Small Country

Nadia and i after shortly after we got married, moved to Australia. I began teaching and the Aussie students loved to hear my American accent and asked if I knew the various Hollywood celebrities they saw on TV and movies. I laughed because I didn’t think they realized that the USA had over 300 million people and I was from Michigan, a long way from Los Angeles. Australia has a population of 18 miillion, and I guess an ordinary citizen’s chances of meeting or getting to know a celebrity like Nicole Kidman, was higher than mine. By the way, one of my first substitute teaching jobs when I moved to Australia, was at the actor Heath Ledger’s old school, the Guildford Grammar School.

Serbia is even smaller than Australia, and the capital city, Belgrade, has a population of 1.5 million in the metro area. Working in the richest private school in the city and living in the most expensive neighborhood, it is easy to meet the “celebrities” of Serbia. Last weekend, our middle school girls’ basketball team hosted a local basketball club. On the visiting club team was the daugher to Serbian President, Boris Tadic. He can be seen in the crowd in the photo above. He is the grey-haired gentleman with the white-striped jacket. He also lives just a few houses down from our new apartment. One nice thing about him is that he is a former high school psychology teacher.

In my time here in Serbia, I have met many of “rich and famous” and it is interesting to see their lifestyle up close.

Latest Reading: “Treasure Islands: Tax Havens and the Men Who Stole the World” by Nicholas Shaxson

Nicholas Shaxson is an English economics writer for The Financial Times and The Economist. This book is an excellent introduction to tax havens. He defines tax havens by ”places that seek to attract business by offering politically stable facilities to help people or entities get around the rules, laws, and regulations of jurisdictions elsewhere.” I was aware of these places due to my expatriate lifestyle, as many expats have bank accounts or do business in these types of places. I wasn’t aware of the magnitude of the money found in these tax havens. Shaxson argues that these tax havens were a big cause of the global economic meltdown recently and that they do much damage to countries that are missing out on tax revenue. The book is an excellent introduction to this world, and he is a good storyteller and it is an easy read, not very much financial jargon. I enjoyed the book and recommend it to others who want to know more about this.

As I am typing this book review, I am following the Australian Open Tennis Championship, and I notice how many of the players live in Monaco or Monte Carlo, two tax havens! All three of Serbia’s superstars, Novak Djokovic, Jelena Jankovic, and Ana Ivanovic, live abroad. Imagine how much tax money Serbia is being deprived by these people living outside the country. I also think many high income earners avoid taxes this way. Shaxson describes how the system began historically and how they spread and maintain themselves.

Tax havens offer secrecy, very low or zero taxes, and have a financial service industry that is very large compared to the size of the size of the local economy. I learned that the world contains about sixty secrecy jurisdictions.

The most important is of all places, London. I thought that with the British organization, that this would be the last place where people to hide money from tax authorities, but “The City of London” is private organization within the municipality of London, that is outside of the government laws, not only city, but on par with the British Monarch and Prime Minister. This is historical, and Shaxson devotes an entire chapter to looking at it.

It was his impression that the latest global economic crisis, was caused in a large part, by these financial service companies and investment banks, operating unregulated in these havens. This offshore system is huge, with expert estimates stating that about half of all banking assets, and  a third of foreign investment is found in these havens.

Other European places that are tax havens are the Serbian tennis professional enclave of Monaco, the Netherlands, Luxembourg, Jersey Island, and, the traditional Switzerland. Shaxson debunks the myth that the Swiss bank secrecy began with the Nazis. It started before them, and it came about because Swiss farmers, and the traditional of independence of the isolated, mountain valleys in the country. They keep the country together by having autonomous regions.

Some other places in the world are the Cayman Islands, Bahamas, Hong Kong, (outgrowth of the British Empire and the City of London), and the USA is not exempt, with Florida, the Virgin Islands, etc. Shaxson also points out that much illegal (drugs, arms sales, dictator theft) ends up in accounts in these areas. Also, many multinational corporations, like petroleum companies, use these to avoid taxes.

