-accession assistance programs (CARDS, PHARE, ISPA and SAPARD) show that from 60% to over 90% of the allocations have been contracted so far (ISPA program contracting is to continue until the end of 2012).

We are currently benefiting from the Instrument for Pre-Accession Assistance (IPA) program via mechanisms similar to those in use for EU Structural and Cohesion Funds.

It is crucial to highlight that in a relatively short period, considerable experience and knowledge in EU funds programming and implementation have been accumulated and are being used for programming documents and for the preparation of larger infrastructural projects in the post-accession period. These projects will give additional value to EU funds invested in our country.

AR: Are there any examples of such investments you would like to highlight?

AP: Good examples of investments currently co-financed by the EU pre-accession instruments in Croatia are several water and waste management projects, as well as investments in the railway infrastructure, designated by the EU as priority areas for the 2007-2013 period.

In line with EU policies, strategic investments immediately following accession will be concentrated on areas important for the development of our economy and employment incentives. They are to include areas such as transport, environment and energy; education, science and research; social inclusion; and support for the development of entrepreneurship.

AR: So, all that said, how much is being an EU member stat going to cost Croatia?

AP: Croatia will pay into the EU budget 267 million euros in the second half of 2013. At the same time, the total envelope for Croatia in 2013 is around 800 million euros for the same period.

AR:  The exchange rate of the Croatian kuna is strongly connected with the euro. When can we expect to see the euro become the means of payment in Croatia, and when could it be adopted as the official state currency?

AP: The introduction of the euro as a national currency does not automatically follow after a country joins the European Union, but is preceded by the fulfillment of a set of so-called convergence criteria. It is therefore not possible to predict precisely when Croatia will adopt the euro.

However, as far as meeting the criteria is concerned, Croatia is in a relatively good position — price stability and a stable exchange rate against the euro have already been achieved. Croatia also meets the legal requirements for the adoption of the euro — our legal framework guarantees the independence of the Croatian National Bank as the central bank, and allows for its integration into the European System of Central Banks.

In conclusion, more than 60% of our foreign trade is with EU countries. Croatia’s EU membership and, ultimately, the introduction of the euro will thus simplify the tasks for our businesses and contribute significantly to the overall macroeconomic stability of Croatia, encouraging more dynamic economic growth.

AR: Becoming a member state raises a question of national borders. Considering Croatia has a really long national border, especially with Bosnia and Herzegovina, how hard will it be to control the borders? When could Croatia become part of the Schengen zone?

AP: Upon accession, Croatia will have 1,377 km of external land border of the EU. Croatia will be ready to join the Schengen area 2 years after accession.

Over the past few years, Croatia has been systematically improving the infrastructure, technical equipment and required human resources at its border crossings, framing these activities within the government’s Integrated Border Management Action Plan.

Entry into the Schengen area depends on the political consensus of all member states in the Council, after determining that all necessary conditions for full implementation of the Schengen acquis have been met.

Croatia will apply a large part of the Schengen acquis from the moment of accession, and preparatory activities will be additionally supported from resources of the Schengen Facility Fund. These will amount to 120 million euros, i.e. 40 million euros in 2013 and 80 million euros in 2014, and are intended to finance activities related to the implementation of the Schengen acquis and external border control at the new external borders of the EU.

AR: Before becoming a member state, there’s a referendum to be held. According to the actual polls, entering the EU is not a sure thing. Which are the actions that Ministry of Foreign Affairs and European Integrations is planning to take to improve the knowledge of its citizens about membership in the EU and what it entails?

AP: The results of the opinion poll carried out in June 2011 show that of the respondents who would vote at the referendum, 57% would vote for the accession of Croatia to the EU, while 37% of the respondents declared themselves against. The expected turnout would be around 76%. The results of the opinion polls are positive and I am convinced that the outcome of the referendum will be a very clear yes vote.

To that effect, we are stepping up the information and communication activities such as a free info telephone line, free publications, round tables, Euro info points, lectures, seminars, public events and conferences concentrating on answering citizens’ questions, addressing their concerns, and presenting the results of the accession negotiations. TV and radio clips have also been launched on channels with national coverage and local media.

