Diplomacy&Commerce 39

February / March 2022 | ISSUE No. 39 | FREE COPY

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DESIGN OF THE CROATIAN EURO AND CENT COIN PRESENTED 07 FEB

(MAP OF CROATIA, THE FIGURE OF NIKOLA TESLA AND GLAGOLITIC ALPHABET)

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MEMBERSHIP IN THE OECD IS ONE OF CROATIA’S STRATEGIC GOALS ZDENKO LUCIĆ

Secretary of State for Foreign Trade and Development Cooperation

THE NAGORNOKARABAKH CONFLICT WAS LEFT IN THE PAST H.E. FAKHRADDIN GURBANOV

Ambassador of the Republic of Azerbaijan to the Republic of Croatia

RECOVERY, STRENGTH AND A SENSE OF BELONGING

EURO-STEP TO A COMPLETED EU INTEGRATION

Ambassador of the Republic of France to Republic of Croatia

Director of the European Relations Department at HNB

H.E. GAËL VEYSSIÈRE

MAN OF QUALITY AND STYLE DAMIR MATEŠKOVIĆ

Director and owner of Fidelio Tailored Clothing

ANA ŠABIĆ

THE BRAVEHEART OF THE CAUCASUS

Reportage by Robert Čoban

Never Say Never Again Three decades later, I’m walking in the streets of Sarajevo and somewhere around the Eternal Flame I noticed a graffiti saying “There will be NO war”, a touching cry of the citizens of this city against repeating what happened thirty years ago. We are living in a region where, sadly, we must never say “Never”, because scenarios that we could never dream of even in our worst nightmares are possible here. The latest events in Ukraine speak in favor of this.

That is why, to finish this editorial in the year of a jubilee for our company, I can only quote Marshal Tito: “Let us act as if we have a hundred years of peace, but let’s be prepared as though a war might break out tomorrow!”

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ROBERT ČOBAN

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Translation

FOREWORD

ROBERT ČOBAN Director

n mid-January, 30 years have passed since the first issue of the student paper “Index” which became Color Press Group later that same year of 1992. We will leave the celebration for after the pandemic, because this year we are also celebrating the launching of “Nezavisni Index” (April 1992) and “Novosadski Index” (October 1992).

On that occasion, I gave an inter-

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view to Student TV in Novi Sad and I said that I hoped that “wars are behind us now” and that we are entering a time of peace and prosperity. Three months later the war in BiH began, after we printed two issues of “Index” the entire editorial office was replaced and thrown out into the street, a bomb was thrown in front of my parents’ house in Bač after a TV show where the editorial staff of our newspaper were marked as “foreign mercenaries”. The war in BiH lasted for the next four years, Serbia was faced with an inflation not seen since Germany in the 1920s…

CONTENTS

GORANKA MILOŠEVIĆ

Predstavnik za RH

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Politics by Žikica Milošević

FILIP VUČAGIĆ

WHERE HAS POLITICAL WISDOM GONE?

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MEMBERSHIP IN THE OECD IS ONE OF CROATIA’S STRATEGIC GOALS ZDENKO LUCIĆ Secretary of State for Foreign Trade and Development Cooperation ”Color Media Communications” LTD, 21132 Petrovaradin, Štrosmajerova 3 TIN 107871532 Matriculation number 20887303 Phone: +381 21 4897 100 Fax: +381 21 4897 126 Office: Vase Čarapića 3/IV/38, Belgrade Phone: 011 4044 960

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WHAT CAN WE LEARN FROM THE PAST 130 YEARS? Interesting facts

CIP - Katalogizacija u publikaciji Biblioteke Matice Srpske, Novi Sad 33 Diplomacy & Commerce / glavni i odgovorni urednik Žikica Milošević, 2016, br. 1 (mart)-.Novi Sad: Color Media Communications, 2016 - , -33cm Mesečno.

ISSN 2466-3808 = Diplomacy & Commerce COBISS.SR-ID 303269895

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EURO-STEP TO A COMPLETED EU INTEGRATION ANA ŠABIĆ Director of the European Relations Department at HNB

A TIME OF GOOD INVESTMENTS Partner and director, Colliers Croatia, Slovenia and Bosnia and Herzegovina

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THE BEST PRIVATE HUMANITIES SCHOOL IN THE WORLD MILENA TIŠMA PRODANIĆ Founder of Bright Horizons International British Primary School

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RECOVERY, STRENGTH AND A SENSE OF BELONGING H.E. GAËL VEYSSIÈRE Ambassador of the Republic of France to Republic of Croatia

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THE NAGORNO-KARABAKH CONFLICT WAS LEFT IN THE PAST H.E. FAKHRADDIN GURBANOV Ambassador of the Republic of Azerbaijan to the Republic of Croatia

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MAN OF QUALITY AND STYLE DAMIR MATEŠKOVIĆ Director and owner of Fidelio Tailored Clothing

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CONTRACTUAL PROHIBITION OF COMPETITION WITH EMPLOYER PETAR PETRIĆ Attorney at Law, Petrić & Kajić Law Firm LLC

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CONFERENCE “THE ECONOMIST: SVIJET U 2022.”

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COLUMN

by Žikica Milošević

Where has Political Wisdom Gone?

Stiff new world t is as though politicians of the 20th century were smarter than today, more willing to negotiate. It is as though the “principles” are now placed so much above human lives that the past seems flexible and nostalgically beautiful When we look at the crisis in Ukraine which is at the verge of war, and the crisis in the South China Sea and around Taiwan, one cannot seem to escape a notion.

Or two, actually. The first notion is that the West is constantly pushing Russia and China into each other’s arms, and the second is that 70 or 40 years ago people were much smarter when they performed the function of a politician.

Namely, when it was time to stand up to Hitler and Japan, which was ruthless and nationalist in a similar manner, although they didn’t have the perfectly formed racial theories as Mein Kampf, an imperialist and a fighter for parliamentary democracy, hater of communism with aversion to the self-determination of the people, then a parliamentary democrat inclined to self-determination of the people and an anti-imperialist, and one single-party communist leader inclined to self-determination of the people but only if they choose him, and also a little more inclined to dictatorship easily met and came to an agreement in Tehran and Yalta. Already in 2015, Russia and the US acted against the Islamic State on their own, unable to recognize the new Nazism in it – or if they did recognize it, they didn’t reach an agreement on joint action.

There’s more. In 1962, Khrushchev and Kennedy were in a clinch. Very similarly to today’s situation – the Americans placed their missiles in Turkey, at the very border of USSR and could destroy Tbilisi, Yerevan and Baku in a matter of minutes, and the other USSR cities would quickly follow. Also, the missiles were placed in a somewhat farther Italy (but close enough to destroy the Warsaw Pact countries). When USSR decided to place the same kind of missiles in allied Cuba and equalize the strategic advantage, this

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INSTEAD OF BRINGING SOMEONE (OR BOTH) CLOSER TO THEM, THEY MANAGED TO DISTANCE BOTH OF THEM FROM THE WEST. PROBABLY BECAUSE IT WAS EASIER TO TALK TO STALIN, GORBY AND MAO THAN IT IS NOW

created an emergency situation.

After one month and 4 days more, the crisis was resolved. The US agreed to remove missiles from Turkey and not to invade Cuba, if the USSR was to withdraw from Cuba. This seems short and reasonable, but the crisis seemed as though the Judgement Day has come and it tore the nerves of the entire world, who believed that we were at the verge of an Apocalypse. How different does this seem from today’s hard negotiation of the West?

How contrasting this is with February 21, 1972, when Henry Kissinger and Richard Nixon got the nerves to organize a meeting in China with the then already completely extreme Mao Tse-

Tung, who conducted the Cultural Revolution 6 years before that, which was one of the worst “mistakes of Socialism”, an unprecedented tyranny that decimated the Chinese culture? But Nixon dared to talk even to this kind of people. On their terrain. And to separate China from the USSR and create the “balance” he wanted.

Or how much different this is from the meetings between Reagan and Gorbachev in the second half of the 1980s. Ronald Reagan, the man who could say the words “Evil Empire” (as though he was talking about Darth Vader and the Star Wars!) and who supported the worst kind of butchers all over Central America just so long as their enemies were the Commu-

nists, sat down at the same table with, well… the leader of the Evil Empire, and worked out a victory in the Cold War, dissolution of the Soviet Union and the Warsaw Pact and a unipolar world for the next 20+ years. Di you think that Roosevelt, Churchill, Nixon, Kissinger or Reagan felt comfortable or that they didn’t care? No. They knew what their end goal was.

Then why are Biden, Boris Johnson and the entire Western crew of politicians constantly pushing NATO borders towards Russia, and even promising NATO membership to Ukraine and Georgia (there are weak chances for that)on the borders of Russia? Are the “security guarantees” that Russia is asking too difficult?

Neutral countries on the borders and withdrawal of army from Russia’s borders and stopping NATO’s expansion to the East? Quite reasonable, as President Zoran Milanović said. But, for some reason, it seems that talking to Khrushchev, Gorbachev, and especially to Stalin and Mao, was somehow easier and more acceptable than reaching an agreement with Putin and Xi. Crazy? Yes. And that is why the sagas around Ukraine and Taiwan will continue. China, as the “senior partner” will accept “Russia escaping from Europe”, as well as all those “escaping from Europe” and in general, from the Western world: both countries have already positioned themselves in Asia, and especially in Africa, and have increased mutual trade from $68 million in 2015 immediately after the annexation of Crimea, to $146 billion in 2021. And this trend continues.

If they wanted to “pacify” Russia, it’s hard to believe that they managed to do that with NATO’s new expansions and the sanctions. If they wanted to “control” China, they will hardly succeed through conflict. Instead of bringing someone (or both) closer to them, they managed to distance both of them from the West. Probably because it was easier to talk to Stalin, Gorby and Mao than it is now. C’mon, let’s not joke around anymore. It’s time for reason to take the stage.

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INTERVIEW

Membership in the OECD is One of Croatia’s Strategic Goals That goal is crucial, in addition to joining the Schengen area and the Eurozone

ZDENKO LUCIĆ Secretary of State for Foreign Trade and Development Cooperation

ith the challenging political situation in Europe, very important is to maintain good economic opportunities. Croatia has started negotiations on joining the "club of the richest countries in the world“.

Also, every visit of the minister Gordan Grlić Radman abroad is used to strenghten economic cooperation. Mr Zdenko Lucić, Secretary of State for Foreign Trade and Development Cooperation for Diplomacy & Commerce talks about plans of the Ministry in the economic domain.

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After many years, Croatia has received an invitation to start negotiations with the OECD. What does this mean for Croatia?

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— The decision of the OECD Council took into consideration progress made in four main areas - like-mindedness, significant player, mutual benefit and global consideration. In this context, the Government invested significant efforts that resulted in the formal

eas such as ensuring sustainable growth, attraction of foreign investments, promotion of domestic private sector development and encouragement of responsible business conduct, etc.

We are committed to reforms, alongside the accession process,

WE ARE COMMITTED TO REFORMS, ALONGSIDE THE ACCESSION PROCESS, FOR THE BENEFIT OF OUR COUNTRY AND OUR PEOPLE

decision, which we received on 25th January 2022.

Our cooperation with OECD dates back to 1993 and has increased over the years. We have been implementing various reforms across a range of policy ar-

for the benefit of our country and our people, to improve the quality of life, enhance business environment, while also contributing to the OECD like-minded community committed to a rules-based international order.

What is expected from Croatia now? What is the scope of work that awaits us and which sectors does it cover?