I can see why rich people and companies do not want to pay taxes and how they justify them. I am sure Novak Djokovic is saying that the Serbian government is corrupt and his money would not be used well. He also gives back much to Serbia through promoting the country, winning the Davis Cup, charity, etc. The author however, is dead set against this and he does have many valid points. He points out how the British media loves Virgin’s Richard Branson, who nonetheless, is a major tax-dodger. It is the “little guy” who can’t get out of paying the bulk of taxes. In the last chapter, he gives a list of reforms that would track down this money distribute it to various nation’s governments.

Last week I met gentleman who worked for the German tax authorities. It was his job to work in London, tracking down Germans that owe taxes. It was funny in the book that the rich Russians refer to it as “Londongrad.” I would have to agree with Shaxson, in that this lost revenue could help countries. The book also got me to think about my retirement accounts and savings. Where do I want to put them…

I recommend the book to anyone who wants to learn more about this topic and it is also good for expatriates to read.


The People I Work With Everyday

ISB Administration Team - 2011

I am fortunate to work with outstanding people. I’ve really enjoyed the professional sharing, support, and camaradarie of the administration team at our school.  We’ve all had different experiences in education and are from different parts of the US and the world. This diversity of experiences and backgrounds has really helped me improve and grow as an educator. I appreciate the support, honest feedback, and trust we have.

From left to right are school director Eric Sands, lower school principal Tim Moynihan, IT director “Bane” Nikolic, Business Manager Zhana Hasanovic, yours truly, and MS Coordinator, Mark Noonan.

Ocean’s First Toboggan Run


Oceanćs First Tobaggan Run, originally uploaded by bill kralovec.

I promise not to do too many “kids in the snow” photo and video posts this year. I couldn’t resist however last weekend. We took the kids to Košutnjak Hill for some tobogganning. Ocean went down solo for the first time. She doesn’t like the snow as much as she does the water.

We really enjoyed the big snowfall and hopefully, more snow is on the way.

Family Journal: Saturday January 22, 2011


Ocean is shown above playing in the snow. We had a nice family Saturday yesterday. The snow continues to fall as I write this early Sunday morning and we plan to hit the sledding hill after breakfast. Yesterday I had a nice day with the kids. We had snowball fights, played snow football and enjoyed our new garden. It is a massive play space with many huge trees (I am a big tree lover!). I anticipate many good times in there in the years to come.

I made another moving run, taking a full car of stuff from our old apartment to the new place. Nadia organized a bit in the kitchen and the place is really coming into shape. I reckon in another week, we’ll be finished with the move. I took the boys to our intrasquad basketball scrimmage and afterwards, fellow coach Eric Sands hosted both the boys and girls’ basketball teams for a get-together. The high school students are always great with my children. My kids are exposed to a variety of cultures and interests. Shahaf a grade nine student, shown below, taught the boys a bit on the piano. After basketball season, I plan to take piano lessons, and after seeing Oliver last night, perhaps him too. It would be good to get our family playing music together.

Snow & Introduction to Dedinje: January 21, 2011

Yesterday Belgrade received a decent snow! It was only the second snowfall of the winter, the first being right before we left for Bahrain, on December 18th. I can’t wait to go outside and play with the kids today! I will definitely be posting photos our our family winter fun. Nadia, Oliver, and Owen are shown above walking to the car. Our new apartment building is in the background.

We will be finishing our move this weekend also (hopefully). We moved suburbs, going from Senjak to Dedinje. The suburb of Dedinje, which means “Old Man’s HIll” (note that deda is grandfather or old man in Serbian), is the most exclusive, and in my opinion, the most interesting neighborhood in Belgrade. The area reminds me somewhat of Gross Pointe, in suburban Detroit. That is a nice thing about teaching overseas – educators can live in the nicest neighborhoods in the city. In the US, our middle class salaries put us in more modest areas.

