We seek economic diplomats even among companies

It seems that Foreign Ministry’s new motto is economic diplomacy. According to the new organisation, an Assistant Foreign Minister, who Minister Picula is still looking for, will be appointed to that position. About the dissatisfaction of Croatia’s business people with the Croatian diplomacy and the planned changes in the structure of the Ministry we spoke with Foreign Minister Picula after his return from the EU Summit in Thessaloniki.

Was the Thessaloniki Summit successful for Croatia and other Western Balkan countries, or was the EU’s message a negative one? Thessaloniki was a success, even though it was burdened by unrealistic expectations. On one hand, the EU expected to give a clearer EU membership perspective to the countries of the Southeast Europe, warning, however, that these countries are still a long way from entering the EU. Of course, after Copenhagen, and fed up with the stories about enlargement, Europe was sceptical about the extent to which it should open itself to the Southeast Europe. On the other hand, the summit was burdened by high ambitions of certain SE European countries that hoped the EU in its generosity would just ignore their problems and offer them a shortcut to candidacy by not insisting on meeting the required criteria. Someone has cleverly noticed that the Thessaloniki Summit came too soon for some and too late for Croatia. We did our part of the job before Thessaloniki: from 2000, when we had no institutional relations with the EU, to Zagreb Summit and signing of the SAA, we have earned our way to EU candidacy.

One of the more controversial themes of the summit was the setting up of assembly centres for the immigrants to the EU in Croatia. How did that end? Just before the summit, Great Britain announced that it is giving up on the project. This coincides with my opinion, which I have publicly expressed in Croatian newspapers, that we do not want to be an assembly centre on the EU’s edge, but perceive ourselves as a part of it in the near future.

Did the Thessaloniki Summit discuss Croatia’s co-operation with the Hague tribunal and the case of general Ante Gotovina? No more that any other similar summits, maybe even less. This is certainly the result of our successful co-operation with the Hague, as verified by Carla del Ponte in her recent statements. As regards Gotovina case, it was not discussed at all. The world has a sort of a kibitzing view on it. Many foreign diplomats feel excluded from the whole process and are only guessing what the media and political speculations around Gotovina case are all about. However, now, June 2003, the co-operation with the Hague is no longer the main obstacle on our road to the EU. Just to show you how much the times have changed – every few months I a have lunch with the ambassadors of the EU states and states outside the EU. At the last couple of lunches, the evergreen problems like the Hague and return of refugees to Croatia have been pushed to the side for the first time. The themes that dominated the discussions and reflected the ambassadors’ interests pertained for the most part to economy, especially the continuation of privatisation in Croatia.

Is that one of the reasons why you recently have established a special division for economic diplomacy? The establishment of the Division for Economic Diplomacy is a part of the effort to get closer to the realisation of our foreign policy objectives through the reconstruction of our organisation. These objectives include, of course, the EU, NATO, harmonising the relations with our neighbours, and a greater presence of Croatia in the political and economic arena outside Europe. Analysis have shown that without such a division we can hardly realise and promote our political goals. The Division for Economic Diplomacy has learned from both good and bad experiences of the previous projects, and will focus its capacity and sensibility on promoting Croatia as a reliable economic partner and a foreign capital destination. Commercial activities should fall within the domain of some other government bodies, the Chamber of Commerce, or even the companies themselves. They have to establish direct relations with the investors and business partners and make deals. Economic diplomacy has a different task: it has to design the country’s policy on that issue and maintain contact with the institutions in which we have diplomatic and consular representatives.

How will this new Division for Economic Diplomacy be organised and how many people will it employ? The government passed a decree 10 June on the reorganisation of the Ministry of Foreign Affairs that established the Division for Economic Diplomacy. It will consist of 2 departments - for bilateral and multilateral relations. Analysis have shown that we already have considerable resources: we have more that 55 economic advisors scattered across the globe and that should be adjusted to meet our ambitions. The new division will certainly employ professional diplomats with an economic background, but professionals from other ministries too, as well as from non-governmental and semi-governmental organisations like the Croatian Chamber of Commerce (HGK) and the Croatian Employers’ Association (HUP). I will also try to animate businessmen who have proven themselves “on the ground”. It is hard to talk about the number of employees, as we still have to draw up a rule book and systematise work posts. Right now, it is important that we insist on quality.

Is Darko Bekić going to be appointed Head of the Division for Economic Diplomacy? Your information is incorrect. This is the kind of gossip that accompanies all reforms and reorganisations. Bekić is being unreasonably put in the context of these changes. He is the Assistant Foreign Minister for Analysis, and I am sure he has more than enough work to do.

Who is going to be appointed the Head of the Division, then? We are negotiating with a few persons, all of them top professionals. A few of them are not from the MFA. Getting a top professional to fill the position of assistant minister in the election year requires strong motivation on the part of that person. However, I will not give up trying to find the right person for the right position, at a time when we need it the most, because I do not want to wait for the elections to be over to start the reconstruction.

How is the new division going to help Croatian companies and businessmen? Right now, we are acting as a substitute for the HGK and other business associations in parts of the world where such representative bodies do not exist. Our embassies in Asia, Latin America, and Africa do much more than just keep formal contact with the institutions of the country in which they are located. They often help companies make deals or establish contact with business partners in that country. of course, the success of this division depends on how the other bodies will accept that challenge. We will sign some sort of an agreement with the Ministry of Economy in July that is supposed to make the Agency for the Promotion of Export more operative, along with some documents that the government will adopt later on.

What is the Division for Economic Diplomacy supposed to achieve before the elections? The Division is removing the chimerical, mythical sediments from that concept and is really concentrating on its work. It is supposed to facilitate the contacts between the institutions for economic co-operation in some 80 odd countries and our exporters and business people that see beyond our limited market. If that is not enough to establish such a division, then I do not know what is.