— The Accession Roadmap, which is being prepared by the OECD, will set out the terms and conditions of the accession process.

This process will involve an evaluation of Croatia’s alignment to the legal instruments, policies and standards of the Organisation, which will be achieved in close cooperation with the OECD. In this regard, the Government established a Negotiating team for the accession with all relevant ministries and institutions included in its work. Coordination of the Negotiation team is within the MFEA, with Minister of Foreign and European Affairs, Mr Gordan Grlić Radman being the Chief negotiator.

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The Ministry of Foreign and European Affairs has strengthened the economic and trade dimension. What are the results of that action?

— One of our main goals is assisting Croatian companies in foreign markets in finding relevant partners and promoting investment possibilities.

Business forums that often follow official visits proved to be a successful model for strengthening economic cooperation - both in terms of attracting investments and helping companies find partners in certain markets. Thanks to this model of cooperation, we were able to increase our presence on various markets.

Political talks during Minister Grlić Radman's visits to Algeria, Egypt and Azerbaijan were followed by economic forums in those countries. What are the results of these meetings?

— I am glad to say that in all three countries there was a great interest for participation of Croatian and local business entities.

The forums were well attended.

Companies had the opportunity to meet their respective partners and discuss possibilities of closer cooperation.

We have to stress out the important role of the Croatian Chamber of Commerce in this process, which is essential in communi-

ONE OF OUR MAIN GOALS IS ASSISTING CROATIAN COMPANIES IN FOREIGN MARKETS IN FINDING RELEVANT PARTNERS AND PROMOTING INVESTMENT POSSIBILITIES

cation with companies, preparations and organization of these forums.

Development projects are also within your scope. What is the dynamics of the implementation of such projects during the pandemic, has it slowed down plans? What projects are currently in focus?

— The COVID-19 pandemic revealed the need to keep development policy priorities high on our agenda, since they encompass the most advanced principles in relation to human rights, rule of law, labor rights, open economies and environmental protection. This global crisis encouraged us to find innovative ways to respond more rapidly and more effectively to emergencies and assist our partner countries in efforts to bring sustainable economic growth to their citizens. I would like to emphasize that we have, in the spirit of solidarity with countries most in need, donated over 2 million doses of the COVID-19 vaccine so far. At the same time, we remain strongly committed to our neighboring countries in South East Europe, with the priority being Bosnia and Herzegovina. Regarding projects that are currently underway, the thematic focus is on education, health and empowerment of women, girls and youth.

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INTERESTING FACTS

What Can We Learn From the Past 130 Years? hether history is really "the teacher of life" or is it just a waste of time, since the future is unpredictable is one of the most commonly asked questions? Here is a map of Europe that may not be perfectly accurate in every aspect (data from 1890 can come from different sources), but it pretty well outlines who was rich then, and we know who is rich now. It is striking to see that the UK was by far the richest country in Europe at the time, due to rapid industrialization, as was Belgium - the two countries were the first to embrace new technologies. The UK is now poorer than the newly created Republic of Ireland, which has adopted new digital technologies faster than anyone. Belgium was de-industrialized and was demoted from its high position. The moral of the story is - a) be the first to embrace new technology to become rich, b) don't give up on it and improve it, and c) having colonies at this time is not acceptable, but we must not forget the riches of the British Empire, the Belgian Congo, and the Dutch colonies. On the other hand, we can see that Switzerland, a country that did not exist before the war, as well as the Scandinavians, are among the richest today (the latter were not even close to being wealthy 130 years ago)

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and that the countries of Southeast and Eastern Europe are either still poor or poorer than before, which again brings us to the following conclusions - a) it takes many years of peace to

accumulate wealth and b) only a few years of war are enough for a country to fall into poverty. See you in 130 years, to paraphrase Mayakovsky.

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INTERVIEW

Euro-Step to a Completed EU Integration European Commission will prepare a Convergence Report in the spring, where they will give their estimate on whether Croatia and other EU members who still haven’t adopted the euro meet the convergence criteria tary statements of value to be applied four months prior to and 12 months after the euro introduction date. This umbrella law provides a legal framework for transition to the new currency and ensures legal certainty. It is worth noting that, in addition to the principle of consumer protection, it also contains the principle of continuity of contracts and other legal instruments, which means that existing contracts and other legal instruments stating the kuna are still valid.

ANA ŠABIĆ Director of the European Relations Department at HNB

roatia has initiated the process of introducing the euro motivated by significant benefits it will gain from joining the eurozone, Ana Sabic, Director of the European Relations Department at the Croatian National Bank, told Diplomacy & Commerce. The economic benefits of the introduction of euro are significant and lasting, unlike the costs, which are small and one-off.

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Prime Minister Andrej Plenkovic, together with Deputy Prime Minister and Minister of Finance, Minister of Economy and Sustainable Development, and HNB Governor Mr Vujcic,

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presented a draft act on introducing the euro as the official currency in the Republic of Croatia and guidelines for adjusting the economy in the process of replacing the Croatian kuna with the euro. What specifically does this law provide for?

ing and rounding prices and for the conversion of deposits, loans and securities, the rules related to the two-week period in which the kuna and euro will be in circulation at the same time, and the method and deadlines for cash exchange to be carried out free of

WE EXPECT THE PRICE GROWTH DUE TO EURO CHANGEOVER TO BE INSIGNIFICANT; SPECIFICALLY, THE EFFECT OF THE INTRODUCTION OF EURO ON THE INFLATION RATE SHOULD BE LOWER THAN 0.3 PERCENTAGE POINTS — The recently presented draft act on the euro as the official currency in the Republic of Croatia contains main determinants for the transition to a new currency, such as the rules for convert-

charge and by applying a fixed conversion rate. The draft act also provides for a series of measures aimed at consumer protection, such as the obligation of dual display of prices and other mone-

Which guidelines are most important to the citizens?

— We should point out several important elements from the citizens’ perspective. When it comes to exchange of cash, it’s important to note that the citizens will be able to exchange their kuna for euro in branch offices of banks, Fina and Croatian Post, free of charge and at the fixed conversion rate. Exchange will be possible over the course of 12 months from the date of introduction of euro, after which kuna can be exchanged for euro at the Croatian National Bank, where banknotes have no time limit, while coins must be replaced within three years from the date of the introduction of euro. This will also be possible free of charge and at the fixed conversion rate.

Citizens will not have to worry about deposits and loans in banks because their conversion into euros will be done automatically on the day of the introduction of euro, free of charge and at the fixed conversion rate. The loan and deposit account contracts will continue to be valid. For kuna-denominated loans, the principal will be converted into euros at the fixed conversion rate. If it is a loan agreement with a fixed interest rate, it remains unchanged. On the other hand, if a loan is contracted at a variable interest rate, the interest rate remains variable.

Any necessary adjustments will be made in a way that will ensure

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that the total interest rate paid by the citizen must not increase.

In other words, after the conversion, interest rate on the loan will be equal to or lower than that paid by the citizen in the period before the introduction of the euro. All these and other important information and guidelines will be included in the activities aimed at informing citizens about all practical aspects of the introduction of the euro, which will be intensified in the months before the introduction of the euro.

Which guidelines are most important for the economy?

— Adjustment of the economy to the euro changeover involves a series of activities that need to be carried out in time for businesses to be ready to adopt the euro.

Some of these activities include preparations for dual display of prices, timely adjustment of information systems to operate in the new currency, timely supply of euro cash and training for handling euro cash, as well as preparations for operations during the dual circulation period. These obligations for businesses, including the relevant deadlines, will be regulated by the legal framework for the introduction of the euro. In addition, the Coordination Committee for Adjustment of Economy and Consumer Protection, chaired by the Ministry of the Economy and Sustainable Development and in whose operations representatives of the business community actively participate, has developed Guidelines for the adjustment of the economy in the process of replacing the Croatian kuna with the euro. The aim of this document is to inform businesses in a timely manner about the preparations that need to be made in the process of introducing the euro as the national currency.

Whether Croatia will enter the eurozone, we will know with certainty in the summer when this decision should be made.

What that decision depends on and do you expect any surprises?

— European Commission will prepare a Convergence Report in the spring, where they will give their estimate on whether Croatia and other EU members who still haven’t adopted the euro meet the convergence criteria. They will assess the compliance with the criteria relating to price stability, exchange rate stability, sustaina-

THE GREATEST BENEFIT FOR THE CROATIAN ECONOMY IS UNDOUBTEDLY THE ELIMINATION OF CURRENCY RISK TO WHICH MANY CITIZENS AND COMPANIES, AS WELL AS THE GOVERNEMENT ITSELF, ARE NOW EXPOSED bility of public finances and convergence of long-term interest rates. In the event of a positive assessment by the European Commission, the Council of the European Union will decide then, in July, on the introduction of euro and set a fixed conversion rate.

Croatia has been de facto meeting the convergence criteria since 2016. Despite the stable exchange rate of the kuna against the euro, it could not meet the criterion of

exchange rate stability because it has only been participating in the exchange rate mechanism (ERM II) since July 2020, and it has to be a part of it for at least two years.

When it comes to the criterion of price stability where - due to the manner in which the benchmark is determined and due to the increase in inflation that we are witnessing in Croatia and globally - there is some uncertainty. However, it is worth noting that Cro-

atia has met this condition in all the previous Convergence Reports. Also, so far the benchmark for the inflation criterion has never been set at a level lower than the average inflation rate in the eurozone. Given that inflation developments in Croatia are generally highly in line with developments in the eurozone, which also applies to the recent period when both the eurozone and Croatia are experiencing somewhat more pronounced inflationary pressures, it is likely that Croatia will manage to meet the inflation criterion.

We are also facing a number of logistic preparations for HNB, but also for the others – the banking sector, enterprises. What exactly do we still have to do?

— Switching to a new curren-

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cy is a complex and demanding task, and since the beginning of last year, efforts have been made to implement the National Euro Changeover Plan. This document foresaw a series of logistical, legal and administrative adjustment activities that require the involvement of a large number of stakeholders from the public and private sectors. These include legislative adjustments, preparations for the cash changeover, financial sector adjustments, general government adjustments, preparation of the economy, consumer protection and information.

Over the coming months, a number of activities which were previously defined within the relevant coordination committees will be carried out. Some of them are campaigns for accession of businesses to the Code of Ethics, which will oblige retailers and other businesses to correctly recalculate and not use the moment of euro changeover to raise prices, then adjustment of information systems, both in private and public sectors, for functioning in the new currency and for adjusting the official statistics. I would like to mention just a few of the main adaptation activities that lie ahead. It is certainly a logistically demanding job to exchange kuna cash for euro cash, which involves procuring the required amount of euro banknotes and producing euro coins, then withdrawing kuna banknotes and coins from circulation and putting euro banknotes and coins into circulation. In that sense, an important part of the work that has already been done, specifically the recently adopted decision on the design of the Croatian side of euro coins.

The citizens are concerned the most about the inflation and price growth after the euro changeover. However, there are other unknown aspects, for example, what happens to the foreign currency accounts of citizens, will the money be transferred to normal (current) accounts?

— We believe that after the euro changeover, citizens will realize that this fear was unjustified. Namely, we expect the price growth due to euro changeover to be insignificant; specifically, the effect of the introduction of euro on the inflation rate should be lower than 0.3 percentage points.

We expect that the use of mech-

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anisms to prevent price increases due to the introduction of the euro, which proved to be effective in the new Member States that have already adopted the euro, will achieve the goal of consumer protection in this segment.