A series of 35 leaflets about accession negotiating chapters have been published in daily newspapers and are available on the Ministry of Foreign Affairs and European Integration website. In addition, we have published the entire negotiating documentation of Croatia on the Government website to increase transparency.

AR: How do you comment on monitoring in certain chapters?

AP: During the pre-accession and ratification stages, Croatia will continue to work hard on fulfilling all its commitments. It is important to underline that it is exclusively pre-accession monitoring that will be conducted until Croatia’s entry into the EU, and that it will not continue after that date. We see the EU pre-accession monitoring mechanism as a way to provide Croatia with additional support in its continued reform efforts.

Special emphasis will be put on the chapters covering Judiciary and Fundamental Rights, Justice, Freedom and Security, and Competition Policy. Croatia has nothing to hide and is open and determent to be fully prepared for its EU membership.

AR: At the end of this interview, do you have any message for the euro-skeptics?

AP: The referendum on EU membership should be a festival of democracy in Croatia. All actors in our society should take part in the public debate and different opinions should be heard. My message is that a healthy and vibrant dialogue on Croatia in the European Union will help us to formulate policies and positions once we become a Member State.

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Regional Police Cooperation, Border Security and the Fight Against Organized Crime: Interview with Croatian Police Director Oliver Grbic

Oliver Grbic has been the Chief Director of Police in the Croatian Interior Ministry since August 2009. Born in 1964, he graduated from Zagreb University’s Faculty of Ecomonics, and became a member of the police in 1991, mainly working in the sector for fighting economic crime. In 2001, he was appointed deputy chief of police in Primorsko-goranska county, becoming chief of police there another three years later. In his career, Mr Grbic has enjoyed a string of successes in leading operations against various kinds of crime, from drug smuggling and extortion to the rapid investigation and solving of murder cases.

Ante Raic, a journalist with Croatian National Television and Balkanalysis.com correspondent in Zagreb, recently spoke with Chief Director Grbic to get his insights on various issues of interest and new developments in the areas of technological capacity-building, regional security cooperation between Croatia and its neighbors, and the major security threats facing Croatia today. In the interview, Chief Director Grbic also discloses that new borders are being created, and that cooperation with EU police continues to improve in anticipation of Croatia’s planned entry into the Schengen zone.

On the New Croatia-Serbia Police Video Link

Oliver Grbic, Croatia's Chief Director of Police, in his office.

Ante Raic: A direct and secure video link between Zagreb and Belgrade was established three months ago. What is the importance of this link for the cooperation of the police of both countries? Have there been any direct benefits from it so far?

Oliver Grbic: The secure conference link between Zagreb and Belgrade was established as a part of an initiative for forming a center for the fight against organized crime and terrorism among the police of Croatia and Serbia. We presented it to the public on September 6. It should be seen as a tool which the two interior ministries and police can use, to maintain direct cooperation on the strategic and operational levels.

The establishment of this communication channel provided for secure daily communication via a VPN tunnel, which will help in fighting organized crime. However, that’s only one of the activities on the way for establishing this center for the fight against organized crime and terrorism. It is important that both countries, Croatia and Serbia, are working on accomplishing the whole set of measures so that this center can work effectively. Forming it will open a new space for direct and operative cooperation and exchange of all criminal and intelligence information between Croatian and Serbian police. The center should also soon start to work on making mutual estimation of terrorism threats.

The establishment of a video link is extremely useful for work of the Croatian and Serbian police because it provides quality every-day communication on all the mutual issues, enables faster decision-making on important subjects, and lowers the costs of cooperation. Teams of detectives working together on cases are using the video-link daily. This is the main benefit that this communication channel has brought so far.

Regional Police Cooperation: Details and Estimates

AR: Are you satisfied with the cooperation with the police in neighboring countries? With which is cooperation the best at the moment?

OG: Cooperation among police in the region is at an extremely high level. I’m very satisfied with the quality of cooperation. But, at the same time I see additional opportunities that are available, and personally I’m doing my best to take advantage of them. First of all, the duty of myself and my colleagues (ie., the chiefs of police in the other countries in the region) is to create legal precedents. Thus our experts from all the fields of police work can cooperate to attain a higher qualitative level, and use all the available instruments in the field of international police cooperation, such as exchange of information, making mutual investigative teams, liaison officers, mutual border patrols and others.

