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 the neighbourhood"

In Croatia, small-scale industry, which had survived privatisation or stayed steady due to a long business history, could take over many Croatian market opportunities from their Austrian counterparts. The case is similar with numerous trading companies and chains of supermarkets, which cut off the flow of customers to Austria. As far as competition is concerned, northern Croatia plays an important role because the people there had a good chance to increase their human capital based on the experience they gained in Austria and Germany where they were doing business, went shopping and working. The financial capital that directors and private entrepreneurs used to keep in Austrian banks during socialism came back to Croatia and has helped building most middle-sized private companies.31

The globalisation of the world economy as well as the development of the Internet and easy-to-use international means of payment will also have a disruptive effect on the economic integration of the Danube region and its leading role as an economic centre. Products based on an intensive level of human capital and information about them are easily available from any part of the globe.32

The cultural and academic dominance of Vienna is losing its vitality in central Europe. Flight costs to any part of the globe or Western Europe depreciated, and it seems that Vienna is a little bit late in building up such networks.33 It is similar with foreign languages. Most young people in Croatia speak English rather than German and Italian. The German language has lost its meaning as a language of Central Europe - something that is also obvious at this conference where English and German were official languages.34

During the last years of communism and in the beginning of the war, directors and managers of socialist companies had excellent opportunities to extract extreme private profit (especially playing with inflation), which was often kept in Austrian banks. The first years of independent Croatia were years of an extremely good business situation on an almost „virgin” market. Most of those inflation profit-makers decided to set up companies for this and that. In order to cover the origin of their capital, they often took credits from the banks in which they already had deposits. There is a chance that a wrong impression could be created, especially regarding the recovery of the Croatian economy, in particular in northern Croatia, that was based on Austrian capital.

32 At this point, 1 must draw on my personal experience in the graphic industry. Some special ink, which we would probably have bought in Vienna only fifteen years ago, can nowadays be ordered for a very low price from far-off markets, such as the American and/or Korean market. A few months ago, one of my customers who live in Varazdin, close to Austria, bought a very specific printing machine in Scotland. He found it on the Internet, paid via a swift international payment system and ordered an international transport agency to get the product to where he lives. This process used to be a typical Austrian small-scale job, until recently.

33 It takes me almost ten hours by train from Rijeka to Vienna. There are no good flight opportunities, a trip to London or Frankfurt would take up even less time and cost the same. At the same time, flights to Vienna are still quite expensive.

34 The Austrian attitude against using the English language in trade and communications is far away from French nationalism but it is very common between lower strata officials and ordinary people. Such nationalism could be a barrier for small-scale business. Here I am reminded of Jews in Croatia, who profoundly penetrated Croatian provincial markets thanks to their will and success to learn the language of their customers.

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