When it comes to other unknowns that might concern the citizens, there are fewer and fewer of them, especially now that all relevant issues are defined in the draft act on the introduction of euro presented to the public. For example, related to the situation where citizens today have kuna and foreign currency (euro) accounts, on the date of the euro changeover foreign currency current account in euros will become

There are many votes against the introduction of euro, but there are many more in favor. Croatia has committed itself to this in its accession treaty with the EU. In your opinion, what are the advantages and disadvantages of the euro changeover in Croatia?

— In short, the greatest benefit for the Croatian economy is undoubtedly the elimination of currency risk to which many citizens and companies, as well as the governement itself, are now exposed. The importance of eliminating this risk is evidenced by the fact that the total gross foreign currency debt of all domestic sectors, including the debt denominated in kuna with a cur-

THE DRAFT LAW ON THE INTRODUCTION OF EURO AS OFFICIAL CURRENCY IN THE REPUBLIC OF CROATIA PROVIDES A LEGAL FRAMEWORK FOR TRANSITION TO THE NEW CURRENCY AND ENSURES LEGAL CERTAINTY a current account in local currency because the euro will become the official currency in Croatia. The legal solution will enable citizens, if they had a kuna current account and a foreign currency account, euro-denominated, at the same bank in the period prior to the euro changeover, after the euro changeover they will be able to close one of these accounts without charge and to transfer the funds recorded in that account to another account. The euro changeover will not cause any changes in foreign currency accounts denominated in other currencies (e.g. Swiss francs, US dollars, etc.).

rency clause, amounts to HRK 533 billion (almost 130% of GDP).

More than 90% of that debt is tied to euro, which means that a stronger depreciation of the kuna against the euro would significantly increase the debt repayment burden for domestic debtors. With the introduction of euro, currency risk disappears, and debt denominated in euros becomes debt in domestic currency. Furthermore, after the euro changeover, there will be no need for transactions for the exchange of kuna for euros and vice versa, and transaction costs will be significantly reduced. This will benefit companies that par-

ticipate intensively in international trade, but also the citizens who travel to eurozone member-countries. Eliminating the costs of foreign exchange operations will also benefit the tourism sector. Also, interest rates will be lower than they would be if Croatia remained outside the eurozone. When a country adopts the euro, its vulnerability decreases and its credit rating increases, which provides it with more favourable borrowing conditions in international financial markets. An additional reason is the fact that the cost of bank regulation will be significantly reduced with the introduction of euro. Thanks to lower costs, banks will be able to offer loans at lower interest rates. Finally, after the euro changeover, Croatia will be more resilient to financial crises. Namely, with the introduction of euro, banks and countries will gain access to additional sources of financing from the European Central Bank, and the European Stability Mechanism, which will make it easier for Croatia to deal with financial and economic crises in the future.

When it comes to costs, it is worth noting that for Croatia, the loss of independent monetary policy will not be a significant cost, due to the fact that autonomy is already effectively limited, and also due to the fact that business cycles of Croatia and the Eurozone are highly harmonized and the common monetary policy of the European Central Bank will suit Croatia.

Regarding the potential effect of the euro changeover on price increase, based on the experience of other countries, it is expected that in Croatia, the effect of the introduction of euro on consumer prices will be one-off and very weak. Finally, there are the one-off costs of adapting the private and public sectors to the euro. These include costs related to the purchase of banknotes and the production of euro coins, the withdrawal of kuna from circulation and the release of euro banknotes and coins, the adjustment of ATMs and other adjustments in the financial sector, IT and administrative adjustments in the government and private sector and activities for providing information to citizens and businesses. Finally, among the costs is the one-off payment into the capital of the relevant institutions of the European Union.

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CORPORATE

A Time of Good Investments All relevant financial institutions in the EU and Croatia do not announce changes in the market FILIP VUČAGIĆ Partner and director, Colliers Croatia, Slovenia And Bosnia And Herzegovina

he total transaction volume of commercial real estate was around €700 million in 2021, which represents 40% growth y-o-y, says Filip Vučagić , Partner and director at Colliers Croatia, Slovenia And Bosnia And Herzegovina. Volumes, though robust, failed to underscore the true scope of demand, as investor interest is meeting limited supply.

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Croatian real estate market is entering 2022 with great results.

The increase in real estate transactions in comparison to 2021 has been significant?

— Supported by V-shape economic recovery, strong commercial real estate market fundamentals and inflation scare, we are seeing high investor demand and continued downward pressure on yields.

Geographically, transaction activity was strongest in Dalmatia region with approx. 40% of total volume, while Zagreb accounted for approx. 25% of total commercial real estate transaction volume. Core and core+ properties were most sought after, however, a substantial share in 2021 volume was taken by value-add properties.

Which segment of the commercial real estate were predominantly interesting to investors in 2021?

— Office and logistics assets are still the primary focus for many investors, but majority of transaction volume was recorded in hotel and retail sectors where there was more supply. Retail sector was especially vibrant in H2 with several portfolio and single-asset deals.

Resilience and quick recovery of Croatian tourism was reflected in high demand for hotels, albeit at highest bid-ask spread among all property types. The gap in expectations between owners and prospective buyers has not materialized in real property prices.

On contrary, achieved prices remained similar to pre-covid lev-

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THE LARGEST TRANSACTION WAS THE ACQUISITION OF SUNCE HOTELI (BLUESUN HOTELS AND RESORTS BRAND) BY UAE-BASED PRIVATE RE INVESTMENT AND DEVELOPMENT COMPANY, EAGLE HILLS els, showing disconnect to stock market prices and proving strong investor confidence in HTL sector.

Where did the investment capital come from?

— In 2021 foreign capital accounted for 75% of transaction volume.

The largest transaction was the acquisition of Sunce Hoteli (BlueSun Hotels and Resorts brand) by UAEbased private RE investment and development company, Eagle Hills. Investors from CEE countries were also quite active, especially in the retail sector.

Domestic institutional investors (pension funds and insurance companies) continued increasing allocation to commercial real estate. Last year they made almost 20% of total market transaction volume, with several deals in office, hotel and logistics sectors. There is still a lot of room for higher allocation to CRE, which can offer excellent risk-adjusted returns, particularly in the long run. Domestic institutional investors entry to CRE is a sign of market becoming more mature.

When it comes to yields, it seems like Croatian has reached the levels of CEE countries?

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— Indeed, prime net yields in Croatia for all commercial real estate segments are within the spread between 6,5 and 7,5. The yield compression has continued due to competition as too much money is chasing too few deals, inflation panic, low (or even negative) interest rates on bank deposits and preference for real estate as an asset class since it offers more stable returns and capital appreciation potential, relatively to other asset classes.

We need to keep in mind the rising construction costs might further delay development of new supply and product, which should strengthen existing core and coreplus property values in particular and reinforce the seller’s market.

We do expect though the distressed opportunities/new NPLs, primarily for some small and medium-sized hotels which were overinvested prior to Covid-19 outbreak and temporarily “saved” by moratoriums and government subsidies.

Continuous increase in residential real estate prices has been a fairly common topic lately. Are we facing new real estate bubble, or is the increase of prices in Croatia consequence of inflation and low interest rates common to all European markets?

— After the last financial crisis, we have witnessed reduced developers’ activity and accumulated demand, and at the same time, strong growth of tourism. As a consequence, we record strong price growth primarily in Zagreb and on the coast, while in the rest

OFFICE AND LOGISTICS ASSETS ARE STILL THE PRIMARY FOCUS FOR MANY INVESTORS, BUT MAJORITY OF TRANSACTION VOLUME WAS RECORDED IN HOTEL AND RETAIL SECTORS WHERE THERE WAS MORE SUPPLY of Croatia prices did not rise to such an extent. In addition to inflation, which was not high until a year ago, and low interest rates, price growth was also influenced by the subsidized housing loan program, the so-called APN. We believe that such high rates of price growth are not sustainable over a long period of time, and we

expect price growth to stabilize, which does not mean that prices will not have an upward trajectory during the course of this year.

Price growth in the medium and long term usually accompanies the rates of inflation and growth of the economy, and it must be accompanied by both wage growth and demand. The

latest census showed a sharp decline in the population in Croatia, and a slight decrease was also observed in Zagreb, with a higher total number of apartments.

Demographic trends indicate that demand is not unlimited, although it should be noted that real estate in Croatia is purchased by both foreigners and the Croatian diaspora.

Recently, there has been increasing talk of rising interest rates.

Will rising interest rates reverse trends in the Croatian real estate market? Or will investing in real estate be a good investment in 2022, as has been the case for the last few years?

— According to the latest announcements, the European Central Bank (ECB) will not touch interest rates until 2023, and even after the announced raisings of benchmark rates, interest rates should not, seen in a broader historical context, be very high.

Further, albeit referent rates might (or will) increase Croatia has one of the biggest spread between risk-free rates and yields in real estate in EU, which gives certain comfort that with strengthening real estate market - yields will stay unchanged. Therefore, if rental incomes stay similar, we will not see any major downward capital value corrections.

Also, message that comes from Croatian Central Bank is that it is reasonable to believe that financing rates in Croatia will stay the same or even drop slightly due to growing domestic economy and euro-zone entry.

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CORPORATE

The Best Private Humanities School in the World The award was awarded by the Lookup Register, which is the most comprehensive registry of private schools that selects the world's best schools in various categories every year a way of thinking, and its strategies help us continue to grow and develop at any stage of life during our lifelong learning. The concept was envisioned by psychologist Carol S. Dweck PhD, and it represents one of the starting points in the creation of the school’s curriculum. In its work, the school recognizes the importance of students' mental health and has designed a well-being program that aims to secure personal growth and development of each child and prepare students for the future. All of the aforementioned strategies in work with the students have caused the school to be selected as the best private humanities school in the world, according to the Lookup registry.

The Lookup registry is the most MILENA TIŠMA PRODANIĆ Founder of Bright Horizons International British Primary School

he story about the Bright Horizons International Primary School started as an idea to enable the vertical educational program starting with the preschool program until high school. After successful work with the Horizons kindergarten, the founder Milena Prodanić Tišma decided to offer the continuation of educational service through services of primary education.

The leitmotif that guided the founder, Ms Prodanić Tišma, was to work with children according to a holistic approach and the idea that students can reach their full potential when placed in a highly motivating environment. The school has deeply instilled goals for personal development and international diversity through its international primary school curriculum. The values that are the goals for personal development are communicated to students in everyday life. The school has enriched classes through various innovative programs to enable students to learn with the assistance of modern technologies. This has

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LOOKUP REGISTRY IS THE MOST COMPREHENSIVE REGISTRY OF PRIVATE SCHOOLS THAT SELECTS THE WORLD'S BEST SCHOOLS IN VARIOUS CATEGORIES EVERY YEAR provided great advantage for the school during the pandemic and various forms of online teaching.

Teachers also choose approach through modern teaching methods, where they introduce the students to the growth mindset concept, and self-evaluation has been introduced into work with the students. The growth mindset is

comprehensive registry of private schools that selects the world's best schools in various categories every year.

“The Lookup award is a great honour, which is the result of continuous team work and it’s an additional incentive for us to continue with this. The school will continue to develop programs

in order for our students to develop skills that will help them in all the challenges. I trust that our work will serve as a good example of practice in work with the students”, says the founder of the International School, Milena Prodanić Tišma After regular curriculum, and in cooperation with external associates, the school provided various extracurricular activities, like bridge and robotics workshops, chess and various sports like tennis, football and gymnastics, and there is also the option of horseback riding. The school also has understanding for student-athletes, it supports them in their sporting commitments and helps them achieve the necessary balance between school and extracurricular obligations.