It is hard to say with which country cooperation is the best, because it is on a high level with all of our neighboring countries. I’m in contact with the chiefs of the neighoring countries’ police on a daily basis, and I’m proud that I can say that we all share the same goals – the unconditional fight against all sorts of crime, especially organized crime and corruption, and in achieving a high level [of results] for the citizens of our countries.

The thing that is really important is the fact that cooperation is not good only on the highest, strategic levels, but on the operative ones as well. And we have numerous joint actions to prove it.

Despite the general high level of cooperation, I woouldn’t be wrong if I say that we’ve gone furthest in our cooperation with the Serbian police. Our cooperation has its legal basis in a modern agreement signed in May 2009. Its operationalization happened through a series of successful criminal investigations in both Croatia and Serbia.

Successful Recent Joint Police Operations

AR: Can you name some of the most successful joint actions with neighboring countries’ police? Is one of these, perhaps, the case of the murders of journalist and publisher Ivo Pukanic and his associate, Niko Franjic?

OG: There has been a series of succesful joint actions on the part of the Croatian and neighboring countries’ police forces. Of course, the murders of Ivo Pukanic and Niko Franjic were the most interesting for the media. That case proved the existence of an intensive cooperation between criminal groups from Croatia and Serbia. It also proved that any succesful fight against crime can be based only on joint work between police in the countries in the region.

We have a lot of cases in which we cooperate with neighbouring countries’ police, such as the case of a clash between two members of the [Serbian mafia group] the “Zemun Clan” in Zagreb. There was also the case involving international smuggling of drugs and weapons in which, through well-organized smuggling channels, weapons from Bosnia & Hercegovina were smuggled through Croatia to EU countries, particularly to the Netherlands and Germany. Drugs travel in the other direction.

I don’t want to get into specific cases, because there are a lot of them. Rather I’d like to point out that I am really very happy that some of these cases have reached their epilogue in front of the law. And that is the final goal of our work, and a sign that we’ve successfully done our part of the job.

Emerging Priorities in Police Investigation

AR: In which fields has regional police cooperation been the most intensive? Which kinds of criminals or criminal groups in your focus? Is it smuggling drugs, trafficking or perhaps terrorism?

OG: Police cooperation in the region is most intensive in the fight against international organized crime, but it is significant in other fields as well, such as with the cooperation of the national border police, addressing the violence of football hooligans, in the field of forensics, and so on.

Of course, we can’t forget our cooperation in the fight against terrorism, to be more precise, in regards to the estimation of terrorism threats. Here it is important to mention an original Croatian police project called “Secure Touristic Season,” in which we are cooperating with the police of seven EU-member nations. During the crucial summertime tourist season, their policemen are working in mixed patrols with their Croatian colleagues. This project received numerous recognitions from the domestic and international public, and it was recognised by INTERPOL, which has also been involved in the project.

If we speak about the kinds of crime that are especially intense in this region and internationally, smuggling is number-one: from smuggling drugs and weapons to people and all sorts of luxury goods.

Over the last period, we intensified cooperation in the field of financial investigations focused on tracing dirty money that had been earned illegally, and that was later laundered and transacted into legal businesses, both in the countries in which it was earned and in the neighboring countries. Other kinds of crime, especially violent crime like murders, threats, extortions and so on are very often the result of clashes between the criminal groups involved in smuggling. This is most often due to changing relations inside one of the groups or because of the fight for the power between two or more groups.

Challenges at the Border

AR: Croatia is getting closer to the EU. One of the biggest challenges will be the Schengen border system, especially the border with Bosnia & Hercegovina, which is 1,000 kilometers long. Are you taking steps to improve control of that border?

OG: We can say that Croatia is now approaching the entrance of the EU, and the Croatian police have done a lot to fulfil the criteria for entering the EU. Safeguarding the border is one of the most important subjects and I can say that the Croatian border police have been intensively preparing for many years for the second phase- Croatian entrance into the Schengen zone.

The [specific] activities undertaken here include getting more of the right people into the needed positions, buying techical equipment, education of the border police, building the infrastructure, informatization of the outside border so it can be connected with the Schengen info-system, and improving the coast guard. In addition, we’re taking steps to solve the issue of the Neum corridor, which comprises about 10 kilometers of the Adriatic-coast road from Split to Dubrovnik, passing through Bosnia and Hercegovina, and the town of Neum, as well as Metkovic.

