It is only when you see the arrival of the staggeringly large cruise ships — disgorging thousands of holidaymakers each day — that you begin to appreciate the impact of tourism on a country as small as Croatia. They come for the picture-postcard coastlines, the historic architecture and an increasingly in-vogue foodie culture.
Yet the cruise ships paint a misleading picture. Most international tourists come from the EU and arrive by car, as evidenced by traffic jams at many border crossings with Slovenia. Hot summers and relatively low prices make Croatia a top destination for millions of Europeans.
“Tourism is our biggest industry,” says Daniela Angelina Jelinčić, a researcher at the Institute for Development and International Relations in the capital, Zagreb, and co-author of the book Creating and Managing Experiences in Cultural Tourism. Jelinčić has a word of warning, however: “Countries that depend only on tourism are generally poor countries.” Although Croatia is not poor in the strictest sense, and is doing better than neighbouring Bosnia and Serbia, Jelinčić’s point is a good one. Croatia, now a member of the EU, could — some would say should — be doing much better economically. And many would argue that tourism has become too central to the country’s economy to be healthy.
Croatia is blessed with mile after mile of fabulous beaches, is home to numerous attractive small islands and has a wonderful holiday climate, one that makes it suited to high-quality wine production. According to official Croatian statistics, in 2018, most foreign visitors were German, with around 2.8 million arrivals staying for around 20 million nights. Germany alone accounts for 24 per cent of all foreign tourist overnight stays. Slovenia is in second place, with just 8.8 per cent, followed by Austria (8.5). Clearly, no other country adds more to the nation’s tourism coffers than Germany.
An unsustainable trend?
A 2018 European Union report on Croatia’s tourism industry says that “international tourists’ expenditure in Croatia amounts to almost 20 per cent of GDP, by far the largest share in the EU”. It adds that “tourism revenue in Croatia — more than for other destinations — is driven by the increasing number of tourist arrivals and overnights, while average spending per tourist is stagnating.” The report concludes that this trend “may not be sustainable in the long term” for the Croatian economy.
It is not just the economic sustainability that is open to question. In 2018, a total of 400 cruise ships docked at the Adriatic town of Dubrovnik. In addition to the environmental damage caused by the cruise ships, visitors on such a scale means that historical sites are increasingly at risk of being eroded. Yet addressing such economic and environmental challenges is made harder because some 80 per cent of Dubrovnik residents rely on tourism for their livelihoods.
Jelinčić, currently a research scholar at the University of Toronto, used to be a tourism consultant for Dubrovnik. Back in 2003, the city was supposed to become “an example of how things could be done well,” she remembers. “Nowadays, however, it receives a huge number of tourists, much larger than its carrying capacity. Much larger than the population of Dubrovnik itself. Practically everything has turned into a slave to tourism. Local life is practically non-existent any more. The old town has turned into a place that serves only tourism.”
Jelinčić points to recent history to highlight how relying too much on the tourism industry can cause problems. “Just 25 years ago, there was a war going on in Croatia and tourism stopped. It just stopped, affecting the economy and everything. And people couldn’t believe this could happen.” The war she is referring to is the one Croatia fought for independence, part of a series of wars that broke up Yugoslavia after 1991.
The break-up of Yugoslavia
For centuries, Croatia had been part of the Habsburg Empire, followed in the 19th century by the Austro-Hungarian Empire. Croats were a people that rarely ruled themselves, and in 1918, after the First World War, they became part of the multinational Kingdom of Yugoslavia.
The country was torn apart during the Second World War. In 1941, the murderous Ustasha regime gained power in Croatia after aligning itself with Nazi Germany and fascist Italy. As in other Central and Eastern European countries, Germany’s defeat ushered in more than four decades of communism — in Croatia, under the second incarnation of Yugoslavia. When communism collapsed after 1989, the Yugoslav state turned in on itself as nationalist and ethnic tensions erupted. The result, seen on millions of TV screens around the world, was wars, ethnic cleansing, war crimes and genocide.
Germany had pushed for the recognition of the newly minted Republic of Croatia back in 1991, in response to the siege of the Croatian city of Vukovar and the murder of hundreds of its citizens by the Yugoslav army and Serbian paramilitary troops. In a series of terrible battles from 1991 to 1995, in which no side came out with its reputation untainted, there were around 140,000 deaths and four million people were displaced. Croatia had been the richest of the six Yugoslav republics, but by the war’s end, its economy was ruined.
Since its independence, Croatia’s development has been steady rather than spectacular. Like many other countries, it was severely affected by the financial crisis more than a decade ago, and reforms to improve the country’s economic resilience are overdue. Importantly, however, Croatia is politically stable, and though not without challenges — particularly relating to corruption — it hasn’t been afflicted by the kind of populism that has blighted Poland and Hungary. Indeed, research on public attitudes by the Pew Forum suggests that Croatia is consistently more open and tolerant than most other Central and Eastern European countries.
Joining the EU
For many Croatians, the promise of EU membership was a distant aspiration back in the late 1990s. After fulfilling the necessary entry requirements, a 2012 referendum saw 66 per cent of Croatian voters opting to join the EU. In July 2013, the country became the EU’s 28th member state and, in October 2019, the European Commission gave it the go-ahead to prepare to join the Schengen border-free area. This should provide an economic boost, not least to tourism. But Croatia is under pressure from the EU to ensure that its borders with non-EU countries are secure, including the border to Bosnia, in order to stop the influx of asylum seekers from countries such as Syria and Afghanistan.
Also, on 1 January 2020, Croatia took over the presidency of the Council of the European Union for six months. And along with Galway in Ireland, the Adriatic port city of Rijeka is one of the EU’s two European Capitals of Culture for 2020.
But challenges remain. Though unemployment is relatively low, at around seven per cent, there is a tradition of young people seeking work abroad, often in Germany. Around a fifth of Croats alive today have emigrated, with around 400,000 in Germany alone. Keeping the best young talent at home continues to be a major problem, which can be solved only by providing attractive career opportunities in a more dynamic, well-balanced economy.
Discussions of Croatia’s economic future inevitably lead back to tourism. There is much more to the country’s economy, of course, with agriculture, infrastructure building, and the oil and gas sector all important. But with the economy’s continuing reliance on attracting foreign visitors, the cars and cruise ships will likely keep arriving in ever increasing numbers.