The International Primary School has been growing year after year, and after starting with five students, we are now proud of our 153 students of various nationalities that we currently have.

The school collective consists of teachers from different countries, who contribute to the international context of the school itself.

So far, two generations of students graduated from the school and the school is working on the idea of opening a high school in order to continue the vertical learning and enable its students to continue their education within the same program.

www.diplomacyandcommerce.hr

INTERVIEW

Recovery, Strength and a Sense of Belonging France and Croatia, working together for a stronger Europe and its values in a competitive, sometimes brutal global reality; “sense of belonging” because that we should contribute to reviving the links between the EU, its values, our common culture and history and the people everywhere in Europe.

H.E. GAËL VEYSSIÈRE Ambassador of the Republic of France to Republic of Croatia

rance holds the presidency of the EU Council in the first half of the year.

The agenda and goals of Paris for recovery and consolidation of the EU are ambitious. H.E. Gaël Veyssière Ambassador of the Republic of France to Republic of Croatia for Diplomacy& Commerce talks about concrete plans and priorities during the French Presidency.

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"Recovery, strength and a sense of belonging" is France’s motto as it assumes presidency of the Council of EU. The country performed this duty last in 2008, but new challenges have appeared before Europe since then.

What are the main priorities of

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the Paris administration?

— A lot of increased and sometimes new challenges have built up over the last years: increasing threats on our democratic institutions, our values and our economies from external actors; a major economic, social and health crisis

nologies; populism has contributed in some countries to question the rule of law and in all countries to deepen a sense of estrangement from EU institutions among its citizens.

This is what we want to address in our role of president of the

WE HAVE TO IMPROVE TRUST IN THE SCHENGEN AREA AND MECHANISMS, TO ENSURE AN IMPROVED POLITICAL GOVERNANCE BY ESTABLISHING REGULAR MEETINGS BETWEEN SCHENGEN MINISTERS OF INTERIOR created by the COVID19 pandemic; the climate and environmental situation has become more urgent to tackle than ever and this calls for transformation of our economies, along with new digital tech-

Council of EU ministers for the next months: “recovery”, to build back our economies in a greener, smarter way, “strength” because we need to give the EU the necessary tools to stand for its interests

France is committed to increasing the effectiveness of Schengen and to reforming Schengen. In what way and what does this mean, and also what is your stand on Croatia joining Schengen?

— We have to do precisely those two things: reform Schengen and enlarge it to Croatia.

Schengen has been facing tough times in recent years, especially with the pandemic, with a continued flow of illegal migrations, an insufficient degree of solidarity between Member States, sometimes a lack of implementation of our common rules.

The current situation, which paves the way for the multiplication of controls inside Schengen itself, is not satisfactory. We have to rebuild trust in the Schengen area and mechanisms, to ensure an improved political governance by establishing regular meetings between Schengen Ministers of Interior. The President of the French Republic raised these issues with the 27 ministers of Interior in Tourcoing a few days ago, and we hope that the first “Schengen Council” will be held on 3rd March. Meanwhile, we also have to reform the evaluation system of Schengen, which is key for its credibility, and to finalise the reform of the EU asylum policy.

The reform is in the best interest of Croatia too. As President Macron said during his visit to Croatia, we support fully Croatia’s accession to Schengen, because we know that you are a very serious partner in terms of border control and you can bring a very valuable and positive contribution.

With the reform of Schengen,

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France’s goal is also the Strategic Compass which should be adopted in March. What is this about?

— It is an ambitious document, a strategy paper where the EU will define the concept of its sovereignty and of its global interests, identify potential threats but also tools to defend itself and its sovereignty (including by reinforcing European defence industry, joint exercises, etc.). It is about defence of course, but we should also think more broadly about our strategic interests, including in economic terms: which critical technologies, added value chains do we have to maintain in Europe? This is an essential part of our work on “strength”, and the current events along the Russia/ Ukraine border prove how important it is for the EU to have a clear, common strategic roadmap in order for our voice to be heard.

Many efforts have been made in that direction under the previous presidencies, including introducing a mechanism for a more effective screening of foreign investments. What we must do now with the compass is to take a big step further, towards European strategic autonomy, while of course developing the cooperation between the EU and NATO. EU’s goal is not only the recovery from Covid-19, but also to transfer to “green and digital economy”. Do you think that something tangible can be done within 6 months, and how ready is the EU for the numerous reforms that France stands for?

— Transition to green and digital economy is indeed a longterm strategy, and the EU has been working on these issues for some time already. This is the very aim of the national recovery plans, which will benefit from EU funds that have been raised in common on financial markets (for the first time in our history): for the record, Croatia’s recovery plan will be supported by €6.3 billion of EU grants with 40.3% of the plan supporting climate objectives and 20.4% of the plan fostering the digital transition.

What we want to achieve as a presidency is to help Member States in implementing these plans fully and also to make headways on the “Fit for 55” legislative package, which sets out a detailed vision of Europe’s new climate ambitions for 2030 in all economic sectors: we want to see a revi-

ern Balkans and we are investing more in terms of economic, security and defence cooperation, as well as in political dialogue, because we believe in the strategic importance of the region for the whole European continent, for its economy but also its security. This upcoming conference should not just be a new declaration of principles on the Western Balkans’ membership prospects: we want to work concretely on investments that can make a difference for the region, now and for the years to come. I am happy that the Czech presidency will continue this effort.

STRATEGIC COMPASS IS AN AMBITIOUS DOCUMENT, A STRATEGY PAPER WHERE THE EU WILL DEFINE THE CONCEPT OF ITS SOVEREIGNTY AND OF ITS GLOBAL INTERESTS, IDENTIFY POTENTIAL THREATS BUT ALSO TOOLS TO DEFEND ITSELF AND ITS SOVEREIGNTY sion of the EU Emissions Trading System (EU ETS) and the implementation of a Carbon Border Adjustment Mechanism in order to protect the EU from unfair competition based on non-environmentally-friendly practices. We will also keep the pace of ongoing EU discussions on measures to preserve biodiversity; to promote a more circular and sustainable economy; and to reduce the impact of pollution on the environment and on health.

Over the past period, France opposed the Union’s expansion to the Western Balkans. What is Paris’ position on that matter now, because France’s President Emmanuel Macron himself announced that in June, a conference on Western Balkans will be held, stating that “more than neighbours, the Balkans are at the heart of Europe”?

— France has not been opposed to the Western Balkans’ Europe-

an perspective: on the contrary, France was responsible for initiating the first EU-Western Balkans summit in 2000, under French presidency of the EU at that time, and and we wanted it to happen in Zagreb, when Croatia was still far from joining the Union Under Croatian presidency, France and Croatia made a very important move together to reform the enlargement policy, in order for this policy to be more financially supportive and more responsive to the political context . This enabled the principle decision in the second Zagreb Summit to open negotiations with Albania and Northern Macedonia, which was a very significant success. We would have liked these negotiations to start months ago and we hope that the discussions between Bulgaria and Northern Macedonia will enable this soon.

We also have a stronger national focus on this region, with a new national strategy for the West-

How do you rate the cooperation and relations between France and Croatia, and how much has the sale of “Rafale” affected the strengthening of this cooperation?

— Our relations have always been excellent, but the historical high-level visits to Croatia last year of our minister of Foreign Affairs and of our President, for the first official visit ever at this level, demonstrate that we are committed, now more than ever, to have an in-depth cooperation with Croatia in all aspects. The Rafale contract is a showcase for this strategic partnership cooperation we want to build: it is, of course, an important aspect because it entails a lot of technical cooperation between our defence sectors, and because it leads to a stronger defence dialogue between EU partners and NATO allies. But this is just an example among many other areas where our two friendly nations already work together and share a common vision, be it in the economic sector, where French companies have increased their investment in Croatia, in the education, scientific and cultural sectors, where more and more students, scholars, artists are building ties, or in the political domain where our bilateral dialogue is strong and regular. The strategic partnership document that was signed by the French President and the Croatian Prime minister, on the 25 of November 2021, builds a new framework, a fully European one, for this already rich cooperation, and we want this to be an opportunity for our peoples to get closer together. The idea is to develop a strategic relationship that is not only bilateral, but also turned toward a joint effort in to build Europe together.

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INTERVIEW

The Nagorno-Karabakh Conflict was Left in the Past Our view is that respect to the norms and principles of the international law and cooperation the only way for the benefits of the region and prosper of people H.E. FAKHRADDIN GURBANOV

Croatia and Azerbaijan continue the positive trends in all levels.

Ambassador of the Republic of Azerbaijan to the Republic of Croatia

any countries share the same fate, history, experience, dark times and times of prosperity. Same connectivity between Croatia and Azerbaijan which enjoys with mutually good relations for Diplomacy & Commerce says H.E. Fakhraddin Gurbanov Ambassador of the Republic of Azerbaijan to the Republic of Croatia . The ambassador told our magazine about the possibilities of expanding cooperation between the two countries, but also about resolving the long-standing conflict between Azerbaijan and Armenia, and what his country's positions in global politics are.

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You have been in Croatia since 2018. How would you rate the development of relations between the two countries and how different are they compared to the period when you came to Zagreb?

— Since 2013 relations between the countries raised to the strategic partnership level. I have privileged to be appointed to represent my country in Croatia since 2018 and I can tell that we managed to improve relations, I would like to underline the opening of the Croatian Embassy In Baku in April 2019, it was a new dimension. In September 2018 President Aliyev paid an official visit to Zagreb. I can tell that 2019 was successful in terms of our diplomatic activities.

Speaking about new dimension I would like to highlight cooperation on people-to-people level. Shaki city in Azerbaijan and Varazdin in Croatia signed partnership agreement. Both cities have long history and cultural experience. Hopefully it will give a new impute to intergovernmental relations.

2020 was challenging year due

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AZERBAIJAN INITIATED TRANSPORT CORRIDORS, TODAY WE ARE ONE OF THE IMPORTANT CONTRIBUTORS TO THE EUROPEAN ENERGY SECURITY. THE SOUTH GAS CORRIDOR IS ONE OF THE SOURCES FOR THE GAS CONSUMERS IN EUROPE to coronavirus pandemic. Many events as cultural as well as economically has forced to be canceled. However dialogue continued by using online capabilities.

Since epidemiologic situation were allowed in last year ministries of foreign affairs held political consultations and in October Zagreb host the 2nd session of the Joint Commission between the Government of the Republic of Azerbaijan and the Government of

the Republic of Croatia for Promotion of Economic Cooperation.

And I can tell that between this two important events Minister of Foreign and European Affairs Mr. G. Grlić-Radman paid an official visit to Baku. We can evaluate it as a successful. During the join press-conference Minister J.Bayramov noted “the successful development of friendly and strategic relations between the two countries.”

And our hope that in coming years

Where do you see the most room for improvement of mutual relations, which areas specifically and in what way?

— As of today we are observing decrease in pandemic. We can see tourists again walking on the streets. Croatia one of the experienced countries in the region in terms of tourism industry. Cooperation in this area could be one of the expectations. Azerbaijan has rich energy resources and we already established good cooperation in this field, however there we have some room to widen this cooperation.

As you know Azerbaijan managed to liberate lands from the occupation. Those towns, cities and villages as well as all necessary infostructures and facilities has been looted for years. We need to bring this land to the better shape existed even before. Croatia has extensive experience in demining as well as experienced companies in energy facilities.

One of the characteristic features marking country quality is great culture and thanks God Croatia and Azerbaijan has great culture. It includes music, literacy, architecture, art. Promotion of the cultural cooperation is one of the points of interest on the list. Last year we placed Azerbaijani carpets photo-exhibition and I can tell you that it attracted a great interest of people and we are planning new events in this year.