The Republic of Croatia has performed a detailed analysis of the situation on the border. That analysis provides the basis for defining the activities that will improve the quality of the control and protection of Croatia’s border. Before entering the EU, we will reconstruct the Klek border crossing, and build a new border crossing at Zaton Doli, in order to control the state border according to EU rules. By the middle of 2011, we’ll build a new international border crossing called Metkovic II, with all the needed inspection services. It will be in line with all the European standards for that category of border crossing.

Here it is important to mention that we started estimating missions in this segment four years ago, and the latest reports show a significant improvement in the field of managing the border. After Croatia enters the EU, the evaluation will take place to decide when we will enter the Schengen zone. We curently estimate that we’ll need 2 years after we enter the EU to fulful all the Schengen standards.

Conclusions

AR: The police and the army are the basis of security of every country. What are the biggest security threats facing Croatia today?

OG: In peacetime, the police is the basis of security for every country, that is, the police and an efficient judiciary system. Today, our main security challenge is to continue the fight against corruption. We have been very successful in this area so far. On the other hand, the fight against organized crime should be high among our priorities until we manage to reduce it to the minimum, as with the other kinds of crime as well.

I personally think that one of the main challenges is to form efficient mechanisms for taking away illegally-purchased property. Without this, it will be hard to fight against crime. Of course, it is a benefit to us that Croatia is not at the moment directly exposed to terrorism, as are other European states, but we are aware of its danger and unpredictability.

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Croatian Defense Reforms and Issues of National Security: Interview with Military Analyst Igor Tabak

Igor Tabak is a Croatian independent military analyst in Zagreb. Since the early 1990’s, he has written for the official magazines of the Croatian Ministry of Defense. In addition, since 2003 he has often commented on military and security issues for various national and regional media.

Ante Raic, a journalist with Croatian National Television and Balkanalysis.com correspondent in Zagreb, recently surveyed Mr Tabak to gain his insights on issues related to Croatia’s programme of defense reforms before joining NATO, public and media perceptions regarding the defense sector, politically-sensitive cases involving military procurement issues, and the overall main security threats facing the country today.

Croatia’s Defense Reforms: A Work in Progress?

Ante Raic: In the year 2000, Croatia started a big cycle of defense reforms. How far did we get?

Igor Tabak, Croatian military analyst

Igor Tabak: Those reforms are of a cyclical nature. They started after the elections of 2000, and were done by 2006 or 2007- when we should have started the next cycle. It is important to note that this [second] round did not happen, and that this remains a big problem.

While the first round of reforms dealt with global problems and rough structural changes, a lot of more detailed questions remained unanswered (or at least were not answered thoroughly enough), as can easily be seen- we have a lot of retired generals acting strangely, and problems in enforcing the law there. While in our [country’s] legal regulations we speak of two intelligence agencies, in practice we also have a third one, which we forgot to integrate fully- that is, a specialized department in the Ministry of Foreign Affairs that managed to keep some of its former independence, and is not mentioned in the law. Further, we formed the National Protection and Rescue Directorate as a somewhat independent body, with a voice of its own, but still left it connected budget-wise to the Ministry of the Interior. So, although they look or act as two separate entities, in reality they are not as separate as they should have been.

The defense sector saw a huge planning effort fall apart during the last two years, particularly concerning finances. The crisis was hard to avoid, but instead of attempting a revision, our planning effort stumbled into wholesale stagnation. This was especially visible with structural reform and downsizing efforts- concentrated on the armed forces, and somehow sidestepping the Ministry of Defense. The MoD broke all deadlines for its reorganization well before the economic crisis. The Croatian MoD, oversized before, remains even more so today.

Still, some small bits of second-round reform actually did happen. We enacted some measure of civilian oversight over the defense system; a parliamentary committee on defense was established, one that also involves outside expert members, appointed by public call, who are not members of the parliament but representatives of the general and specialized public. This system of defense committee organization is unique in this region. Even with those small changes happening, the reforms in general have stalled and it will probably take a new parliamentary election to get them back on track.

