January 29, 2020 - Is change really possible in Croatia, a society where corruption is rife wherever you look? Meet Dario Hrebak, the dynamic young Mayor of Bjelovar, who believes not only that it is possible, but that his city is free of corruption.
Living on Hvar for 13 years, eastern Croatia was for many years a total mystery. The only places that you ever heard about were Vukovar and Osijek, and I maintain that many people living in Croatia today only have a very sketchy understanding of what there is to see and do once you head east of the capital. Which is a pity, for people are really missing out. As we reported late last year, you can have an awful lot of fun heading on east for a weekend.
Over the years, my knowledge of the east has improved considerably, but there was still one sizable town that I knew almost nothing about, one which I could not with certainty place on the map.
Bjelovar.
A city of more than 40,000 people, I knew almost nothing about it apart from the fact that its handball team had once been the Kings of Europe almost 50 years ago. But Bjelovar has been very much on my radar in the last few weeks, as so many people told me the same thing when I asked them for examples of non-corrupt politicians in Croatia, and for examples of good governance at the local level. Of politicians serving the public good rather than linking their own pockets.
Dario Hrebak, the Mayor of Bjelovar, Member of Parliament, and President of the HSLS Liberal Party.
The stories I was hearing were scarcely credible in the modern Croatia. His was the first local administration in Croatia to introduce digitalisation, whereby certain services could be done online more efficiently and comfortably than having to queue and take up an official's time for a function that could be done online without human interaction. All the costs of the administration became publicly available, even down to the cost of a lunch on official business. As part of the efficiency drive, he is the only mayor to reduce the staff of his administration - by 10% - with another 10% in the pipeline by the end of his mandate. And while he could not control taxation at the national level, he slashed local tax from 12% to 6%, with a plan to take that down to zero by the end of the year. The result? More than 250,000 kuna MORE in the administration's bank account in the first 17 days of 2020, compared to the same time last year.
Digital, transparent, pro-business and entrepreneurship, not afraid to tackle the waste in the administration. All this happening in modern, corrupt and unreformable Croatia. Could this Dario Hrebak be an agent of change? I had to meet him.
He responded promptly to my text message, complimented me on TCN which he knew well, and invited me to visit him in Bjelovar.
It was quite a meeting.
"Meetings, meetings, meetings," he began warmly, clearing the folded daily newspaper from his desk. "So many meetings and no time to even read the morning newspaper headlines."
"But you had time for your morning coffee, surely? Croats cannot function without their coffee," I replied.
"Well, no, not even that, as you can see - just this half-finished mug of tea."
It quickly became apparent why there was no time for newspapers and cups of tea in the world of Dario Hrebak - he was a man on a mission, extremely focused on his objectives and next moves. An active member of liberal parties for more than 15 years, including the European Liberal Youth movement, through which he travelled extensively, picked up best practices from other countries, and widened his mindset beyond the more socialist upbringing of his peers in this post-Yugoslav state, Hrebak had clearly had enough of corruption and was determined to introduce a regime of transparency and progress in his city.
These are words that one hears a lot in Croatia, but they are not followed up on.
Bjelovar and Dario Hrebak are different. Here's why.
Of the many obstacles to real change in Croatia, one of the most intransigent is the relationship between voters and those in power. Those in power depend on getting enough votes to continue their private gains from the public purse, and they will do anything to stay in power. This includes giving jobs of little or no value to unqualified but loyal people. A job for life in exchange for a vote for life. Or rather votes for life. If the father has a nice job in the administration in this sea of unemployment, all the other voters in the extended family are going to make sure it stays that way come election time. This is not a practice unique to Croatia, of course, but it has become an art form, and until that cycle is broken, real change will not be possible, bloated administrations will continue to grow, more war veterans will be added to the list, and taxes will have to rise so that the shrinking number of honest workers and entrepreneurs can contribute the money to pay for all this.
It would be political suicide to mess with that system. Reducing benefits, abolishing unnecessary jobs, thereby cutting those previous jobs and risking the multiple votes in the process.