What is the official Baku’s position on the conflicts around Nagorno-Karabakh and what do you see as the possible solution for this dispute?

— Azerbaijan had been victim of invasion. Almost 20% of the territory of Azerbaijan has been occupied by the military mean by Armenia. Thereafter for thirty years this lands, agonized under these occupants. This whole territories devastated again and again by

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those invaders.

Speaking about the conflict I have to mention that In 1993, The UN Security Council adopted 4 resolutions demanding the immediate and unconditional withdrawal of the Armenian troops from all the occupied territories of Azerbaijan and the return of all refugees and internally displaces persons to their lands. The UNSC resolutions condemn the use of force against Azerbaijan and occupation of its territories and reaffirm sovereignty, territorial integrity and inviolability of borders of Azerbaijan. These resolutions have not been fulfilled by Armenia. The decisions and resolutions of the UN General Assembly, the OSCE, the European Parliament, the Council of Europe, and other international organizations have not been respected either.

As I mentioned earlier 2020 was challenging for the whole the world. However it was one of the important years in history spin of my country. 2020 was the year of liberation of the lands and “homeland war”. On the morning of September 27, 2020 Armenian armed forces lunched advanced, full scale military attack on Azerbaijan. This aggression resulted with the war by its all means for 44 days and ending with the liberation of the most occupied towns and cities. The “44 days war” was necessity, it was fought for life, for the country and nation existence.

It was a record of heroism in all levels of our society.

Today we consider that the conflict between Armenia and Azerbaijan is over. Our view is that respect to the norms and principles of the international law and cooperation the only way for the benefits of the region and prosper of people.

As President Aliyev noted: “Azerbaijan resolved the 30-yearlong conflict and restored its territorial integrity and historical justice by military-political means.

The Nagorno-Karabakh conflict was left in the past. There is no administrative territorial unit called Nagorno-Karabakh in Azerbaijan. We have created Karabakh and Eastern Zangazur economic zones by the Presidential decree signed on 7 July 2021. Using this occasion, I would like to call on all the UN Member States and the UN Secretariat to avoid using legally non-existing, politically biased and manipulative names while referring to our territories.”

And as an ambassador I would

like to use this opportunity once more to bring to the attention that there is no such thing as “Nagorno Karabakh” and am expecting respect to that.

In January, Azerbaijan remembers the victims of the attacks of Soviet troops on Baku when 147 civilians lost their lives. You commemorate this as National Mourning Day. How important is this date in your history and how much does it serve as a “warning” even today?

— This year on 20th of January 32 year passed since those days. Over the night from 19 to 20 January 1990 26,000 Soviet troops invaded Azerbaijan’s capital city of Baku and brutally massacred Azerbaijani civilians, including women, children and the elderly. The mas-

for freedom resulted in the restoration of Azerbaijan's independence in 1991.

Since then, 20 January has been commemorated as National Mourning Day. Every year on January 20, millions visiting the Alley of Martyrs to give tribute. They give one minutes of silence in respect. These lessons of the history must not be forgotten.

When we observe the global map, where is Azerbaijan today when it comes to international relations, and what would you single out as the most important objectives of your politics?

— Azerbaijan’s geographical location was and will be “the Natural Seats of Interests.” Hence when we observe the global map - Azerbaijan in the center. Caucuses, the

SHAKI CITY IN AZERBAIJAN AND VARAZDIN IN CROATIA SIGNED PARTNERSHIP AGREEMENT. BOTH CITIES HAVE LONG HISTORY AND CULTURAL EXPERIENCE sacre at 20 January was one of the most horrific events in the history of 20th century.

The Soviet Army deployed to the country in order to prevent the national movement and break the will of the Azerbaijani people for independence, committed massacre against the peaceful population, violating the norms of international law.

Deaths were part of living in those days. But the tragedy of January 20 did not break the will of ordinary people, and the struggle

land of myths and legends, were also been blessed by the God with an abundance of valuable possessions and wealth. Caspian sea, on which west coast lays Azerbaijan, rich of natural gas and oil reserves.

However natural resources and advantage geography sometimes brings challenging and rich historical experience with. It attracts attention as friends as well as rivals.

Azerbaijan initiated transport corridors, today we are one of the

important contributors to the European energy security. The South Gas Corridor, which is already operational, one of the sources for the gas consumers in Europe. This is even more appropriate in this days, when are we observing raise on demand and price.

Political philosophy of Azerbaijan is a friendly, equally respectful, mutually beneficial relations with all countries as well as with all actors of international relations. We would like to live in a world where every people, every nation and every country lives in harmony, peace and friendship.

What do you like the most in Croatia (a city, a place, food, drinks, etc.), and what would you like to recommend to everyone coming here?

— Croatia is a beautiful country with dazzling Adriatic coastline with its sunny beaches, stammering waters, clusters of walled, redcapped towns, sprouting photogenic headlands. Its even difficult to high light a separate city, all of them are special in its way.

Croatia historically has been one of the famous tourist destinations and not only for Europeans. Cities like Dubrovnik, Split and small cozy villages on coastline always attracting connoisseurs of sun and good food. Varazdin with which established good relations also one of top touristic destinations.

I would recommend to see as much as possible, specially historic places, with the magnificent castles, national parks should be of special attention. And of course to taste very delicious food.

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INTERVIEW

Man of Quality and Style Fidelio Tailored Clothing is an example of how a project launched with true passion can become a successful business if, in addition to love, you invest sufficient persistence, patience and dedication into it From a business point of view, how good of an example is Fidelio Tailored Clothing to others?

What do the numbers (growth, percentages, etc.) say?

— Fidelio Tailored Clothing is an example of how a project launched with true passion can become a successful business if, in addition to love, you invest sufficient persistence, patience and dedication into it.

The last two years have been challenging for most entrepreneurs and we cannot say that the pandemic did not affect our business, especially when it comes to clients who need our services for a wedding. However, our advantage is that we provide personalized one-on-one service at pre-arranged times so our clients feel safe, even during the pandemic, which has allowed us to grow despite the difficult situation.

DAMIR MATEŠKOVIĆ Director and owner of Fidelio Tailored Clothing

e have but one chance for a first impression, which means that the message we send out with our clothing is very important, especially in the business world, Damir Matešković, Director and owner of Fidelio Tailored Clothing, states for Diplomacy&Commerce. Fidelio’s clients have recognized this and that is precisely why they choose clothes tailored just for them, completely personalized and customized to their preferences.

Nothing speaks of style more than clothes that fit flawlessly and compliments a person, and that is precisely what Fidelio offers.

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Judging by your resume, you seem to be a true example of a successful young man, who could be an example to others. After your primary business (owner of hair salons and company for distribution of professional hair care cosmetics and tools), you launched your own fashion line of tailor-made men’s suits in 2018. How would you rate your decision today, 4 years later?

— The decision to launch Fidelio Tailored Clothing was not a decision with a business plan and strategy, but an emotional urge driven by my love of good clothes and also my personal need to stop agreeing to compromises which are necessary when buying readymade clothes – whether it comes to the cut, colour or size. Four years later, I can say that this passion of mine has led me to a successful brand and good business in this specific niche.

Men’s fashion seems to be more expensive and not so common.

How much are Croats and everyone else interested in your suits, shoes and everything else you offer, and what does the production process look like?

— Our market lacked such an offer, especially when it comes to men. Men’s need to be dressed

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YOU CAN’T TELL A MAN BY HIS SUIT, BUT IT DOES MAKE THE FIRST IMPRESSION, WHICH IS KEY AND OFTEN CRUCIAL with quality and style is getting stronger, and precisely our personalized styling service is what attracts them the most to us, with the option to have every detail of their outfit fully tailored to their wishes, whether it is a wedding suit which should match the theme and style of the wedding or a business suit that should provide impeccable elegance combined with comfort, durable and quality materials that do not crease and allow comfortable wearing.

The story about the making of a suit starts with an informative meeting where we learn about the needs, desires and habits of our clients, and it continues with a meeting where we take measures, choose the materials, details and fashion accessories. All suits and shoes are made by hand in Italy within three to four weeks, af-

ter which we test the product with the client and finish the suit with our Croatian team, and do the final touch-ups before the final delivery.

Where do you procure the materials, who does the designs and how the final product will look like?

— Fidelio’s clients can choose between more than 3,000 fabric samples of renowned Italian and English suiting fabric manufacturers, and we make sure everything is flawlessly combined and personalized by providing styling services when designing a suit. The final appearance of a tailor-made suit, shoes, coat or some other clothing item from our offer is a harmonious combination of client’s desires, needs and habits with our experience, expertise and interpretation of global fashion trends.

Where can those who want your products find you?

— We started working in a room within Gentlemen’s Shop in Rijeka, and during the four years of our presence on the market, Fidelio Tailored Clothing grew and became ready for the next step, so we are currently furnishing a showroom and a tailor shop at a new address in Rijeka. We expect to move there very soon. Also, due to huge interest of the market, over the past two years we have been in Zagreb once or twice a week as well. Our Zagreb showroom is located at the EU Business Club at Sky Office Towers.

In the end, do you think that you can tell a man by his suit, or not?

— As our motto states, you can’t tell a man by his suit, but it does make the first impression, which is key and often crucial. That is precisely why we created Fidelio Tailored Clothing, and we found the inspiration for the brand’s name in the Latin word ‘fides’, which means trust, security, credibility and reliability, because these values are what embodies Fidelio and what anyone who decides to become Fidelio’s client will feel.

www.diplomacyandcommerce.hr

NATIONAL DAYS

ADRIAN GJERGJIZI New director in PwC Croatia

Adrian Gjergjizi was appointed at the beginning of the year as the new Director of Technology Services at PwC Croatia and the South East Europe region.

It is a great pleasure for me to have the opportunity to help our clients along the way, because we have already started working on various initiatives and I am sure that we will have many victories together. The start of the year is an ideal time for big changes and I am especially glad to have the privilege of starting 2022 as part of the PwC team. Leading services in the technology sector in the region of Southeast Europe is a great honor and responsibility for me and I take this opportunity to thank John Gašparc, Emmanuel Koenig, Petar Lozek, Mircea Bozga and other members of PwC's team with whom I am embarking on new business chapters, "he said. is Gjergjizi.

KRISTIJAN PAVIĆ Continues to lead the ACI as Chairman of the Board Despite the challenges posed by the coronavirus pandemic, ACI is behind an extremely successful period in which it has established itself as an innovator, a leader in the development of nautical tourism and nautical trends in the Adriatic. This is primarily confirmed by exceptional business results, but also various infrastructure projects such as the reconstruction of ACI Marina Dubrovnik and ACI Marina Korcula, construction and reconstruction of the most luxurious Croatian marina with prestigious five anchors - ACI Marina Rovinj and the concession for the future ACI Marina Rijeka in Porto Baros. other strategic investments in infrastructure and service excellence. ACI has significantly expanded its portfolio of services, the best example of which is the ACI Sail project with a fleet of six luxury sailboats and a unique training center in Split.

DAMIR VUKOTIĆ New partner in Deloitte Croatia Damir Vukotić is a new partner in Deloitte Croatia, and will be in charge of further development of the services of the Risk and Regulatory Department in the financial sector in Deloitte's Central Europe South region (Albania, Bosnia and Herzegovina, Bulgaria, Montenegro, Croatia, Kosovo, Northern Macedonia). Slovenia and Serbia). Damir gained more than 15 years of experience in the banking sector working for international banking institutions in Vienna. He is an excellent expert on banking issues in the region.