Background

AR: When did the approach towards the defense sector start to change?

IT: Over the past 20 years, the approach towards defense has been changing and developing in Croatia. From its humble beginnings, the forming of the defense sector at the beginning of the war, and through to the end of the war, had a force of around 270,000 soldiers. During the second part of the 1990’s, the reduction of that huge structure began. In the year 2000, the government changed, with a left-wing coalition winning the election. The process of de-politization and defense reform accelerated, in the end bringing Croatia into NATO in 2009.

Depolitization was really painful. The actions of Stjepan Mesić, who was president during that time, were very important. He was presented with a letter (published in media), signed by a group of active-duty generals in the Croatian army who had obvious political aspirations. And he reacted to their road-trip into politics. His reaction was justified and solved the problem for a longer time to come. But at the time it was really a hard decision to take. Mesić was at the beginning of his first term, just months after the first Croatian president Tuđman died, and the old authoritarian system was still strong in the society and the military alike.

At the same time, his decision to retire those generals was rather mild, since those generals who signed that letter (actually, a political proclamation) weren’t dishonorably discharged, as they’d have been in some other countries, but only forced to retire. So, they kept their ranks and benefits that go with it. In retirement they could have become politically active, but only a few of them actually did. Those people lost a lot of their importance and almost disappeared from public. So that presidential mildness did solve the problem, but it set an unpleasant precedent. It showed that rules exist and if you do not behave well, you’ll be sanctioned- but not very harshly.

The same attitude could be observed later, near the end of Mesić’s second term in office. He did not remove the ranks of the above-mentioned group of convicted retired officers, though he could have, but he did take some of their medals instead. He left them with their officer ranks and uniforms, in which they could walk proudly and say: “I’m a general!” On the other hand, he could say: “I did something!”- President Josipović decided to be more categorical there.

Public Perceptions of the Defense Sector

AR: What do you think about the treatment the sector of defense gets in the eyes of Croatian politicians and the media?

IT: In the last few years, Croatian politicians have developed a pretty theatrical and parade-oriented way of looking at their national armed forces. You can hear or read about the Croatian military when a state official visits some distant place and accidentally runs into Croats taking part in an international mission, or when it is time for a parade, for showing off in uniform, purely as a ceremonial background for the politicians. And I think that’s symptomatic.

Since Croatia’s downsizing of its armed forces, its political influence- in the last instance the population living off the military in general, unlike the veteran’s population, is rather small and does not carry much political weight. It is hard to get re-elected through work in this field. So, consequently, the politicians are not interested in defense-sector issues, where the benefits are small, and where the expenses needed for the upkeep are huge.

This is not in correlation with the importance of the themes that the defense sector, and the security sector in general, are covering- after all, human lives can still be in danger there. And we treat all this on a ceremonial level only. In Croatia, we don’t seriously discuss issues of national security or defense. The lack of critical and expert discourse on those subjects poses a serious problem here.

AR: The opinion of most people in Croatia is that Croatia became a member state of NATO, so we don’t have to be afraid anymore. What do you have to say on that?

IT: In a way, that opinion is true, but on the other hand, it is a big mistake, one that shows a deep misunderstanding of the subject (though very popular in Croatia). While NATO does affect our security in a positive manner, it is in no way enough by itself. NATO is not a charity organization; NATO doesn’t protect one nation just by itself. One cannot chronically neglect one’s own defense sector because of the fact of NATO membership.

NATO insists that its members be self-sufficient in these matters, and then contribute to the organization. In a moment of need, Croatia will certainly respond first by itself, and only if the problem is bigger – and can’t be solved by ourselves alone or fast enough – then we can and should expect NATO to help us. It’s a huge organization, with a complicated system of decision-making, where consensus must be accomplished for almost anything. It thus takes actions slowly and very carefully. So, it would be a bad idea to count on NATO as the only national solution in cases of real emergency.

Croatia’s Main Security Concerns Today

AR: Which are the main security concerns that Croatia faces today?

IT: There are three sets of problems, nicely illustrated through the lens provided by the three general tasks of the Croatian armed forces. The first of these is the defense of the state, second is participation in international [peacekeeping] missions, and the third is helping the civil sector to overcome disaster situations.

