The Yugosphere Fantasy

The Croatian Times website reports the president of the German-Croatian Chamber of Industry and Commerce, Klaus Mangold, as saying that German business wants to be the number one investor in Croatia. i.e. overtaking Austria and the Netherlands. See here.

Such statements and intentions are very important indeed. Regardless of whether the Germans achieve this, they are still the number three investor in Croatia, and one of Croatia’s biggest export markets.

Despite the obvious importance of Germany – and currently moreso Austria – there is  more written about Croatia’s relations with Serbia. Those relations are largely legacy ones, to do with the war and ex-Yugoslavia.

Matters are not helped by the ‘Yugosphere’ idea formulated by Tim Judah of the Economist. This has created a false perception that Yugoslavia is reforming in some way. It isn’t. Certainly not in economic terms. One can speak of an Austro-sphere – or a German version if they do become the number one investor.

We at CBR sometimes find people are surprised when we tell them that Austria is the number one investor or that Italy is the top export market for Croatia. With theories like the Yugosphere around and constant stories linking Croatia with the ex-Yugoslavia this is hardly surprising.

However, it is very misleading and can only create confusion. Seeing Croatia via a Yugo-nostalgic perspective has failed since 1991.

Look to Croatia’s  links with its actual economic, political and indeed cultural partners, such as Austria, Germany, Italy and the states of the old Austro-Hungarian Empire to understand Croatia today. If you are doing business with Croatia, you need to get the context right – be wary of Yugosphere theories.

For much more, listen to – or download – our podcast on the matter here.

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