MARCH

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BOSNIA AND HERZEGOVINA roclamation of P Independence 1992

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BULGARIA Liberation Day

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HUNGARY 1848 Revolution Day

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IRELAND St. Patrick's Day

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TUNISIA Independence Day

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NAMIBIA Independence Day

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GREECE Independence Day

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MALTA Freedom Day

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CORPORATE

Contractual Prohibition of Competition With Employer COMPETITIVE ACTIVITY

PETAR PETRIĆ Attorney at Law, Petrić & Kajić Law Firm LLC

mployer and Employee may agree that for a certain period of time after the termination of employment contract, the Employee may not be employed by another entity competing with the Employer and may not enter into transactions, for his own account or for the account of a third party, which represent competition for the Employer.

If parties agree that the non-compete clause is to be in force for more than two years, the contractual prohibition would bind the contracting parties for only two years, and the part of contractual provision contracting a period longer than two years would be null and void.

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WHEN IS IT NOT BINDING ON THE EMPLOYEE The contractual prohibition of competition does not bind the employee if its purpose is not to protect the justified interests of the employer or if they, considering the scope, period and purpose of the prohibition, and in relation to justified business interests of the employer, disproportionately limit the work and progress of the employee.

The aim is not to prevent the employee from working, but only to work with the employer who is a competition for the previous employer.

COMPENSATION The contractual prohibition of competition is binding for the employee only if the employer has undertaken to pay the employee compensation of at least half of the average salary paid to the employee in the three months before the termination of employment contract.

The employer is obliged to pay the compensation no later than the fifteenth of the month for the previous month.

In practice, the question has

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CONTRACTUAL PROHIBITION IS TO BE CONCLUDED FOR A PERIOD OF MAXIMUM TWO YEARS FROM THE DATE OF TERMINATION OF EMPLOYMENT appeared as to whether an employer is obliged to pay wage compensation if an employee is employed by an employer who is not in competition with the previous employer during the period of non-competition. The answer is that in that case the Employer is obliged to pay compensation.

It is considered that if an employee is bound by the prohibition of competition, this does not mean that he must be unemployed during the period of validity of the prohibition.

CONTRACTUAL PENALTY The contract may provide for a penalty for the employee who violates the prohibition of competition, i.e. who is employed by an employer whom the former employer considers to be his competition on the market or if the employee establishes his own company with the same or sim-

ilar activities. The penalty is set at a specific amount, i.e. in the amount of several salaries that the employee earned with the former employer.

Pursuant to Article 106 of the Labour Law, a contractual penalty may also be agreed in the event that the employer does not undertake to pay salary compensation during the contractual prohibition of competition, if at the time of concluding such a contract the employee received salary higher than the average salary in Croatia.

In that case, if only contractual penalty is provided for in the event of non-compliance with the contractual prohibition of competition, the employer may, in accordance with the general rules of the law of obligations, demand only payment of that penalty and not the fulfilment of obligations or compensation for major damage.

Answer to this question in a specific case will be given by the court before which the proceedings are conducted. The prohibition can refer only to other companies, i.e. business entities that represent real competition for the current employer.

It is important to establish whether the new and the former employer offer the same products and services on the market, where the real situation is the decisive factor, and not the one according to the court register. Difference between statutory prohibition and contractual prohibition of competition Statutory prohibition of competition lasts for the duration of the employment relationship, while the contractual prohibition of competition is valid only after the termination of employment contract.

Statutory prohibition of competition refers to every employment relationship without the need for special contracting, and the contractual prohibition of competition must be explicitly agreed.

WHAT TO PAY ATTENTION TO If an employment contract is concluded and it contains a contractual prohibition of competition, the amount of compensation to be paid by the former employer during the period of prohibition of competition may be negotiated. The law prescribes a minimum amount of compensation, but there is no obstacle to contracting that amount in a significantly higher amount through negotiations.

It is possible to negotiate a contractual penalty in case of violation of the prohibition of competition, and its amount, and it can be negotiated to not have the contractual penalty as part of the contract.

It is also good to determine in advance who actually represents competitors to the employer. info@petric-kajic.hr www.petric-kajic.hr

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COLUMN

Where is the Transparency Hidden?

We are witnessing a global transformation and numerous challenges in the organization of working time

DANIJEL KOLETIĆ Apriori World

he pandemic has changed the way we do business and we are entering one of the key periods that needs to answer many questions, the first of which is whether we put people ahead of technology.

There are a number of models that will need to be considered in order to change work organizations and performance structures. Everyone is talking about digital transformation, new technologies, the growing number of applications, solutions that solve the speed of certain processes and control. However, we forget about differences, and even more about possibilities. The pandemic has put us all on online platforms, and millions don’t even have internet within the European Union, let alone within Southeast Europe. How efficient we really are in the processes of our work and how aware we are of our efficiency also depends on many factors. However, the key factors are skills, knowledge and love for the work we do.

Demographic transformation is happening on a grand scale. There are a lot of questions and changes that await us in this area as well.

We must be prepared, especially those of us living in Southeast Europe, for an increasing number of foreign nationals, and thus the demographic picture will change.

If we add up the overall statistics according to the available data of the tax administrations, for which the demographic picture in Southeast Europe in the last 10 years is very important, 10 million people emigrated abroad. In Serbia, more than 1.5 million people send money to their families every

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month through various platforms.

All these processes are connected by the keyword transparency. Every transparency starts with communication.

Corruption as a global virus has reached its peak without consequences and it has become a global standard, I would dare say since the beginning of humanity. But we must not globalize things because not everyone is corrupt.

Corruption stems from the value process but that is another matter. We are witnessing numerous global, national, regional cases that ultimately remain just stories on portals or newspaper articles that warn and reveal certain non-transparency, including recent non-transparency, for example in the Republic of Croatia in allocating funds from the Ministry of Culture, but this is not the only example. Who will answer, no one? Paper suffers everything, so different decisions and changes in the internal system will find a modality and solution to please

yourself and find ways to earn more.

Everyone is talking about patriotism and it is sacred. However, patriotism, according to me, is measured by a key category, and that is the care of the state, read the politician, the political system for the elderly and infirm. By this you can assess not only the transparency of a nation but also the culture but also the care of people for people. It is not a matter of law; it is a matter of the national identity of consciousness that you have or do not have. If they wanted to be transparent and efficient, which unfortunately will never happen in public administration in the Balkans. A law would be passed which would have procedures that would enable employees in public administration to be fired, and thus not only a certain number of them are not interested in transparent communication, but they are not interested in the function of public service in the service of citizens.

WHEN POLITICIANS START LISTENING MORE TO PEOPLE AND SO DO DIRECTORS, THERE WILL BE MORE EFFICIENCY AND TRANSPARENCY

Unfortunately, always a small number of people ruin the perception and reputation of a larger number of people, so in public administration there are many people who create good, working for the benefit of the community. Whether we really want to be transparent and whether we are in an era when transparency is desirable is one of the key issues behind another key word, and that is trust. The public sometimes does not understand the positive aspects and effects of public administration, and for that it is the fault of the public administration itself.

If we analyze the communication systems of public administration, we would come to devastating data, that in the 21st century, there are no systems or departments in some cities that conduct communication practices on a daily basis, and as I said without it there is no transparency.

None of us can solve the challenges of corruption and the challenges of transparency but we can try to change the concepts of new legal norms in the public sector. Is it and how to communicate after a pandemic, what is it that can connect us without putting people ahead of technology? Definitely the possibility that employees depend on the sector in which they work or get in the system of companies the opportunity not only to form different decisions but to talk to professionals who would find out what makes them happy in the workplace and how they see efficiency.

New trends are going in the direction of the chief happiness officer, it sounds a bit strange and challenging, but it is definitely a long-term solution. However, unable to take on the role that a chief happiness officer can play, his task should be to talk to employees which makes employees happy in order to try to meet their demands which ultimately has higher productivity, if the goal is to put people ahead of technology.

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CORPORATE

Quality Ahead of its Time With beautiful yet unexpected storytelling, the new campaign welcomes consumers into the Miele world, bringing to life the brand’s core values of craftsmanship, performance and sustainability

he campaign also highlights that Miele products are designed for long-lasting performance – providing a level of quality and sustainability that makes an important counterpoint to a throwaway culture. The campaign is visually unique, surprising and engaging, designed to captivate premium customers. It is run in 49 countries around the world.

• Miele prioritises longevity as the ultimate form of sustainability with products that are designed for long-lasting performance.

• Brand campaign builds on a year during which we all rediscovered the importance of our homes The campaign is an expression of more than 120 years of Miele craftsmanship and innovation.

Since inception, Miele has been on a relentless pursuit to be better than its latest best, improving and perfecting everything it does. This obsession with quality and producing things that last is integral to the world today.

For more than 120 years, Miele has been known for its brand promise “Immer Besser” – a commitment to forever be better than its latest best. Now, the launch of a new global marketing campaign.

The way in which people make purchase decisions is changing and Miele recognises that their values have never been more relevant, or more important. Today, 72% of consumers make purchase

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QUALITY AHEAD OF ITS TIME’, IS SHINING A SPOTLIGHT ON THE VALUES THAT HAVE BEEN A CORE PART OF MIELE’S DNA FOR MORE THAN A CENTURY, AND WHAT THEY MEAN FOR CONSUMERS TODAY decisions based on a brand’s values and principles. When it comes to values that resonate, authenticity and consistency are often the keys to success.

On top of this, with consumers spending more time than ever in their homes, their greater appreciation of both means Miele’s cam-

paign arrives at a poignant moment. From the beginning, the brand has made quality craftsmanship a priority as the ultimate form of sustainability, with products that are designed for long-lasting performance.

By calling attention to the purpose that has fuelled the brand

from its inception, Miele strives to differentiate itself in the industry and secure trust and loyalty at a time when it has never been more important for brands to show people what they stand for.

Today, customer experience has gone beyond a transactional process to a deep, meaningful relationship between brands and their audiences – a relationship built on shared values, trust, and loyalty. Recognising this shift, Miele decided to do things differently in order to stand out in a fiercely competitive landscape.

For more information on ‘Quality Ahead of its Time’, please visit www.miele.hr.

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COLUMN

Successful Brand Communication It is a fact that the value of brand rises and falls with its communication. A crucial thing for (strong) brands is to communicate well their values to be perceived by consumers and sell

JAGODA POROPAT DARRER Business Communication Professional

s it is known, successful brand communication has two clinchers: enthusiastic customers and satisfied employees. As recently as ten years ago, companies created their own realities with advertising and PR - today, employees and customers define the reality and reputation of a brand name company.

They talk to others about their experience with the company and its products around the clock (marketing91.com). Trust is the greatest asset in all this. It only arises when the customer has a consistent, credible brand experience at all brand touchpoints.

Consistent brand touchpoint management is therefore an important control tool of brand communication.

But the best lever for earning the customer's trust, as the same portal states, are a company's employees, when they act as (trained) brand ambassadors, and credibly live and communicate the brand values and brand positioning. This can be clearly illustrated by using the Apple brand as an example. The term "APPLE" is used internally as an abbreviation for "approach, probe, present, listen, end" – meaning "approaching" the customer, "probing" him about what he wants, "presenting" a solution, "listening " to feedback, and "ending" the conversation with a heartfelt invitation to come back.

So-called "context-based" brand communication has increasingly emerged as a key to success in the digital media world, proving the relevance of brand messages by systematically aligning them with the context. Compa-

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nies use targeting techniques for approaching target groups to accomplish this. Bhasin (2021) states that brand communication is an important part and tool of brand management by which the companies inform, persuade, enlighten, teach, remind, and enrich the knowledge of their stakeholders about the brand, its strengths, values, fundamentals, and its offerings of products and services.

