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    INTERVIEW Vuk Vukovic: Croatia needs to mature as a democracy

    Croatians Online had the pleasure of speaking with Vuk Vukovic, PhD, CIO, and co-founder of Oraclum Capital, US hedge fund that uses the wisdom of crowds and proprietary network analysis of social media bubbles to predict weekly equity market moves. Vuk Vukovic holds a PhD in political economy from the University of Oxford. His thesis focused on forming elite networks between politicians and firms and how they affect the distribution of top incomes. He also holds a Master of Science degree from the London School of Economics and a BA in economics from the University of Zagreb. During his studies, he attended summer schools at the University of California at Berkeley and Harvard University and served as a visiting scholar at the University of Cambridge. On his LinkedIn profile, he also adds that he is happily married and a father of three.

    Vuk, you are a man of many hats. Which one would be your favorite title?

    CIO of Oraclum Capital, meaning a hedge fund owner and portfolio manager. This is my entire focus, and I’m super excited to do it. I will always have my Oxford PhD, and I’m certainly very proud of that accomplishment, but running the hedge fund is an immense challenge and a massive opportunity.

    You are known to be an anti-corruption advocate and even tried to influence the Croatian government to pass and implement a budget transparency law in 2021. Do you think it was a success?

     Unfortunately, it hasn’t been. Yes, we’ve implemented the budget transparency project in several Croatian cities and have exerted immense pressure to include the budget transparency clause in the law. Still, the government bureaucracy succeeded in adding their flavor to it and has watered down the whole idea. The clause is non-binding and selective regarding which data must be published, thus defeating its purpose. The bureaucrats have won, and only a few cities in the country can honestly say they abide by the highest standards of transparency. The vast majority (over 80%) still need to publish more on how they spend taxpayer money. It is too bad since the idea was, and still is, excellent and crucial to increasing trust in government and government accountability. But I guess Croatia still needs to mature a little bit as a democracy before we can see greater accountability.

    This is a very broad question, and you can probably write another doctoral dissertation on it, but please try to give us your opinion on where Croatia stands today with respect to economic success and what the next steps should be.

    Indeed, I can, but I’ll be brief. Croatia is limited by its context – a small open economy, very sensitive to how things are in the EU, our biggest trading partner. Croatia is a price taker, so our inflation issue persists as long as it persists in the rest of Europe. EU entry was crucial for us back in 2013, as export-led growth helped the country recover from the previous recession and sustain reasonable growth rates and declining unemployment over the next decade. Because of this, we have had the best macroeconomic situation (both fiscal and monetary) since the country was founded. We still have many problems related to our young democracy – corruption, lack of government accountability, inefficient bureaucracy, overregulation, lack of judicial independence, etc. These things still stifle investment opportunities, but luckily, many companies exist outside that realm of corruption and inefficiency and can compete in foreign markets. So, you have two realities: one depressing, linked to politics and poor demographics, unable to break that chain, and the other buoyant and exciting, unrelated to politics, and able to grow and create value for the entire country. I am optimistic that this second reality will prevail, pushing the country to a new high where democratic standards will improve. This might take a while to materialize.

    Croatia has always tried to attract American companies to invest there, but lately, we have seen the opposite trend: Croatians are eager to come and bring their products to the US market. What do you think is needed to succeed in America?

    Quality, no doubt. The US market will happily absorb any number of products or services as long as they provide good quality, and by that, I also mean great value for money. This is what the Croatian tech companies have been able to offer in the US market, and quite successfully so. But it is not just tech; we’re seeing production companies with physical products coming in and competing as well. That’s amazing, as it was inconceivable 20 or 30 years ago. This creates one of those trickle-down effects for the Croatian economy, where the tide lifts all boats. And it’s always better to provide value with an actual product or service rather than ask for money.

    You studied and lived in London, then Zagreb, and we hear your next stop is New York.

     I plan to relocate to New York with my family, wife, and three kids by summer 2025. The reason is twofold: first, I want to be present in the city to build and grow the fund, and second, my wife and I said that after we lived in London in 2011 and 2012, the next big city we wanted to live in was New York. The time is now ripe for that move.

    We heard your book is out and can be bought on Amazon and Barnes and Noble. Congrats are in order. Can you tell us more about the topic and content?

    The book “Elite Networks” is a general audience version of my Oxford PhD. The topic is how collusion between politics and corporate executives impacts the distribution of incomes. The research was done for the US and the UK, using a database of a million corporate executives and politicians. I found that if you were a politically connected top executive in the US, you had a $150,000 higher annual salary than the top executive in the same position within the same company. That’s a significant effect, and it suggests that political connections can be a large explainer behind top income inequality. This also means we need to rethink policy solutions – high taxation will not likely solve the issue. Reducing political power will. It was released in the US in May 2024, published by Oxford University Press, and available on Amazon and Barnes and Noble. The European release is in June.

    We know that your company, Oraclum Intelligence System Ltd, developed a technique to predict election outcomes, market direction, and volatility, which you successfully implemented in your co-owned hedge fund. Our Croatian American readers would be very interested in what you think would happen in November: Biden or Trump?

    We no longer do elections, but the US elections have always been our favorite thing to follow and predict. So yes, we will be predicting the November US elections, for our fund clients for sure, and maybe even as a subscription option if someone wants, we’ll see.

    We also heard that you have a passion for cooking and even have a blog. What are some of your favorite dishes?

     This has been a hobby of mine for almost ten years now, and I love it. It’s relaxing and often quite creative. My favorite things to make are homemade pasta dishes – I always make my fresh pasta – tagliatelle, lasagna, ravioli, spaghetti, etc. I combine this with sauces, like beef ragu or homemade pesto with salmon. I love some fish and meat dishes. I make a killer risotto, but one of my classics is beef Wellington, which I make every New Year’s Eve for my family. I showcase my dishes on my Instagram page, @cookwithvuk.

    On another personal note, being a world traveler, can you compare living in Croatia, London, and New York? I will not ask you which is your favorite, but what is the best in each place?

    Croatia still offers the highest quality of living, hands down. The country is safe, the food is excellent, the cultural offerings (shows, concerts, festivals, etc.) are getting better and better, and obviously, it’s beautiful. The problem is business-wise, if you want to grow, it needs to be bigger as a market. But this is precisely why many Croatian entrepreneurs, especially in the tech sector, have sought to penetrate the US market. It’s the only way to scale up. The best combination is to live in Croatia and work abroad (i.e., have money coming from abroad). You can live like a king in Croatia on a NYC or London salary.

    By Sanja Floricic-Bogovic


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