Can you name some exles when the Croatian diplomacy and yourself have helped Croatian companies and economy? We are not a resource ministry to deal with the foreign trade, but because of the efforts that preceded the founding of the Division, we are able to document some of what has been done. During my visit to Japan in November 2002 I offered some 30 projects to various Japanese institutions that deal with export and investments marketing. We have recently received information that several Japanese banks are prepared to take part in 3 projects involving the building of infrastructure: some local railway lines, the rebuilding of Vukovar port, traffic corridor Budapest-Ploče, and the hydro-power plant in Podsused. The Japanese have positively reacted to our proposal to appear at the Zagreb Fair as a partner country. The Japanese company Nippon Co. has been chosen as a consultant in the project of transferring a part of the Rijeka port. Also, Croatia’s export to Japan has risen from last year’s $4 to $40 million, mainly due to tuna export. I wanted to offer the Japanese something else from out mariculture that they would be interested in. My search lasted for 25 days and only one owner of a fish-processing plant in Dalmatia had shown interest that waned later on. Even the distinguished science institutes that I have kindly asked to conceptualise our presentation in that field have sent no more than two A4 papers. This is a proof that this initiative cannot succeed on its own, without help from the outside. Here is another exle. Money transfers with the countries outside Europe are usually done through a third party, which makes the whole thing a lot more expensive. The result of our economic advisers’ work is the joining of the Croatian Bank for Reconstruction and Development (HBOR) with the guarantee companies and EXIM banks in countries like India, Indonesia, and Iran, which facilitates a direct transfer of money. Our activities are especially important for territories outside the reach of our companies that do not have enough finances to keep permanent representative offices.

What about the ex-Yugoslavian countries where the companies have arrives before the diplomats? Politics used to hinder economic relations, like, for instance, the problems with getting visas, or the cancellation of your visit to Montenegro, during which you were supposed to negotiate a free trade agreement. Because of relations burdened by war and aggression against Croatia, as well as Croatia’s share of guilt in Bosnia and Herzegovina, opening politically towards those countries is understandably more traumatic than opening an embassy in Dublin, for instance. It is only natural that in those circumstances we have first started with economy, culture, and sport, and only afterwards began establishing political relations. After I was appointed minister, I refused to send an ambassador to Belgrade as long as Milošević was in power. After he left, I wanted to be sure in new and democratic Serbia’s real intentions. It took a while before we harmonised our political instruments and met on the same political page. In the last 2 years we have solved some of the most delicate political issues, such as the border issue, and signed the free trade agreement. As regards the cancellation of my visit to Montenegro, if a country is incapable of foreseeing the problems and protecting the embassy of its first neighbour, then that is not a good environment for making deals.

Speaking of ambassadors, business people often complain that in countries like Germany, that are an important market for Croatia, there has been no Croatian ambassador for a couple of months at a time. The process of appointing the ambassadors is different now that it was in 2000. Firstly, it takes more time because now we have an additional component– the hearing before the Parliamentary Committee for Foreign Policy. We have also introduced co-signing. So, the whole procedure now takes much longer than it did before, when it was up to only one person to appoint the ambassadors, a decision that used to be made literally over night. The procedure now takes longer also because of the necessity of a political consensus, as it is hard to reach an agreement between coalition partners. Also, the embassy and consular top positions are about to go through some drastic changes, as these persons’ 4-year term is about to end. But even when an embassy or a consular office is left without its top officials it can still function quite perfectly, because there are charges d’affaires. These are professional diplomats that are more than capable of doing their job. A person that wishes to do business with another country and needs the Ministry’s assistance, cannot hide behind the claim that there are no ambassadors in that country.

Do these professional diplomats have enough education and experience in economy to engage in economic diplomacy? The MFA is not a resource ministry for foreign trade, that depends on the overall economic conditions in the country. It would be tragic, however, if this project did not bring about some positive changes. As to whether the people that we are going to appoint will rise to the challenge, we will just have to see about that. We are not looking for an alibi for failure, but we are not going to burden the project with unrealistic expectations. It will be a long time before the world starts looking at Croatia as an economic partner, not just political. Of course, in case a solution does not work out, we will revise it, and if we are not satisfied with some persons, we will dismiss them.

In view of our past experiences and the current economic situation, do we really need a diplomatic network of 55 economic advisors? Yes. If we had already realised all our foreign policy priorities, then this claim would be justified, but since we have so much to make up for and, if nothing else, show the readiness to eliminate deficits and join the modern economic and political world, then I would say 55 advisers are far from enough. A better question would be whether all these advisors (now 55, and later maybe only 10) are joined in a project that will ensure a bigger influx of investments and a better business opportunities for Croatian companies.

Criticism of our work is across the board and unfounded

Croatian diplomacy’s image in economic circles at home is not very favourable. For instance, the head of the Croatian Employers’ Association is one of the severest critics of the economic diplomats’ work. How do you plan on winning the confidence of the economy at home? I have heard a lot of such across the board criticism, and I would be perfectly happy to respond to it if it was valid. The MFA has in the past 3 years had an insane amount of work to do to balance out the negative position Croatia was in internationally. We had to reaffirm Croatia’s political position to give the economy at home a chance to develop. A part of the effort to improve Croatia’s image abroad is going to be a visit to the European Commission in October this year. At the preparatory meeting in the MFA, a dozen leading Croatian economic organisations have gathered to discuss the presentation of Croatia’s economic possibilities before the European Commission decision makers. This year, we will again organise a Seminar for economic advisors. The least years’ seminar saw 47 economic advisors from 44 countries, from various ministries and institutions. We will also visit Podravka, one of the companies that see themselves as primarily export oriented.