In order to understand the environment in which the project CARNet has been launched and developed over the course of a decade, basic information on the political situation in Croatia, its market, telecommunication market and academic community seems to be required. In addition, the development in academic and research networking in Europe needs to be kept in mind as well.
Croatia is a Mediterranean state located in the central Europe. It covers 57,000 square km. of land with 2,000 km. of land borders and 6,000 km. of coastline along the Adriatic Sea, its 1,185 islands being its special geographical beauty.
Croats had their own state already in 9th century. After that, they had been the constituent nation in various states from Austro-Hungarian Empire, Kingdom of Yugoslavia and, finally, Socialist Federative Republic of Yugoslavia (SFRY). SFRY had been constituted of six federal republics. By constitution, those republics had a right to decide on separating from SFRY. In 1990, in Slovenia and Croatia referendums were held and a vast majority voted for their respective independence. However, Croatia did not decide to separate from Yugoslavia immediately; it would have rather sought for more autonomy within SFRY, especially in independent self-deciding how to spend large sums of money it was to donate to less developed areas of Yugoslavia. It was only after Yugoslavia had launched into a military intervention in Croatia (September 15, 1991) that the Croatian parliament declared complete autonomy and separation from the rest of SFRY (October 8, 1991). European Union and United Nations soon recognized Croatia as a sovereign state during 1992. However, Croatia, who had to continue fighting off Yugoslavia, was pushed to defend its independence, and the war lasted until 1995.
During the war, one third of the territory was occupied and the population of barely 4.5 million had to accommodate over 700,000 displaced persons and refugees. As much as 30% of companies were destroyed either directly in the war operations or indirectly having had transportation routes or electricity supply cut off for several years.
Present-day population of Croatia is 4.3 million. About one fourth lives in the capital, Zagreb. GNP fell from 24.4 billion USD in 1990 to 11.86 billion USD in 1993, rising to 24.9 USD in 2000 (Source: Croatian Bureau of Statistics).
Croatia is a parliamentary democracy with guaranteed private property and a market-oriented economy. However, 50 years of planned economy in Yugoslavia cannot be erased overnight, certainly not from the heads of people nor from the ways of doing business, which is offering very little readiness to integrate into global trends.
Previously, state-owned companies had been privatized, although it did not automatically bring changes in their product and services portfolios, internal organization or working practices. The Yugoslav market had been lost, and the buying power of domestic market had been tremendously weakened in the years of war.
Croatia inherited a monopoly in telecommunication market. By law and in effect, all telecommunication was in the hands of a single, state-owned company: Croatian Post and Telecommunications (HPT). Yugoslav Telecommunications were not in bad shape, though still far from developed, especially with regards to the services. During the war, Yugoslav army had been advised to destroy telecommunication infrastructure. Although it was having a monopoly, HPT had heavily invested in development of infrastructure. In early 90s, they decided to rebuild a major infrastructure with new technology: fibre optical cables. Despite the war, Croatia soon had the whole national telecommunication infrastructure rebuilt and upgraded, and it was all optical.
In 1999, HPT had been divided into two companies: Croatian Post and Croatian Telecom ("Hrvatske telekomunikacije—HT" = «Croatian Telecommunications») with government declaring intention to have them privatized. Soon after, Deutsche Telecom became the strategic partner in HT, but the state kept controlling the significant package of stocks. In 2001, the government sold more stocks to Deustche Telecom, which made them the majority stockholder. The first deal was kept secret by both sides, and the public never got to know under what conditions their most profitable company and asset was sold. The situation was further mystified by the fact that government prolonged its monopoly period for an additional year (until December 31, 2003) as a part of the second deal. Neither was it ever clear whether Deutsche Telecom had bought the "holes in the ground," i.e., the infrastructure which could easily accept additional cables potentially from other providers, once the telecomm market in Croatia got fully de-monopolized. This is of particular importance as Croatia does not seem to have any other telecommunication infrastructure at present, not even for military, police or other public sectors of special interest. As a potential market entrant, Croatian electricity and power grid company did lay some fibres along their power lines but they have been far from ever representing a network, as it is far from any possibility of commercialization.
In contrast to the public expectations and political rhetoric, Deutsche Telecom did not enlarge investments in HT. Actually, they have been minimized. All investments seem to have even been stopped from the very first day. The prices for the services have remained very high despite some initial understanding of the possible reduction.