Anyway, Dedinje is interesting because of all the history that has occured here. The suburb is located on the slopes of Topcider Hill, and was home to the city’s rich and elite for many generations. After World War II, Tito and the communists came in and occupied the mansions and villas of the old money families of Belgrade. Later, ex Yugoslav President Slobodan Milosevic, and other shady characters like Arkan, moved in. I’ll be posting about the various aspects of the suburb for the next couple of years. Our apartment is quite modest compared to the diplomatic residences and other mansions around us. It is very comfortable however, and we’re very happy to be in a newer and better constructed apartment. We are just off the main drag of the suburb, ulica Užička. (ulica is street in Serbian, and Užiče is a city in southern Serbia)

Moving – Family Journal January 18, 2011

Owen & Oliver, originally uploaded by bill kralovec.

We’ve been quite busy since our return to Belgrade last weekend. It was a busy start to the school year with getting the second semester off and running and coaching basketball. Outside of school, our time has been devoted to moving apartments. After 2+ years in Senjak, we are moving to a different suburb. I’ll be blogging about the move and our new home later this month. Above, Owen and Oliver are shown playing our first soccer game at our new apartment. We should be in the house this week.

As you can see, there is no snow on the ground. Temperatures have been quite warm, and it is strange to have such a green winter. All is well and I should have more time to blog later this week.

Reflections from a Holiday in Bahrain

 It was the perfect time to go to the Arabian Peninsula because the weather in the winter is great. We had temperatures in the 70’s with cool evenings. I heard much about the stifling heat for most of the year, and I am not sure if that would be great to live in.

My perception of Arabs changed because of my visit. From the US media, I had a different impression of the Arabs. You hear much about the stern, fundamentalist Muslims, but the majority I met were kind and gentle. It was shocking to first see women covered in black robes and the men wearing the robes and headdress also, but after a while, one gets used to it.   Modesty is one thing, but I don’t think I’ll ever agree with covering up women and separating the sexes so much in daily life. It is very unnatural and bad for the psyche and well-being of both men and women. I do like the lack of alcohol in the society. Alcohol and drugs have ruined many lives and it was refreshing to see people drinking coffee and smoking from the communal pipes, rather than getting drunk.

Bahrain is regarded as the “Las Vegas” of the Arab world for it relaxed social mores. The Bahrainis were very accepting of western culture, and my family never felt any negativity. We had very little contact with actual citizens because most of the day-to-day business is handled by expatriate workers from India, Bangladesh, Pakistan, Nepal, and the Philippines.

The effects of so much money being pumped into the region because of petroleum can be seen everywhere. The changes brought by this were overwhelming. I wonder what the place looked like before petroleum? The money has brought the Bahrainis the ability to build a modern city-state, with world-class highways, skyscrapers, shopping malls, Formula One racetrack, magnificent mosques, palaces, PGA golf course, etc. It also allowed them to import foreigners to not only do the menial labor jobs like security, construction, etc., but also skilled British, American, and other nationalities from the west to manage businesses and make it a financial hub. They do spend much time in shopping malls and I was impressed with the quality of variety of things one could buy. Manama had several malls that were bigger and better than the Usce Mall here in Belgrade. I wonder what effect that much money would have on any society? I see that with another 100 years of petroleum cash as well as an increase in communication around the world, these two factors will eventually change the Arabs into a less religious and more Western or consumer oriented society.

World Trade Center - Bahrain

The trip also got me to understand the Islamic world a bit better. I see four major groups of people, the Turks, the Arabs, the Persians and the Indonesians. There are struggles between the groups, which also have a Shiite versus Sunni undercurrent. It was palpable in Bahrain. The island was pearl and fish trading port for most of its existence and was controlled by the Persians for centuries. I had a reader comment on my use of the term Persian Gulf, when discussing our trip to the beach. The Arabs refer to it as the Arabian Gulf.

The pictures of the royal ruling threesome were everywhere. There were literally thousands of pictures of the king, the prime minister, and the king’s son. It was a clear reminder that democracy is not favored by the Arabs.

It was my first time in a non-Western country and I was fascinated with the exoticism. It made me want to visit other parts of the world that are different from what I’ve experienced. It was also great to stay with a “local” so we could see the places and meet people that ordinary tourists would not have the chance.

