Croatian Ambassador Touts Business Opportunities

June 7, 2002
| By Katy Rent |
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GRAND RAPIDS — When the Croatian Ambassador to the United States recently visited Grand Rapids it wasn’t to discuss U.N. relations, it was to talk trade.

Brought to Grand Rapids to talk with high school students, area business people and politicians, through the efforts of State Rep. Doug Hart, World Hope USA, Van Andel Global Trade Center and the Embassy of Croatia, the ambassador had the opportunity to talk trade on many different levels.

“Croatia is now in many ways ready for investment, partnerships or just trade,” said Ivan Grdesic. “Croatia is now ready in many ways to accept investment or expanding trade, especially in manufacturing which is strong in Michigan, so we have a lot of potential partners here.”

What Grdesic would like to see is partnerships among small to medium-sized businesses in manufacturing, electronics, shipbuilding and numerous other areas.

“Our mission is to educate people in Michigan of relevant opportunities in Croatia for trade. The war is over and the message I want to share with the Michigan community is that Croatia is now on the right track in many ways,” said Grdesic.

The ambassador stressed that Croatia is now a stable, democratic country that has signed an agreement of association and cooperation with Europe. That pact makes Croatia a member of the European market.

And he insists that it is a safe market in which Americans can do business.

“It is a secure market. For example, the Croatian banking system is 90 percent privately owned, mostly by Italian financial institutions. The exchange rate is very stable. So you can have some prediction as to what is going to happen and being close to Europe and Euro markets — and with experience with trade with European countries — that is something Croatia can offer to American companies as well,” Grdesic said. “We have a stock market and many of our companies are traded publicly in Croatia. Some of them are traded on the London Stock Exchange so it is young system, but it is stable and provides a lot of opportunities for those interested in doing business.

“Right now we are interested in trade associated with the energy sector, especially in privatization of the energy sector. That is something that is very new now in Croatia. Businesses are related to refineries, oil, electrical distribution, generation, pipeline, the energy sector and pharmaceutical. We also partner with Europe in the furniture business and I understand that is something that is strong here. So that is another area we would be interested in.”

Grdesic suggests that companies in Michigan and Croatia work through their respective chambers of commerce to find compatible pairings.

Another possibility, he said, are “economic road shows” in which aspects of the Croatian economy are presented in Washington, New York and other large cities, giving business leaders and politicians from around the country a chance to attend.

“It is important to show economic opportunities and also political, to show that the country is a stable democracy and a good partner to the United States. This is the 10th anniversary of the independence of Croatia. We are a new democracy but an old nation in a way. Being independent gives us different opportunities to work with different nations and different areas. Working with the United States is something that is important to every nation.”

Croatia is encouraging investment through privatization. Grdesic said that means buying or acquiring a business that is already in existence but used to be owned by the government.

“Energy and now tourism are two industries that we are now privatizing. We are looking for strong partners or strategic partners that will buy shares or parts of shares of the businesses.

“There is no interest to see a state be an owner of businesses. Usually it is a bad practice. We’ve seen it so we want to sell that to people who have experience in management, have market access and can run that.”

Croatia sold its telecommunications sector to a German company, which Grdesic said brought in better management, better services, better prices and all around improvements in the industry.

Grdesic noted there also are benefits to privatization, including tax breaks and a variation on the Renaissance Zone program in Michigan.

“We have a free trade zones that we would like to offer, which means you can manufacture in a free trade zone in a place that will not be in jurisdiction of Croatian authority and basically pay no taxes or just the basic infrastructure fees. And then you have to resell (the product) to somewhere else in Europe or elsewhere.”

During his stay in Grand Rapids and through talks with area business people and State Rep. Hart, Grdesic said he has found there is a missing link.

“One side may potentially have the need for manufacturing or tooling or something, and there is a capacity for that in Croatia. And we need to put these people together. We talked about creating an Internet base, a portal that was kind of an ebay (with) software that linked people and they can go in and see what the demand and supply sides are and then partner,” the ambassador said.

“We are past the time when politicians would create business opportunities. I think it is on the business sector and on me and diplomats and politicians just to get them together and tell them this is what we have and they will find a way to make the best out of it.”

And he sees Croatia as being in a good strategic position in Europe. With large ports and a good railway and highway system, Croatia can be used not only as a hub for manufacturing, but also as a distribution center for products in Europe.

“Basically we are a small country. We are a small market. But because we are a part of Europe we are a part of the European market, and that is important to know. Also, the war is over; we are out of the conflict zone. We are not on the front pages of the paper anymore. We are trying to be a normal, beautiful, small, boring country and just carry on with business as normal.”           

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