Gertrude Enderle-Burcel, Dieter Stiefel, Alice Teichova (Hrsg.): Sonderband 9. „Zarte Bande” – Österreich und die europäischen planwirtschaftlichen Länder / „Delicate Relationships” – Austria and Europe’s Planned Economies (2006)

Damir Jelic: “Living in the neighbourhood” - Economic Relations between Capitalist Austria and Socialist Croatia in Historical Perspective

“Living in lhe neighbourhood

Chart l:16 Average Joint Stock Capital of foreign controlled enterprise (million dinars)

Austrian capital had different penetration effects in different regions of Yugoslavia; it was stronger in the former provinces of the Austro-Hungarian Monarchy. According to my calculations based on Dimitrijevic’s data,17 foreign owned companies in Croatia predominated in capital intensive and labour force intensive joint stock companies, but they were not very powerful. Apart from the export-oriented wood industry, the enterprises worked for the domestic market. That can be explained with the consumption strength of Slavonia and Zagreb. A cheap labour force substituted for expensive machines that were actually needed. Thus, most enterprises remained part of small-scale industry. At the same time, lack of capital and expertise attracted numerous foreign small-scale entrepreneurs. That is to say that the penetration of Austrian capital was based on the situation of human capital as well as on the business skills of Austrian entrepreneurs.

Croatia, Austria and the role of human capital The geographical position combined with a relatively bad communication network11* between Croatia and western Slavonia did not really support the development of a proto-industry which negatively affected the development of

16 D i m i t r ij e v i c : Strani kapital, p. 186, data that excludes the banking and trade sectors, which had an effect on data for Germany, which was much stronger than it is indicated in that chart.

17 J el ic, Damir: The Importance of Foreign Capital within inter-war Yugoslavia, unpublished MA dissertation: University of Leicester, 1999.

IS About the problems of communications as a barrier to an economic development, see deliberate observations in the Handbook that was set up under the direction of the historical section of the Foreign Office, No. 9, „Croatia and Slavonia”, (London, March 1919). Croatian economic nationalism, both in Austro-Hungarian Monarchy as well as later in Yugoslavia, was very often about the development of communications.

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