Latest Reading: “Dining With al-Qaeda: Three Decades Exploring the Many Worlds of the Middle East” by Hugh Pope

In preparation for my trip to Bahrain, I read Hugh Pope’s memoir of his 3 decades of reporting from the Middle East. He worked for several newspapers and news agencies, including the Wall Street Journal. He begins as a student in 1980 and finishes with the US war in Iraq and Afghanistan. He lived and reported from almost all of the countries in the Middle East from the Sudan to Turkey, to Lebanon to Afghanistan and many in between. He knows the region like few others. He speaks fluent Arabic and practically grew up there, beginning with trips with his parents as a child, to studying Arabic and Persian history in university. Pope stayed in the region throughout his career and this book is the culmination of his experiences. Below are some quotes from the book with my comments. I learned much about the region and recommend the book.

Interesting Quotes:

“Jean Pierre taught me how to use a magic cloak of unprejudiced openness that guarded him from all suspicion. It was a gift that would serve me well.”

– Pope is discussing his first mentor of the region, a French academic. I would use the term unprejudiced curiosity instead of openness. I have taken this attitude in my travels around the world. The people I meet will most always answer my questions and show me insights into their culture.

“I had no idea of the homosexual current that runs through much of the Middle East. Unlike in the West, consorting with another male is usually not a statement of sexual identity but mostly a pragmatic solution to the lack of available women.”

–          The Islamic traditions keep boys and girls separated during their most hormonal times. I see why this unnatural condition could lead to this kind of stuff. I also never thought about “Arabists” who specialized in studying the region because of the opportunity to meet men. Pope does not fit in this category.

“…Family legend has it that at the age of four I built of cairn of stones amid the colonnades of Palmyra, an ancient city in the Syrian desert, and announced, “I shall come back here.”

–          I hope that the travels we take with our children influence them to explore the world as I have, or at least profoundly change their personalities and intelligence.

“Brought up as I was in an Anglo-Saxon world of self-improvement, opportunity, and entitlement, I tired of hearing outsiders blamed for everything. Usually, it was an excuse never to try. The same defeatism applied to politics all over the Middle East. With the exception of the first centuries of Muhammad’s Arab and Islamic empire based in the Arabian Peninsula, this crossroads between continents has always been a cockpit for battles between the marcher lords of stronger powers elsewhere. From a Middle Eastern perspective, this has bred a sense that since foreigners controlled one’s fate, there was no point in trying to cure one’s own ills. It was so much easier, and politically much safer, to blame all problems on foreign spies, global conspiracies, and imperialist plots.”

Hugh Pope had some interesting views on Israel. I didn’t know that only 1/3 of the world’s Jews live in Israel. The USA is associated with Israel because of the US government support of their military. I don’t have an opinion of the Israeli-Palestine conflict, but someday want to visit Israel to see for myself. He writes that the Egyptian playwright, Ali Salem, when after visiting Israel, believed that the explanation for why Israelis got on so badly with their neighbors was the very Arabness of their country – “Is there any one more cruel to an Arab than another Arab?”

– That sounds like the conflict between the Serbs and Croats.

“Drink wine, Hafez, be glad, be wild! Don’t copy those who make the Koran a hypocritical trap.”

-This quote is from an Iranian poet. I didn’t understand the Arab-Persian rivalry in the region. It is sad that the US does not have a closer relationship to Iran, which is a big country. The Islamists who control the government are not in the majority in my opinion. The Persians are like the crazy Latinos.

“The Koran allows Muslims to have up to four official wives, if they can support them equally.”

–          Marita showed us the four huge homes of a rich Bahraini. They are all identical in a compound downtown, except for one detail. The wife that sired him a son, has her home painted brown while the others are white.

“Later I was to see that friends who married Middle Easterners, men or women, often had to work much harder than other couples to overcome differences of education, outlook, and expectation. It didn’t have much to do with religion, since Middle Eastern Christians and Jews can be just as traditional as Muslims, and similar issues challenged friends who married spouses from any significantly different culture. Perhaps it was just proof that, for everybody, tribalism can matter much more than we expect.”

–          As a person in a “mixed marriage” I understand what he is writing about.

