Croatian Diaspora Experiences: From San Paolo to Zagreb to New Jersey

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Croatia has a declining population, but with a population of 4.2 million and a global diaspora of an estimated 3 million, persuading those living abroad to return to the homeland could solve the problem. TCN continues its series on March 26, 2016 looking at those who returned to Croatia, with mixed results. Returnees like Igor Krstelj, who arrived to his native Zagreb from the US via Brazil, before resettling in his current home, New Jersey. 

1. Firstly, tell us a little about your connection with Croatia.

I was born in Zagreb where I went to MIOC (Math High school) and received a Civil Engineering degree from The University of Zagreb. I had a job at the University of Zagreb before moving to the States where I earned Ph.D. in engineering and applied math from Princeton University. I was fortunate to receive a full scholarship at Princeton, where I worked as a faculty after completing my studies. After graduating I realised there was no money or glory in academia, so I opted for the Wall Street and a career in business… no glory in business either but the money is better.  

After seven years at Princeton and seven on Manhattan, back in 2002, my wife Anne and I had an opportunity to move our work to Sao Paulo, Brazil. The move was successful; however, my paperwork got delayed for a few months because of the elections in Brazil. There was no point in returning back to the States, so I went to Croatia hoping to chill, do little windsurfing and skiing in the Alps. I managed to windsurf for just two days. A high school friend, now a successful businessman, heard I was back in town and asked me to help him with his company. After a few months I had my own company, I won a few key contracts and hired a few of people. There was no time for windsurfing… In the mean time my wife was still working in Brazil, alone in a huge apartment with five bathrooms, maid and cook. As we were quickly burning through hundreds of thousands of frequent flyer miles accumulated in previous life flying back and forth between the continents we were wandering what to do next.

I often say that no amount of planning can replace dumb luck … a headhunter called me from the States, having heard that I was in Croatia. He offered me a great job, as the head of corporate finance for the big pharmaceutical company in Zagreb. I told them I was not the right candidate but I had the perfect person for him, a very strong candidate with a Chicago MBA and many years in international business – Anne. The headhunter flew to Brazil to meet her and within weeks our furniture was back on a container somewhere in the Atlantic and Anne was on her way to Zagreb to start her new job with Pliva.

2. And how was life in Zagreb in 2002?

It was great! The lifestyle was great. There was a booming real estate economy enhanced by government investment such as motorways. We all mistook it for a real economy. I rode the wave and even bought a house in Hvar, Hvar. I still have it, never completely finished the renovations … it took t “only” six years to get a location permit to renovate. 

I had my own company that was doing reasonably well. I was also working for IBM for a short period of time, heading their consulting group. My wife was happy with her work and career as Pliva was milking their Sumamed success… Life was great – sailing in the summer, skiing in the winter. Our daughters were born while we were in Croatia. They were born in Chicago but they enjoyed grandmother “baka” service in Zagreb … and the social benefits were great too – full pay for 6 months! .

The downturn started in 2007 when the investment in real estate, mostly from the Brits slowly dried out. . As the global crash unraveled cash flow turned to drip so in 2009 I collected only about 30% of what I invoiced. Also, I had to paid VAT for the full invoiced amount. I was involved in a big project which took me more than 2.5 years to collect while I was out of pocket for the VAT amount.

No amount of planning at work again … Pliva got sold and my wife was offered a generous severance package (70% of which would have been paid for taxes) or a job with relocation back to the States. We realized we could not maintain the standard of living in Croatia, our daughters were approaching school age; and it was seven years in Croatia … time to move on. Our furniture with some of the original boxes packed in New York and San Paolo were repacked and shipped back to the US. … and here we are, living the suburban life in New Jersey, with a view of the Manhattan skyline just 12 miles away. It took a few years, to recover financially and professionally from the Croatian adventure and the life goes on … we still ski and sail a lot and are still hoping we can find time to finish the house on Hvar.  

3. If the financial crisis had not happened, would you still be in Croatia? What was positive and what was negative?

Quite possibly yes. It was an interesting time. There was of course the old Communist club – HDZ,SDP, ZZZ … same people, same programs/ no programs great skills in politics and power grabbing, no analytical/ economic skills or emotional intelligence.

However, there was a new wave of professionals with increasing influence and back in 2002 I was hoping they could provide the nucleus for something better. It took time and energy to find these people. People from “the club” were more common. I would have great business conversations without any traction … for months. My guess was they were expecting something I was not offering. I could never start that conversation … one could say I did not know how to do big business in Croatia. That was my challenge.

4. If you were single now, would you try Croatia again?

No. London or New York. I am done experimenting.

5. Tell us about the lifestyle.

The lifestyle was great! Zagreb shuts down for six weeks in the summer and three weeks in the winter, and everyone heads to the coast or to the mountains. Great summer sailing great winter skiing. In few hours by car from Zagreb you have an excellent choice of world class skiing, windsurfing and/or sailing. I never had a problem finding a tennis partner.

I have friends and family in Zagreb; the support network every family needs. In New Jersey when my wife and kids got sick while I was overseas we had to fly in my mother-in-law from Chicago. However, there were challenges. I noticed how I grew apart with some of the childhood/high school friends… the war, different lives and experiences. Also, Anne was never fully accepted, and social events were sometimes awkward. While she speaks several languages Croatian was not her strength and Croats are very exclusive and not very welcoming. Even towards me, I was away for 14 years and was not considered a “local”.

Yes, I was ‘Amerikanac’. You don’t know. You don’t understand. It is amazing. Even close friends. I could not merge back into my previous life… but we created a new one. We met some amazing new people, and made new friends.

6. What advice do you have for people thinking of returning to Croatia?

It depends what you want to do. If you are retiring, keep your nest egg outside of the country. I would happily retire to Hvar 4-5 months a year, buy and old wooden boat “trabakul” and work on it “pituravat”. I could live with Hvar people – they are freaks, but I love them… my type of freaks.

From a business point of view, a few pieces of advice: First, don’t count on selling in Croatia. Don’t build a business depending on revenue stream from Croatia. Second, it takes time and energy to find the right people to work with. Great professionals exist, but they are hard to find and they are not cheap.

Third, arm yourself with infinite patience. The government is there to slow you down, tax you and make your life really complicated/ miserable … and they do it really well.  

7. Tell us about the legendary Croatian bureaucracy.

Ha! Unbelievable! My wife had the best lawyers Pliva could buy, and her immigration file was 7-8 inches thick. Each year, the visa extension took several months and about 1.5 inches of paperwork. One of the firm’s junior lawyers would spend a few days standing in the queues in Petrinjska, then call her up when she would get close to the front. My house on Hvar is a six hundred year old national monument. It took me SIX years to get a location permit… i.e., to prove that the house exists on that location.

I had some British clients over looking at real estate on Hvar. I showed them a few investment opportunities and they were very interested… then they asked me if we could turn the project around in 2 years (they were used to 12-18 months turnaround in London). When I told them about my house paperwork they lost interest… one of these projects (Villas on Male Rudine) is now quietly rotting almost a decade later.  Time will kill every real estate deal. 

I have a friend who runs an investment fund which is today the biggest landowner in one of Croatian larger coastal towns. Ten+ years later and not a single brick laid. How is that possible?

There are success stories. However, getting permits to build a shopping centre in the heart of Zagreb on “Cvjetni” takes the same skills needed to walk away after killing two Italian sailors with a motor yacht. I do not have the skills.


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