Brand communication influences the stakeholders of the company. The stakeholders include employees, customers, investors, and sponsors as they are attached to the brand in the most integrated manner, and it is the prime duty of the management to have a communication with them on regular basis about the happenings and important matters of the brand.

It works as the voice of the brand that strengthens the relationship with the stakeholders on the longterm basis. It encompasses the mixed use of traditional media channels such as newspapers and television with the strategic amalgamation of contemporary media such as social media platforms,

content marketing, blogs, and digital marketing that works as an integrated approach to enlighten the customers and other stakeholders about the latest developments about the brand.

Furthermore, Bhasin (2020) suggests that there is a big and important role of the PR department of the brand along with the hired PR agency in designing and planning the Brand Communication strategy so that the message provided is clear, authentic, and relevant in nature. Before any sort of Brand Communication going outside the closed doors of the company, it is crucial to carefully understand every nuance of it so that any element of the communication does not harm the brand image and standing of the company in the market and in the minds of the customers. Hence, it needs to be backed by the meticulous planning and expert advice.

Advantages of good brand communication creates an impact, makes you authority, improves loyalty, improves the market. How to improve brand communication? Bhasin (2020) suggests you

AS IT IS KNOWN, SUCCESSFUL BRAND COMMUNICATION HAS TWO CLINCHERS: ENTHUSIASTIC CUSTOMERS AND SATISFIED EMPLOYEES

decide on the spokesperson (usually, the main promoter or the key member of the management is the spokesperson as being a promoter he or she knows and understand the brand in the most intricate manner plus has been an integral part of the growth journey of the brand right from the day one), have proper media channels (Hence, it is vital to plan and choose the proper media channels having a potent mix of traditional mediums such as newspapers, business magazines, and periodicals along with the combination of the latest digital and social media platforms such as content marketing and blogging amongst others. Having press conferences and stakeholders meets are still one of the best and most effective channels to improve Brand Communication.), be authentic, have a dialogue. Furthermore, it is useful to showcase the brand personality, as well as being helpful, open, and transparent.

One more thing is not to be neglected. That is the importance of connecting with other brands, the strategy called brand-to-brand communication. An article found in Forbes (2020) point out that strategically tapping into other brands' customer base can open the chance for marketing techniques that appeal to the shared consumers in each audience.

Brand-to-brand communication on social media can have a significant positive impact on a brand's image. For example, as states Alysia Gradney for Forbes, brand-tobrand communication on social media is a great way to influence unconscious consumer associations. By associating your offerings to a brand that consumers already know, trust and love, you are now able to create a positive memory association quickly, allowing you to unconsciously build consumer loyalty by connecting your offerings to memories and positive emotions.

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CORPORATE

Story About Chivas Regal Whisky Launched in 1909, Chivas Regal is the world’s first luxury whisky and is considered to be a timeless classic, renowned for style, substance and exclusivity his story begins in 1836 with two brothers named James and John Chivas.

The brothers were two of fourteen children born to Robert & Christian Chivas, living on the remote Strathythan farm in the Ellon Parish of Aberdeenshire. At 26 and 22 years old respectively, James and his younger brother John decided it was time to follow their dreams and leave farm life in search of bigger and better opportunities. They left the small crowded Strathythan farm in search of the bright ‘northern’ lights of Old Aberdeen.

At this time there were no trainlines or stage-coach routes across Aberdeenshire, so the young brothers trekked for several days across 20 miles of Scottish countryside to the Granite City. Aberdeen at this time was a city typifying the period of industrial revolution, booming with new people, industries, exotic goods and most importantly new ideas. One of these new ideas was the blending of grain and malt whisky, referred to today as Blended Whisky. Blended Whisky is defined by the Scottish Whisky Association as, ‘A blend of one or more Single Malt Scotch Whiskies with one or more Single Grain Scotch Whiskies.’ The core concept of blending is to create something better than the sum of its parts by harmonizing the complex flavors of the malt and grain whisky, bringing them together and creating a new and superior character.

Arriving in Aberdeen, John began working at a wholesale firm while his older brother James worked in a grocery store, where he later partnered with a gentleman named Charles Stewart. This was no ordinary store however – established in 1801 it soon gained a reputation of supplying the finest goods, provisions and highest quality whisky to the gentry of Scotland. If you wanted real craftsmanship and goods of the highest quality, this was your one stop shop. This recognition of the reputation and quality of the business soon extended from the gentry of Scotland to Queen Victoria herself, who awarded James and Charles the first of many roy-

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TODAY, THE CHIVAS REGAL RANGE NOW INCLUDES CHIVAS 12, CHIVAS 18, CHIVAS 25 AND THE GLOBAL TRAVEL RETAIL EXCLUSIVE, CHIVAS BROTHERS BLEND

al warrants to supply goods and provisions to her royal summer home, Balmoral Castle.

Since joining the Aberdeen grocery store James had learned and mastered the craft of tea blending. The skills James learnt during this time, coupled with his years of training both his nose and pallet, provided him with superior skill in the blending of whiskies.

Now inspired by his royal patronage, James Chivas began pioneering the art of blending whiskies, using the many ageing casks laid down in the shops cellars. He created what we consider today to be the Chivas house style – blending whiskies in a style encompassing smoothness, richness and harmony of flavour. Charles Stew-

art left the partnership in 1857 and soon after John joined his brother James at the shop, forming the Chivas Brothers family business.

Two years later ‘The 1860 Spirits Act’ permitted the blending of whiskies in warehouses. This confirmed both the Art of Blending as an established technique and Blended Whisky as a category of whisky in its own right. As a result, the demand for Chivas Brothers’ smooth, rich and harmonious style whisky boomed.

When James Chivas died in 1886 the store was passed to his son Alexander Chivas (John having also passed in 1862) who continued to expand the business, assisted by his good friend Alexander Smith. Following the death

of Alexander Chivas in 1893, Chivas Brothers was then taken over

by Alexander Smith and its new Master Blender Charles Howard.

By 1909, Chivas Brothers had developed a wide reputation for producing luxury goods, which they shipped around the world.

The Chivas Brothers had extensive knowledge and expertise on the aging and blending of whiskies and built up extensive stocks of maturing whisky. Following several successful releases across the globe Charles Howard, Chivas Brothers’ Master Blender at the time, wanted to create a new blend that payed tribute to the legacy of the founding brothers, James and John.

Using the name Chivas Regal, Charles created what he believed to be the finest whisky ever made, releasing a 25 year old whisky in 1909. This met the regulatory requirements for bottling and labeling, a feat that hadn’t been accomplished by any other companies or brands at the time, establishing it as the world’s first luxury whisky.

The Chivas house style has been passed down by generations of Master Blenders, and is still carefully guarded today by Colin Scott, Chivas Regal’s fifth Master Blender.

In October 2014, Chivas Regal announced the addition of a fifth permanent expression in the Chivas Regal family, Chivas Regal Extra, sitting within the super-premium range, positioned between Chivas 12 and Chivas 18. In February 2016, Colin Scott presented Chivas Regal The Icon (RRP: 3.000 EUR), a perfectly balanced expression that showcases the depth and complexity of his craftsmanship and knowledge, echoing the pioneering James and John Chivas.

Chivas Regal The Icon is an ultra prestige blended whisky created with a blend of some of the rarest and oldest whiskies available to Chivas Regal, some from distilleries now lost forever.

As you can see from the Chivas Regal story, for over 170 years brotherhood, generosity, entrepreneurship, and integrity have – and continue to be – at heart of Chivas Regal.

Sláinte (Cheers)!

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CONFERENCE

Conference “The Economist: Svijet u 2022.”

Conference was held for the third time in Croatia

Josip Aladrović Minister of Labor, Pensions, Family and Social Policy, Tomislav Ćorić Minister of Economy and Sustainable Development, Zdravko Marić Deputy Prime Minister and Minister of Finance, PM Andrej Plenković, Nataša Tramišak Minister of Regional Development and European Union Funds, Ivan Vrdoljak Livit, Boban Spasojević CMC

he publisher Color Media Communications publishes magazines intended for the local market also on the markets of Serbia, Slovenia, Bosnia and Herzegovina and Northern Macedonia. Conferences were also held in Belgrade and Sarajevo, and magazine promotions were held in Ljubljana and Skopje.

Transformation of the Croatian economy through the National Recovery and Resilience Plan 2021-2026 was the main topic of the business conference “The Economist: Svijet u 2022”, which was held in December in Zagreb’s Lauba.

Croatian Prime Minister Andrej Plenković said that in turbulent times for the state’s stability, it is crucial to have a stable and peaceful leadership, not demagogues

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who look only at their own interests, and to have resilience.

The following diplomatic and business panels were held at the conference: “International agreements today and tomorrow: secu-

Hrvoje Glavaš (INA), Adrian Ježina (Telemach Croatia), Gordan Kolak (Končar), Mirna Marović (President of the Croatian Private Equity and Venture Capital Association – CVCA)

TRANSFORMATION OF THE CROATIAN ECONOMY THROUGH THE NATIONAL RECOVERY AND RESILIENCE PLAN 2021-2026 WAS THE MAIN TOPIC rity or a dead letter, and “Transforming the business from the user’s perspective”. Speakers were the Ambassadors of Great Britain, France, Ireland and the Head of the European Commission’s Representation in Croatia, while the business panel was attended by Sabina Škrtić (Enna Group),

The licensee for “The Economist: World Ahead” for Southeast Europe is the company Color Media Communications from Novi Sad, and the Croatian partner in charge of production of the magazine in the Croatian language and for the organization of a conference in Croatia is the company

Livit, owned by the former Minister of Economy Ivan Vrdoljak.

“Every decision-maker in the business world will benefit from this magazine, because almost every article in the magazine has some valuable information that can be used to better position our companies in certain markets or industries,” said Ivan Vrdoljak.

Boban Spasojević, director of the project and magazine in Croatia, said that the localized edition of the magazine aims to show where the countries are individually and where the world is in total. “In the countries of the region, we will agree, it is necessary to set the standards of developed countries so that we know what our priorities should be if we want to join that society,” said Boban Spasojević.

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PM Andrej Plaenković

H.E. Gaëla Veyssièrea Ambassador of the French Republic, H.E. Simon Thomas OBE Ambassador of the United Kingdom, H.E Ruaidhri Dowling, Ambassador of Ireland, Ognian Zlatev, Head of the European Commission Representation in Croatia

Boban Spasojević CMC, Ljubiša Mitof Visurski General Manager Adria Region, AbbVie

Ivan Vrdoljak, Livit

Milena Prodanić Tišma, British School Bright Horizonte

Sabina Škrtić (Enna Group),Hrvoje Glavaš (INA), Adrian Ježina (Telemach Croatia), Gordan Kolak(Končar), Mirna Marović (President of the Croatian Private Equity and Venture Capital Association– CVCA)

Boban Spasojević Project Director The Economist Svijet u .., CMC

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INTERVIEW

by Robert Čoban

The Braveheart of the Caucasus In Svaneti, which was controlled by mafia gangs since the collapse of the USSR in 1991 until only 15 years ago, tourism has started to develop only recently - roads are being built, hotels and ski resorts are being opened, while the airport building in Mestia, named after a medieval Georgian queen Tamar, has made it to the BBC’s list of the 10 most beautiful airport buildings in the world

ONE OF THE TOP 10 MOST BEAUTIFUL IN THE WORLD ACCORDING TO THE BBC: Queen Tamar Airport in Mestia

huburhindzhi, the administrative crossing between Georgia and its breakaway province of Abkhazia, resembling our Jarinje, but with no barricades and stickers on license plates... Old women, dressed in black, are pulling bags and the policeman warns us not to take photos.