“…the secularists are quite right, as in France, to insist that no head scarves be allowed in schools. A schoolgirl wearing a head scarf implies that I, as a man, might be lusting after her. I find the insinuation repugnant – if people really think there is such a general problem, they should first start reeducating the men.”

-Well said Hugh. I still don’t understand why the women cover themselves up. What a hassle for them.

“I hadn’t realized how problematic it is for husbands, fathers, and brothers. They have to rush home to drive women about, and to do themselves all the things women are prohibited from doing… why Saudi Arabia kept its women figuratively locked up: to sustain its image as the holy land of Islamic pilgrimage”

–          I see women driving here in Bahrain. Most are covered up to various degrees and dressed in black (so men can’t see through it)

Hugh’s explains the difference between the Shia and Sunni sects of Islam. 1,300 years ago there was a civil war after the death of Muhammad. The Shia faction were loyal to the Prophet’s family and are mainly found in Iran, Iraq, parts of the Persian Gulf, and Lebanon. The Sunni faction are of “tradition” and can be mainly found in the Arab heartland, Egypt, Turkey, North Africa, and Asia. The fight was who would head the Islamic movement after Muhammad, would it be a member of his family (Shia) or the best qualified non-family member (Sunni).

Pope writes about Wahhabism, the official doctrine of modern Saudi Arabia. This started in the 1700s by a puritanical preacher who wanted to stop the degeneration of high Islam. His family had and still has today, a strong relationship with the Saud clan of central Arabia. He also sees today the impossible choice between Wahhabi fundamentalism or with the flow of oil dollars, an utterly western lifestyle. Pope interviewed a Saudi who said, “In my family I have no credibility. I’m the Western-educated infidel,” he joked as we…My cousin didn’t finish school but goes to the mosque five times a day. Whenever he speaks, it’s him they listen to.” The religious studies of universities (2/3 of subjects were Islam oriented and 1/3 of students of the students were at all-religious universities) is no way to build a modern state. The Royal family of Saudi costs anywhere between 15-35 % of oil income.

–          Bahrain is a more permissive sheikdom and may be influencing Saudi Arabia proper. I wonder how much of Bahrain government income goes to the ruling family?

“Bedrock loyalty is usually bought pragramatically through a hierarchy of patronage, and if the ruler can tie in the loyalty of at least 1/3 of the population, the regime is probably safe indefinitely. “

“Gulf sheikdoms could seem unreal. They relied on the US to defend them, depended for services on majorities of their resident populations who were temporary laborers with no political rights, and their native citizens numbered so few that the ruler could be in personal touch with most of the people who counted. “  Attract tourists, financiers, and functionality – better than authoritarianism, Islam

–          57 countries in Middle East

–          22 countries in the Arab World

Family Journal: January 5, 2010

We are enjoying our final days of holiday here in Bahrain. The kids are pictured above on the way to the dentist. Oliver fell at the water park the other day and hurt his teeth and gums. We wanted to make sure he was okay. (he is) Yesterday besides going to the soccer game, we watched the partial solar eclipse. I made a pinhole box to view it safely and you can see the image below.


Nadia also has been enjoying shopping down at the exotic markets in town. She is shown below with Mohammed the carpet salesman. She bought a nice Turkmenistan rug for our new apartment in Belgrade.

North Korea Defeats Bahrain 1-0

The VIP Section of the Bahrain National Stadium

It was certainly a different experience at the stadium last night as we watched North Korea defeat Bahrain 1-0 in an international friendly (exhibition) game in the National Stadium here in Riffa, Bahrain. The first strange thing about game was admission was free. They don’t have any tickets and do not charge spectators to enter. There were security guards at all the gates and inside the stadium, but a very relaxed atmosphere. The 10,000 seat capacity stadium was probably about 1/4 full. We had a difficult time finding four consecutive seats that were not broken. It is strange that the kingdom has such good infrastructure with roads, lights, etc, and such a poor stadium. The lights were good and the field in decent shape, but the seats, bathrooms, running track, etc. all need to be renovated. I only saw two women in the crowd, one British woman and one local in the black robes. Many fans were chewing sunflower seeds. The only items for sale were pumpkin, sunflower and other types of seeds, soda pop, and “sloppy joes” made with liver.