The Croatian academic community consists of four universities: Rijeka, Osijek, Split and Zagreb. The universities are weak and formal unions, while real power lies in individual constituent Faculties (schools). Faculties are legal bodies with their own property, status and autonomy. There are 20+ public research institutes, but the majority of research is performed on the Faculties. The community counts some 12,000 staff and 100,000 students. The cooperation within the academic and research community is very weak.
The cooperation with commercial companies does exist, but it is far from the required level. This is partly the result of generally very low level of investments in research and development within the industry and partly due to enterprises' intentions to have their own research facilities not trusting the competence of academic and research community, in general.
As a consequence, the largest financing of the academic and research community comes from the state budget. Only 3% of the budget, or approximately US$200 million, is spent on all activities in the academic and research community each year.
In higher education, the law (1996 Act) allows privately owned educational institutions at all levels. However, the majority is still owned by the government and the higher education is free for all citizens of Croatia. Students do pay for textbooks, food and lodging. Still, those expenses are partly subsidized by the state budget. The overall quality of higher education is considered to be traditionally high, and proof can be found in the fact that Croatian diplomas are readily recognized in most developed countries. The Croats who have graduated in Croatia easily get employed and prosper in the developed world. This is especially true for technical and natural sciences fields. However, there is a growing opinion that Croatian higher education needs redefining and restructuring in order to prepare students better for the information age and global economy. Unfortunately, the solution has to rely on slow formal processes, and it means mostly waiting for changes in legislation. There is no exploitation of possibilities for fast changes in spite of targeted developmental programs and projects, campaigns and experimental facilities.
Research is being financed by the budget through about 1,500 research projects with very low participation of industry. In addition, the tendering process run by Ministry of Science and Technology, typically re-launched every three to five years, does not specify practical problems to be solved but rather invites researchers to propose topics they find attractive to deal with.
There is almost a decade old program in place, aimed at rejuvenating the academic population by financing 1,000+ young scientists, in the period of up to 10 years, to achieve their master and doctoral degrees and attend the postdoctoral studies. Their salaries have been financed directly by the state budget through the Ministry of Science and Technology. They have been chosen among 10% of best graduates in their respective field and assigned to existing research projects, on the request of the project leaders.
Croatian government consists of about 20 ministries that are to administer and divide the budget of approximately $6 billion. The budget is allocated predominantly to activities not projects. Although ministries are supposed to propose their budgets based on projects, once funds have been allocated there is virtually no project follow-up, and financing is based on activities rather than on results. In fact, in projects that last for several years, financing is provided for the next year, even if no results had been achieved in the previous years, largely due to the lack of monitoring.
Although officially CARNet project is a government initiative, it was actually an initiative of five engineers who were supported by a university professor, recently appointed deputy minister of science, at the beginning of the war. The project quickly (in the course of one year) generated large and visible results, and from that point on, it had been progressing using the so-called "avalanche" effect. Thus, despite overall lack of vision and guidance on the part of the government, and ministries of education, culture, and public health total lack of interest, the project was growing and remained present maintaining influence over a decade.
The idea of academic and research network was not invented in Croatia. It was spontaneously launched in late eighties in the developed countries of Europe and coordinated in the collective effort under the overall Framework of Research Programs of European Union.
EU recognized the importance of information technology and the need not to lag behind the development in the USA. Therefore, significant funds had been provided with the aim to develop new technologies and to build national but also pan-European academic and research computer network. In the later stage, funds had been provided to eligible countries from the Central and Eastern Europe (CEE) for connectivity of their national networks to pan-European infrastructure.
Although specific and different, most of national academic and research networks (ARNet) were similar in their basic goals and operations. A typical ARNet was set to establish international connectivity and national backbone. Connectivity of individual institutions to the backbones was to be left to ambition and finances of individual institution. A minimum of services would then be provided just to support the basic activity, help desk, basic communication and information services, targeted research as well as information packages. Extensive information services, databases, large scale educational activities, pilot projects and promotion were not considered to be part of their tasks and duties. This view remained throughout the major part of 90s. As a contrast, the CARNet initiative, from the beginning, had a broad range of services in vision. Main differences between the typical academic and research network (ARNet) development scheme from a country in transition and Croatian are summarized in Bartolini (2000).
In addition, a typical ARNet would be strictly focused on academic community leaving the rest of population to commercial developments. Since, academic community was only the first phase of CARNet vision and, in many instances, a tool for overall national development, CARNet believed there is much more to just providing communication infrastructure.