Abkhazia declared its independence from Georgia after the 1992-1993 war. To date, Russia, Nicaragua, Venezuela and Nauru, as well as South Ossetia and Transnistria, have recognized it as the independent Republic of Abkhazia.

International organizations such as the UN, the European Commission, the OSCE, the NATO, the World Trade Organization, the Council of Europe and most sovereign states recognize Abkhazia as part of Georgia.

A van carries a group of media representatives from Serbia who came to Georgia to see a natural beauty and abundant cultural her-

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itage of this ancient European civilization, all before the imminent establishment of a direct flight to Belgrade.

Our driver is a refugee from Abkhazia, who was only a child when, in 1993, his family had to leave their house and flee to the south.

As he is driving along the Enguri Valley, on a road reminiscent of the ones in the Morača Canyon, the scenery around us is changing

and at times, resembles the Indian Summer in New England. A few minutes later it looks like a postcard from Switzerland or a picture on a Milka chocolate wrapping paper, featuring a cow grazing on a green slope while in the distance we can see the white peak of the Ushba Mountain (standing at 4,710 metres altitude).

It was already dark when we arrived in Mestia, the capital of the mountainous region of Svaneti.

Everything is reminiscent of any other mountain resort in Europe, except that there are dozens of stray dogs on the streets here. As in the rest of Georgia, stray dogs are all chipped, neutered and very tame, constantly wrapping themselves around your legs and wanting to cuddle.

To stretch our legs a little after a five-hour drive from Kutaisi, we decided to take an evening tour of the famous Svaneti Towers. The story behind these towers begins in the 8th century, when due to a foreign invasion, but also conflicts between family clans that often ended in blood feuds, stone towers were built next to every house in the Upper Svaneti region. There used to be 280 of them, but only 175 remain in the whole region.

The Svaneti Towers are unusually reminiscent of the ones in San Gimignano in Tuscany that we saw in 2009. Today, the Svaneti Towers are included in the list of the UNESCO World Heritage Sites and although the streets around them are steep and rocky, they are beautifully lit which made our night walk quite enjoyable.

Even in the dark streets of Mestia, you do not feel threatened by locals whose shadows appear every now and then on the illuminated walls of stone houses and towers. "There is almost no crime in this area. People here know that every incident would destroy the tourism they live off, so it nev-

SPECIAL AWARD OF THE KARLOVY VARY FESTIVAL: The film "Dede" ("The Mother"), which actors mostly "SALT FOR SVANETI": A controversial HIGHLANDERS: In front of the birth house of the famous alpinist come from the village of Ushguli, documentary from 1930 Mikhail Vissarionovich Khergiani where the film takes place.

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Defending against invaders and avalanches: Towers of Svaneti

er occurs to anyone to do anything bad to foreigners," Tina, a girl of small stature, with smart eyes, tells us. She was assigned to us as a tour guide by the Georgian Tourist Board during our seven-day stay.

The next day, after breakfast, seated in two SUVs, we set off for Ushguli, a community of four villages (Zhibian, Chvibiani, Chazhashi and Murqmeli) high in the mountains, under the Shar summit (5,193 metres). Ushguli in the local language of the Svan people means "braveheart". Parallels with the Scottish Highlanders draw themselves.

The 45-kilometre-long road to Ushguli leads through sharp, mostly completely unprotected mountain passes in several places, intersected by torrents.

The driver of our SUV, a local in the late sixties, plays a mix of local music and in skilful slalom, bypasses the cows that walk the road almost as if we were in India.

Today, Ushguli has a population of about 250, who work in agriculture and tourism. There are several hotels (one is called "NATO"), a couple of cafes and households that rent horses and hiking equipment for tourists.

Four villages share one school and five churches - the most famous of which is Lamaria (Church of the Mother of God).

The entire region was ruled by local mafia gangs since the collapse of the USSR until only15 years ago. After the arrest of their leaders, tourism started to develop in the valley began, as did the construction of roads and airports.

We arrive in front of the Church of Lamaria, from the 9th century, which is dedicated to the Mother of God, but its name derives from the ancient cult of the Svani people, who respected the pagan goddess of fertility.

According to local legend, the Church of Lamaria was the scene

ON THE UNESCO WORLD HERITAGE LIST: Towers in Ushgulia

THE NATO HOTEL in Ushguli

of the murder of Puta Dackhelani a member of the Dadeshkeliani family of aristocrats, who tried to impose himself as a feudal lord on the local highlanders. The locals of Ushguli allegedly invited him to a feast to come to an agreement, got him drunk and then executed him in a way similar to the one described in Agatha Christie's "Murder on the Orient Express". Namely, the representative of each of the families in the village pulled the rope that was tied to the musket which killed the drunk and deranged guest. In this way, they shared the responsibility and avoided blood feuds against one individual family.

They say that Puta's shirt is still kept in the church. Next to it, there are a large number of icons, manuscripts and crosses, all of which were catalogued by the famous Georgian historian Ekvtime Takaishvili during his visit to Svaneti.

The cemetery in Ushgu-

li is made of plots, bordered by wrought iron fences, each one containing the graves of one family. After the harsh winter of 1981, which caused a lot of problems for the inhabitants of the four villages, the USSR authorities decided to displace about half of the population to the steppe part of Georgia.

It is not difficult to imagine what it was like for the Highlanders when they were transferred from 2,000-metres-altitude to the dry steppes. Some of them returned to Ushgura after 1990, and some remained to live in the steppes. The real reason for this relocation was the fear that the disobedient inhabitants of this part of Georgia would rebel, as well as that the displacement of certain ethnic groups was the common practice of the Soviet authorities.

The film "Dede" ("The Mother") from 2017, directed by Mariam Khatchvani, is being advertised in several places in Ushguli.

The film, whose director and most

FAMILY TREE: The owner of Chateau Chikovani talks about four centuries of turbulent history of his lineage

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of the actors come from the four villages, won a special award at the Karlovy Vary Festival. Stephen Dalton of The Hollywood Reporter wrote in his review of the film: "Feminism meets fatalism in this beautiful Georgian melodrama!"

This film is screened at a cinema in Ushguli, but also at the cinema in Mestia, where it is showcased (to tourists) several times a day.

Another film that celebrates this region is the Soviet silent film "Salt for Svaneti" from 1930.

It showcases the life in Svaneti, as the backward and inaccessible part of Georgia. The film puts special emphasis on the chronic lack of salt for both people and cattle, with the latter being allowed to “lick the sweat from people and drink urine" to ensure sufficient intake of salt.

The film was made for propaganda purposes in order to glorify the project of modernization of the USSR via its First Five-Year Plan. Despite that, the film was criticized because it highlighted the backwardness and primitiveness of the population in this area. The Svani later complained that the film director, Mikhail Kalatozov, invented some customs and details from their lives in order to portray them as "exotic" as possible. Because of this and his next film "The Nail in a Boot", Kalatozov fell out of favour with the Stalinist regime.

He continued to direct his war drama "Cranes Fly" from 1957, after Stalin's death, which was the first significant deviation from the propagandistic depiction of events in the Second World War. Kalatozov is also important as the author of the Cuban film "I, Cuba", which featured significant technical innovations in 1960s filmmaking. His son Georgi Kalatozishvili and grandson Mikheil Kalatozishvili are also renowned filmmakers.

Moving on… One of the ancient houses in the village was transformed into a small museum where we had the opportunity to see how families and cattle slept in the same room, which was not uncommon in our mountainous areas as well. The heat "produced" by cows, goats and sheep was not wasted, especially in the winter months. We also found the swastika motif in several places.

In the yard we pass by, a seventy-year-old woman is chopping wood. I jump to her aid and she happily hands me a big axe but refuses to be photographed.

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Tina tells us how tourists are often confused by the frowning faces of the locals who rarely smile.

She explains that they are simply mountaineers who have been taught not to show their emotions, and only recently, since tourism started to bring them more money, they are known for giving an odd smile or two.

Exhausted by an almost twohour walk through the villages during which we tried to avoid the cow dung that littered almost all the cobbled streets of Ushguli, we arrive at the small hotel called Villa Lileo (Lileo is the name of a Svaneti song dedicated to the Sun). Here, the hostess shows us how to knead and bake small loaves of bread, after which we enjoy a tasty mountain meal.

On the way back to Mestia, we are stopped by road works (yes, the road are being paved, not asphalted). As we wait, we watch one of the workers level the holes in the fresh concrete made by the

ubiquitous cows passing by.

Mikhail Vissarionovich Khergiani (1932-1969) was a Georgian alpinist, seven-time USSR champion who was nicknamed "Tiger from the Rock" and was awarded the Special Order of Sport of the Soviet Union in 1963.

His birth house in Mestia was transformed into a beautifully decorated museum in 1981. The house also features a tower, the top of which we climbed with the help of several ladders and through the opening on the roof enjoyed a spectacular view of the other towers in Mestia. In front of the house, there were several locals dressed in traditional Caucasian costumes. They were extras in a movie that was being shot there. The local curator told us about Khergiani with such zeal so much so that we were so invested in listening about his life. Khergiani's uncle was also an alpinist, so little Mikhail started climbing mountains in his early childhood.

SUMPTUOUS CAUCASIAN CUISINE: Lunch in Ushgulia

THE SITE OF THE GEORGIAN VERSION OF "MURDER ON THE ORIENT EXPRESS": Cemetery next to Lamaria Church

After great successes in the USSR, Mikhail joined the British expedition to Mount Everest in 1953 at the invitation of Baron John Hunt. The news of the expedition’s success arrived in London on June 2, the morning before the coronation of Queen Elizabeth II. In the summer of 1969, in the Italian Alps, a fallen stone cut his climbing rope. As he did not have a spare rope, he fell from a height of 600 metres and died.

From the top of the tower in Khergiani's house, I saw an unusual building. It is the building that houses one of the highest airports in Europe - Queen Tamar Airport.

The building was designed and built in 2010 by German architect Jürgen Mayer Hermann and his company, J. Mayer H. and Partners. The BBC included it on the list of the 10 most beautiful airport buildings in the world. The design of this building, spanning 250 square metres, is an homage to traditional Svanetian architecture which features towers next to houses. It is located at 1,467-metres-altitude and is named after Queen Tamar from the 12th century (who is called "king" in Georgia because in their language the ruler is called "king" regardless of gender and "queen" is the king's wife).

Until the pandemic, the small airport served 9,000 passengers a year. The only airliner that uses this airport is Vanilla Sky, which L-410 aircraft take off and land only when the weather allows.

Occasionally, private planes, owned by wealthy people from all over the world, use this runway, which is only 1,200 metres long, as they are starting to discover the natural beauty of this part of the Caucasus.

We leave Mestia at dawn and on our way to Kutaisi, we stop at Chateau Chikovani, a building that is a cross between a castle, a winery and a restaurant. The heir of a family, who dates back to the mid-17th century, tells us about a history rife with turmoil from the time from the Kingdom of Georgia through the Russian Empire and the USSR to the newly independent Georgia. He has a big family tree hung on the wall which shows that his great-grandfather Dmitry had 16 children with one wife while he has only one son.

He complains about a shortage of workers and reminds me of one of the Serbian winemakers. His son was born in 1991, lives in Kutaisi and cares little for his father's business and family tree.

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