Dario Hrebak is attempting a full-frontal assault on the system, betting that efficiency savings, better quality of life, transparency, economic growth and real jobs will win the day.
He has made a very impressive start, as the numbers show. When he started, his budget was 130 million kuna, then 148 million in 2018, 180 million last year, and it will be over 200 million this year. As the income grows, he wants to keep the expenditures on the same level, while pouring the surplus revenue into tax reductions, projects, and stimulating the economy. Bjelovar was bottom of the list for extracting EU finds when he started, now it is in the top 10 towns in Croatia.
His small digital revolution is still largely in beta mode, but there are already concrete results, and he gave me a couple of examples. The monthly payroll used to take the employee three days to perform. Now, with much of it digitised, that process is performed in just three hours.
There are now ten concrete services that can be performed online via the dedicated app which has been created. New-born babies are entitled to 1000 kuna from his administration. Previously, that would have involved a visit to the office from the young mother, forms to be filled in, another meeting, period of checking and approval, and so on. Now that can all be done from home online, without all the stress of taking the young child around the famous Croatian bureaucratic system.
The plan is to put almost all services online in the same way. Quicker services, less public administration needed, more efficient procedures, and all without the need to leave the house and queue to get the blessing of a grumpy official.
Standard practice in countries like Estonia. Absolutely revolutionary for Croatia.
One of the first acts he did as mayor was to cut social welfare where it was not needed. Bjelovar has an unemployment rate of 6%, around 200 people. Rather than continue with the generous benefit for the unemployed, he announced that he would be happy to pay it to those without a job who reported for work at his administration, where they would be put to work as required. Of the 200 contacted, just four showed up for work, which meant that 196 had their benefits cut. More money in the administration's budget, less cash simply given to people who did not want to work. More votes under threat as vested interests are challenged.
"If someone genuinely needs help, an operation or something, then the city is ready to help absolutely," said Hrebak. "But why should the city cover someone's laziness? This whole system was created by HDZ and SDP, which are both social parties. We have literally made invalids out of people. Sadly, the most important question in Croatia today remains - are you left or are you right?"
The mayor is putting a lot of faith and investment into IT and attracting foreign investment. There is a tax-free model for foreign investors regarding local taxes (he cannot influence tax policy at the national level) - land for one kuna, communal tax one kuna, communal contributions one kuna, free space, electricity and other utilities. Bjelovar has the biggest startup contest in Croatia, with prize money of 100,000 kuna, and judges from the entrepreneurial and banking worlds. The University of Bjelovar's first IT graduates have all found employment.
And the investors are coming. TCN recently reported on the first geothermal power plant in Croatia, which was built by Turkish investors with an investment of over 40 million euro under a concession. Hrebak says the return on investment will take just six years, and also that there are other thermal water sources which can provide three more plants. His plan is to build a spa in one of these locations with city money, then find an investor to build the second hotel the town so badly needs. It will be located just 50 metres from the exit of the new stretch of motorway which will open in 2-3 years - and eventually connect Bjelovar with Budapest, making this an attractive spa stop for Hungarians heading to the coast.
He is disappointed, but not surprised, that no other town has followed his lead, despite many fine words about fighting corruption.
"I know 5-6 young mayors, and I am sure that they are not corrupt. But despite the words, they have done nothing. The reason is the system - they are scared of losing those votes which will cost them power. This is the cycle we have to break in Croatia, in order to progress."
"This is a long, long fight, a marathon. The only way to make this change is through patience and persistence. We will keep on trying, delivering excellent services, cutting tax and administration, and providing the best incentives for foreign investment. We are small, with just 1% of support, but we are trying. My city is corruption-free."
And, as he went to take a first sip of the cup of tea that he made several hours ago, I concluded that I for one would not bet against Dario Hrebak expanding his digital and transparent revolution far beyond the borders of Bjelovar, especially if international institutions and the EU took a greater interest and offered support.
it is a topic we will be returning to very soon. For the very latest from Bjelovar, check out the dedicated TCN section.