The first of these tasks is slowly losing some of its urgency in Croatia. Not so long ago, during the time of war, our defense system was created, and that was most of what it did. Now we are at peace, and so we are gradually stressing other aspects of the same task, Therefore we defend our country through enforcement of law and order, through a stricter border control done by the police, and by the establishment of a more complete system of democratic control over the security sector of the Croatian state. The police, as part of the security sector, controls the national borders- a system that has to be further strengthened significantly as Croatia gets closer to the EU and the implementation of the Schengen system.

In recent years, the other two tasks gave also gained in prominence. Croatia is very active as a [contributor to] NATO, UN and EU mission. For a country of its size, Croatia is exceptionally active, with Croatian soldiers in most of the world’s trouble spots. While this is certainly important, we still have to find the right balance of defense activities at home and abroad, and not let one harm the other.

The third task, to help in disaster response and crisis management, will be more and more in the scope of duties of the Croatian armed forces. Since the National Protection and Rescue Directorate was established recently, the armed forces remain an option of last resort, in the case of any serious disaster. During the recent floods and wildfires, it was noticeable that much more attention was needed in that field.

The Long Border with Bosnia: Enabling Extremist Infiltration?

AR: One of Croatia’s main problems before becoming an EU member state involves its 1,000 km-long border with Bosnia and Herzegovina. Everybody’s talking about the possibility of al Qaeda, about Islamic terrorists there, and some of them perhaps near the Croatian border. What is your opinion here?

IT: Croatia is lucky because a large part of its national borders run along rivers, making them somewhat easier to control. The problem is the part of the borderline along the top of mountain ranges in the Dalmatian hinterland. There aren’t a lot of people living in that area, the landscape is rough and it’s hard to know in anything close to real-time what exactly is going on there. Trafficking and smuggling of all sorts are the main problems.

Islamic terrorism as a subject is very popular in these parts, both in public and among experts. There the situation is not as it seems at the first glance. If we take a look at it historically, that problem is fading out. Bosnia was a center of radical Islamism in the early 1990s, during the war. At that time, people were talking of Bin Laden walking around, of groups that are at war with the Egyptian government having their branches in Bosnia- camps, a series of training centers for people who were taking part in the war, as well as separate Islamist military units at the front lines.

And, let’s not forget that Croatia is one of the few countries in the wider region that had its own Islamic car bombing before 9/11, in Rijeka- a form of revenge by the Egyptian organization Al Gama’a Al-Islamiyya, after Abu Talat was arrested in Croatia (a man wanted for his involvement in the WTC attack of 1993). Even at that time, the Croatian state was at war with those groups and their views of the world.

Today, the situation is somewhat different. There are some relics of wartime Islamism in Bosnia, mostly villages inhabited by foreign people who arrived to fight for Islam on the side of the Sarajevo government. For that, they got Bosnian citizenship and passports, decided to stay and started families with local women. Maybe they’re just there, living their ordinary lives, or maybe they’re waiting for their chance and a call to action.

That is a problem somewhat different from the one facing Serbia. There we often hear about Islamism, al Qaeda, camps, armed groups… but if we consider all that from outside the “Belgrade viewpoint,” it’s not clear what’s actually happening. Is there real, armed Islamist activity? Or are they [just] Albanians thinking of starting a fight for, let’s say, the Preševo area? Are are those maybe armed Muslim movements focused on a kind of autonomy in Sandžak? Today, as you can clearly see in the Caucasus region, the simplest way for a state to react in that kind of situation is to say: “It’s al Qaeda!” And you have an easy and popular public explanation.

Political Rumblings in the Defense Sector

AR: The ex-minister of defense, Berislav Rončević, is being prosecuted because of the so-called “Trucks” affair, that occurred while he was minister. In that case, the ministry in 2004 bought 39 military trucks, which were both more expensive and lower in quality, from the IVECO company instead of from MAN. The latter’s trucks would have been two million euros cheaper. Now there is talk that the current minister Branko Vukelić could also loose his job… do you have any insights on how things will develop here?

IT: Minister Vukelić is politically weak. For a while now, in Croatia we have had a situation where relatively weak politicians get to the head of the Ministry of Defense, and that corresponds with the lesser weight that sector has in the eyes of the political elite. Vukelić arrived into defense from the sector of economy- while already under suspicion of involvement in a number of corruption scandals there. So, he arrived politically shaken and he hasn’t gotten any stronger since. Then he had some health problem, and this too impaired his work.

