Boris Miksic's Double Life

Croatia declared independence from Yugoslavia in 1991; that declaration led to a brutal four-year war with neighboring Serbia, which had dominated Yugoslavia’s politics since that now-former nation was formed after World War I. Croatia is fully independent now. But, Miksic wonders, how free is it?

“What really got me involved in politics was that now we had a free country, a country we’d paid dearly for, and all of a sudden the politicians are helping Europe buy up the entire country,” he says. “They are not fighting for a stronger Croatia, a stronger economy. They’re giving the keys to foreign interests.” According to Miksic, more than 90 percent of the banks are owned by non-Croatian companies, and much of the country’s telecommunications industry is in the hands of German entities.

Instead, Miksic wants to see greater Croatian ownership of Croatian businesses. He doesn’t consider this to be a xenophobic stance, even in a global economy. To Miksic, it reflects a real concern for Croatia’s continued development under its own guidance, and for the security of opportunity for its citizens entering the work force. “It’s like the current U.S. concern for energy independence,” he says.

The Croatian economy doesn’t appear to be doing badly. The International Monetary Fund forecasts growth in gross domestic product of 4.7 percent for Croatia in 2007, with a slight cooling off in 2008 to 4.5 percent. Inflation is expected to remain below 3 percent. This relative economic stability should help Croatia formally enter the European Union (EU) in either 2009 or 2010. In 2006, outside investment in Croatia was $3.6 billion—not bad, though Poland, Slovakia, and Hungary attracted more. This is partly due to Croatia’s higher labor costs. On the other hand, Croatia is considered to have a strong education system and high labor skills, which could help it become a high-tech center. Meanwhile, Zagreb’s Middle European beauty and culture are being discovered by tourists worldwide.

But perhaps the biggest business issue in Croatia is political and economic corruption. Miksic asserts that many of Croatia’s current politicos are holdovers from the Communist era. “They are career politicians,” Miksic says. He detests the old bureaucratic structure and its inefficiency: “If you look at Croatia’s GDP, it’s not even among the first Fortune 500 companies.” (Croatia’s 2005 GDP was $38.5 billion, which would put the country at number 58 in the 2006 Fortune 500 ranking.) “So what are we talking about? We have a huge government in Croatia that’s producing nothing.”

Indeed, the Germany-based anti-corruption organization Transparency International has rated Croatia one of Europe’s most corrupt business environments. Croatia dropped three places, from 67 to 70, in the organization’s Corruption Perceptions Index of 159 countries from 2004 to 2005. On a scale of 1 (most corrupt) to 10 (no corruption), Transparency International gave Croatia a rating of 3.4. The World Bank’s annual “Doing Business” reports and the Heritage Foundation/Wall Street Journal Index of Economic Freedom have come to similar conclusions. The country still has numerous state-run enterprises, and the nepotism, favoritism, and mutual financial back-scratching that typified Croatia’s “command economy” under the Yugoslav Communists stubbornly lingers on. Particular concerns are unregulated campaign financing and medical institutions. Getting off the waiting list for treatment in a Croatian hospital, for instance, often requires bribing doctors and administrators, according to Transparency International.

There isn’t a whole lot Miksic can do as an independent Zagreb council member to battle this entrenched system. He’s pretty much one against 50. Indeed, he refuses to be classified as entirely right, left, or center in his politics. It’s this political stance that has many in Croatia and throughout Europe asking: Just who is Boris Miksic?

The Croatian Dream

If you think the American Dream is simply a fable, take a look at Miksic’s life.

He and his pregnant wife left Croatia in February 1974 with $37 and a doctored passport. His biggest help in getting into the United States was Dick Singer, a representative for a St. Paul–based company, Northern Instruments, which made corrosion-inhibition products. Singer, who met Miksic in Croatia, helped him get a job at Northern Instruments as a chemical engineer. Northern Instruments flew him and his wife to Minnesota and paid their rent for six months.

Four years later, frustrated by his slow rise in the company, Miksic got a $40,000 loan and started his own anti-corrosion business in his garage. His timing was just about perfect. The market for products such as anti-rust coatings for metal and concrete supports and special packaging to protect the metal elements on circuit boards was just beginning to take off. His business grew quickly. He’d found what he’d sought in America: opportunity.

Then, in 1991, Croatia, which hadn’t known true independence in Miksic’s lifetime, made a break for it as Yugoslavia descended into chaos. Serbia then occupied Croatia, which called upon its many expatriates to help raise worldwide awareness of its plight.

“The influence from abroad—that’s probably what helped us the most in liberating our country from Serbia,” Miksic says. “The people who had emigrated to other countries organized support for the independence drive, and they especially helped financially. Also, they helped through political involvement.”