The game was quite boring with Bahrain trying to attack but with a lot of backwards passing and North Korea mostly playing a defensive, counter-attacking style. North Korea got the lone goal 14 minutes into the second half with a nice crossing pass to a cutting striker. The Korean goalkeeper made some nice stops, but he was annoyingly slow in retrieving the ball and kicking balls from the goal. I don’t see Bahrain getting out of their group and North Korea definitely has to step up their game to be successful in next week’s Asian Cup.

The Home Team Bahrain is in Red Uniforms

Below is the preview I wrote yesterday prior to going to the game.

Tonight I’m taking the boys to the North Korea versus Bahrain international friendly soccer game.

Both teams are getting ready for next week’s Asian Cup in neighbor Qatar. The cup features 16 teams from Asia with Australia, Japan, and South Korea as favorites. Bahrain will be grouped with Australia, India, and South Korea. North Korea will be matched up with UAE, Iraq, and Iran. It would be funny to substitute Cuba for UAE and add Venezuela to get an “axis of evil” tourney going.

Bahrain has never qualified for the World Cup. The past two cup qualifying competitions however, they lost in the final playoff leg, losing to New Zealand last year and to Trinidad & Tobago in 2006. They don’t have any players I recognize, most play in the Persian Gulf region. One guy plays on a first division Swiss team and another for a first division Turkish team.

North Korea is a more interesting team. They were in last summer’s World Cup, but lost three straight games, including a 0-7 drubbing by Portugal. The regime punished the coach by firing him and putting him on a construction job. In another article by Newsweek reporter Eve Fairbanks, she argues that the team should be banned from international competitions and discusses their star player, Jong Tae-se, a German second division player:

People who dismiss boycotts say they punish ordinary people rather than those in power, and furthermore, that cultural exchanges like orchestra tours and sports matches help dispel the sense of otherness that hangs over pariah peoples, allowing us to recognize our common humanity. Permit me to suggest that, in the case of North Korea and the World Cup, this is idiocy. Consider North Korea’s star player, the striker Jong Tae-se. A vocal and charismatic 20-something nicknamed “The People’s Wayne Rooney,” Jong has asserted that North Korea’s participation in the World Cup will do a great deal to demystify the country, win it respect and understanding abroad, and stoke pride at home. Indeed, Jong himself leads a totally normal and enjoyable-sounding life, by professional-athlete standards. He rolls in a silver Hummer, loves to snowboard, travels with an iPod and a Nintendo, and aspires to bed one of the Wondergirls—the Spice Girls of Seoul. He has also never lived in North Korea. He was born in Japan and continues to reside there, in the better-off Korean diaspora. He was the one who told the newspapers about his North Korean teammates’ quaint penchant for rock-paper-scissors. If Jong doesn’t represent the existence of Joe Ebrahim’s “dual life” in terms of North Korean society—in which a few nation-glorifying stars are allowed to pursue a capitalist lifestyle while most forage for food and dream about basic rights—I don’t know what does.

North Korea’s thrashing by Portugal means the team will not play on past their last group match, on Friday against the Ivory Coast. I suspect Jong Tae-se will manage. As for the regular North Korean fans, however, it’s not clear if they’ll be able to keep watching the Cup, thanks to a dispute between North and South Korea that affects the television signal. As for his rock-paper-scissors-playing comrades headed back to the Korean Peninsula, who knows—which is what makes North Korea’s participation in a sporting event like this one really scary. The team’s spokesman told South African journalists that the team’s one aim was to make the Dear Leader (he really said that) happy. A team whose purpose in winning is to bring honor to an inhumane regime—as South Africa’s apartheid rule was—should not be allowed a world platform to do so, particularly when its players face a dark reward for losing.

The team, except for the two diaspora Japanese ringers (Jong and another guy) were publicly shamed in a six-hour assembly. Weird! I wonder in tonight’s game if they will have any fans? I am looking forward to an interesting experience. I predict a Bahrain win, 2-1.  I’ll have photos and a match report tonight.