All those facts reflect on how the Croatian defense sector was functioning recently. On top of that, the economical crisis struck Croatia in 2009. The defense budget was severely cut, while the planning process staggered. Even before the recent loss of two MIG fighter planes, Vukelić was a likely candidate for replacement in even a minor reconstruction of government.

AR: Croatian president Ivo Josipović recently took away the ranks and decorations of some military officers, even generals, who were convicted of serious crime. How do you comment on these actions?

IT: When you say “a general” in Croatia, people rarely think of someone who is in active military service. In popular terms, the title usually refers to someone in the ranks of the retired, wartime generals- most of whom don’t always feel the need to stress that they are actually in retirement. A number of them keep on, from time to time forgetting to mention that fact in public. And at times they end up showing off in public in their uniforms, with all the medals they won, while at the same time bringing themselves into situations that bear no connection with the armed forces, and that even tend to be expressively forbidden for active military personnel.

So, on one hand, we have a situation in which there is a group of people that is clearly separated from the general society by their military rank and wartime record. On the other hand, some of them at times feel strong enough to dare to jump outside the usual societal or legal norms. While not being restrained by the norms appropriate for active duty officers, they use their military and wartime background to somehow bypass the civilian authority that would bind them as ordinary retired citizens. As thiswhole practice depends on them keeping their rank and service-time decorations, that is why the move by President Josipović provoked so fierce a reaction.

Our president, who is a professor of law – criminal-procedural law to be precise – thinks that his decision made on September 9th to remove the military ranks of retired generals Branimir Glavaš, Vladimir Zagorec and Mirko Norac, as well as of retired lieutenant colonel Tihomir Orešković and retired major Siniša Rimac, is both legal and moral. Combined with a legal argument, he states a moral reasoning also, saying that an officer must be honorable (in the Croatian language, “officer” is časnik and “honor” is čast). Consequently, a man whose judicial sentence for war crimes, murder or similar offenses is beyond appeal has forfeited the honor he needs to bear the rank of an officer.

The procedure with the five persons in question would be simple and straightforward if they were still on active duty, as they have been sentenced without possibility for appeal for serious criminal deeds, committed while in active military duty. By the power of law, because they’re convicted to serve three or more years in prison, their ranks would be taken from them, and they’d be dishonourably discharged from the military.

However, they are not in active duty now, as they retired while the judicial process was still going on, or [for some] even before it started. They got to enjoy the full rights and benefits of their corresponding ranks, and they keep enjoying those even after the sentencing. They base a large part of their relation with the rest of the society, as well as a large part of their public image, on the fact of their having military rank (retired) and various decorations. Now, those have been taken from them, and some sort of showdown between them and the President of Croatia seems unavoidable. Legal charges have been brought to dispute the presidential decision.

AR: Of the generals accused, why do you think that only Generals Norac and Glavaš appealed his decision?

IT: Out of this whole group of retired and sentenced military officers, [these two] are most present in media and they have the firmest base in the regions from which they come; there they are still considered to be heroes solely, and not criminals also. But I wouldn’t be surprised if the others from this group would also appeal. And I think that’s good, because this whole question is actually a legal “gray area.” We have a tradition of improvisation, of solving things as they happen, even in a not really complete manner. Consequently, a binding legal decision would be good here, and I wouldn’t be surprised if the judgement would come a lot sooner than the new law on defense or the law on service in the armed forces, which actually should regulate that question in a more comprehensive manner.

AR: President Josipović’s term is still at its beginning. Can we otherwise compare Mesić and Josipović? Did Josipović continue where Mesić stopped, in terms of defense-related matters?

IT: Definitively not. So far, during these 10 months of his first term, it seems that Josipović is not using much of his executive authority in sectors in which the constitution gives him his biggest competences – defense and foreign affairs. He is still looking for direction, and may be still sorting through his priorities. You can hear him talking a lot about social, economical, historical and cultural issues; he visits cemetaries and [buildings under] scaffolding, and takes much less visible action in sectors where his competences are actually more concrete and more broad.

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