Preoccupied with worries about whether inflation will rise, GDP will fall, how safe banks are, and the likelihood of a nuclear war breaking out, we fail to notice one, as they say, perfect storm that is happening in Croatia.
How can this perfect storm be seen? One manifestation is a poor Nepali who recently arrived in Zagreb and is rushing down the street with a Wolt delivery bag on his back. Another example is a moderately wealthy Austrian who has arrived in a small Dalmatian town to take over the keys to a newly purchased house, front row to the sea.
Perhaps just a few minutes after the Austrian passed the border crossing at Macelj without stopping, a representative of a Polish investment fund entered Croatia with associates to take over the family business that was just sold to him by the founder from a smaller town near Zagreb. And in the virtual world, thousands of addresses are currently testing how artificial intelligence can replace a local PR person, lawyer, or market analyst.
Perfect Storm
Each individual case, an example of separate processes, has long-term deep consequences for the local community. When these four processes converge, they create a perfect storm with dramatic consequences. Sleepy in the belief that he, his children, and grandchildren will be able to live undisturbed from various forms of rent-seeking (renting apartments, a secure place in the state apparatus as long as the membership card is in the pocket, nibbling on the benefits of EU funds…), the average local native is completely unaware of what is coming. He is foolishly proud when some foreign blogger praises the relaxation he encountered in Croatia. And the native will be surprised when one morning he wakes up and realizes that the governance of the country has been taken over by some more agile and ambitious individuals who have come from abroad. The processes are accelerating rapidly. Last year, about 125,000 work permits for foreign workers were issued. Real estate agents are witnessing an additional influx of buyers from EU countries after the introduction of the euro and Schengen. More than a third of real estate is being purchased by foreigners. Among 400 million people, there are quite enough who consider one million euros for a villa on the Adriatic a trifle. And whose purchasing power most domestic aspirants for holiday homes can no longer keep up with. Owners of rocky land 400 meters from the sea are selling their inheritance for 400,000 euros. Some buy apartments in Zagreb for that money, but there are also many examples of such acquired wealth being dissipated within a few years.
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In the absence of systemic assistance in the transition of managing family businesses from founders to heirs, the rich harvest is being taken over by acquirers from Central Europe. Agencies that deal with arranging acquisitions have their hands full. After foreigners bought most large companies in the early phase of returning to capitalism, now it is the turn of medium and smaller healthy companies. Those that should have been conquerors in other countries are becoming prey for the more enterprising from other countries. Unfortunately, the money that families received from selling companies mostly ends up in real estate again. Rent-seeking is comfortable, but it rarely sustains itself into the second or third generation.
Poor Grandchildren
The team with college degrees looks approvingly at the arrival of Nepalis, Indians, or Filipinos. They are not competition for them. Perhaps they are not, but they will be for their children, especially grandchildren, when new communities are formed here and the ambitious children of today’s builders, waiters, and delivery workers start attending universities. And while they are growing up, ChatGPT has appeared, threatening to replace many jobs of college graduates. Only those who can – through their above-average abilities – participate in the hybrid work of human and artificial intelligence are secure.
What can the native community do? The first and most likely option is – to ignore the new circumstances and continue to doze. The second variant is to defend themselves by all means, but that is a battle lost in advance. The third is to slow down the challenges. However, this would require a quality political-intellectual elite to devise soft solutions. Given that they have not proven effective in solving simpler tasks, it is hard to believe that there are capacities when it comes to the perfect storm. The fourth and most desirable variant is to establish a dialogue and seek a win-win model of coexistence. And an attempt to keep the main levers, as much as possible, in native hands. If this direction is not taken, in ten or twenty years, a coalition of incoming business owners, owners of the Adriatic coast, owners of cheap labor, and owners of artificial intelligence will thank the natives for preserving such a beautiful part of the world for them. And for giving it to them cheaply.
